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HomeMy WebLinkAbout2012-12-04; Public Financing Authority; Resolution 60EXHIBIT 1 24 25 26 27 28 1 RESOLUTION NO. 60 2 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD PUBLIC FINANCING AUTHORITY, ^ APPROVING THE CROSSINGS GOLF COURSE MANAGEMENT AGREEMENT BETWEEN THE CARLSBAD PUBLIC FINANCING AUTHORITY AND KEMPERSPORTS 5 MANAGEMENT, INC. 6 WHEREAS, the Carlsbad Public Financing Authority ("CFPA") currently has a 7 Golf Course Management Agreement ("Agreement") (dated July 28, 2007) with 8 o KemperSports Management (KSM) to manage The Crossings at Carlsbad golf course 10 ("The Crossings"); and 11 WHEREAS, the Authority approved an amendment on April, 26, 2012 to the 12 extend the current golf course Management Agreement for six additional months to 1^ January 27, 2013; and WHEREAS, KSM is currently managing The Crossings in accordance with the said Agreement; and WHEREAS, the Agreement is scheduled to expire on January 28, 2013; and WHEREAS, An RFP for a new management agreement was conducted and ten (10) proposals were submitted on November 8, 2012; and 14 15 16 17 18 19 2Q WHEREAS, the submitted responsive proposals were reviewed and interviews 21 conducted; and 22 WHEREAS, KSM, Inc.'s proposal was selected by a staff committee as the 23 company recommended for award of the Management Agreement for The Crossing; and WHEREAS, a proposed Management Agreement with KSM to maintain and manage the 18-hole golf course, driving range, club house, pro shop and maintenance 4 5 6 7 8 9 10 1 facility; for The Crossings has been prepared and is hereby presented for the CPFA's 2 review and action; and ^ WHEREAS, this Agreement will commence on January 28, 2013; and WHEREAS, KSM's responsibilities would include, but not be limited to: all day- to-day operations, including building and course maintenance, course reservations, tee times, cart rentals, golf instructions, hiring, training and supervision of all employees, prepare annual plan and reports, manage all marketing and promotional activities, making recommendations to the Authority regarding green fee changes, acquiring all necessary permits and licenses, including those related to food preparation and 11 alcoholic beverages. 12 NOW, THEREFORE, BE IT RESOLVED by the Carlsbad Public Financing Authority as follows: 1. That the above recitations are true and correct. 2. The form of the Management Agreement, herewith submitted, is approved substantially in the form submitted. The President of the Board is hereby authorized to execute the final form of each such agreement on behalf of the 19 CPFA. The City Manager, subject to the review of the City Attorney, is 20 authorized to approve changes in such agreement deemed to be in the best 21 interests of the CPFA, approval of such changes to be evidenced by the 22 execution of such agreement. 23 24 25 26 27 r 14 15 16 17 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Special Meeting ofthe Board of Directors of the Carlsbad Public Financing Authority on the 4*^ day of December, 2012, by the following vote to wit: AYES: NOES: Board Members Hall, Kulchin, Blackburn, Douglas and Packard. None. ABSENT: None. MATT HA ATTEST: OD, Secreta V EXHIBIT 2 GOLF COURSE MANAGEMENT AGREEMENT TABLE OF CONTENTS RECITALS 1 ARTICLE I DEFINITIONS 1-4 ARTICLE II GOLF COURSE OPERATIONS AND MANAGEMENT 4 2.0 Term 4 2.1 Management Of The Golf Course By KSM 4 2.2 Authority Financing • -5 ANNUAL PLAN 5 2.3 Preparation And Approval 5 2.4 Quarterly Review Of Annual Plan 6 CAPITAL EXPENDITURES 6 2.5 Capital Improvement Funds 6 2.6 Capital Improvement Plans 7 2.7 Implementation of Capital Improvement Projects 7 2.8 Responsibilities of KSM 7-9 PERSONNEL 9 2.9 General 9 2.10 Pension and Benefit Plans 9 2.11 Temporary Assignment of Other KSM Personnel ...9 2.12 Key Management Employees 10 2.13 KSM Acknowledgment of Regulatory and Permit Documents: Easements 10 2.14 Publicity - 10 2.15 Specific Operating Procedures 10 2.16 Golf Course Hours of Operation 10 FEES AND CHARGES 1 2.17 Setting of Fees 1 2.18 City Use Day * 1 2.19 Resident Green Fee Discount 1 2.20 Food and Beverage Operations 1 2.21 Office Operations. 7 2.22 Safety and Security 12 2.23 Contracts and Agreements 12 2.24 Alterations to Buildings 12 2.25 Operations and Maintenance Standards 12 2.26 Authority Inspection and Evaluation 12 2.27 Results of KSM's Failure to Take Corrective Action 13 2.28 Exclusions from Imposition of Deductions 13 2.29 Acknowledgement of Parties Conceming Deductions 14 2.30 KSM Performance Evaluation Deposit 14 2.31 KSM Purchases 14 ARTICLE III INSURANCE REQUIREMENTS AND INDEMNITY 15 3.0 Amounts of Insurance and Coverage 15 3.1 Types of Coverage 15 (a) Workers' Compensation 15 (b) Commercial General Liability 15 (c) Automobile Liability and Garage Keeper's Liability 15 (d) Property Insurance 15 (e) Direct and Indirect Loss of Eamings 15 (f) Fidelity Bond 16 (g) Umbrella or Excess Liability Coverage 16 3.2 Other Insurance Provisions 16 3.3 Insurance Maintained by KSM 16 3.4 Handling of Claims 17 INDEMNITIES 17 3.5 KSM's Indemnity 17 3.6 Compliance with Environmental Law 17 3.7 Environmental Remediation 17 ARTICLE IV KSM FEES DURING MANAGEMENT TERM: AVAILABLE FUNDS 18 4.0 Forms of KSM Compensation 18 4.1 Fixed Management Fee 18 4.2 Percentage Management Fee 18 4.3 Gross Revenues Defined 19 ARTICLE V ACCOUNTS: WORKING FUNDS; DISBURSEMENT OF FUNDS; RECORDS AND REPORTS; GOLF COURSE EXPENSES 20 5.0 Golf Course Accounts 20 5.1 Disbursements from Golf Course Accounts 20 5.2 Available Funds 21 5.3 Remaining Funds 21 5.4 Books and Records 21 5.5 Inspection 22 5.6 Reports to Authority 22 5.7 Golf Course Expenses 22 5.8 Payroll 23 5.9 KSM Accounting Software 23 ARTICLE VI TERMINATION RIGHTS 24 6.0 Termination by Authority 24 6.1 Termination by KSM 25 6.2 Payments Upon Termination 25 6.3 Curing Defaults 25 6.4 Effect of Termination -.25 6.5 Remedies 25 A. Authority's Remedies 25 B, KSM's Remedies 26 6.6 Remedies Cumulative 26 ARTICLE VII TITLE MATTERS: ASSIGNMENT 26 7.0 Ownership of Improvements and Personal Property 26 7.1 No KSM Assignment or Subcontracting 26 7.2 Successors and Assigns 27 7.3 Golf Course Name 27 ARTICLE VIII DAMAGE OR DESTRUCTION; EMINENT DOMAIN: FORCE MAJEURE EVENTS 8.0 Damage or Destmction 27 8.1 Eminent Domain 27 8.2 Force Majeure Events 28 ARTICLE IX GENERAL PROVISIONS 28 9.0 Contract Administration 28 9.1 Compliance 28 9.2 Notices 29 9.3 Independent Contractor 29 9 9.4 Modification and Changes 29 9.5 Entire Understanding and Agreement 29 9.6 Headings 30 9.7 Consents 30 9.8 Survival of Covenants 30 9.9 Third Parties 30 9.10 Waivers 30 9.11 Applicable Law. Venue: Service of Process 30 9.12 No Presumption Regarding Drafter 30 9.13 Enforceablility of Any Provision 30 9.14 Counterparts; Facsimile Signatures 30 9.15 Covenants Against Discrimination 31 9.16 Non-liability of Authority or Authority Officers and Employees 31 9.17 Time of the Essence 31 9.18 Exhibits and Attachments Incorporated 31 9.19 Authority • 31 9.20 Authorization to Executive Director 31 9.21 Possessory Interest 31 9.22 Proprietary Information 31 9.23 Restrictions as to Employees 31 9.24 Outside Business 32 EXHIBITS Exhibit A - Golf Course Operations and Maintenance Evaluation Form 20 pages Exhibit B - Habitat Preserve Area 2 pages Exhibit C - Notice of Golf Course Deficiency 1 page Exhibit D - Legal Description of Real Property 2 pages Exhibit E - Regulatory Permits 39 pages IV lb GOLF COURSE MANAGEMENT AGREEMENT THIS MANAGEMENT AGREEMENT ("Agreement") is made and entered into this day of , 2012 ("Effective Date") by and between the Carlsbad Public Financing Authority, Califomia, a public entity and joint powers authority (the "Authority"), and KEMPER SPORTS MANAGEMENT, INC., an Illinois corporation ("KSM"). RECITALS A. WHEREAS, the City of Carlsbad, a municipal corporation ("City"), is the Owner of certain property located in the city of Carlsbad, Califomia, to be developed as a municipal golf course; and B. WHEREAS, the City has leased the golf course property to the Authority which is responsible for the operation of the public golf course, known as the "The Crossings Golf Course", located in the City of Carlsbad, Califomia, consisting of an 18-hole golf course, a driving range. Golf Course Clubhouse, player's lounge, pro shop, and maintenance facility (collectively, the "Golf Course"); and C. WHEREAS, the Authority desires to utilize the services of KSM to manage the Golf Course upon the terms and conditions set forth in this Agreement; and NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, the Authority and KSM hereby agrees as follows: ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the respective meanings indicated below: LO Affiliate - Any and all corporations, partnerships, trusts, and other entities directly or indirectly controlled by, controlling, or subject to direct or indirect common control of an entity or person. 1.1 Board of Directors of the Authority - The Board of Directors of the Carlsbad Public Financing Authority, currently the City Council members and, thereafter as designated by the Board. 1.2 Capital Improvement Funds - The funds disbursed to the Authority pursuant to Section 2.5. 1.3 Capital Improvements - Any alteration, addition, improvement, repair, replacement, rebuilding, or renovation to the Golf Course, the cost of which exceeds Five Thousand Dollars ($5,000.00). 1.4 Citv - The City of Carlsbad, a chartered municipal corporation. 1.5 Carlsbad Public Financing Authority (^^Authority") - is a public entity and joint powers authority whose members are the City of Carlsbad, a municipal corporation and general law city in the State of Califomia, and the Carlsbad Municipal Water District, a public agency organized and existing under the Municipal Water Act of 1911, and a Subsidiary District ofthe City of Carlsbad. 1.6 City Council - The City Council of the City of Carlsbad. 1.7 [Intentionally left blank.] 1.8 Conditional Use Permit - The conditional use permit for the Golf Course approved by and issued by the City in accordance with the Carlsbad Zoning Code. 1.9 Cost of Sales - All monies expended by KSM for the purchase of consumable items at the Golf Course, including but not limited to, food and beverages (including liquor) and Pro Shop merchandise. 1.10 Employee Compensation - The direct salaries and wages paid to or accming for the benefit of the management staff and all other persons employed by KSM at the Golf Course, except Key Management Employees as defined in Section 2.12 of this Agreement, together with all fringe benefits payable to or accruing for the benefit of such employees, including employer's contribution under the Federal Insurance Contributions Act ("PICA"), unemployment compensation, or other employment taxes, pension fund contributions, worker's compensation, group life and accident and health insurance premiums, profit sharing, retirement, disability and other similar benefits, as determined by KSM and as set forth in the approved Annual Plan. 1.11 Environmental Laws - All current and future federal, state, and local statutes, regulafions, ordinances, and mles relating to (i) the emission, discharge, release, or threatened release of a Hazardous Material into the air, surface water, groundwater, or land; (ii) the manufacturing, processing, use, generation, treatment, storage, disposal, transportafion, handling, removal, remediation, or invesfigafion of a Hazardous Material; or (iii) the protecfion of human health, safety, or the indoor or outdoor environment, including, without limitafion, the Clean Air Act, the Federal Water Pollufion Control Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensafion and Liability Act, the Occupafional Safety and Health Act, all amendments thereto, all regulafions promulgated thereunder, and their state or local statutory and regulatory counterparts. 1.12 Executive Director of Carlsbad Public Financing Authority - The person holding the posifion of City Manager of the City of Carlsbad, or his or her authorized designee, including but not limited to the Project Manager. 1.13 Furnishings and Equipment - All fumiture, fumishings, trade fixtures, apparatus and equipment, including without limitation course maintenance vehicles and equipment, golf carts, driving range pickers and pullers, mats, range ball baskets, cash registers, rental golf clubs and bags, ball washers, benches, uniforms, kitchen equipment, appliances, china, glassware, silverware, office equipment computers, copy machines, facsimile machines, telephone systems (not including pay telephones), and other personal property used in or held in storage for use in the operafion of the Golf Course, other than Operafing Inventory. 1.14 Golf Course Expenses - The total of (a) all expenses specifically idenfified as "Golf Course Expenses" in this Agreement (see Secfion 5.7); and (b) all other expenses incurred by KSM in connecfion with the Golf Course or this Agreement, which expenses were not reasonably anficipated by the parties or otherwise provided in this Agreement provided that, except for emergency expenditures as described in Secfion 2.8(p) below, any such unplanned expense which exceeds Five Thousand Dollars ($5,000.00) must have prior vsritten approval from the Executive Director, which approval shall not be unreasonably withheld. Golf Course Expenses shall not include any expenses of KSM's corporate office or the 2 compensafion of any Key Management Employees as defined in Secfion 2.12 of this Agreement, except as otherwise provided in Section 2.11 of this Agreement. 1.15 Golf Course Operations and Maintenance Evaluation Form - The form, attached to this Agreement as Exhibit "A", to be used to evaluate KSM's adherence to the Golf Course Operations and Maintenance Standards. The Golf Course Operafions and Maintenance Evaluafion Form includes a "Golf Course Clubhouse Audit form". This form may be modified from time to time by mutual written agreement ofthe Executive Director and KSM's representafive idenfified in secfion 1.12 and 9.0 1.16 Golf Course Operations and Maintenance Standards - Those written maintenance standards described in Secfion 2.25 to be agreed upon by the parties, which may be modified from fime to time by mutual written agreement ofthe Executive Director and KSM's representative identified in Sections 1.12 and 9.0. 1.17 Habitat Preserve Area - As depicted on Exhibit "B" locator map along with legal descriptions on file with the City Clerk as amended from time to time. 1.18 Hazardous Material - Any solid, liquid, or gaseous substance, chemical, compound, product, byproduct, waste, or material that is or becomes regulated, defined, or designated by any applicable federal, state, or local govemmental authority or by any Environmental Law as hazardous, extremely hazardous, imminently hazardous, dangerous, or toxic, or as a pollutant or contaminant, and shall include, without limitation, asbestos, polychlorinated biphenyls, and oil, petroleum, petroleum products and petroleum byproducts. 1.19 Impositions - All taxes and assessments (including without limitation real property taxes and assessments, possessory interest taxes, and personal property taxes), water, sewer or other similar rents, rates and charges, levies, license fees, permit fees, inspection fees and other authorization fees and charges, which at any time may be assessed, levied, confirmed or imposed on the Golf Course or the operafion of the Golf Course. 1.20 Index - The Consumer Price Index for All Urban Consumers for West Region (1982-84 equals 100) as published by the United States Department of Labor, Bureau of Labor Stafistics. 1.21 Insurance Requirements - All requirements of each insurance policy, and all orders, mles, regulations and other requirements ofthe Authority applicable to the Golf Course or the operation ofthe Golf Course. 1.22 KSM- Kemper Sports Management, Inc. or any successor in interest under this Agreement. 1.23 Legal Requirements - All laws, statutes, ordinances, orders, mles, regulations, permits, licenses, authorizations, directives and requirements of govemments and govemmental authorities, which now or hereafter may be applicable to the Golf Course or the operation of the Golf Course. 1.24 Management Term - The Management Term shall commence on January 28, 2013 and end on January 28, 2018. 1.25 Notice of Golf Course Deficiency - The form attached to this Agreement as Exhibit "C" to be used to notify KSM of Deficiency Items (as that term is defined in Secfion 2.25). 3 IS 1-26 Opening Date - The date the Golf Course is first opened to the public. 1.27 Operating Inventory - Consumable items used in or held in storage for use in the operation ofthe Golf Course, including scorecards and cart fickets, driving range balls, golf pro shop merchandise, food and beverage inventory, kitchen supplies, paper and plastic ware, locker room and bathroom supplies, towels, fuel, cleaning materials, fertilizers, pesticides, seed, maintenance parts and supplies, office supplies, and other similar items. 1.28 Operating Year - An Operafing Year shall be a twelve (12) month Fiscal year during the Term of this Agreement commencing on July 1 and continuing through June 30. 1.29 Real Property - As designated in the Legal Descripfion as Exhibit "D". 1.30 Technical Advisory Committee ("TAG") - The advisory group required by the Califomia Coastal Commission Permit with respect to the Golf Course. 1.31 Termination Date - January 27, 2018. 1.32 Weekends - The period commencing at 12:01 a.m. Friday and ending at 11:59 p.m. on Sunday. ARTICLE II GOLF COURSE OPERATIONS AND MANAGEMENT 2.0 Term. This Management Agreement shall commence on January 28, 2013 and terminate on January 27, 2018 ("Management Term"). This Agreement may be terminated by the Authority, without penalty or cause, at any time after the 3''* anniversary of the Agreement if the Authority delivers written notice to KSM of its intention to terminate. Such notice shall be given at least ninety (90) days prior to such 3''' anniversary, or one hundred twenty (120) days prior to termination if after the 3'' anniversary. If such prior written notice is not given by the Authority in the time period specified above, then this Agreement shall continue until the Termination Date. At the Termination Date, the Management Term may be extended for one additional five (5) year period upon mutual agreement ofthe parties. 2.1 Management of the Golf Course by KSM. The Authority hereby contracts with KSM, during the Management Term, to manage and operate the Golf Course, pursuant to the terms of this Agreement, and KSM agrees it shall manage and operate the Golf Course in such manner. Subject to the terms of this Agreement, and further subject to the approved Annual Plan, KSM shall have authority and responsibility to: (a) implement the policies and standards for the Golf Course as determined by the Authority; (b) manage and supervise all day-to-day operafions ofthe Golf Course including starting, course marshals, pro shop, player's lounge, building and course maintenance, security, cart rental, driving range, food and beverage service, golf instmcfion, and administrafion management; (c) subject to Secfion 2.17, set, from time to time, greens fees and fees and charges for other uses and items charged to Golf Course customers, (d) hire, train, and supervise all employees required to carry out KSM's responsibilities, including with Authority approval, the General Manager, Course Superintendent, and Controller; (e) acquire all goods and services necessary to carry out KSM's responsibilities; (f) acquire all necessary licenses and permits for the operation ofthe Golf Course including those related to food preparation and alcoholic beverages; (g) manage all course reservations, tee times, and toumaments, including special events or other activities requested by Authority; (h) manage all marketing and promotional activities and customer service relations; (i) manage accounting and payroll procedures and functions; and (j) prepare such annual and other plans and reports as set forth in this Agreement. The Authority agrees that it shall cooperate with KSM to permit and assist KSM to carry out its duties under this Agreement. 2.2 Authority Financing. KSM acknowledges that Authority has obtained tax-exempt bond financing ("Authority Financing") for constmction of the Golf Course. Authority has the right, at any time and from time to time, to affect a refinancing and refiinding of the Authority Financing in its sole and absolute discretion. Notwithstanding any authority given in this Agreement to KSM to set fees, charges, and prices, the Authority Board of Directors shall have the superior authority to set fees, charges, and prices at the Golf Course, but only if necessary to meet the operafing covenants required by the Authority's financing and the financing documents pertaining thereto. KSM agrees to amend this Agreement at any time and from time to time, if, in the opinion ofthe Authority's legal counsel, this Agreement must be amended to comply with laws, regulations, mles, or procedures applicable to the Authority Financing, and any refinancing or refiinding thereto, including but not limited to those laws, regulations, mles, and procedures applicable to or promulgated by the Intemal Revenue Service. Authority and KSM shall meet and confer in good faith to effect such written amendment to this Agreement as necessary to ensure the Agreement is in compliance as required by the preceding sentence, which amendment(s) shall be affixed as an attachment to this Agreement; provided, however, that in the event Authority and KSM cannot come to final agreement on the required amendment(s) necessary to ensure the Agreement is in compliance as required above, either party shall have the right to terminate this Agreement without penalty upon written notice to the other party. ANNUAL PLAN. 2.3 Preparation and Approval. Annually on or before April 1 of each year, KSM shall submit to the Authority the Annual Plan for the Golf Course for the next Operating Year ("Annual Plan"). The Annual Plan shall include (1) an operating budget containing bona fide good faith estimates of all Golf Course Expenses for the next Operating Year, including expenditures for (a) property operation and maintenance, (b) repairs, replacements, and alterations which do not constitute Capital Improvements, (c) Fumishings and Equipment and Operating Inventory, and (d) advertising, sales, and business promotion, and (2) a Capital Improvement Plan as described in Section 2.6 and (3) recommendation for all fees and charges as further described in Sections 2.17-2.18. The Annual Plan shall also include the course maintenance plan, the marketing and business plan for the Golf Course and hours of operation for the next Operating Year. The parties agree that they shall use commercially reasonable efforts to limit the increase in total Golf Course Expenses during the term of this Agreement to the increase in the Index or increases due to increases in Gross Revenues. Any increase in excess of the increase in the Index shall be thoroughly documented in the Annual Plan. The Annual Plan shall be subject to the prior written approval of the Executive Director ofthe Carlsbad Public Financing Authority ("Executive Director"). It is contemplated by the parties that the Annual Plan will be agreed upon by KSM and the Executive Director not later than ninety (90) days following delivery ofthe Annual Plan by KSM to the Authority. If the Executive Director fails to either approve the Annual Plan within said 90-day period or to advise KSM in writing of his/her objections to the Annual Plan within such period, then the Executive Director shall be deemed to have disapproved the Annual Plan as submitted. In the event of a dispute with regard to the Annual Plan, pending the resolution of such dispute, KSM shall continue to manage and operate the Golf Course in accordance with the standards set forth in this Agreement at a level of expenditures comparable to those of the preceding Operating Year, subject to increases in Golf Course Expenses due to increases in Gross Revenues, plus up to an additional two percent (2%) of such amount. This two percent (2%) shall apply to actual course costs, and shall not include any 5 expenditure not authorized as a Golf Course Expense pursuant to this Agreement, nor the Fixed Management Fee as defined in Section 4.1, nor the Percentage Management Fee defined in Secfion 4.2. The Fixed Management Fee shall be subject to the Index adjustment only in the manner described in Sections 4.1. An execufive summary of the Annual Plan shall be reviewed and approved by the Board of Directors prior to the commencement of each Operafing Year. KSM shall comply, to the extent reasonably and commercially practicable, with the applicable Annual Plan. However, the Authority agrees that the approved budgets and Annual Plan are intended to be reasonable estimates, and accordingly, KSM shall be entitled from time to time to revise the budgets and Annual Plan to cover any expenditures that were unanticipated at the time of preparation ofthe budgets and Annual Plan but are reasonable and necessary to carry out the provisions of this Agreement; provided, however, that except as otherwise set forth in this Agreement, KSM shall be required to obtain prior written consent ofthe Authority, ifthe actual amount expended per calendar month for Golf Course Expenses shall be greater than two (2%) higher than the amount budgeted for that calendar month in the Annual Plan. KSM is authorized to take all action reasonably deemed necessary by KSM to implement, perform, or cause the performance of the items set forth in the approved budgets and Annual Plans. The Authority acknowledges that the Annual Plan is intended to set forth objectives and goals based upon KSM's judgment and the facts and circumstances known by KSM at the time of preparation and that KSM has not made any guarantee or warranty conceming or relating to (i) the Annual Plan, including the budgets, or (ii) the amounts of Gross Revenues or Golf Course Expenses to be generated or incurred from the operation of the Golf Course. 2.4 Ouarterly Review of Annual Plan. Every three (3) months, the Executive Director and the General Manager ofthe Golf Course shall meet and discuss the operating resuhs of the Golf Course, and the parties shall agree in writing upon any amendments or revisions to the Annual Plan to take into consideration variables or events that did not exist, or could not be anticipated by KSM or Authority, at the time the Annual Plan was prepared. The Annual Plan and any material amendments or revisions to the Annual Plan shall require the approval of the Executive Director, and/or the Board of Directors, which approval shall not be unreasonably withheld. CAPITAL EXPENDITURES: 2.5 Capital Improyement Funds. Subject to the availability of funds in the "Golf Course Account" (as defined in Section 5.0 below), KSM, as provided in Section 5.2 below, shall disburse to Authority monthly from the Golf Course Account an amount equal to two percent (2%) ("Capital Improvement Fund Percentage") of that portion ofthe Gross Revenues for the previous month attributed to green fees ("Capital Improvement Funds"). If available, accmed Capital Improvement Funds shall be disbursed to Authority within ten (10) days after the delivery to the Executive Director of the monthly profit and loss statements required by Section 5.6(a) below. In the event there are insufficient funds in the Golf Course Accounts to pay all or any portion ofthe Capital Improvement Funds for any particular month, then the unpaid Capital Improvement Funds shall be accmed and paid in the next succeeding month or months when sufficient funds exist in the Golf Course Account to pay such accmed Capital Improvement Funds. Authority shall establish and maintain a separate reserve account for the Capital Improvement Funds received pursuant to this section, and these Capital Improvement Funds shall be used for the purposes described in this Agreement. The parties hereby acknowledge and agree that the Capital Improvement Funds shall belong to Authority, and Authority shall have complete control over the Capital Improvement Funds. The parties hereby agree that prior to each Operating Year, in connection with the preparation and approval of the "Capital Improvement Plan" as described in Section 2.6 below, the parties shall discuss whether the Capital 6 Improvement Fund Percentage should be changed. Any decision to change the Capital Improvement Fund Percentage shall be in the sole discretion of the Executive Director, and in making such decision the Executive Director shall consider such factors as the amount of Capital Improvement Funds currently available and the projected capital improvement requirements of the Golf Course. In no event, however, shall the Capital Improvement Fund Percentage be increased in excess of two percent (2%) except with the written approval of the Executive Director. 2.6 Capital Improvement Plans. During the Management Term, KSM shall submit on or before April 1 of each year, a "Capital Improvement Plan" for the Golf Course for the next Operating Year, which shall include KSM's recommendation of Capital Improvement projects for the next Operating Year and the estimated costs of such Capital Improvement projects. 2.7 Implementation of Capital Improvement Proiects. The parties acknowledge and agree that all Capital Improvement projects are in Authority's sole control and discretion, and all costs and expenses of Capital Improvement projects shall be paid from the Capital Improvement Funds or from other Authority funds (and not from the Golf Course Accounts). The costs and expenses of Capital Improvement projects shall not be considered Golf Course Expenses. Once approved by the Board, KSM shall be responsible for the constmction or purchase of the Capital Improvements, unless otherwise instmcted by the Authority. 2.8 Responsibilities of KSM. Without in any way limiting KSM's right to manage and operate the Golf Course in accordance with the terms of this Agreement, KSM shall, in addition to other obligations and responsibilities set forth in this Agreement, perform the following services, or cause the same to be performed for the Golf Course, subject to the approved Annual Plan and the other terms and conditions set forth in this Agreement, and all expenditures of KSM and costs and expenses incurred by KSM in performing these services, including the "Management Fees" (as defined in Secfion 4.0), shall be Golf Course expenses: (a) Manage and market the Golf Course; (b) Hire, train and terminate all Golf Course personnel; (c) Consummate arrangements with concessionaires, licensees, tenants, or other intended users of the Golf Course; (d) Negotiate and execute on behalf of the Authority contracts for the fumishing of utilities and maintenance and other services to the Golf Course, subject to Section 2.22; (e) Make all repairs, decorations, replacements, additions, revisions, alterations and improvements to the Golf Course as shall be reasonably necessary for maintenance of the Golf Course in good order, condition and repair, subject to the terms of this Agreement; (f) Manage payment of Golf Course operating expenses as identified in the Annual Plan; (g) Maintain a level of Operafing Inventory deemed appropriate by KSM for supplying the needs of the Golf Course and its customers; (h) Apply for, and use its best efforts to obtain and maintain, all licenses and permits required of KSM in connection with the operation and management of the Golf Course; and Authority agrees to 7 execute any and all applications and such other documents as shall be reasonably required and to otherwise cooperate, in all reasonable respects, with KSM in the application for, and obtaining and maintenance of, such licenses and permits. Upon termination or expiration of this Agreement, KSM shall cooperate in transferring all licenses, permits and accreditations in the name of KSM to Authority as permitted by law; (i) Use its best efforts to do, or cause to be done, all such acts and things in and about the Golf Course as shall be reasonably necessary to comply with all Insurance Requirements and Legal Requirements, whether or not compliance therewith shall interfere with the use and enjoyment ofthe Golf Course except for those which are the obligation of the Authority or the Authority's separate contractors. Notwithstanding the foregoing, the Authority acknowledges and agrees that the Authority or its constmction contractors shall be responsible for procuring, maintaining and complying with all licenses and other authorizations relating to design, construction, zoning, erection, installation and similar matters relating to any constmction at the Golf Course. In the event, at any time during the Management Term, repairs, additions, changes, or corrections in the Golf Course of any nature shall be required by reason of any Legal Requirements, KSM shall notify the Authority and request the Authority's consent to take all reasonable steps and to make all reasonable expenditures necessary to repair and correct any such repairs, additions, changes, or corrections whether or not provisions have been made in the Annual Plan for any such expenditures, the costs of which shall be Golf Course Expenses. If the Authority withholds such consent, KSM shall not be liable for any failure of the Golf Course to be in compliance with such Legal Requirements due to the Authority's refusal to consent; (j) Pay all Impositions and insurance premiums when due; (k) Implement a marketing, advertising, and promotional plan for the Golf Course; (1) Purchase Fumishings and Equipment necessary to operate and maintain the Golf Course in the manner provided in this Agreement; (m) Maintain the landscaping within the boundaries of the Golf Course pursuant to the Golf Course Operations and Maintenance Standards; and (n) Defend and settle claims, lawsuits, and demands relating to the Golf Course and Golf Course personnel (as further provided in Section 3.4 below), and retain legal counsel (and pay legal fees and costs) who under the direction of KSM will represent KSM, and the Golf Course on all questions relating to Legal Requirements, will defend any claims or actions brought against KSM relating to the Golf Course or Golf Course personnel, and will institute and defend any and all legal actions or proceedings as shall be reasonably necessary to collect charges, rent or other income for the Golf Course to dispossess tenants or other persons in possession from all or any portion of the Golf Course to cancel or terminate any lease, license or concession agreement on the grounds of default by the tenant, licensee, or concessionaire, or to contest property taxes. KSM shall notify Authority and its General Counsel of any claims or lawsuits relating to the Golf Course within two (2) business days after KSM receives notice of such claims or lawsuits. Any legal fees for outside counsel shall be paid by KSM and charged as a Golf Course Expense and shall not include any KSM corporate overhead or administrative fee or charge. The Authority's General Counsel shall have the right to reasonably pre-approve any legal counsel retained by KSM to defend KSM and the Golf Course in connection with such matters. For all claims naming the Authority and/or City, KSM shall cooperate with the Authority's General Counsel/City Attomey who at his discretion may represent the Authority/City or retain any outside counsel to assist in the representation of the Authority/City as a Golf Course expense. (o) During the Management Term, KSM's on-site controller shall: (i) maintain all books, records, and other data associated with the financial acfivifies of the Golf Course, (ii) prepare all operating budgets, cash flow budgets, and other financial projections and forecasts, and (iii) be responsible for the day-to-day financial affairs of the Golf Course; (p) Notwithstanding anything else in this Agreement to the contrary, in the event, at any time during the Management Term, a condition should exist in, on, or about the Golf Course of an emergency nature which, in KSM's sole and absolute discretion, requires immediate action to preserve and protect the Golf Course, to better assure the Golf Course's continued operation, or to protect the Golf Course's customers, guests, or employees, KSM is authorized to take all steps and to make all reasonable expenditures necessary to repair and correct any such condition, whether or not provisions have been made in the applicable Annual Plan for any such expenditures. The Authority shall be notified of the need for, and estimated amount of, any such emergency expenditures as soon as reasonably practical; and (q) In fulfilling its operational responsibilities hereunder, KSM shall have all rights ordinarily accorded to a KSM in the ordinary course of business, including, without limitation, the collection of proceeds from the operation of the Golf Course, the approval and payment of obligations, and the negotiating and signing of leases and contracts. KSM shall not be obligated to advance any of its own funds to or for the account ofthe Authority, nor to incur any financial liability, unless the Authority shall have ftimished KSM with ftinds necessary for the full discharge thereof However, if for any reason KSM shall have advanced funds in payment of any reasonable expense in connection with the maintenance and operation of the Golf Course, the Authority shall reimburse KSM within a reasonable fime upon demand for the full amount of such payments. PERSONNEL 2.9 General. Subject to Section 2.1(d), KSM shall employ all of the employees of the Golf Course. KSM shall recmit, hire, train, discharge, promote and supervise the management staff of the Golf Course (i.e., the General Manager, the Course Superintendent, and other key personnel), and KSM shall supervise through the management staff the recmiting, hiring, training, discharge, promotion and work of all other employees ofthe Golf Course. All employees ofthe Golf Course shall be properly qualified for their positions. 2.10 Pension and Benefit Plans. KSM shall have the right to provide eligible employees of the Golf Course with pensions and other employee retirement benefits and disability, health and welfare benefits, and other benefit plans now or hereafter available to employees of other golf courses and country clubs operated by KSM, and the allocable share of such employee benefits shall be a Golf Course Expense. 2.11 Temporary Assignment of Other KSM PersonneL If the posifion of General Manager, Course Superintendent, or other Key Management Employee positions of the Golf Course are not filled for whatever reason, KSM may temporarily assign to these positions the staff of other golf courses and country club Golf Courses operated by KSM or other qualified KSM staff; provided, however, that said temporary assignment shall not exceed ninety (90) days without the written approval of the Executive Director. During such time as these employees are temporarily assigned to the Golf Course, all such employees will 9 11 be paid a pro-rata share of their regular Employee Compensation equal to the actual time such employees worked at the Golf Course which shall be a Golf Course Expense and the Fixed Management Fee shall be increased or decreased accordingly. 2.12 Key Management Employees. The General Manager of the Golf Course shall be responsible for the day-to-day management and operation of the Golf Course. The name and telephone number (both home and business) of the General Manager shall be provided, in writing, to the Executive Director and shall be current at all times. The General Manager shall be reasonably available during normal working hours to meet with the Executive Director. After normal working hours, the General Manager shall be reasonably available to appear at the Golf Course if deemed necessary by the Executive Director. The Course Superintendent for the Golf Course shall be certified by the Golf Course Superintendents Association. The General Manager for the Golf Course shall be a current Class "A" member in good standing of the Professional Golf Association or the Ladies Professional Golf Association. The Executive Director shall have the right to approve the individuals who KSM intends to hire to fill the positions of General Manager, Golf Course Superintendent, and Controller (regardless of the tities given for such positions by KSM) (collectively, the "Key Management Employees"), which approval shall not be unreasonably withheld. 2.13 KSM Acknowledgment of Regulatorv and Permit Documents: Easements. KSM acknowledges that it has been provided copies ofthe Regulatory Permits pertaining to the Golf Course property attached here to as Exhibit E consisting of 1. State Water Resources Control Board, WDID No. 937C337203, dated 10/17/05; 2. Califomia Department offish and Game, Streambed Alteration Agreement No. 5-122-00, dated June 30, 2004; 3. United States Army Corps of Engineers Permit No. 972020600-SMJ, dated 1/5/05, modifying permit No. 972020600-MAT, dated September 30, 2000; 4. Califomia Coastal Commission Coastal Development Permit No. A-6CII-00-087, Notice of Acceptance, dated April 25, 2005; 5. City of Carlsbad, Endangered Species Act Incidental Take Permit No. HMP 04-01, dated December 5, 2004; and 6. San Diego Gas and Electric Company, Letter of Permission for Grading and Constmction of Improvements, dated June 23, 2005. 2.14 Publicity. Any commercial advertisements, press releases, articles, or other media information using Authority's or City's name shall be subject to the prior approval of the Executive Director which approval may be or withheld in the Executive Director's sole and absolute discretion. 2.15 Specific Operating Procedures. In addition to the more general responsibilities of KSM as manager of the Golf Course as provided in this Article II, KSM shall operate and manage the Golf Course in accordance with the following operating procedures consistent with the approved budget and Annual Plan: 2.16 Golf Course Hours of Operation. Except upon the occurrence of the events described in Article VIII of this Agreement, the Golf Course shall be operated on a daily basis all year and shall not be closed on holidays. The Golf Course shall be kept open during all hours necessary to adequately serve the public utilizing the Golf Course, subject to the specific conditions of the Conditional Use Permit and except for instances in which normal maintenance requires temporary closure. The driving range may be open when the Golf Course is closed, subject to the conditions of the Conditional Use Permit. The inside food and beverage services of the Golf Course Clubhouse shall be open as determined in the Annual Plan. The 10 <2o permitted hours for food and beverage services in the Golf Course Clubhouse restaurant shall be as provided in the Conditional Use Permit. FEES AND CHARGES 2.17 Setting of Fees. KSM shall, from time to time, set the amount for fees and charges for services at the Golf Course, including greens fees (which shall include use of a golf cart). Golf Club rental, and driving range. All fees, charges, and prices at the Golf Course set by KSM shall be comparative and competitive with other first class public golf courses in San Diego County and approved by the Executive Director. All fees and charges shall be set first to ensure coverage of Golf Course Expenses, Management Fees, and debt service and secondarily, to provide a benefit to residents of Carlsbad. The green fees shall be recommended in the Annual Plan. KSM acknowledges that Authority intends to obtain public and/or private financing for constmction of the Golf Course, and that such financing may require Authority to control the setting of other charges, and prices at the Golf Course in addition to green fees. 2.18 City Use Day. The Authority/City shall have the right to designate a day for its exclusive use of the Golf Course and all improvements free of charge once a year on a Monday through Thursday only. 2.19 Resident Green Fee Discount. KSM shall establish a "Resident Green Fee Discount," whereby Carlsbad residents shall receive a discount on green fees. KSM shall recommend the amount of the resident green fee discount and include the recommended discount in the Annual Plan. KSM shall develop all necessary mles and procedures for implementing the Resident Green Fee Discount, which rules, and procedures shall be subject to the prior written approval of the Executive Director. KSM may also recommend discounted rates for other specified groups. 2.20 Food and Beverage Operations. The Golf Course shall include a restaurant located in the Golf Course Clubhouse and a snack bar, which shall be operated in accordance with the Conditional Use Permit. Temporary fixed food stands shall not be installed on the Golf Course except for special events. KSM shall provide a staffed food service and beverage cart for the service of players on the Golf Course during peak hours of operation. KSM shall comply with all requirements of state and local law goveming the sale and distribution of alcoholic beverages. KSM shall obtain and maintain all permits from all governmental agencies having jurisdiction for all food and beverage operations at the Golf Course, including holding a liquor license in the name of KSM or a KSM Affiliate. KSM shall comply with all health law and regulations as existing or as may be established by the federal, state, county, and city governmental agencies. All food service employees shall possess valid food handler cards, and a copy of these cards shall be maintained in the administrative office at the Golf Course. KSM, for all food and beverage employees, shall comply with all applicable codes and regulations as relates to tuberculosis and other health and disease testing - as now or hereafter required by applicable law. Prices of food and beverages sold at the Golf Course shall be market rate and competitive with prices charged at comparable first class public golf courses in San Diego County. 2.21 Office Operations. KSM shall employ sufficient administrative staff at the Golf Course to permit KSM to competentiy perform KSM's obligations under this Agreement. Upon Authority's written request, KSM shall provide the Executive Director with a written job descripfion for each management position at the Golf Course. The Executive Director shall keep these job descriptions in strict confidence, subject to applicable public records disclosure laws. KSM shall maintain at the Golf Course copies of all KSM corporate policies and procedures, as such may be changed from time to time. 2.22 Safety and Security. The Golf Course shall comply with all safety regulafions of federal, state, and local govemmental agencies, including without limitation any requirements imposed by Califomia Labor Code Section 6300 et seq. and regulations promulgated with respect thereto, and applicable federal occupational, health, and safety laws and regulations. KSM shall take all reasonable actions to protect the safety of all Golf Course employees and customers. The Golf Course shall contain appropriate security systems, including video monitoring of cash operations, security alarm systems, motion detection sensors for after hours control, and locks for the maintenance yard and perimeter gates. The alarm system at the Golf Course shall be tied into an airtight monitoring station. KSM shall keep for seven (7) days computer back-up tapes for all accounts payable and accounts receivable information. All records at the Golf Course shall be kept in fireproof files and made available to the Authority upon request. 2.23 Contracts and Agreements. KSM shall negotiate, consummate, enter into, and perform, on behalf of Authority, such agreements as KSM may deem necessary or advisable for the fiimishing of all food, beverages, utilities, concessions, entertainment, operating supplies, equipment, repairs and other materials and services as KSM determines are needed from time to time for the management and operation of the Golf Course. KSM shall not be obligated to sign any leases or other agreements in KSM's name except for any employment related agreements, if any, which shall be in KSM's name. Notwithstanding the above, any contract which exceeds Twenty Five Thousand Dollars ($25,000) in total payments over the term of such contract or which has a term of over one (1) year shall be negotiated by KSM but provided to Authority for its approval and signature. 2.24 Alterations to Buildings. KSM shall not make any substantial alterations, additions, or changes to the exterior appearance or the stmctural nature of the Golf Course Clubhouse, golf pro shop, maintenance building, or other buildings located at the Golf Course without the prior consent of the Executive Director. 2.25 Operations and Maintenance Standards. The parties acknowledge and agree that the Golf Course shall be operated and maintained as a first class golf course. As used herein, "first class golf course" shall mean a golf course comparable to the following golf courses in San Diego County: Torrey Pines - City of San Diego; The Vineyard - City of Escondido; and Encinitas Ranch - City of Encinitas Califomia, as they existed on the Effective Date of this Agreement. In addition to all other responsibilities of KSM under this Agreement, KSM agrees that at all times during the term of this Agreement, the Golf Course shall be operated and maintained in accordance with the written standards to be agreed upon by Authority and KSM (the "Golf Course Operations and Maintenance Standards"), which will be consistent with the approved budget and Annual Plan. 2.26 Authority Inspection and Evaluation. At any time during the term of this Agreement, the Authority Executive Director, or his designee shall inspect some or all of the Golf Course for purposes of compliance with the Golf Course Operations and Maintenance Standards and this Section. In conducting such inspection and evaluation, the Authority Executive Director, or his designee shall complete the Golf Course Operations and Maintenance Evaluation Form, or applicable portions thereof, and shall promptly thereafter provide KSM a copy of the completed form or applicable portion thereof Authority agrees that the Executive Director shall act reasonably and in good faith in making the determination of whether the Golf Course Operations and Maintenance Standards, or applicable portion thereof, have been met. As set forth in Exhibit "A", the Golf Course Operations and Maintenance components shall be rated as "Acceptable," "Needs Improvement," and "Unacceptable." Notwithstanding KSM's obligation to correct Deficiency Items as set forth below, KSM shall be in compliance with the Golf Course Operations and Maintenance Standards unless an overall rating is 12 determined to be "Unacceptable." The Executive Director's rating of an item as "Unacceptable" or "Needs Improvement" shall, upon KSM's receipt of the Golf Course Operations and Maintenance Evaluation Form, constitute a Notice of Golf Course Deficiency with respect to the deficient item(s). Within one (1) week after receipt of the Golf Course Operations and Maintenance Evaluation Form, the Executive Director and General Manager of the Golf Course, and the Golf Course Superintendent, if necessary, shall meet to review the Deficiency Item(s), including the corrective actions KSM intends to take to correct the Deficiency Item(s). KSM shall complete the "Statement of Corrective Action", detailing the steps it intends to take to correct each Deficiency Item and the time schedule for completion of corrective action. The proposed corrective action and the time schedule shall be reasonably approved by the Executive Director. When a Deficient Item has been satisfactorily corrected in the judgment of the Executive Director, the Executive Director and the General Manager of the Golf Course shall each sign the Notice acknowledging completion of the corrective action. The cost for correcting any Deficiency Item shall be a Golf Course Expense. 2.27 Results of KSM's Failure to Take Corrective Action. Except as provided in Secfion 2.27 below, if KSM obtains an overall rating of "Unacceptable", or fails to take action to timely correct any Deficiency Item(s), the following shall occur: (a) If there are two (2) consecutive months in which the Golf Course Operations and Maintenance Evaluafion Form indicates that KSM's management of the Golf Course has obtained an overall rating of "Unacceptable," the Authority shall be entitied to deduct from the Performance Evaluation Deposit described in Section 2.29, the amount of Five Thousand Dollars ($5,000) per month, and such deduction amount shall be retroactive to the first (1st) of the two (2) consecutive months and shall continue until KSM's management ofthe Golf Course achieves an overall rating of "Acceptable" as indicated on the Golf Course Maintenance Evaluation Form. In addition, any failure to achieve an overall rating of "Acceptable" for (i) any four (4) months within any single operating year, or (ii) any three (3) consecutive months, shall be considered a material breach of this Agreement entitling the Authority to terminate this Agreement regardless of the deductions that have been made from the Performance Evaluation Deposit. (b) The Authority shall further be entitled to deduct from the Performance Evaluation Deposit the amount of Two Thousand Dollars ($2,000) per month for each Deficiency Item that is not fimely corrected. Such deduction shall be imposed as of the date the Deficiency Item was to have been corrected and shall continue each month thereafter until such Deficiency Item has been corrected as indicated by the signature of the Executive Director and General Manager of the Golf Course on the Notice of Golf Course Deficiency as described in Section 2.25. The deductions provided for in this Section shall not be a Golf Course Expense. 2.28 Exclusions from Imposition of Deductions. The following items shall be considered exclusions for the purpose of determining whether there have been two (2) consecutive months with overall ratings of "Unacceptable" and for the purpose of determining whether an outstanding Deficiency Item has been timely corrected: (a) any outstanding Deficiency Item that KSM is diligentiy and timely correcting in accordance with the time schedule jointly agreed to by the Executive Director and the General Manager of the Golf Course as provided in Section 2.25; (b) any Deficiency Item in which the correction is considered a Capital Improvement, but only if and to the extent KSM, in light of its expertise and experience as a manager of first class golf courses, could not have taken reasonable measures to prevent or mitigate the Deficiency Item from occurring; (c) any Deficiency Item that KSM is unable to correct because of, or any rafing of "Unacceptable" caused by, the occurrence of a "Force Majeure Event" (as defined in Section 8.2 13 of this Agreement) but only to the extent KSM, in light of its expertise and experience as a manager of first class golf courses, could not have taken reasonable measures to prevent or mitigate the Force Majeure Event; and (d) any Deficiency Item that KSM is unable to correct due to, or any rating of "Unacceptable" caused by, the Authority's failure to provide sufficient fiinds to effect such correction. 2.29 Acknowledgement of Parties Concerning Deductions. THE PARTIES HERETO AGREE THAT THE $5,000.00 PER MONTH DEDUCTIONS FROM THE PERFORMANCE EVALUATION DEPOSIT REFERENCED ABOVE CONSTITUTE A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT THE AUTHORITY WOULD SUFFER DUE TO A FAILURE BY KSM TO ADHERE TO THE REQUIRED PERFORMANCE LEVEL, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE CHARGES TO THE RANGE OF HARM TO THE AUTHORITY THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AUTHORITY OF THE AUTHORITY TO EFFECT SUCH DEDUCTIONS SHALL NOT LIMIT THE AUTHORITY'S TERMINATION RIGHTS AS SET FORTH IN THIS AGREEMENT. IN PLACING its INITIALS AT THE PLACES PROVIDED HEREIN BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO HAS EXPLAESfED THE CONSEQUENCES OF THE DEDUCTION PROVISIONS AT OR PRIOR TO THE TIME EACH EXECUTED THIS. 2.30 KSM Performance Evaluation Deposit. Not later than commencement of the Management Term, and as a condition to commencement of the Management Term, KSM shall deposit with the Authority in cash the sum of Twenty-Five Thousand Dollars ($25,000) as security for the performance of KSM's obligations pursuant to Section 2.26 ("Performance Evaluation Deposit"). The Authority shall place the Performance Evaluation Deposit in a separate interest-bearing account and such funds shall not be intermingled with any other funds, nor subject to withdrawal or allocation except as specifically set forth in Section 2.26. The Performance Evaluation Deposit shall not be a Golf Course Expense. In the event of failure of KSM to timely correct Deficiency Items as provided in Section 2.26, the Executive Director shall have the authority to deduct from the Performance Evaluation Deposit the amounts set forth in Section 2.26. In the event the Authority is required to make deductions from the Performance Evaluation Deposit, KSM shall promptly, upon written request therefore by the Authority, submit such additional cash amounts to the Authority as is required in order to maintain the Performance Evaluation Deposit at the Twenty-Five Thousand Dollar ($25,000) level. Upon expiration or termination of this Agreement for any reason, all of the Performance Evaluation Deposit, along with all accmed interest, shall be retumed to KSM within sixty (60) days after such expiration or termination. 2.31 KSM Purchases. In connection with any purchases made by KSM or an Affiliate of KSM for the account of the Authority, it is understood that KSM or such Affiliate may perform services as a representative ofthe manufacturer to secure the benefits of lower costs, and that any resulting savings shall be passed on to the Authority, including representatives' fees. In addition, all trade discounts, rebates and refunds pertaining directly to purchases for the Golf Course shall accme to the benefit of the Authority. If any purchases of goods or services for the Golf Course are made from or through an Affiliate of KSM, that shall be disclosed to the Authority in the Monthly Report, and the charges to the Golf Course for such goods or services shall not exceed the lesser of the cost actually paid or the market prices for such goods and services. ARTICLE III INSURANCE REQUIREMENTS AND INDEMNITY 3.0 Amounts of Insurance and coverage. For the duration of this Agreement, KSM shall procure and maintain, at a minimum, the following types and amounts of insurance and coverage as described in this Article III, all as a Golf Course Expense: 3.1 Types of Coverage: (a) Workers' Compensation. Coverage in compliance with the Workers' Compensation Laws of the State of Califomia providing all statutory benefits and covering all Golf Course employees who are KSM employees. (b) Commercial General Liability. (i) Coverage shall include all premises and operations, including but not limited to, bodily injury, property damage, personal injury, liquor liability, independent contractors, products and completed operations and contractual liability. The applicable limits of liability shall be the minimum combined single limit of $10,000,000 per occurrence. (ii) The Authority, and its officers, officials, employees, agents, and volunteers, and the City of Carlsbad, its officers, officials, employees, agents and volunteers, and any other parties to which the Authority or City is required to have named as additional insured on insurance related to the Golf Course (provided that such parties are identified in writing to KSM), shall be named as an additional insured as respects liability arising out of work or operations performed by or on behalf of KSM. (c) Automobile Liability and Garage Keeper's Liability. Automobile Liability coverage shall apply to all automobiles, tmcks and other motor vehicles utilized or controlled by KSM in connection with the Agreement, and shall include all owned, hired and non-owned vehicles in the amount of $1,000,000 combined single limit per occurrence. KSM will maintain Garagekeepers Liability protection in the amount of $900,000 for customers' automobiles, subject to policy deductibles acceptable to the Authority. (d) Property Insurance. Property Insurance covering loss or damages to the buildings, structures or other improvements, contents, equipment and supplies on a replacement cost per occurrence basis (except for golf carts that are over five (5) years old shall be insured on an actual cost value basis) for "all risk", including specifically irrigafion and/or sprinkler system leakage damage, vandalism and malicious mischief The Authority shall provide KSM with the appropriate written specificafions for all such property to be insured under such policy. The Authority must notify KSM in writing if the Authority wants coverage for flood, earthquake or wind damage or else this damage shall be excluded from coverage. (e) Direct and Indirect Loss of Earnings. Business Intermption, Loss of Income and Extra Expense Insurance in such amounts as will reimburse Authority for direct and indirect loss of eamings 15 ^5 attributable to the annual value of lost business in connection with insured physical damage. Such coverage shall be on an "all risk" basis with Authority named as the loss payee. (f) Fidelity Bond. Coverage shall apply to all KSM employees who may handle funds or property in connection with the Golf Course and shall be in an amount not less than $300,000. (g) Umbrella or Excess Liability Coverage. The coverage required above may be satisfied through a combination of primary and umbrella or excess liability coverage. 3.2 Other Insurance Provisions: (a) All insurance as is afforded under this Agreement shall be primary and without right of contribution from any other policies that are carried or are self-insured by the Authority or by any Additional Insured with respect to their interest in the Golf Course. Further, such insurance shall expressly provide that all the provisions thereof, except limits of liability, shall operate in the same manner as if there were a separate policy covering each insured. (b) Authority and/or City shall be named as additional insureds on all policies on which each is not named as a primary insured to the extent allowed by law. (c) Within ten (10) business days after execution of this Agreement, KSM will fumish certificates of insurance and endorsements to Authority evidencing compliance with the insurance requirements in this Agreement. Authority has the right to review certified policies as reasonably necessary. Each certificate and endorsement shall be subject to reasonable approval by Authority and shall provide that such policy shall not be subject to material alteration to the detriment of Authority or KSM or cancellation without thirty (30) days' notice in writing to be delivered by registered mail to Authority. Should any policy expire or be canceled before the expiration of this Agreement and KSM fail to immediately procure other insurance as specified. Authority reserves the right, but shall have no obligation, to procure such insurance. Certificates and endorsements will be fumished per the Notice requirements in Section 9.2. (d) Insurance required under this Agreement shall be maintained with Califomia admitted insurers that carry a minimum Best's Rating of A-VII. If a carrier is non-admitted, a minimum Best's Rating of A- X shall be required. Coverage shall be from a surety or insurance company reasonably acceptable to Authority. 3.3 Insurance Maintained by KSM. The parties acknowledge and understand that as of the Effective Date the following applies to insurance maintained by KSM: (a) Five Thousand Dollars ($5000.00) deductible per occurrence for property damage insurance, (b) ZERO Dollars ($0.00) self-insured retention per occurrence for commercial general liability insurance and automobile liability insurance and [garage keeper's liability], and (c) ZERO Dollars ($0.00) participation in loss limits (which is comparable to self- insurance) per accident for workers compensation insurance. Authority understands and agrees that with respect to all policies of insurance required under Sections 3.1, 3.2 and 3.3 the portion of any claim, loss, or damage subject to a deductible amount or a self-insurance or self-assumption amount shall be a Golf Course Expense. KSM shall notify Authority in writing at least thirty (30) days prior to any increase in the deductible amount or self-insured or self-assumed amounts for the insurance coverage maintained by KSM under this Section 3.3. The Executive Director shall have the right to approve an increase in the amount of any deductible. 16 c24 3.4 Handling of Claims. With the exception of claims naming the Authority and/or the City, which in the sole discretion of the General Counsel for the Authority may be handled by the General Counsel/City Attomey, KSM (or its insurers) shall be responsible for handling all claims, demands, and lawsuits for any losses, damages, liability, and expenses (including without limitation personal injury and property damage claims) arising out of the operation and management of the Golf Course ("Claims"), whether or not such Claims are covered by the insurance required under Section 3.1. Handling such Claims shall include without limitation responding to such Claims, investigating such Claims, retaining outside legal counsel to defend such Claims, settling such Claims, and paying any losses, damages and expenses relating to such Claims. All costs and expenses, including attomeys' fees relating to the handling of such Claims as set forth in the preceding sentence, (including employment related lawsuits), shall be a Golf Course Expense, subject to KSM's obligations to indemnify Authority/City pursuant to Section 3.5(a). INDEMNITIES. 3.5 (a) KSM's Indemnity. KSM agrees to defend (with legal counsel reasonably satisfactory to the Authority's General Counsel/City Attomey), indemnify and hold harmless Authority and City and Authority's and City's officers, officials, members, employees, agents, representatives, and volunteers from and against any and all claims, demands, actions, lawsuits, proceedings, damages, liabilities, judgments, penalties, fines, expert witness fees, attomeys' fees, costs, and expenses, which results from or is connected with one or more of the following: (i) Any act or omission by KSM or any shareholder, director, officer, or employee of KSM in connection with KSM's performance under this Agreement that constitutes negligence or willfiil misconduct; or (ii) Any action taken by KSM relafing to the Golf Course (i) that is expressly prohibited by this Agreement, or (ii) that is not within the scope of KSM's dufies under this Agreement, or (iii) that is not within KSM's delegated authority under this Agreement. KSM's defense and indemnification obligations under this Section shall not apply to (i) any acts or omissions taken either at the specific written direction or written approval of the Authority, or (ii) the use by KSM of Golf Course trade names, trademarks, logos or other intellectual property used in connection with the Golf Course, or (ii) claims arising out of the sole negligence or willful misconduct of Authority, City, or their officers, officials, members, employees, agents, representatives or volunteers. (b) SurviyaL The defense and indemnification obligations of KSM contained in this Section 3.5 shall survive the expiration or termination of this Agreement for any reason. 3.6 Compliance with Environmental Law. In performing its responsibilities under this Agreement, KSM shall comply with all federal state, and local laws and regulations pertaining to the storage, use, and disposal of "hazardous or toxic wastes, substances, or materials" as defined by applicable law. 3.7 Environmental Remediation. Throughout the Management Term, if KSM becomes aware of the presence of any Hazardous Material in a quantity sufficient to require remediation or reporting under any Environmental Law in, on or under the Golf Course or if KSM, Authority, the Golf Course, City or the Golf Course becomes subject to any order of any federal, state or local agency to investigate, remove, remediate, repair, close, detoxify, decontaminate or otherwise clean up the Golf Course, KSM shall, at Authority's sole expense, use all commercially reasonable efforts to carry out and complete any required 17 SI investigation, removal, remediation, repair, closure, detoxification, decontamination or other cleanup ofthe Golf Course; provided, that such remediation activities shall be at KSM's expense if such activities are required as a direct consequence of Hazardous Material being present in, on or under the Golf Course as a result of negligent actions or willful misconduct of KSM, its agents, contractors or employees. ARTICLE IV KSM FEES DURING MANAGEMENT TERM: AVAILABLE FUNDS. 4.0 Forms of KSM Compensation. KSM shall receive as compensation for its services during the Management Term, the following: (i) a fixed management fee (the "Fixed Management Fee"); and (ii) a percentage management fee (the "Percentage Management Fee") (the Fixed Management Fee and the Percentage Management Fee are collectively referred to hereinafter as the "Management Fees"). The Management Fees are further defined below. 4.1 Fixed Management Fee. During the Management Term, KSM shall receive from Authority a Fixed Management Fee in the annual amount of One Hundred Twenty Five Thousand Dollars ($125,000) (plus any annual adjustments as provided herein and amounts for the salaries of Key Management Employees as defined in Section 2.12 of this Agreement). The annual Fixed Management Fee shall be payable in twelve monthly installments, payable in advance on the first day of the month for which such installment pertains. (Such Fixed Management Fee shall be prorated for any partial calendar months occurring during the Management Term.) The Fixed Management Fee shall be increased annually on January 1 of each Operating Year (the "Adjustment Date") in accordance with the percentage increase, if any, in the Index for the month of October immediately preceding the Adjustment Date as compared to the Index for the like month of the previous year. The Fixed Management Fee may also be increased or decreased by mutual agreement of the parties during the term of this Agreement to reflect adjustments in Key Management Employee salaries. In no event, however, shall the Fixed Management Fee, as such amount may be increased by any increase in the Index, be adjusted downward to reflect a percentage decrease in the Index. 22 4.2 Percentage Management Fee. During the Management Term, KSM shall also receive from Authority, as Percentage Management Fee, two percent (2%) of that portion of gross revenues between $5,000,000 and 5,500,000, 5% of revenues between $5,500,001 and $6,500,000 and 10% of revenues in excess of $6,500,000. The Percentage Management Fee amount shall not exceed the Fixed Management Fee. For example, if the gross revenues for a year were $7 million, KSM would receive a Fixed Management Fee of $125,000 (plus 2% of $500,000 = $10,000 and 5% ofthe next $1,000,000 = $50,000) and 10% of the amount exceeding 6,500,000 = $50,000) for a total of $110,000. The viable management fee is capped at the amount ofthe annual fixed management fee, or $125,000 in the first year. In any of these examples or under any scenario, the salaries of the Key Employees shall be added to the $125,000 for the total Fixed Management Fee, but they shall not be included for purposes of calculation of the Percentage Management Fee. If applicable, the Percentage Management Fee shall be paid to KSM, annually in arrears within ten (10) days following the delivery to the Executive Director of the Operating Year profit and loss statement required by Section 5.6 below. Any Percentage Management Fee owing as of the expiration or earlier 18 termination of this Agreement shall be payable concurrently with the delivery to the Executive Director of the final profit and loss statement. 4.3 Gross Revenues Defined. For the purposes of this Agreement, the term "Gross Revenues" means, except as provided below, all money received as a result of the operation of the Golf Course and the sale of goods and services at the Golf Course, determined on an accmal basis in accordance with generally accepted accounting principles consistently applied. By way of example, and without limitation. Gross Revenues shall include all green fees; rental fees for golf carts, golf clubs and bags, and other rental items; bag storage fees; range balls; reservation fees; fees for golf handicap service; rental and concession payments; revenue generated from space rentals and from meetings, banquets, parties, receptions, toumaments, and other group gatherings; golf instruction fees; revenues from golf schools; and proceeds from business intermption insurance. Gross Revenues shall be reduced by any cash refunds or credits allowed on retums by customers. Gross Revenues shall not include the following: (a) Sales taxes, excise taxes, gross receipts taxes and other similar taxes now or later imposed upon the sale of food, beverages, merchandise or services and paid to the appropriate taxing authority, whether added to or included in the selling price; (b) Those fees charged by a golf professional functioning as an independent contractor for the teaching of golf lessons and instmction which are not paid by the golf professional to the Golf Course operation; (c) Receipts in the form of refiinds from, or the value of merchandise, supplies or equipment retumed to, shippers, suppliers or manufacturers; (d) The amount of any gratuities paid or given by customers to Golf Course employees, or service charges added to customer billings, which represent gratuities to Golf Course employees; (e) Gross receipts received by licensees or concessionaires, except to the extent any portion of such receipts is received by the Golf Course; (f) Proceeds oflnsurance other than business intermption insurance or similar types oflnsurance; (g) Receipts from public telephones and vending machines, except to the extent of commissions paid to KSM or Authority; (h) Proceeds of any borrowings by KSM or Authority; (i) Any amount received by KSM in connection with any claim, demand, or lawsuit, except when such amount is for interruption or loss of Golf Course business or; (j) Any additional funds provided by the Authority for, or paid by the Authority for, any Golf Course purpose. (k) Interest eamings on any Golf Course funds. 19 ARTICLE V ACCOUNTS: WORKING FUNDS; DISBURSEMENT OF FUNDS; RECORDS AND REPORTS; GOLF COURSE EXPENSES 5.0 Golf Course Accounts. KSM shall use the established bank accounts for the Golf Course. Individuals designated and approved in writing by the Authority as well as City employees designated in writing by the Authority shall be signatories on the accounts, and KSM will not change the signatories of such accounts or close such accounts without the prior written consent of the Authority. The Authority shall not close the accounts without ten (10) days written notice to KSM. KSM shall deposit in the Golf Course Accounts all monies received from the operation of the Golf Course. Any interest earned on monies in the Golf Course Accounts shall be the property of the Golf Course. The ftinds in the Golf Course Accounts shall be disbursed by KSM for the purposes set forth in Section 5.1 below. Notwithstanding the provisions of the foregoing sentence, KSM shall be entitled to maintain funds in reasonable amounts in "cash register banks" or in petty cash funds at the Golf Course. No later than fifteen (15) days after the Effective Date (and in any event, prior to KSM's incurrence of any Golf Course Expenses), the Authority shall fimd for deposit into the Golf Course Accounts, Advances equal to one (1) month's estimated Golf Course Expenses (including payroll) equal to the highest monthly operating budget identified in the current approved Annual Plan (the "Operating Expense Minimum"). The Authority shall maintain the Operating Expense Minimum in the Golf Course Accounts at all times. KSM shall be responsible for the payment of Golf Course Expenses as incurred in accordance with the monthly operating budgets set forth in the approved Annual Plan directly from the Golf Course Accounts, but only to the extent funds have been made available by the Authority. KSM shall provide Authority with statements informing Authority of the amounts needed in the Golf Course Accounts in order to pay operating expenses and payroll and Authority shall make sure that the Golf Course Accounts contain such needed amounts before they become due and payable. Authority may not offset amounts needed for payment of operating expenses and payroll against the Operating Expense Minimum, as the Operating Expense Minimum shall be available solely for payment by KSM of unanticipated Golf Course Expenses. KSM shall have no liability for, and shall not be obliged to process or otherwise address, any and all expenses of the Golf Course incurred prior to the Effective Date. All Golf Course funds held by KSM, whether the Advances or monies held by KSM in "cash register banks" or petty cash funds at the Golf Course, shall be owned and controlled by The Authority. 5.1 Disbursements from Golf Course Accounts. From the Golf Course Accounts (or, if appropriate, from "cash register banks" or petty cash fiinds available at the Golf Course), KSM is authorized to pay the following: (a) Golf Course Expenses as and when incurred; provided, however, that (1) the amount disbursed shall constitute a Golf Course Expense, and (2) KSM shall provide the Executive Director, within ten (10) days following the end of each calendar month, an accounting delineating the Golf Course Expenses disbursed from the Golf Course Accounts for such preceding calendar month (e.g., accounting due not later than April 10 covering the immediately preceding month of March); (b) The Fixed Management Fee; provided, however, that such disbursement/payment to KSM shall be paid in accordance with the terms of Section 4.1; (c) The Percentage Management Fee, if applicable; provided, however, that (1) Such disbursement/payment to KSM shall be paid in arrears on not more than an armual basis pursuant to Section 4.2, and 20 3^ (2) KSM shall provide the Executive Director, within ten (10) days following the end of the Operating Year, an accounting delineating the calculation of the Percentage Management Fee for the annual period for which the Percentage Management Fee is disbursed/paid to KSM. The Percentage Management Fee shall be adjusted if necessary to agree with the audit. (d) All accmed (but undisbursed) Capital Improvement Funds as provided in Section 2.5; (e) Amounts needed to maintain the Operating Expense Minimum; and (f) The Available Funds payable to the Authority pursuant to Section 5.2. KSM shall maintain at all times, in accordance with the Annual Plan, sufficient funds in the Golf Course Account to satisfy the daily working capital needs of the Golf Course, KSM shall only disburse funds from the Golf Course Accounts to pay accmed Capital Improvement Funds when there are sufficient fiinds available in the Golf Course Account to safisfy the daily working capital needs of the Golf Course. In the event Golf Course gross revenues are insufficient to pay the amounts set forth in the foregoing subparagraphs (a), (b), and (c), Authority, after reviewing Golf Course accounts and confirming the insufficiency of Golf Course gross revenues to meet the obligations to pay (a), (b), and (c) above, shall remit to KSM such funds as necessary for (a), (b), and (c) to be paid. 5.2 Available Funds. If after payment ofthe Golf Course Expenses, the Fixed Management Fee, and the Percentage Management Fee (if applicable), maintenance of the Operating Expense Minimum, and all accmed Capital Improvement Funds, then any excess fiinds in the Golf Course Accounts "Available Funds" shall be disbursed by KSM to Authority. The Available Funds shall be disbursed to Authority monthly at the same time as the monthly profit and loss statements required by Section 5.6 or within 20 days of month end, whichever occurs first. 5.3 Remaining Funds. Upon the expiration or earlier termination of this Agreement, all funds remaining in the Golf Course Accounts, after payment of the Golf Course Expenses, Fixed Management Fee, and the Percentage Management Fee (if applicable), shall be disbursed by KSM to Authority within ten (10) days after KSM delivers to the Authority the final profit and loss statement or within thirty (30) days of the Termination date, whichever occurs earlier. 5.4 Books and Records. KSM shall keep full and accurate books of account and such other records as are necessary to reflect the resuhs ofthe operation of the Golf Course. For this purpose. Authority agrees it will make available to KSM, or KSM's representatives, all books and records in Authority's possession relating to the Golf Course, including Golf Course construction plans and specifications and as-built drawings and constmction records. All books and records for the Golf Course shall be located at the Golf Course. All accounting records shall be maintained in accordance with generally accepted accounting principles and shall be maintained on an accmal basis. All such books, records, and reports shall be maintained separately from other facilities operated by KSM. KSM agrees to maintain reasonable and necessary accounting, operating, and administrative controls relating to the financial aspects of the Golf Course and such controls shall provide checks and balances designed to protect the Golf Course, KSM, and Authority. The cash registers used by KSM shall be approved by the Executive Director. KSM shall surrender all on-site books and records to the Authority upon the expiration or earlier termination of this Agreement. The Authority shall have the right to inspect and audit the Golf Course books and records as provided in Section 5.5 below. 21 3i 5.5 Inspection. The Authority or its authorized agents, auditors, or representatives shall have the right during normal business hours to review, inspect, audit, and copy the books, records, invoices, deposit receipts, canceled checks, and other accounting and financial information maintained by KSM in connection with the operation of the Golf Course. All such books and records shall be made available to Authority at the Golf Course unless Authority and KSM agree upon another location. The Authority shall have the right to retain an independent accounting firm to audit the books and records of the Golf Course the cost of which shall be a Golf Course Expense and included in the Annual Plans. Such inspection right shall not extend to any inspection of non-Golf Course records at KSM's corporate office. 5.6 Reports to Authority. KSM shall deliver to Authority the following financial statements, in a form reasonably acceptable to Authority: (a) Within twenty (20) calendar days after the end of each calendar month, a profit and loss statement showing the results of operation of the Golf Course for such month and for the Operating Year to date, which statement shall include sufficient detail to reflect all Gross Revenues, Cost of Sales, Fixed Management Fee, Percentage Management Fee (if applicable), and Capital Improvement Funds; and (b) Within sixty (60) calendar days after the end of each Operating Year, a profit and loss statement, set of financial statements in a form reasonably acceptable to the Executive Director, including a balance sheet and income statements, showing the results of operation of the Golf Course for such Operating Year which statement shall include sufficient detail to reflect all Gross Revenues, Fixed Management Fee, Percentage Management Fee (if applicable), and Capital Improvement Funds. If requested by Authority, these financial statements shall be certified by an independent certified public accountant acceptable to Authority, the cost of which shall be a Golf Course Expense and included in the Annual Plans. 5.7 Golf Course Expenses. "Golf Course Expenses" shall include all operating expenses of the Golf Course incurred or paid on behalf of the Authority during the Management Term as approved by the Authority in the Annual Plan or otherwise, computed on an accmal basis, including, but not limited to, the following items: (a) Salaries, wages, employee benefits, and payroll expenses, including ADP fees, payroll taxes. Golf Course profit sharing programs, and insurance for all employees employed on-site in the direct operation of the Golf Course (except for the Key Management Employees as defined in Section 2.12 of this Agreement), excluding, however, service charges, which are defined as percentage gratuities added to billings and paid to employees (collectively, the "Gross Payroll"); (b) Marketing-, advertising, and promotional expenses; (c) Purchase and replacement, as necessary, of inventories of maintenance parts and supplies, food stores and bar supplies; (d) Purchase and replacement, as necessary, of silver, chinaware, glassware, cooking utensils, and other similar items of equipment; (e) Purchase and replacement, as necessary, of office supplies, computers, printers, facsimile machines, photocopiers, postage, printing, routine office expenses, and accounting services incurred for the on-site operation of the Golf Course; 22 3^ (f) The costs of IT third party consultants and other third party consultants utilized for the Golf Course; (g) Reasonable travel expenses of on-site employees only incurred exclusively in connection with the business of the Golf Course; (h) Accmal of a reserve for insurance (including workers' compensation) each month in an amount or at a rate that is sufficient to pay such insurance premiums when they become due and payable; (i) Insurance premiums to the extent not provided for in the reserve established therefor; (j) Auditing, accounting costs. Golf Course computer fees, and legal fees as approved by the General Counsel for the Authority, incurred in respect of the operation of the Golf Course, including any reasonable financial management and reasonable accounting fees paid to third party accounting firms, if included in the Operating Budgets; (k) Costs incurred for utilities, including, but not limited to, all electric, gas, and water costs, and any other private utility charges incurred in connection with the operation of the Golf Course; (1) Ordinary maintenance and repairs, exclusive of any capital improvements or capital replacements, which are hereby excluded; (m) All incidental expenses, as set forth in the approved Annual Plan, including those incurred by KSM in providing services under the terms of this Agreement and reasonable travel for employees employed on-site at the Golf Course while engaged in performing the obligations of KSM hereunder, air express, costs of recmitment (including applicable agent's fee), and other incidental expenses included in the Annual Plan; and (n) All other customary and reasonable expenses incurred in the operation of the Golf Course in accordance with the Annual Plan. 5.8 Payroll. The parties acknowledge that as of the date of this Agreement, the method used by KSM to administer the payroll for its employees employed at golf courses it manages is to have the bank processing payroll to automatically withdraw the amount of the payroll payment from the Payroll Expense Account. The processing bank shall notify KSM of the amount of the payroll payment prior to the date of such payroll payment. 5.9 KSM Accounting Software. The parties acknowledge and understand if the accounting software to be used at the Golf Course is owned or licensed by KSM, and the Authority shall have no rights or interests in such software. Upon the expiration or earlier termination of this Agreement, all such accounting software shall be removed from the Golf Course by KSM. 23 3i ARTICLE VI TERMINATION RIGHTS. 6.0 Termination by Authority. In addition to any other rights of the Authority to terminate this Agreement that are set forth in this Agreement, the Authority shall also have the right to terminate this Agreement upon the occurrence of any of the following events: (a) KSM fails to keep, observe or perform any material covenant, agreement, term or provision of this Agreement to be kept, observed or performed by KSM, and such defauh continues for a period of thirty (30) days after written nofice of such default by Authority to KSM; or (b) (i) KSM applies for or consents to the appointment of a receiver, tmstee or liquidator of KSM or of all or a substantial part of its assets; (ii) KSM files a voluntary pefifion in bankmptcy or commences a proceeding seeking reorganization, liquidafion, or an arrangement with creditors; (iii) KSM files an answer admitting the material allegations of a bankmptcy petifion reorganization proceeding, or insolvency proceeding filed against KSM; (iv) KSM admits in writing its inability to pay its debts as they come due; (v) KSM makes a general assignment for the benefit of creditors; or (vi) an order, judgment or decree is entered by a court of competent jurisdiction, on the application of a creditor, adjudicating KSM a bankmpt or insolvent or approving a petition seeking reorganization of KSM or appointing a receiver, tmstee or liquidator of KSM or of all or a substantial part of its assets, and such order, judgment or decree continues unstated and in effect for any period of sixty (60) consecutive days; or (c) If, following commencement of constmction, the Authority determines in its sole and absolute discretion not to develop the Golf Course, and the Golf Course in not developed by the Authority, the City or any of their Affiliates or any third party; or following completion of constmction ofthe Golf Course, not to open or operate the Golf Course and the Golf Course is not operated by the Authority, the City or any of their Affiliates or any third party; or (d) The Planning Commission of the City of Carlsbad, or the City Council, as applicable, fails to renew approval or conditional approval of the Conditional Use Permit as required and, therefore, the Golf Course cannot continue to operate. (e) Ifthe Authority sells or transfers all or any portion of the Golf Course to a third party during the Management Term, Authority shall deliver to KSM written notice of such proposed sale or transfer at least ninety (90) days prior to the anticipated date of such sale or transfer. If this Agreement is terminated as a result of such sale or transfer within the first three years of the Management Agreement and KSM is not retained by the Authority's successor to manage the Golf Course, KSM shall receive from the Authority, not as a penalty but as compensation for the damages caused to KSM by such early termination, an early termination fee of One Hundred Thousand Dollars ($100,000) or a pro-rata share of the annual Fixed Management Fee as yet unpaid at the time of such termination, whichever is less. Such early termination fee shall be paid to KSM within thirty (30) days after the closing of such sale or transfer. The Authority's right to terminate this Agreement pursuant to this section shall be exercised upon written notice to KSM given and Authority's termination notice shall specify the effective date of such termination, which date shall not be less than thirty (30) days after the date of KSM's receipt of Authority's termination notice pursuant to Section 6.0; provided, however, that no grace period or thirty (30) day delay shall apply with respect to terminations pursuant to subparagraphs (c) and (d) of this section. 24 31 6.1 Termination by KSM. KSM shall have the right to terminate this Agreement upon the following events: (a) If the Authority fails to keep, observe, or perform any other material covenant, agreement, term or provision of this Agreement to be kept, observed or performed by Authority, and such default continues for a period of sixty (60) days after notice of such defauh by KSM to Authority, KSM's right to terminate this Agreement pursuant to this Section 6.1(a) shall be exercised upon written notice to Authority given at any time after the applicable grace period has expired. The grace period shall be extended as may be required for the Board of Directors of the Authority to comply with applicable law pertaining to the posting of agendas and hearings notices. KSM's termination notice shall specify the effective date of such termination, which date shall not be less than sixty (60) days after the date of KSM's termination notice. (b) The Authority's failure to pay any sums payable under this Agreement when and as the same shall become due and payable and such failure shall continue for a period often (10) days after written notice thereof from KSM to the Authority. KSM's right to terminate this Agreement pursuant to this Section 6.1(b) shall be exercised upon written notice to Authority given at any time after the applicable grace period has expired and the notice shall be effective pursuant to the provisions in Section 9.2. 6.2 Payments Upon Termination. Upon expiration or termination of this Agreement, all sums owed by either party to the other shall be paid within sixty (60) days of the effective date of such termination. 6.3 Curing Defaults. Any defauh by KSM or Authority under the provisions of Sections 6.0 or 6.1(a), as the case may be, which is susceptible of being cured shall not constitute a basis for termination of this Agreement if the nature of such default will not permit it to be cured within the grace period allotted; provided that within such grace period the alleged party in default shall have given notice of its intent to cure, has commenced to cure such default, and is proceeding to complete the cure in good faith and with reasonable diligence. 6.4 Effect of Termination. The termination of this Agreement under the provisions of this Article 6 shall not affect the rights of the terminating party with respect to any damages it has suffered as a resuh of any breach of this Agreement, nor shall it affect the rights of either party with respect to any liability or claims accmed, or arising out of events occurring, prior to the date of termination. 6.5 Remedies. A. The Authority's Remedies. Upon the occurrence of an event of default by KSM, the Authority may: 1. Seek specific performance of KSM's obligafions or injunctive relief, as applicable; 2. Demand payment of all amounts due the Authority under the terms of this Agreement and demand the payment of all costs, damages, expenses, and fees of the Authority arising due to KSM's event of default; and 3. Proceed to remedy the event of default,. All sums so expended or obligations incurred by the Authority in connection therewith, with the exception of attomeys' fees, shall be paid by KSM to the Authority within thirty (30) days after written demand by the Authority, and in 25 the event of a failure of KSM to provide such reimbursement, the Authority may, at the Authority's option, deduct all costs and expenses incurred in connection with remedying the event of default from the next sums becoming due to KSM from the Authority under the terms of this Agreement; and 4. Terminate this Agreement by v^itten notice of termination to KSM. Upon proper termination of this Agreement, KSM shall surrender occupancy of the Golf Course to the Authority. B. KSM Remedies. Upon the occurrence of an event of defauh by the Authority, KSM may: 1. Demand payment of all amounts due KSM under the terms of this Agreement and demand the payment of all costs, damages, expenses, fees of KSM due to the Authority's event of default; 2. Terminate this Agreement by KSM's written notice of termination to the Authority. In such event, the Authority shall pay to KSM within sixty (60) days of termination an amount equal to the total unpaid Management Fees that KSM would have eamed had the Agreement remained in effect until the Termination Date. If the Authority is in material breach of this Agreement, the parties agree that the Authority shall pay One Hundred Thousand Dollars ($100,000) to KSM as liquidated damages for its breach which is a fair and reasonable estimate of the damage caused thereby to KSM. 6.6 Remedies Cumulative. Neither the right of termination, nor the right to sue for damages, nor any other remedy available to a party under this Agreement shall be exclusive of any other remedy given under this Agreement or now or hereafter existing at law or in equity. ARTICLE VII TITLE MATTERS: ASSIGNMENT 7.0 Ownership of Improvements and Personal Property. All improvements to the Golf Course made during the term of this Agreement and all Fumishings and Equipment and Operating Inventory purchased for the Golf Course during the term of this Agreement shall be considered property owned by Authority at such time as the improvements are made or the Fumishings and Equipment or Operating Inventory are purchased. 7.1 No KSM Assignment or Subcontracting. KSM shall not assign this Agreement, except to an Affiliate of KSM, or subcontract any work, without the prior written consent of the Executive Director. Any assignment by KSM, whether or not requiring the prior consent of Executive Director, shall not be effective unless and until KSM and such assignee execute an assignment and assumption in a form acceptable to the City Attomey. It is understood and agreed that any consent granted by the Executive Director to any such assignment by KSM shall not be deemed a waiver of any consent required under this Section as to any future assignment. Any assignment by KSM of this Agreement in violation of the provisions of this Agreement shall be null and void and shall result in the termination of this Agreement. In addition to any other remedies available to the parties, the provisions of this Section shall be enforceable by injunctive proceeding or by suit for specific performance. 26 3^ 7.2 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, legal representatives, successors and assigns. 7.3 Golf Course Name. The Golf Course shall be known by such trade name and/or trademark or logo as may from time to time be determined by the Authority. The parties acknowledge and understand that the names, logos, and designs developed or provided for the Authority and used in the operation of the Golf Course together with appurtenant goodwill, are the exclusive property of the Authority. KSM may identify the Golf Course as a golf course managed and operated by KSM; provided, however, that any display of any KSM logo or other corporate identification shall first be approved by the Executive Director in his sole discretion. ARTICLE VIII DAMAGE OR DESTRUCTION; EMINENT DOMAIN: FORCE MAJEURE EVENTS 8.0 Damage or Destruction. Should the Golf Course be destroyed or substantially damaged by fire, flood, acts of God, or other casualty. Authority, by written notice to KSM given within sixty (60) days following the occurrence of such event, shall have the right to terminate this Agreement on the basis that Authority does not choose to rebuild or restore the Golf Course, and in such event neither party shall have any further obligation to the other party under this Agreement, except with respect to liabilities accruing, or based upon events occurring, prior to the effective date of such termination (or, with respect to amounts due KSM, after such date if it is reasonably necessary to incur additional expenses in the wind-down of operations of the Golf Course). For the purpose of this Section, the Golf Course shall be deemed to have been substantially damaged if the estimated length of time required to restore the Golf Course substantially to its condition and character just prior to the occurrence of such casualty shall be in excess of six (6) months, as indicated by an architect's certificate or other evidence reasonably safisfactory to Authority. If this Agreement is not terminated in the event of damage to the Golf Course either because (i) the damage does not amount to substantial damage as described above, or (ii) notwithstanding destrucfion of or substantial damage to the Golf Course, Authority elects to restore the Golf Course, then Authority shall proceed, at Authority's own expense, with all due diligence to commence and complete restoration ofthe Golf Course to its condition and character just prior to the occurrence of such casualty. 8.1 Eminent Domain. If all of the Golf Course (or such a substantial portion of the Golf Course so to make it unfeasible, in the reasonable opinion of Authority, to restore and continue to operate the remaining portion of the Golf Course for the purposes contemplated in this Agreement) shall be taken through the exercise (or by agreement in lieu of the exercise) of the power of eminent domain, then upon the earlier of (i) the date that Authority shall be required to surrender possession of the Golf Course or of that substantial portion of the Golf Course, or (ii) the date when the Golf Course is no longer open, this Agreement shall terminate and neither party shall have any further obligation to the other party under this Agreement except with respect to liabilities accruing, or based upon events occurring, prior to the effective date of such termination (or, with respect to amounts due KSM, after such date if it is reasonably necessary to incur additional expenses in the wind-dovm of operations of the Golf Course). If such taking of a portion ofthe Golf Course shall not make it unfeasible, in the reasonable opinion of Authority, to restore and continue to operate the remaining portion of the Golf Course for the purposes contemplated in this Agreement, then this Agreement shall not terminate, and Authority shall proceed, at Authority's own expense, with all due diligence to after or modify the Golf Course so as to render it a complete architectural unit, which can be operated as a golf course of substantially the same type and character as before. If as a result of any alteration or modificafion of the Golf Course as provided in this Section, the responsibilifies of KSM under 27 this Agreement are substantially changed, then the parties shall meet and discuss in good faith appropriate modifications to this Agreement including the Management Fees. 8.2 Force Maieure Events. As used in this Agreement, the term "Force Majeure Event" means a dismption in the operation of the Golf Course due to, or the cause of the failure to perform by a party hereto due to, declared or undeclared war, sabotage, riot or acts of civil disobedience, acts or omissions of govemmental agencies (except acts of govemmental agencies including, but not limited to, the Authority taken in accordance with this Agreement), accidents, fires, explosions, floods, earthquakes, or other acts of God, strikes, labor disputes, shortages of materials, or any other event not within the control of KSM and not caused by the gross negligence or intentional wrongful conduct of KSM. Notwithstanding anything contained herein to the contrary, the provisions of this Section shall not be applicable to either party's obligation to pay any sums, monies, costs, charges, or expenses required to be paid pursuant to the terms of this Agreement. ARTICLE IX GENERAL PROVISIONS 9.0 Contract Administration. Authority has designated the Executive Director as the individual who is responsible for administering this Agreement on behalf of Authority. The Executive Director may designate a member of his or her staff to serve as the Project Manager, which individual shall carry out the Executive Director's responsibilities in administering this Agreement. The Executive Director shall inform KSM in writing of the person who will serve as the Project Manger and any change of the Project Manager. KSM has designated James R. Stegal as the individual who is responsible for administering this Agreement on behalf of KSM. KSM shall notify the Executive Director in writing if another individual has replaced the foregoing designated person as the person responsible for administering this Agreement on behalf of KSM. The parties acknowledge that except as otherwise expressly provided herein (a) the Execufive Director has the authority to approve or consent to those matters identified in this Agreement as requiring Authority's approval or consent and to make all other decisions on behalf of the Authority regarding the administration of this Agreement (except where the Authority's Board of Directors approval is expressly required herein), and (b) KSM's foregoing designated person or such other individual designated by KSM in writing to the Authority has the authority to approve or consent to those matters identified in this Agreement as requiring KSM's approval or consent and to make all other decisions on behalf of KSM regarding the administration of this Agreement. The Authority's management direction to KSM shall be given by the Executive Director. 9.1 Compliance. KSM shall comply with all applicable laws of govemmental bodies having jurisdiction with respect to the Golf Course site and KSM performance of this Agreement. KSM shall as a Golf Course Expense procure and maintain all licenses, permits, and approvals required for the Golf Course. Upon termination or expiration of this Agreement, KSM shall cooperate in transferring all licenses, permits and accreditations in the name of KSM to Authority as permitted by law. Without the prior written consent of the Executive Director, the actual amount expended for any Golf Course Expense shall not be greater than two percent (2%) higher than the amount budgeted in the Annual Plan. Notwithstanding the foregoing sentence, KSM shall be entitled to make additional expenditures not authorized under the then applicable Annual Plan in the event of an emergency pursuant to the provisions of Section 2.8(p) or in order to comply with Insurance Requirements or Legal Requirements. 28 9.2 Notices. All notices, demands, requests, consents, approvals, replies and other communications ("Notices") required or permitted by this Agreement shall be in writing and may be delivered by any one of the following methods: (a) by personal delivery; (b) by deposit with the United States Postal Service as certified or registered mail retum receipt requested, postage prepaid to the addresses stated below ; or (c) by deposit with a same-day or ovemight express delivery service that provides a receipt showing date and time of delivery. Notice deposited with the United States Postal Service in the manner described above shall be deemed effective three (3) business days after deposit with the Postal Service. Notice by same-day or ovemight express delivery service shall be deemed effective upon receipt. Notice by personal delivery shall be deemed effective at the time of personal delivery. For purposes of Notices hereunder, the address of Authority shall be: Carlsbad Public Financing Authority c/o City Manager of the City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, Califomia 92008 Attention: Executive Director For purposes of Notices hereunder, the address of KSM shall be: Kemper Sports Management, Inc. 500 Skokie Blvd., Suite 444 Northbrook, IL 60062 Attention: Steven K. Skinner, President With a copy to: Kemper Sports Management, Inc. 500 Skokie Blvd., Suite 444 Northbrook, IL 60062 Attention: Corporate Counsel Each party shall have the right to designate a different address by the giving of notice in conformity with this Section. 9.3 Independent Contractor. KSM shall at all times be considered an independent contractor under this Agreement. Nothing contained in this Agreement shall be construed to be or create a partnership or joint venture between Authority and its successors and assigns, on the one part, and KSM and its successors and assigns, on the other part. 9.4 Modification and Changes. This Agreement may be amended or modified only by a wrhing signed by both parties. 9.5 Entire Understanding and Agreement. This Agreement constitutes the entire understanding and agreement between the parties with respect to the management of the Golf Course and this Agreement supersedes all prior understandings and agreements, whether written or oral, between Authority and KSM pertaining to the subject matter hereof 29 9.6 Headings. The Article, Section, and Subsection headings contained in this Agreement are for convenience and reference only and are not intended to define, limit or describe the scope or intent of any provision of this Agreement. 9.7 Consents. Each party agrees that it will not unreasonably withhold any consent or approval requested by the other party pursuant to the terms of the Agreement, and that any such consent or approval shall not be unreasonably delayed or qualified, except where such consent is expressly stated as within the party's sole and absolute discretion. Similarly, each party agrees that any provision of this Agreement, which permits such party to make requests of the other party, shall not be constmed to permit the making of unreasonable requests. 9.8 Survival of Covenants. Any covenant, term, or provision of this Agreement which in order to be effective must survive the termination of this Agreement shall survive any such termination. 9.9 Third Parties. None of the obligafions under this Agreement of either party shall mn to or be enforceable by any party other than the party to this Agreement or by a party deriving rights under this Agreement as a resuh of an assignment permitted pursuant to the terms of this Agreement. 9.10 Waivers. No failure by KSM or Authority to insist upon the strict performance of any covenant, agreement, term or condition of this Agreement or to exercise any right or remedy consequent upon the breach of this Agreement shall constitute a waiver of any such breach or any subsequent breach ofthe same covenant, agreement, term or condition. No covenant, agreement, term or condition of this Agreement and no breach of this Agreement shall be waived, altered or modified except by a written instmment. A waiver of any breach of this Agreement shall only affect this Agreement to the extent of the specific waiver, and all covenants, agreements, terms and conditions of this Agreement shall continue in full force and effect. 9.11 Applicable Law. Venue: Service of Process. This Agreement shall be construed and interpreted in accordance with, and shall be govemed by, the laws of the State of Califomia. The parties agree that the Superior Court of the State of Califomia, County of San Diego shall have jurisdicfion of any litigation between the parties relating to this Agreement. Service of process on Authority shall be affected in such manner as required by Califomia law for service on public entities. Service of process on KSM shall be made in any manner permitted by Califomia law. 9.12 No Presumption Regarding Drafter. Authority and KSM acknowledge and agree that the terms and provisions of this Agreement have been negotiated and discussed between Authority and KSM, and that this Agreement reflects their mutual agreement regarding the subject matter of this Agreement. Because of the nature of such negotiations and discussions, it would be inappropriate to deem either Authority or KSM to be the drafter of this Agreement, and therefore no presumption for or against the drafter shall be applicable in interpreting or enforcing this Agreement. 9.13 Enforceability of Any Provision. If any term, condition, covenant or obligation of this Agreement shall be determined to be unenforceable, invalid, or void, such determination shall not affect, impair, invalidate, or render unenforceable any other term, condition, covenant, or obligation of this Agreement . All amounts payable pursuant to this Agreement shall be in lawful money of the United States of America. 9.14 Counterparts; Facsimile Signatures. This Agreement and any amendment may be executed in counterparts, and upon all counterparts being so executed each such counterpart shall be considered as an 30 original of this Agreement or any amendment and all counterparts shall be considered together as one agreement. Facsimile signatures shall be as effective as an original signature. 9.15 Covenants Against Discrimination. KSM agrees that in connection with its performance under this Agreement, there shall be no discrimination by KSM against any person on account of race, color, creed, religion, sex, marital status, national origin or ancestry. KSM agrees to include a provision similar to this Section in all subcontracts entered into by KSM in connection with work being performed under this Agreement. 9.16 Non-liability of Authority or Authority Officers and Employees. No officer, official, employee, agent, representative, or volunteer of the Authority, or City shall be personally liable to KSM, or any successor in interest, in the event of any default or breach by the Authority, or for any amount which may become due to KSM or any successor, or for breach of any obligation of the terms of this Agreement. 9.17 Time of the Essence. Time is of the essence of this Agreement. The parties understand that the time for performance of each obligation has been the subject of negotiation by the parties. 9.18 Exhibits and Attachments Incorporated. All exhibits and attachments to this Agreement are incorporated herein and made a part hereof 9.19 Authority. The parties represent for themselves that (a) such party is duly organized and validly existing, (b) the person or persons executing this Agreement on behalf of such party is/are duly authorized to execute and deliver this Agreement on behalf of such party, (c) by so executing this Agreement, such party is formally bound to the terms and provisions of this Agreement, and (d) the execution of this Agreement does not violate any provision of any other agreement to which such party is bound. Additionally, the Authority represents and warrants to KSM that (i) the Authority has and will retain the property interests in the Golf Course necessary to enable KSM to perform its duties pursuant to this Agreement peaceably and quietly; and (ii) that KSM's performance of the services required by this Agreement shall not violate the property rights or interests of any third party. 9.20 Authorization to Executive Director. In addition to such other authorizations granted to the Executive Director of Authority in this Agreement to act on behalf of Authority, the Executive Director shall have the authority, in the event of a dispute involving the interpretation of the terms and provisions of this Agreement, to reasonably interpret the terms and provisions of this Agreement on behalf of Authority. 9.21 Possessory Interest. Pursuant to Califomia Revenue and Taxation Code Section 107.6, Authority hereby informs KSM that this Agreement may create a possessory interest subject to property taxation, and in such event KSM may be subject to the payment of property taxes levied on such interest. 9.22 Proprietary Information. All specifically identifiable information developed by KSM for the Authority at the expense of the Authority shall be the property of the Authority. All materials, software programs and technology developed by KSM at KSM's expense, shall be the exclusive property of KSM and neither the Authority nor any of its affiliates or successors may use, copy or disclose such proprietary information without the advance written consent of KSM. The obligations and restrictions contained in this Section shall survive the expiration or termination of this Agreement for any reason. 9.23 Restrictions as to Employees. During the Management Term and for a period of one (1) year after the end of the Management Term, it is agreed that neither the Authority nor the City shall employ any Key 31 HI Employee of KSM nor shall the Authority or the City request or require their agents or contractors to employ or seek to employ any such Key Employee, without first obtaining the written consent of KSM. For purposes hereof, a "Key Employee" of KSM shall mean the General Manager of the Golf Course, the Golf Course superintendent, or any employee of KSM's corporate office. 9.24 Outside Business. Nothing contained in this Agreement shall be constmed to restrict or prevent, in any manner, any party or any party's affiliates, parent corporations, or representatives or principals from engaging in any other businesses or investments, nor shall the Authority or KSM have any right to share or participate in any such other businesses or investments of the other party. [end - signature page follows] 32 ESf WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the day and year first written above. CONTRACTOR: KEMPER SPORTS MANAGEMENT, INC., an fllinois Corporation By: (sign here) CARLSBAD PUBLIC FINANCESfG AUTHORITY, a Public Entity and Joint Powers Authority By: MATT HALL Chairman of the Board By: (print name/title) (sign here) (print name/title) ATTEST: LORRAE^JE M. WOOD, Secretary If required by Authority, proper notarial acknowledgment of execution by contractor must be attached. Ifa Corporation, Agreement must be signed by one corporate officer from each ofthe following two groups. *Group A. Chairman, President, or Vice-President **Group B. Secretary, Assistant Secretary, CFO or Assistant Treasurer Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation. EXHIBITS: EXHIBIT A -Golf Course Operations and Maintenance Evaluation Form EXHIBIT B - Habitat Preserve Area EXHIBIT C - Notice of Golf Course Deficiency EXHIBIT D - Legal Description of Real Property EXHIBIT E - Regulatory Permits 33 ^3 EXHIBIT A The Crossings At Carlsbad AT CARLSBAD Golf Course Operations & Maintenance Standards . T C A R L f-i 8 A i J GOLF COURSE AUDIT TABLE OF CONTENTS INTRODUCTION OVER VIEW OF MAINTENANCE RESPONSIBILITIES GREENS MAINTENANCE TEE MAINTENANCE FAIRWAY MAINTENANCE (INCLUDING DRIVE RANGE AREA)_ ROUGH AND OTHER TURF AREA MAINTENANCE NURSERY MAINTENANCE ACCESSORY EQUIPMENT MAINTENANCE IRRIGATION MAINTENANCE OTHER GOLF COURSE AUDIT-RATING SHEETS GREENS FAIRWAYS AND ROUGHS TEES PRACTICE RANGE LAKES AND OTHER WATER BODIES TRAFFIC CONTROL DRAINAGE GOLF COURSE RESTROOMS MAINTENANCE SHOP AND EQUIPMENT NATIVE AREAS / MITIGATION / V-DITCHES CLUBHOUSE AUDIT EXTERIOR CLUBHOUSE INTERIOR CLUBHOUSE . RESTROOMS GOLF SHOP FOOD AND BEVERAGE BANQUET ROOM - "The Canyons" SECURITY CARTS NOTICE OF GOLF COURSE DEFICIENCIES DEFICIENCY FOLLOW-UP 10 10 10 11 11 11 11 12 13 14 14 14 15 16 17 17 18 19 20 HS AT CARLSBAD ^ INTRODUCTION The City shall complete an Operation and Maintenance Evaluation form and supply the Golf Course operator with the results ofthe evaluation. The purpose is to ensure that Golf Course operations are adhering to best practices in management operations, resulting in providing the citizens of Carlsbad with the best experience possible related to all facets of the golf course. The following Golf Course Operations & Maintenance Standards have been produced by City staff as a tool for this purpose. This document is meant to be only a guide for evaluation of performance. Evaluations are not limited to the items within and some ofthe listed items may not need to be evaluated. This document may be amended from time to time by the City to best suit their needs. The schedule of evaluations by the City will be determined at their sole discretion however it anticipated that they will be made quarterly. The Crossings at Carlsbad in Carlsbad, CA At C A R LSBAD OVERVIEW OF MAINTENANCE RESPONSIBILITIES GREENS MAINTENANCE Golf Course Operator shall maintain all greens in accordance with accepted playability and industry-wide standards. Without limiting the generality of the foregoing, Golf Course Operator shall maintain all greens in accordance with the following minimum requirements that will allow the greens to be between 9 and 9.5 on a Stimp Meter, the recommended speed ofthe greens: 1. Change cups and repair ball markers daily. 2. Mow greens daily with a reel-type mower designed specifically for mowing golf greens and of the type, make and model accepted by the golf industry. 3. Verticut all greens as needed to control mat and thatch buildup. 4. Aerify greens as needed and remove plugs the same day, top dress the greens following each aerification. 5. Treat greens with proper chemicals to control invasive grasses (i.e. Poa Anua, Kikuyu), insects, disease and other pests. 6. Fertilize greens at a rate and frequency that will promote healthy turf propagation. 7. Golf Course Operator shall have the soil analyzed annually and shall apply fertilizer in the quantity and type recommended by such analysis in a manner to provide uniform growth of turf. TEE MAINTENANCE Golf Course Operator shall maintain all tees in accordance with accepted playability and industry-wide standards. Without limiting the generality ofthe foregoing. Golf Course Operator shall maintain all tees in accordance with the following minimum requirements: 1. Sen/ice tees decks daily by moving markers, sand and seed buckets, and picking up broken and used golf tees. 2. Mow tees three to four times weekly with reel-type mower at appropriate height for turf type and climate conditions. Also make sure tees are squared correctly to maintain their original shape. 3. Verticut tees as needed for thatch removal. 4. Repair worn and damaged turf areas as they occur by overseeding or resodding to ensure playable tees at all times. 5. Treat tees for control of invasive grasses (Kikuyu, Poa Anua, Common Bermuda, etc.) insects, disease, weeds, and other pests necessary to maintain healthy turf. 6. Repair divots at least 3-5 days per week. 7. Golf Course Operator shall have the soil tested as needed and apply fertilizer in the quantity and type recommended by such soil analysis in a manner to provide uniform growth of turf. FAIRWAY MAINTENANCE (INCLUDING DRIVE RANGE AREA) 1. Mow fain^/ays with a reel-type mower. 2. Verticut fainA/ays as necessary for turf health and playing conditions. 3. Aerify all fairways as needed. 4. Overseed and top dress (or, resod) worn or bare areas of fairways as necessary. 5. Treat turf to control weeks, invasive grasses (Kikuyu, Poa Anua, Bermuda) disease, insects and other pests necessary to maintain week-free and healthy turf. 6. Fertilize fain/vays at a rate and frequency that will promote healthy turf propagation. 7. Golf Course Operator shall have the soil analyzed annually and apply fertilizer in the quantity and type recommended by such soil analysis in a manner to provide uniform growth of turf. ROUGH AND OTHER TURF AREA MAINTENANCE Golf Course Operator shall maintain rough, turf, perimeter landscape areas, and landscape lawn areas, including plant and annual color areas, in accordance with accepted playability and industry-wide standards. Without limiting the generality of the foregoing. Golf Course Operator shall maintain all rough, turf, perimeter landscape areas, landscape lawn areas, including plant and annual color areas, in accordance with the following minimum requirements: 1. Mow at least once per week. 2. Vericut as necessary to promote healthy growth. 3. Aerify as needed and seed or sod worn bare areas in turf as necessary. 4. Treat turf to control weeks, invasive grasses (Kikuyu, Poa Anua, Bermuda) disease, insects and other pests necessary to maintain a healthy turf. 5. Fertilize at a rate and frequency that will promote healthy turf propagation. 6. Golf Course Operator shall have the soil analyzed as needed and apply fertilizer in the quantity and type recommended by soil analysis in a manner to provide uniform growth of turf. 7. All V-Ditches along the perimeter of the property must be kept clean of debris to allow storm run-off. 8. Native areas must be kept free of all non-native plant life and weeded at least twice a year. Areas lacking growth will be aerified, seeded and irrigated to promote growth. If necessary some native floral will be planted. NURSERY MAINTENANCE Kemper shall maintain the sod nursery green located at the maintenance yard at all times to the foregoing greens maintenance specifications. ACCESSORY EQUIPMENT MAINTENANCE Golf Course Operator shall maintain all golf course accessory equipment in a clean, safe, functioning condition at all times, replacing with equipment and/or materials as necessary, including, but not limited to, the following: 1. Signs. 2. Tee markers. 3. Course Markers (out-of-bounds markers, water hazard stakes, cart directional signs, etc.) 4. Directional flags, poles and roping. 5. Distance markers (tee yardages, 150 yards, etc.) 6. Green flags, poles and cups. 7. Practice green markers and cups. 8. Trash receptacles. 9. Cleat brushes. IRRIGATION MAINTENANCE Golf Course Operator shall maintain the entire irrigation system serving the Golf Course property, including main lines, valves, lateral lines, sprinkler heads, and controllers, in good repair, functioning properly and conforming to all related codes and regulations at all times. Kemper shall irrigate the Golf Course property as required to maintain adequate moisture for growth rate and appearance in accordance with accepted industry standards. Adequate soil moisture shall be determined by visual observation, plant resiliency, turgidity, examining cores removed by soil probe, devices which measure moisture content and programming irrigation controllers accordingly. In addition: 1. Consideration shall be given to soil texture, structure, water holding capacity, drainage, compaction, precipitation rate, run-off, infiltration rate, percolation rate, seasonal temperatures, prevailing wind condition, time of day or night, type of grass or plant, and root structures. 2. In areas where wind creates problems of spraying onto private property or road rights-of- way, the controller shall be set to operate during the period of lowest velocity. 3. Golf Course Operator shall be responsible for monitoring all systems within the Golf Course property and for correcting the same for coverage, adjustment, clogging of lines, and sprinkler heads, and removal of obstacles, including plant materials which obstruct the spray. 4. Golf Course Operator shall check the system daily and adjust and/or repair any sprinkler heads causing excessive run-off, or which throw directly onto roadway, paving or walks within rights-of way. 5. All controllers shall be inspected on a daily basis and adjusted as required, considering the water requirements of each remote control valve. 6. A soil probe or tension meter shall be used regularly to determine the soil moisture content in various areas, with particular attention being given to the greens. 7. Golf Course Operator shall repair all leaking or defective valves within twenty-four (24) hours. OTHER Golf Course Operator shall obsen/e all legal requirements and safety regulations in the use and storage of chemicals, hazardous materials, supplies and equipment. Golf Course Operator shall maintain the golf maintenance storage room and yard in a clean, orderly and safe condition at all times, conforming to all applicable laws and regulations. Golf Course Operator shall take reasonable measures to protect golfers from injury and the Golf Course from damage in periods of frost, rainy weather and other unusual conditions. Golf Course Operator shall maintain walkways, steps, handrails on walkways, header boards, and cart paths in a clean, edged, safe and weed-free condition. Golf Course Operatorshall maintain, repair and replace parking lots, driveways to achieve clean, safe and weed-free conditions. Golf Course Operator shall inspect the following frequently and repair as needed: a. All area lighting systems for safe and functioning condition, and b. All golf course parking lots, walkways and interior paved and/or unpaved surface roads. ^Uli CROSSliVo^, AT CARLSBAD Golf Course Operations and Maintenance Standards GOLF COURSE AUDIT - RATING SHEETS Area Greens Fainvays & Rough Tees Driving Range Maintenance Records & Schedules Lakes & Other Water Bodies Traffic Control Drainage Golf Course Restrooms Maintenance Shop & Equipment Native Areas/Mitigation/ V-Ditches Unacceptable Needs Improvement Acceptable Overall Course Operations (Auditor's Name Printed) (Auditor's Signature) Date GREENS QUALITY STANDARDS: Smooth, uniform, turf, firm, but not hard, well-defined, consistent, of suitable speed (suggested 9 to 9.5 on the Stimp Meter depending on season and weather condition) forthe location. Cups placed in accordance with USGA recommendations. Flags must stand straight up. Cups, poles and flags are uniform, clean and in good repair. Pin placements must in line with daily GPS settings. 1. Quality. How do they putt and play? 100% Turf cover, smooth and uniform. Do the greens hold approach shots? Are the cups cut cleanly and in proper location? No diseases, weeds, insects, rodents, bare spots or numerous pitch marks. Unacceptable Needs Improvement Acceptable 2. Appearance. How do they look? Color and texture ofthe greens turf, uniformity ofthe mowing, condition of cup, flag and pole, condition ofthe areas around the greens. No diseases, weeds, rodents, or off-color areas. • Unacceptable Needs Improvement Acceptable 3. Green Bunkers. How do they play and look? Sand surface is uniform and smooth, and is adequate depth for play. No weeds, debris or rocks in traps. Adequate number of rakes, in good condition and properly placed. Quality of mowing/trimming around traps. As necessary, edge traps to always maintain a neat lip. Appropriate drainage. Unacceptable Needs Improvement Acceptable 5/ RATING SHEET FAIRWAYS AND ROUGHS QUALITY STANDARDS: Fain^/ays - Smooth, uniform turf cover, smooth mowing and trimming, clean, firm but not hard, well defined, that properly supports the ball for play. Divots must be repaired in a timely manner. Roughs - Properly mowed and trimmed, clean and adequately uniform for play, distinct in height from fainvays. Perimeter fencing properly trimmed at all times. 1. Quality. How do they play? Mowing height of fainvays and roughs is within USGA specifications, mowing frequency is appropriate for the turf type and season. Second cut of rough. Fain^/ay turf properly supports the ball for play. Able to find the ball in the roughs. Absence of wet or dry spots in play areas. No visible clippings. Appropriate drainage. Unacceptable Needs Improvement Acceptable 2. Appearance. How do they look? Uniformity of color and irrigation, texture, quality mowing. Appearance of being "manicured" through striping. Turf coverage in high traffic areas. No weeds, insects, rodents, off-color areas, invasive grasses. Unacceptable Needs Improvement Acceptable 3. Fain/vay Bunkers. How do they look? Sand surface is uniform and smooth, and is adequate depth for play. No weeds, debris or rocks in traps. Adequate number of rakes, in good condition and properly placed. Quality of mowing/trimming around traps. As necessary, edge traps to always maintain a neat lip. Appropriate drainage. Unacceptable Needs Improvement Acceptable 4. Trees and Shrubs. Pruned to maintain specimen health and safety to golfers and maintenance employees. Not to interfere with cart traffic or line of sight of golfers. Unacceptable Needs Improvement Acceptable TEES QUALITY STANDARDS: Tees -Tees smooth, completely turfed, leveled, firm but not hard, clean, properly directed, with amenities (trash cans, signs, tee markers, monuments, sand and seed containers, as appropriate) in good condition and repair, consistent and uniform. All divots must be filled daily, very few unfilled divots at any given time. 1. Appearance, Manicured and Clean. 100% turf cover, smooth and uniform. No weeds, diseases, insects, rodents or invasive grasses. Consistent, adequate top dressing and seeding program. Minimal litter or broken tees. Unacceptable Needs Improvement Acceptable 2. Perimeter Areas Around Tees. Area between cart path (if any) and tee-uniformity and smoothly turfed, no mud or dirt, ball washers are clean, in good repair and properly located for the tee positions. Cart paths are clean and properly placed as necessary; no identifiable traffic wear into tee. Unacceptable Needs Improvement Acceptable PRACTICE RANGE 1. Appearance, Manicured and Clean. Uniformity of mowing. Color, texture, of turf, smoothness or surface, cleanness of mowing on perimeters, absence of scalping. Consistent, adequate top dressing and seeding program. Unacceptable Needs Improvement Acceptable Perimeter Areas Around Tees. Area between cart path (if any) and tee-uniformity and smoothly turfed, no mud or dirt, benches, club washers, bag stands are clean, in good repair and properly located for the tee positions. Cart paths are clean and properly edged, curbing or ropes / stakes are clean and properly placed as necessary; no identifiable traffic pattern into tee. Unacceptable Needs Improvement Acceptable 3. Range Landing Area. Turfed, clean and mowed per fairway maintenance section of audit. Unacceptable Needs Improvement Acceptable LAKES AND OTHER WATER BODIES QUALITY STANDARDS: Water Bodies - Clean, well-defined, free of weeds and noxious growth; well-marked and attractive. 1. Appearance of water-clean, no weeds or noxious growth, no noxious odors, no floating trash/debris. Unacceptable Needs Improvement Acceptable 2. Ground around lakes - mowing, trimming, etc. Unacceptable Needs Improvement Acceptable TRAFFIC CONTROL 1. Ropes, stakes, and other traffic control devices are clean as necessary, in good condition, straight and repaired. Traffic control devices are used effectively to minimize turf wear in high traffic areas. Worn areas are under repair. Routes used by golf carts are well- maintained, free of potholes, and present a generally smooth and clean appearance. Unacceptable Needs improvement Acceptable 2. Cart paths - Concrete paths are uniform in width and surfaces are safe for spikes, smooth for operation of golf carts. Unacceptable Needs Improvement Acceptable DRAINAGE 1. Appropriate drainage is in place throughout the course and existing drains are clear from turf and debris. Where needed a plan is in place to add additional drainage. Unacceptable Needs Improvement Acceptable GOLF COURSE RESTROOMS 1. Entry mat or carpet clean / entry door finger mark-free / tile and painted walls clean / toilets clean / bowls, rims, tank tops and bodies / toilet seats clean, tops and under sides / mirror clean and streak free / soap dispenser clean and full / paper towel dispenser clean and full / toilet paper dispenser clean and full / seat cover and dispenser clean and full / counter top clean / sink and faucet fixtures clean and functional. Light fixtures clean, functional and bug- free / room air freshener clean and functional / trash receptacle, clean with liner, reasonably empty. Unacceptable Needs Improvement Acceptable MAINTENANCE SHOP AND EQUIPMENT 1. Shop area is orderly, clean, with no obvious safety hazards. Fertilizer and chemical storage is per training manual. No disorganized junk or trash in yard or shop. Condition of Superintendent's office. Unacceptable Needs Improvement Acceptable 2. Equipment is in good repair, is clean and properly maintained. Unacceptable Needs Improvement Acceptable 3. Restrooms. Unacceptable Needs Improvement Acceptable NATIVE AREAS / MITIGATION / V-DITCHES QUALITY STANDARD: Free of weeds at least weeded twice per year and as needed. No weeds 5 yards off the cart path. Approved native palette must be growing in at acceptable rate. Areas that show no growth or are retarded in the grow-in process must be irrigated, aerified and reseeded either by hydro seed or thrown seed. Also acceptable to plant approved native palette. All approved native palette must be maintained to not interfere with the golfer's sight lines. All V-ditches must remain completely clear at all times. After rains V-ditches must be cleared ASAP to allow for future storm drainage. a) NATIVE LANDSCAPES Unacceptable Needs Improvement Acceptable b) MITIGATED AREAS Unacceptable Needs Improvement Acceptable c) V-DITCHES Unacceptable Needs Improvement Acceptable ^i\E CROSSI^Q AT CARLSBAO CLUBHOUSE AUDIT Area Needs Unacceptable Improvement Acceptable Clubhouse Exterior Clubhouse Interior Rest Rooms Golf Shop Food & Beverage Banquet Room Security Carts (Auditor's Name Printed) (Auditor's Signature) Date CLUBHOUSE EXTERIOR CLUBHOUSE 1. Parking lot trash-free / lot well striped and in good repair / trash bin area clean. Unacceptable Needs Improvement Acceptable 2. Exterior wall surface clean and cob-web free / windows clean and edges, proper planting, flowers fresh and colorful, planter beds weed and trash-free. Unacceptable Needs Improvement Acceptable 3. Ground well manicured / trash-free / walkways clean and edged, proper planting, flowers fresh and colorful, planter beds weed and trash-free. Unacceptable Needs Improvement Acceptable 4. Bag racks, shoe cleaners painted, clean and in good repair / pay phones clean / directories available. Unacceptable Needs Improvement Acceptable INTERIOR CLUBHOUSE 1. Interior paint in good condition / walls and vents clean / wall-mounted / pictures hung properly and clean / carpet vacuumed and spot-free or floor clean. Unacceptable Needs Improvement Acceptable RESTROOMS 1. Entry mat or carpet clean / entry door finger mark-free / tile and painted walls clean / toilets clean / bowls, rims, tank tops and bodies / toilet seats clean, tops and under sides / mirror clean and streak free / soap dispenser clean and full / paper towel dispenser clean and full / toilet paper dispenser clean and full / seat cover and dispenser clean and full / counter top clean / sink and faucet fixtures clean and functional. Light fixtures clean, functional and bug- free / room air freshener clean and functional / trash receptacle, clean with liner, reasonably empty. Unacceptable Needs Improvement Acceptable SI GOLF SHOP 1. Customer Service: all staffers have been trained in and provide "Best in Class" service to customers [including staff empowered to handle customer problems]. Unacceptable Needs Improvement Acceptable 2. Ready Golf: Tee-hosts and Player Assistants trained to promote proper speed of play. All golf shop personnel trained on how to properly use GPS (Prolink). Unacceptable Needs Improvement Acceptable 3. Merchandise hung and folded properly by color / departmentalized, clean and neat. Unacceptable Needs Improvement Acceptable 4. Carpet vacuumed and spot-free or floor clean / windows and mirrors clean and streak-free / shelves, counter tops, base boards, window ledges dusted / starter counter clean / dressing room clean, not used for storage. Unacceptable Needs Improvement 5. All signage is professional. Easy and safe flow through golf shop. Unacceptable Needs Improvement 6. Staff in uniform / clean / neat and clean hair, with name badge. Unacceptable Needs Improvement 7. Customer comment forms on counter. Unacceptable Needs Improvement Acceptable Acceptable Acceptable Acceptable 3 ^ FOOD AND BEVERAGE 1. Snack Bar Staff in uniform: logo shirt / name badge / staff is friendly, smiling, and helpful. Unacceptable Needs Improvement Acceptable Front counter clean / condiments fresh and in clean containers, coffee and soft drink stations clean and adequately stocked and ready for use / napkin dispensers clean and full. Unacceptable Needs Improvement 3. Snack display well stocked and clean. Unacceptable Needs Improvement Hot dog cooker clean / well stocked / adequate fresh buns. Unacceptable Needs Improvement 5. Menu board clean / no hand lettering. Unacceptable Needs Improvement Acceptable Acceptable Acceptable Acceptable 6. Storage areas: Clean, shelves organized. Food and chemicals stored per applicable governmental regulations. Unacceptable Needs Improvement Acceptable ^ 7 BANQUET ROOM - "The Canyons" 1. Chairs, seats and frames clean and in good repair / tables clean, tops and bases / carpets clean and in good repair. Unacceptable Needs Improvement Acceptable 2. Dining Area: Carpet vacuumed and spot-free / windows clean and streak-free tables and chairs neatly arranged / table tops clean and bases dusted / chairs clean / linens neat and clean / lights clean and functional / staff in uniform / menu clean. Unacceptable Needs Improvement Acceptable Bar Seating Area: Carpet vacuumed and spot-free / windows clean and streak-free / bar stools, tables and chairs clean / bar top clean with supplies neatly arranged / bar mats and floor clean, glass shelves clean and streak-free / staff in uniform with name badges / light fixtures clean and functional / back bar organized / liquor brands displayed and dusted / refrigerators clean and organized / beer dispenser and drains clean / license framed, posted, and current / liquor storage floors, walls and vents clean. Unacceptable Needs Improvement Acceptable 4. Kitchen: Dish washing machine clean and sanitation procedures followed / garbage disposal operable / pots, pans and all shelving grease-free / garbage cans clean with liners / chopper, slicer and mixer clean and operable, kitchen floors clean / drains operable and clean / hoods, filters clean / refrigerators clean and organized-food stored off of the floor / food film covered in refrigerators and freezers / temperature of refrigerators and freezers compliant with health standards / walls and doors clean / fire extinguishers and ancillary system current / last Health Department Inspection report easily accessible. Unacceptable Needs Improvement Acceptable 5. Equipment clean and functioning / freezers and refrigerators at correct temperature. Sink areas clean. Grill areas and all filters clean. Trash containers clean including lid liner buff or brown / reasonably empty / cigarette urns clean. Unacceptable Needs Improvement Acceptable SECURITY 1. Alarm system operational, staff trained to use / only management has pass through / fire extinguishers services / Infibulations machines and program in place. Unacceptable Needs Improvement Acceptable 2. Parking and clubhouse lighting adequate, functional and on time, set properly for the season: off am - on pm. Unacceptable Needs Improvement Acceptable ^0 CARTS 1. Electric Carts of site: Quantity of carts down # % And reasons why: Unacceptable Needs Improvement Acceptable 2. Carts are rotated on a regular basis / records kept / surfaces of batteries clean and free of acid, rest of cart chassis and mechanical recently cleaned. Unacceptable Needs Improvement Acceptable 3. Carts / seats clean and in good repair / floor mats clean and in good repair / cart bodies and roofs and in good repair. Unacceptable Needs Improvement Acceptable 4. Cart storage area clean, no junk. Unacceptable Needs Improvement Acceptable 5. Employees demonstrate caring customer service / neat appearance / following club dress code / name badge. Unacceptable Needs Improvement Acceptable 6. GPS System operational. Number of Units down r^^^ CROSSING^ AT CARLSBAD City of Carlsbad / The Crossings at Carlsbad NOTICE OF GOLF COURSE DEFICIENCIES Golf Operations Greens Fairways & Roughs Tees Driving Range Maintenance Records & Schedules Lakes & Water Bodies Traffic Control Drainage Golf Course Restrooms Maintenance Shop and Equipment Native Areas / Mitigation / V-Ditches Clubhouse Operations Clubhouse Audit Form Clubhouse Exterior Clubhouse Interior Restrooms Golf Shop Food and Beverage Banquet Room - "The Canyons" Security Carts Statement of Deficiency Describe nature of deficiency to be corrected: Reported By: Date Statement of Correction Due: Date: Statement of Correction Describe what has or will be done to correct this deficiency: Reported By: Date: Acknowledgement of Deficiency Correction It is hereby acknowledged that the above-listed golf course deficiency has been satisfactorily corrected. For City of Carlsbad By: Date: For Golf Course Managen^1ent By: Date: DEFICIENCY FOLLOW-UP Item Deficiency Location Action Taken 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. OS 25 0.43 AC. mm MAP Cin OF CARLSBAD GOU COURSE SITE OPEN SPACE AND CONSERVATION EASEMEMT AND DEED RESTRICHON INDEX MAP OS I P.aa LEGEND INDICATES an OF CARLSBAD GOLF COURS£ SITE OWiERSHIP UNE INDICAIES OPEN SPACE AREA I INDICATES POINT OF BEGINNING INDICATES POINT OF COUktENCEMENT QTY OF CARLSBAD. PROPERTY Ote«A 1200 CARLSBAD VILLAGE DRIVE CARLSBAD, CA 92008 PSD CONSUL TANTS, INC. mumsMt uno omc sum m SMT onn oumcNNu wet m X w H OD i OS 28 4.73 AC OS I • P.O.C. INDICATES OTY OF CARLSBAD GOU^ COURSE SITE OmRSHP UNE INDICATES OPEN SPACE AREA I INDICATES PONT OF BEGINNING mCATES POINT OF COmNCEUENT CITY OF CARLSBAD GOLF COURSE SITE OPEN SPACE AND CONSERVATION EASEMgllT AND DEED RESTRICTION INDEX MAP EMENT RLS8AD. PROPERTY Ofc..„ ^200 CARLSBAD mAGE DRIVE CARLSBAD, CA 92008 PSD CONSUL TANTS, INC. EXHIBIT 0 CariiM Fabiic FlMndnf Aathortty CarbM MwddH Golf Com NOTICE OF GOLT COURSE OEncnaVCY Greem Qubiiouse Fairways & Roughs Golf Shop Tecs Hard Goods Pro Shop DrivingRango Food it Beverage Mainteoaiioe Records A Schedules Security ft Accountii^ Lakes A Water Hazards Carts Maintenance Employees Penonnel MainlrTMnce Shop A Equipment Lodsers Trafflc Control Rest Room StattiMat of DeHdsBcy Describe nature of deficiency to be corrected: Reported By: Date:_ Dale Statement of Correction Due: StateiMBt of CorreetioB Describe what has or will be done to conect this deficiency: Reported BY: Date: Acknowledgeniciit of Deficiency Correction It is hereby acknowledged that the above-listed golf course deficiency has been satisftctorily corrected. For Carisbad Public Financing Authority By: Date:, For Kemper Sports Management Bv: , ^te: EXHIBIT D LEGAL DESCRIFnON OF CTTY OF CARLSBAD GOLF COURSE PROPERTY LOTS 50 THROUGH 76 INCLUSIVE OF CARLSBAD TRACT NO. 81-46 UNIT NO. 3, ACCORDING TO MAP niEREOF NO. 11289, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON JULY 16, 1985, TOGETHER WTTH THAT PORTION OF CARRIER AVENUE, SWIFT PLACE, PALOMAR OAKS WAY, COLLEGE BOULEVARD AND OTIS COURT AS DEDICATED ON SAID MAP NO. 11289, WHICH UPON CLOSING WOULD REVERT TO BY OPERATION OF LAW TO SAID LOTS; ALSO THAT CERTAIN LOT DESIGNATED AS "REMAINDER PARCEL" ON SAID MAP 11289; ALSO. LOTS I THROUGH 26 OF CARLSBAD TRACT NO. 85-17, ACCORDING TO MAP THEREOF NO. 12903, FILED IN THE OFHCE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON DECEMBER 13, 1991, TOGETHER WTTH THAT PORTION OF COLLEGE BOULEVARD, ROCKEFELLER ROAD, CARNEGIE COURT, GETTY PLACE, HAMMER COURT, PALOMAR AIRPORT ROAD AND HIDDEN VALLEY ROAD AS DEDICATED ON SAID MAP NO. 12903, WHICH UPON CLOSING WOULD REVERT BY OPERATION OF LAW TO SAID LOTS; ALSO, A PARCEL OF LAND BED4G A PORTION OF LOT F AND A PORTION OF LOT G OF RANCHO AGUA HEDIONDA, ACCORDING TO PARTITION MAP THEREOF NO. 823 FILED IN THE OFHCE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, NOVEMBER 16, 1896; BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT POINT 9 OF SAID LOT F; THENCE N.0029'irW. ALONG THE WESTERLY BOUNDARY OF SAID LOT F, 167.78 FEET TO A POINT ON THE ARC OF A NONTANGENT 58.00 FOOT RADIUS CURVE, CONCAVE WESTERLY, A RADUVL LINE TO SAID POINT BEARS S.55*»03'22"E.; THENCE NORTHERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 70 5137", A DISTANCE OF 71.73 FEET TO SAID WESTERLY BOUNDARY; THENCE N.00 29'irw., 2092.42 FEET TO POINT 8 OF SAID LOT F; THENCE N.06''4r5rE., 1219.60 FEET TO A POINT ON THE NORTHERLY LINE OF SAID LOT E, DISTANT S.87»23'24"E., 2025.08 FEET FROM POINT 6 OF SAID LOT F; TOENCE S.87*»23'24"E, 2417.19 FEET TO THE NORTHWEST CORNER OF THE LAND DESCRIBED IN DEED TO HOWARD G. KIRGIS, ET UX., RECORDED SEPTEMBER 24,1957 IN BOOK 6761, PAGE 197 OF OFHCIAL RECORDS; THENCE S.02*»36'36"W., 740.00 FEET TO THE SOUTHWEST CORNER OF SAID KIRGIS PROPERTY; THENCE S.8r^3'24''E., 1378.84 FEET TO THE SOUTHEAST CORNER OF SAID KIRGIS PROPERTY; THENCE S.10 58'35"E., 1394.10 FEET TO POINT 14 OF SAID LOT F; BEING THE MOST NORTHERLY CORNER OF LAND DESCRIBED IN DEED TO S.L. KELLY, RECORDED FEBRUARY 3,1%1, AS FILE NO. 202293 OF OFnCL\L RECORDS; THENCE ALONG IHE NORTHEASTERLY LINE OF SAID KELLY'S LAND S.51*^r58"E., 1042.27 FEET; THENCE S.38«58X)2"W., 288.57 FEET; THENCE N.51«0r58''W. 152.00 FEET, THENCE S.38*»58'02"W. 152.00 FEET; THENCE N.51*0r58"W. 1089.27 FEET TO A POINT ON THE LOT LINE BETWEEN POINT 13 AND POINT 14 OF SAID LOT F; THENCE S.63**14'04"W. ALONG SAID LOT LINE 564.30 FEET TO SAID POINT 13; THENCE S.4042'08"W., 1584.44 FEET TO POINT 12 OF SAID LOT F; THENCE N.89"46'4r"W., 646.% FEET TO POINT 11 OF SAID LOT F; THENCE N.59**4749"W 1175.97 FEET TO POINT 10 OF SAID LOT F; THENCE S.70 54'2rW., 546.55 FEET TO THE POINT OF BEGINNING; EXCEPTING THEREFROM ALL THOSE PORTIONS DESCRIBED IN DOCUMENTS RECORDED SEPTEMBER 10,2001 AS INSTRUMENT NO 01-0646854, 010646855, 01-0646856 AND 01-0646857 OF OFFICL\L RECORDS; ALSO EXCEPTING THEREFROM THOSE PORTIONS DESCRIBED IN PARCELS A AND C IN GRANT DEED RECORDED FEBRUARY 15, 2002 AS D4STRUMENT NO. 0135145 OF OFHCLVL RECORDS; ALSO THE SOUTHEASTERLY 152.00 FEET OF THE SOUTHWESTERLY 152.00 FEET OF THAT CERTAIN PORTION OF LOT G OF RANCHO AGUA HEDIONDA, ACCORDING TO SAID PARTITION MAP THEREOF NO 823 BOUNDED AND DESCRIBED AS FOLLOWS: BEGINNING AT POINT 7 OF SAID LOT G WHICH POINT IS ALSO SHOWN AS POINT 14 OF LOT F ON SAID PARTOION MAP NO. 823; THENCE FROM SAID POINT OF BEGINNING, S.5ri5'45"E., ALONG THE NORTHEASTERLY LINE OF SAID LOT G, 104227 FEET; THENCE AT RIGHT ANGLES S.3r'44'15"W. 440.57 FEET; THENCE AT RIGHT ANGLES N,52*»15'45"W., 1240.75 FEET TO A POINT ON THE NORTHWESTERLY LINE OF SAID LOT G; THENCE N.62*W00"E ALONG A PORTION OF THE NORTHWESIERLY LINE OF SAID LOT G, 483.29 FEET TO THE POINT OF BEGINNING OF THE PROPERTY HEREIN DESCRIBED ALL OF THE AFOREDESCRIBED LAND BEING IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNL\. CONTAINING A TOTAL OF 396 ACRES MORE OR LESS. EXHIBIT E ACTIONS, STANDARDS AND PROCEDURES FOR PERMITS Reference the attached permits as follows: 1. State Water Resources Control Board, WDID No. 937C3372G3 dated October 17. 2005; 2. Califomia Department of Fish and Game, Streambed Alteration Agreement No. 5-122-00 dated June 30, 2004; 3. United States Army Corps of Engineers Permit No. 972020600-SMJ dated January 5. 2005 modifying Permit No. 972020600-MAT dated September 30, 2000; 4. Califomia Coastal Commission Coastal Development Pemiit No. A- 6CII-00-087, Notice of Acceptance dated April 25. 2005; 5. City of Carisbad, Endangered Species Act Incidental Take Pennit No. HMP 04 -01 dated December 6, 2004; 6. San Diego Gas and Electric Company, Letter of Pennission for Grading and Construction of Improvements dated June 23, 2005. EXHIBIT E-1 10/17/05 09:38 FAX 9162660053 9162660053 COPY EDGB PRINTING . ^ Sf a J Water Resources Control Board ^ AbnCLIoyrfPliD Statiaryjor October 17.2005 Division of Water Quality 100MS»Bct«S«rrwii ti,Cllifcwh 95114 •(91C)34t-5S3( MaTat Adtec P.O. Bos tSTI • Sacnowakk Cilifhnii • 95112.1977 PAX(9l0341-5S«-laicnelAd*ac i^JtmniMibmiu^ JohnCahill Carisbad Cify 1200 Carlsbad Village Dr Carlsbad. CA 9200S Armold Sdhnmeaeecei OCT I 7 2005 riilXjr. ASSOC. :-K:j.-jrj^fiOE RECEIPT OF YOUR NOTICE OF INTEOT The Stale Water Resources Cbnirol Board (State Water Boaitf) has ncdved and processed yoor NOTICE OF INTEm* TO COMPLY WITH THE TERMS OF THE GENERAL PERMIT TO DISCHARGE STORM WATER ASSOCUTHDWrraaWSmXKmCW ACTIVE Aceoidinglj. you are requktd to comply with the pennit iiBquirBmoits. The WDID identification number 937C3372I», Please lise this number in any future communications teganilttg this pennii SHE DESCRIPTION . OWNERS Carisbad Ciltjr DEVELOPER: Seraa Coos^ocdon Inc COUNTY: San Diego SITE ADDRESS: 5800 Hidden Valley Rd Carlsbwl, CA 9200^ COMMENCEMENT DATE: 9/8/05 EST. COMPLETION DATE: 07/01/07 When constructioo Is complete or ownership has be^ transferred, dischargers aro required to notify the Regional Water Board by submitting a Notice of Terminaaon (NOT). All State and local requiremeott must be met in accordance with Special Provision No. 7 of the General Permit If you do not notify the State Water Board that constructioo activity has been completed you wUl continue lo be invoiced for the annual fee each October. Please vbit the storm water wd> page at www.watBiboards.ca.gov/stonnwtr/indexJitml to obtam an NOT and other stortn water related informsticm and forms. If you have any questions regarding permit requirements, please contact your Regional Water Board at (85») 467-2952. Sincerely, Stonn Water Section Division of Water Qualify California Environmental Protection Agency MecycM Paper 7^ EXHIBIT E-2 DEPARTMENT OF FISH AND GAME Regions 4949VlewridgeAvenue I Diego. Califbmia 92123 J)467-4201 June 30.2004 Mr. John Cahill City of Carisbad 1635 Faraday Avenue C^arisbad. CA 92008-7314 RE: City of Carisbad Municipal Golf Course Streambed Alteration Agreement #5-122-00 Dear Mr. Cahill: Enclosed Is your copy of Streambed Alteration Agreement 5-122-00. If you agree with the conditions/measures set forth In the agreement, please make a copy, then sign and return both copies to our office for s^nature. at the above address. Written notice of your Intent to commence project activities needs to be provided to the Department at least five days in advance of commencing project activities. The Califomia Fish and Game Code requires that you notify the Department in writing - within 14 days of receipt of this Proposal as to its acceptability. If you do not respond within tills time period you will lose your right to request binding arbitration. For mirK>r changes we suggest you contact the person responsible for writing your agreement prior to sending the written response. Please be advised the Department cannot execute (sign) your Streambed Alteration Agreement without your certified CEQA (Califomia Environmental Quality Act) document. Notice of Determination (NOD). Findings, and proof of having paid the CEQA document filing fee. Also, this Agreement is subject to change upon receipt and review of your certified CEQA documents. If the project was determined to be exempt under CEQA by the lead agency, please provide a copy of the Notice of Exemption or other appropriate documentation. If you have any questions regarding the proposed conditions please contact me at (858) 467-4223. Thank you for your cooperation in this matter. Tamara A. Spear Environmental Scientist Habitat Conservation Pianning, Regton 5 11 CAUFORNIA DEPARTMENT GF RSH AND GAME 4949 Viewridge Avenue San Diego. Califomia 92123 Notification No.5-122-00 AGREEMENT REGARDING PROPOSED STREAM OR LAKE ALTERATION THIS AGREEMENT, entered into between tiie State of Califomia, Department of Fish and Game, hereinafter called ttie Department, and John Cahill. representina ttie CItyof parisbad. State of Califomia. hereinafter called ttie Operator, is as bifows: WHEREAS, pursuant to Section 1§S1L of Caliibmia Fish and Gams Code, tiie Operator, on the ll dayof May. 2000. notified tfie Departinent ttiat ttiey intend to dh/ert or obstruct ttie natural Ifow of, or change the bed. channel, or bank of or use material from the stireambed(s) of. ttie follo>^ng vigfits): Unnamed drainage, tributarvto tfie Aoua Hediond^ Lagoon. San Diego Couniy, California, Section, Township 128 Ranoe4W . WHEREAS, ttie Departinent (represented by Tamara Spear) has detemiined that such operations may substantially adversely affect ttiose existing Ish and wildlife resources witfiin ttie streambed of an unnamed tilbutary to ttie San Luis ReyRh^er. specifically ' • — - - . - . ^ mfous-crowned sparrow. Qreat blue heron. San Dieoo bla^taHed ractaabbit Northvustafp^ San Dieoo Ppc^t mouse, San P epp desert w?odrat. Yurna mvoflV bats. Norttiemlia7rie>; mule deer. Ca ifomia Adolphia. Pe^ MarmarTzariita. Lewis' evening primrose. Prpstrata Mneflower. Westem digiondra. Decurrtent aoldanhyfih. Souttiviestem spiny ry spinenowBr. wesiam QiOTonqra. Lrqcurrpem aQManousn. sout Nuttairs scrub oak and Ashy spike-moss. These plants and yildllfe are associated vUth Oieqqn Qp^m gage ggrut^ygpyggg M^TO Chaparral. Na¥e Wnortfla^^ ryrasfilandfi. Souttiem Willqw/Mufofat Scrubs Soutfwn Coastal Freshvater Marah; Rinari^fT herti. Eucalyptus woodland and disturbed lands. THEREFORE, ttie Departinent heret)y proposes measures to protect ffsh and wlkflife resources during the Operator's work. The Operator herebyagrees to accept ttie following measures/conditions as part of ttie proposed work. if the Operator's work changes from ttiat stated in the notif cation specified above, this Agreement is no longer valkf and a newnotification shall be subm'tted to tiie Department of Fish and Game. Failure to comply witti tfie provistons of ttiis Agreement and with other pertinent code sections. Including but not United to Fish and Game C^de Sections 5650.5652.5937, and 5948, may result in prosecution. Nothing in this Agreement authorizBs tfie Operator to ti-espass on anyland or property, nor does it relieve tfie Operator ofresponsibiiity for compliance with applicable federal, state, or local laws or ordinances. A consummated Agreement does not constitute Departinent of Fish and Game endorsement of tfie proposed operation, or assure tiie Departmenfs concurrence with permits required trem other agencies. This Aoreenwnt bffomes effective tiie date of Departmenfs stanafajre and temnnatea December 31.2008 t?r project oonstiruction onlv This Agreement shall remain in effer^t fhr tfiat time necessan^to satisfv the temis/condittons of this Aoreement. Page 1 of 5 1^ STREAlUbED ALTERATION AGREEMENT #5-122-00 1. The folfowmg provisfons constitute ttie limit of activities agreed to and resoh/ed by this Agreement The signing of this Agreement does not imply that ttie Operator is precluded from doing other activities at tfie site. However, activities not spedfically agreed to and resoh/ed by tills Agreement shall be subject to separate notification pursuant to Rsh and Game Code Sections 1600 et seq. Protect Location and Description: 2. The Operator proposes to alter the sti^eambed of an unnamed tributary to Agua Hedfonda Lagoon to accommodate ttie constiuction of a Munidpal Golf Course whfoh will include an 18-hole champtonship golf course, dubhouse, maintenance facility, driving range, conference center, and pads for industilal/golf related uses. The project is located approximately one mite to tiie east of Interstate 5. Palomar Airport Road forms the southem boundary, Hklden Valley Road fonms the westem boundary, and the souttiem edge of grading for ttie ftrture extenston of Faraday Avenue fonns the northem boundary. The 396-acres project site is located in ttie norttiwestem quadrant of ttie City of Carisbad, San Diego C^un^, impacting 0.91 acres of streambed. 3. The agreed woric indudes activities associated with No. 2 above. The projed area is focated In an unnamed ephemeral drainage, tributary to Agua Hedionda Lagoon, San Diego County. Specific woric areas and mitigation measures are described on/in tiie plans and documents submitted by tiie Operator, induding an Environmental Impact Report, and shall be Implemented as proposed unless direded differentiy by tills agreement. 4. The Operator shall not impad more than 0.91 acres of streambed comprised of 0.46 acres mule fat sc^rub, and 0.45 acres of unvegetated channel. Impacts are consfoered pemianent and will be mitigated at a 3:1 ratio for mule fat scrub and 1:1 ratio for unvegetated channel, for a mitigation acreage requirement of 1.83 acres. Mitigation; 5. As mitigation for tiie projed, the Operator shall restore through creation and enhancement, 1.83 acres of comparabte wetiand habitat on-site. The Operator shall submit a final Mitigation and Monitoring Ran within 60 days of signing tills Streambed Alteration Agreement. Department approval of that plan Is required prior to project initiation/impacts. All revegetation shall be instolled no later tiian Maroh31.2009. 6. The Operator shall mitigate at a minimum 5:1 ratio for impacts beyond those authorized in tills Agreement. In the event that additionai mitigation is required, ttie type of mitigatfon shall be detemnined by tiie Department and may include creation, restoration, enhancement and/or preservation. Vegetation. Revegetation and Restoration! 7. All mitigation planting shall have a minimum 100% survival tiie first year and 80% survh/at thereafter and/or shall attain 75 % cover of native wetland spedes after 3 yeare and 90% cover of native wetiand species after 5 years. If the sun/h/al and cover requirements have not been met the Operator is responsible for replacement planting to achieve tiiese requirements. Replacement plants shall be monitored with ttie same sun/ival and growth requirements for 5 years after planting. At ttie completton of ttie monitoring period, ttie mitigation site shall have received NO supplemental inigation for a period of two consecutive years, nonnative plants shall not make up more than 5% of the Page 2 of 5 STREAMBED ALTERATION AGREEMENT #5-122-00 entire cover of the site, no nwre ttian 5% of ttie site shall consist of bare ground and site shall be free of invashre exotic ptents species. ««i lu 8. All planting shouki be done between Odober 1 and April 30 to take advantage of ttie winter rainy season. • 9. An annual report shall be submitted to ttie Department by January 1 of each vear for 5 years afer ttie on-site restoratfon/planting. This report shall indude ttie sun/h/al and percent cover. The number by species of plants replaced, an oven^ew of ttie revegetation eflbrt. and the mettiod used to assess tfiese parameters shall also be induded along with photos from designated photo stations. Woric Period and Time Umita.' 10. The Operator shall not rernove vegetation wittiin the stieam from Febmary 15 to September 1 to avoid impacts to nesting birds. «iy lu Habitat Protection: 11. The Operator shall have a qualified bfotogist onsite daily during any Impads to vegetatfon for the purpose of monitoring and enfordng conditions of tills agrewiSit 1?' P^ra^n be made so ttiat runoff from steep, erodibte surfaces will be diverted into stable areas with Irttie erosfon potential. Frequent water checks shaU be placed on dirt roads, cat tiacks. or ottier woric tiails to control erosfon. Stn^^tlirt^; 14. This Agreement does not au^rize ttie constiudton of any temporary or pennanent dam, stiudure. flow restriction or fill except as described in ttie Operator's notiSatfon Equipment and Acceaar 15. No equipment shall be operated in ponded or flowing areas. 16. Staging/storage areas for equipment and materials shall be focated outside of ttie siream. 17. Access to the woric site shall be via existing roads and access ramps. 18. Any equlpn^nt or vehicles driven and/or operated wittiin or adjacent to tfie stieam Turi)idltv/Siltatten: Page 3 of 5 li STREAMBED ALTERATION AGREEMENT #5-122-00 20. Water conteining mud, silt or other pollutents from aggregate washing or other activities shaH not be allowed to enter a lake or flowing stream or placed in focatfons that may be subjeded to high storm ffows. Pollution. Litter and Cleanup; 21. The Operator shall comply witii all litter and pollution tews. All contractors, subcontradors and emptoyees shall also obey tfiese laws and it shall be the responsibility of the operator to ensure compliance. 22. Spoil sites shall not be focated within a stream, where spoil could be washed back into a sti^eam, or where it couki cover aquatic or riparian vegetetion. 23. Raw cement/concrete or washings tiiereof, asphalt paint or other coating material, oil or other petroleum produds. or any other substences whfoh could be hazardous to aquatic life, resulting from projed reteted activifies. shall be prevented finom conteminating the soil and/or entering ttie waters of ttie stete. These materials, placed within or where ttiey may enter a stream/teke, by Operator or any party working under contrad, or with tiie permissfon of ttie Operator. shaN be removed immediately. 24. No debris, soil, silt, sand, baric, slash, sawdust nibbish, cement or concrete or washings thereof, oil or petroleum produds or other organic or earttien material from any oonstiruction, or assodated activity of whatever natore shall be alfowed to enter into or placed where it may be washed by rainfall or ronoft into, watera of the Stete. When operatfons are completed, any excess materials or debris shall be removed from the woric area. No rubbish shall be deposited witiiin 150 feet ofthe high water marie of any stream or lake. 25. No equipment maintenance shall be done within or near any stream channel where petooleum produds or other pollutente from the equipment may enter these areas under any flow. Other 26. The Operator shall provide a copy of this Agreement to all contractors, subcontractors, and the Operator's project supervtoore. Copies af the Agreement shall be readily available at work sites at all times during periods of active work and must be presented to any Departinent personnel, or personnel from another agency upon demand. 27. The Department reserves the right to enter tiie projed site at any time to ensure compliance with terms/conditions of this Agreement 28. The Operator shall notify the Departinent, In writing, at least five (5) days prior to initiation of construction (project) activities and at least five (5) days prior to completion of construction (project) activities. Notificatfon shall be sent to ttie Departinent at 4949 Viewridge Avenue. San Diego, CA 92123 Attn: Tamara A. Spear 29. It is understood the Department has entered into ttiis Streambed Alteration Agreement for purposes of estebllshing protective featores for fish and wildlife. The dedsfon to proceed witii the projed is the sole responsibility of the Operator, and is not required by tills agreement. It is further agreed all liability and/or Incurred cost related to or arising out of the Operator's project and the fish and wildlife protective conditions of this agreement remain the sote responsibility of the Page 4 of 5 STREAMBED ALTERATION AGREEMENT #5-122-00 Operator. The Operator agrees to hoW hamitess ttie Stete of California and tfie Department of Fish and Game against any related cteim matte by any party or parties for personal injury or any other damages. 30. The Operator may request one extensfon of ttiis agreement subjed to Department approval, prior to its tennination. The extensfon request and fees shall be submitted to the Departmenfs Regfon 5 office at tfie above address. If tiie Operator fails to request the extensfon prior to ttie agreemenf s tennination, tfien tfie Operator shall submit a new notification with fees and required infomiatfon to tfie Department Any actfvttles conduded under an expired agreement are a vfolation of Rsh and Game Code Sedfon 1600 et seq. 31. The Department resen/es the right to suspend or cancel tills Agreement for ottier reasons, induding but not limited to the following: a. The Department detemiines that the infonnation provided by the Operator in support of the Notificatfon/Agreement fs incomplete or Inaccurate; b. The Department obteins new infomnation tfiat was not known to it in preparino the terms and conditfons of the Agreement r- » c. The projed or projed activities as described in ttie Notification/Agreement have changed; d. The conditions affecting fish and wildlife resources change or the Department determines ttiat projed adivities will result in a substential adverse effed on ttie environment. 32. Before any suspensfon or cancellation of ttie Agreement the Department will notifv the Operator in writing of ttie circumstences which ttie Department belteves warrant suspension or cancellation. The Operator will have seven (7) woricing days from ttie date of receipt of this notification to respond In writing to the drcumstences described in the Departrneiif s notification. During ttie seven (7) day response period, ttie Operator shall immediately cease any projed adhrities whicii the Department specified in ite notificatfon The Operator shall not continue ttie spedfied activities until ttiat time when ttie Department notifies tfie Operator in writing ttiat adequate mettiods and/or measures have been Identified and agreed upon to mitigate or eliminate tiie significant adverse effed. CONCURRENCE City of Carisbad John Cahill (titte) /t(i(^f(^j^4L bf Califomia Dept of Rsh and Game (signature) (date) CF. Ravsbnpok. Reafonal Manaq^f (titie) Page 5 of 5 1\o EXHIBIT E-3 Atisnnowoft DEPAfrTMEICrOFTH^ARMY . UM/tficsus ixatncT. com cir ENoam f.oacixs)27ii • LOS MlOeLil^ CAUmNU IOOS»«12i Januazy 5,2005 O0keofthe(3ilef KegalatozyBrindi C3iy of Carisbad En^ineexing Department Attmtkxi: johnCahiU 2075 Las Palmas Diive Cailsbad. CaHfinnia 92009-1519 DearMr.CahiD: Relerence is made to your request of March 16,1999 to amend Ftnnit Nc^ 97202d6(X>-Sh^ whidi aulhoit»J you to !nHM«t X95 acre* of weflands and wa to Cailsbad Mtmkfipal Coif Coum whkh wouM hnpct an uima^^ Hedicxida Creek in Carisbad. San Diego Connlyv CaMxnia. Under ehe provisions of 33 Code ol Meisi Regulatfons 325.6(dX tihe start date is to lemain the s»me and the completfon dale is extended firom Atig^ lAider the piwisJons of 33 Code of Fedsral Regulations 325.7(b)> your pennit is modified as follows*. You axe hen^ sulhorized to construct Carisbad Mimidpal site located in the norttiwest quadrant of ttie Qty of Carlsbad. Palomar Airport Road foims the sottflwin boimdaiy of te site. Hidden Valley Road forms At eastem bounds scttthem edge of grading for te extension of Paraday Avemie fonne te norflxem boundaiy. The northeni portion of te site b to te Agua Hedionda vrateidwd an^ Hedkeida Lagoon. The lemainder of te site ia in teEndnasCredkwatsnted, which drains IhtouAEndnas Canyon tote Padfic Ocean. In addition to telS-holechampionsh^goU course, te proposed projecl indudes a dubhouse, maintenance fadlity, driving range, conference center, and pads for industrial/ golf course uses. Ihe Carlsbad Golf project received te Inddenlal Take Pennit firom te VS. Hsh and Wildlife Serviccijn December 06,2004, Also, te U5. Fish and December 15,200i that te project is consistent with te Oolsbad Habitat Management Plan. Ihetefow, Spedal Condition 1 of te original permit^ dated An^u^t 2^ 2000, is no longer applicable. The permittee shall now impact no mote than 0.91 aae of waters of te United Statts. SpcdficattyTte permittee shall impact no more than 0.46 acre of wedand Waters of te U.S. 11 -2- and 0.45 acte of nonrwedand Watecs of te VS Ihis replaces Spedal Co«idition2 of te original pennit dated August 2,2000. The pemiittee shall mitigate impacts to a91 aae of waten of te VJS. (fnchiding wetland and non-wedand wateis) by te onrsite aeetion of 1J3 aaes of riparian habitat in aa»dance Mtti te of Carlsbad Revised Golf Cottise Riparian Mit^tion FIttw dated I This replaces Special Condldon 3 of te original pernilt dated August 2,2000. Ihe terms and conditions of Ptennit Na 972020600^, txcttrt as dum^ in fuU force and effect Please note tet a copy of this letter is being foiwarfed to Held S^>enrisor, Bc^ Seririoes Field OfiEu:e, U.S. Hsh and Wildlife Senr^ CaUlomia 92009; UJ5. Environmental Protection Agency, Attn: Mr. Um Vandtteskt Supertrisor, Wedanda Regutotoiy OfiBkw (WTM), 75 Hawteme Stieet San F^a^ CaEfomia 94108; CaHfomia Department of Fl^ and GaaM^ Attn: Charies RaypbcooK 4949 View Ridge Ave., San Diego. California 92123. CaHfomia Regional Water QuaUty Central Board, R^ion 9, San Diego, Attn: Mr. Miduiel McCanzw Mmger, Watetahed Bnndi, 9174 Skr Park Court; Suite 100, San Diego. Califomia 92123 ^ Stecerdy, David J-Castanon 7j Acting C3iiefc Reguklniy Brandl tn li LOS ANGH£S D/STRICT U.S. i^RMY CORPS OF ENGINEERS Pennitter. Pennit Number: Issuing Office: DEPARTMENT OF THE ARMY PERMFF Oty of Carisbad 972020600-MAT Los Angeles Distiict Note: The term "you" and its derivatives, as used in this permit means te peimittee or any fuiuze transferee. The terni "tiMs office^ xefets to te appropriate district or division office of te Corps of Engineers having jurisdiction over te pemnitted activity or te appropriate offidal acting under te audiority of te cconmanding officer. You are authorized to perform woric in accordance wilh te teixns and condt^^ Projed Description: To construct te Carlsbad Murocq>a] Golf Course projed in te City of Carlsbad, San Diego County, Califomia, as shown on te attadied drawings. Projed Location: In urnuuned txibutarieste Agua Hedionda Creek a^ of Cartibed, San Diego County, Caiifocxiia. the 418-acre site is located inte northwestem quadrantof teQty of Odsbad. Palomar Airport Road forms te soutem boundaiy of te site. Hidden VaBey Road forms te eastern boundary, and te so\xtem edge of grading for te future extension of Paraday Avenue forms te nortem boundary. The nordiem portion of te site is inte Agua Hedionda watershed and drains into Agua Hedionda Lagoon. Ihe remainder of the sice is in the Encinas Creek water*ed^ which drains duou^ Endlnos Canyon (located on te south side of Palomar Road) to'te Pacific Ocean. Permit Conditions; 1 Your use of te pemiitted activity must not interiere witti te public's right to firee navigation on all navigable waters of te United States. 2 You must have a copy of tfiis permit available on te vessd used for te auterized transportation and disposal of dredged materiaL 3 You must advise tihis office in writing, at least two weeks before you start maintenance n ^ ?9 dredging activities under te authority of this permit 4 You must iristaU and maintain, at your e;q>en$e, any safety Hghts and rignaisp United States Coast Guard (USCG), .through regulations or otherwise, on your auterized facilities. Ihe USCG may be reached at tefoHowiiig address and tekphonenunter. 5 The condition below will be used when a Corps permit auterizes an artificial xeet an aerial transmission Hne, a submerged cable or pipeline, or a structure on te outer continental teH National Ocean Service (NOS) has been notified of tfus auttiorization. Youmust notify >X3S and te office in writmiL at least two weelcs before you begin WDA te activity auteri^ by tfiis peimit Your notification of con^letion must indude a drawing whidi certifies te location and configuration of te coo^leted activity (a certified pennit drawing may be used). Notifications to NOS will be sent to te following address: IheDiiedor, National Ocean Servrice (N/CG 222), RqMQe, Maiyland 20652. 6 Ihe folfowing condition should be used for every pemnit where legrixeconiation of tef^^ would be reasonably practicable and recordation could put a 6d>8eqiient puichaser or owner of property on notice of peimit conditions. You must take te actions required to record tfiis pennit witfi te Registrar of Deeds or other appropriate ofiSdal charged witfi te lesponsibiHty for maintaining records of tide to or interest in real property. General Conditions: 1. Ihe time Hmit for ccnx^ktingte auterized activity ends on August 2^ 2005. Ifyoufindtfvd you i)eed more time to coo^lete te auterized activity, submit your I to this Q£Gce for consideration at least one month before te dx3ve dale is reached. 2. You must maintain te activity autfuxrized by tfiis peimit in good condition and in confinmance with die teims and conditions of tlds peimit. You are not relieved of tti^ reqidiementif you abandon te permitted activity, although you may make a good foitt\ transfer to a tfuid party in con^li4ne* wilh G«rvu»l Condition 4 bdow. Should you wiih to CXSM to maintain te auterized activity or should you desire to abandon it witfiout a good faith transfer, you must obtain a inodification firom tfiis pemdt fiom th^ tearea. 3. H you discover any previously unknown historic or archeotogicalxeinai^ te activity autfiorized by tfus permit, youmust immediately notify this office of what you have found. We will initiate te Federal and state coordinatum required to detennine if te remains warrant a recovery efiort or if te rite, is eHgible for Hstfng in te Natfonal Register of Historic Places. 4 If you sett te property associated witfi tfws permit; you must obtain te signature of ten^^ owner in te space provided and forwani a copy of te pennit to this office fo validate te transfer of this auterization. 5. If a coivditioried water quality certifiation has been issued for your project youmust con^ty with te conditions spedfied in te certification as spedal conditkms to tfus pennit For your convenience, a copy of te certification i| attached if it contains such ccndittons. 6. You must aUow representatives from tfus office to insped te authorized activity at any time deerxved necessaiy to ensure tet it is. being or has b^ accomplished witfi the terms and conditions of yoor permit Spedal Conditions: L Ihe perxnitteeshaU obtain''t^ke''authorization under te Endangered %)^^ any and all impacts to tfareatoned or endangered species prtor to initiating waters/wetlands in^mdsau^orized by this IP. Ihe permittee shaD submit verification of conqpHanoe witf;i this permit condition prior to initiating watexs/wetiands injects authorized by this IP. Ihis authorization snay be obtaiiwd by tefoOowing means: a) Adoption and approvd of teOt/s Habitat Maiuigemeiit Fh^ CDFG. (teQty would then ^ssue their own take autfumzatfon), orb) Individual Sectfon 10 peimit issued by tfie USFWS 2. Ihe peimittee shall ionpad no. more than 2.95 acres of wateis of teUriited Slates (inchidxi^ wetlands aiid non-wetiaiid wateis). ^ I^ barriers) te limits of te construction corridor to prevent additional waters/wetUnds in^acts and te ^read of salt firom te construction zone into adjacent wafers/wetlands. If waters/wetfands impacts occur outside tfiese limits, aU work shall cease, and te Corps shall be notified immediately. Any waters/wetlands io^acts tet occur outside tfie fenced and ixurked Hmits shall be mitigated at a inxnimum 5:1 ratio, and shall be subjed to te requirements of all te special conditions listed below. 3. Ihe peimittee shaUixutigateirnpacts to 2.95 acres of wateis of te Uni (including wetlands and nonrwetland wateis) by a) creating 45 acxes of npanan habitat on-site adjacent to te Cannon road r^arian site and existing Macario Creek riparian corridor; and b) restoring/enhancing 4.0 acres of wetiand lu^itat offite at te Carltassite. Mitigation grading, plaiiting, and incigation shaH begin prior to ^ concurrent witfi te planned date of initiating wateis/wetiands impacts auterized by ttiis IP. 4. A final conceptual wetland mitigation plan based on te Carlsbad Golf Course Composite Wetlands MstigatioiiPlan (PW Environmental Servkes, May 2000) shaU be subini^dJo te Corps for r^w and approvd 30 days prior to initiating waters/wetland impacts (cc USFWS and EPA). These final conceptual plans shall be prepared in strid accordance with the Coips' Habitat Mitigation and Monitoring Proposal Guidelines (June 1^ 1993). In addition to te infonnatfon presented in P&D's draft May 2000 mifigstion plan, it is te Coxp's understanding tet te Carisbad Golf on-site mitiga^cxi will coonfonn, to tfie extent practicable, to te spedfications outiined in theCannon Road Mitigation Plan (spedficalty te "Addendum lo the Conceptwd Mitigation Plan for Cannon Road Extension Project Reaches I 3 and V dated February 20,1998). Ihe final conceptual mitigation plan shaU indude and incorporate aU sections of te Canon Road mitigation plans tet pertain to te Carlsbad Coif projed. In addition, aU addoidums submitted to te Corps shall be induded in te final conceptual plan. Ihe final conceptual plan shall indude details of te ofCrite restoratfon/enhaiiKment including locatiofv mettiods of removal, replanting strategies and techniques, success criteria (perfonnance standards), monitoring/maintenance methods and schedules^ Additional content and requirements for te final conceptual plan are listed befow in spedal conditfon luunberfive. Ihe fixid conceptual plan shaU be stteutted as one complete and comprehensive document for Corps review 30 days prior to te planned date of trdtiatlrigwatexs/wetlandsiix^ads authorized by this IP. No impacts to waters/ wetiands shall occur until after te Corps approves te ccneeptual plan. 5. Final wetland constructfon plans, specifications and drawings i>ased cm te Corps- approved final conceptual wetland mitigation plan shall be submitted tote Corps for review and approval 10 days prior to initiating wetland in^»acta. Ihe final plans and spedficatf oils shall also iridude: a) AH final specifications and topography-based layout gradmg; planting, and inigation. b) A provision tet all wetland creation areas shaH be graded tote same elevation as te adjacent existibng wetlands and/or within one foot of te groundwater teblev and shaH be left in a rou^ gnKie stete with topognq^nc retief (induding channels) tet mimics natunl wetland topography. c) Planting paOets (plant species, size, and number per acre) and seed rnix (plant spedes and pouiMis per acre). AU planting shaH be instaHed in a maimer tet mimics natural plant distribution (e.g., random and/or aggregate distributions rattier than uniform rows). Plantings shaU generally be placed within te mitigatian areas along hydrologic gradients tet make ecofogical sense in relation to eadi plant's facultative category (e.g. obHgate, facultative, etc.). d) A pioidsion tet on te first aimiversaxy of teirixtid planting, aH dead pl^ shaU be replaced unless ttieir function has been replaced by natural recruitment as verified by te Corps. e) A final iinpleinentation sdiedule tet iridieates when aH wetland/waters impacts, as weU as mitigation rite grading, planting and irrigation will begin and end. D Five yeazs of «xpUdt and measurable success criteria for wetland creation, restoration, and enhancement areas. IhepennifeeshaHooodoccamisiiiiumof five years of maincenance and monitDiing of wetiand mitigation areas. If success criteria are met eariier end aU artificial water siqiply to the site has ceased fbr a miiumum of two years^ tfie site may be conrideial» at tfie Corps discretion, fbr eariy approval In addition to die success criteria outlined in te final mitigation iindinonitoiing plan, cVideoccof wetland hydrology and natunl recnutment of native wedand vegetatfon must be present on-site in order to obtain final Corp q)proval of te mitigation areas. Annual mitigation maintenaiice and monitoring reports shaH be submitfed to te Corps (cc: USFWS and EPA). 6. Plaiiting and irrigation shall not be iristalled until te Corps has approved te mitigaiioA sila gradsne. Tho pocmiHc* icKaU confaet dwi Oatupn fov vcxificaftien of HI proper grading of te mitigation site a minimum of 15 days prior to te planned date of initiating planting. 7. If changes are made to teinitigatkm design during its iR^lenientetian,tepeixnittee ShaU immediately notityte Corps. If changes are determined to be greater tfian minimal by te Corps, as-built drawings of te mitigation grading, planting, and irrigation shaU be submitted to te Corps (cc USFWS and EPA) widiin 30 days of implementing te redesigned mitigation. 8. Ihe permittee shaU staff a quaHfied biofogist on ate during aUphMes of construe and mitigation implementatkm to ensure coo^Hanoe wUh te requiremente of ttiis peimit and diaU produce a report tet docua^nb te thning and events of te final implementation schedule. Ihe pexmitfeeshaU submit tebfoksgtsTs name, address, telephane number, cmatf address (if available), and woik sdiedule on te pioject to te . Coipilpiior to teplanned date of initiating waters/wetfands impacte auterized by ttiisIP. Ihe peimittee shaH report any viobtion tote Corps wittiin one day of ite occurxeiue. 9. Ihe pemuttee shaH submit a report to teCbxps witfun 30 days of conmletian of waters/wetfands impacts authorized by ttds IP ttwt documents compliance wifli aH pennit conditions. Ihe report shaH indude photographs showing fenced and marked Hmits of impacts to aU Cbrps jurisdictional areas, as^wflt construction te summary of aU prefect activities. 10. The pcrinittee ten not rernove/impad vegetetion from devetopment areas fiom March 15 to September 15 to avoid impacte to nesting birds. Ax^ habitat restoration and creation activities also shaH be timed to avokl disturbance of iMeralty-Hsted and otfier migratory nesting birds (ie., avoid disturbance fiom March 15 tfuough September 15). However, te permittee may be auttwriaed to remove/impact vegetation witfun devefopment and restoration areas durii^ tfus time ifa qualified biofogist surveys te proposed work area inunediotdy prior to te vegetation lemoval and condudes tet no inqpacte to nesting birds wfll occur. Ihe lesulte of te survey shaU be provided to te Corj>s for review and ipproval prior to initiation of vegetation removal A qualiSed biofogist shaUinonitorte vegetetion removal to ensure te no in^acte to nesting birds WiH occur. 11. Ihe pemdtteeshaU ensure tfiat water quaHty is iriairitBinedwllhtetechan^ downstream of te projed site by incorporating appropriate design elemente into te project (eg., xruunteining a soft bottom channel installing detention basins, etc.) IZ IheperxnitteeshaHprescrveinperpetuityaHinitigationareasbyplacingabidogi^ conrervation easement in favor of an^^ pemiifSre shaU submit a draft easemnit to te Coxps prior to initiating wetland impacte. The form and content of teeasefnentshaUfoUowteendosedexaowle, and mustbeapprovedbyteCoipspriortoiteexecution. Ihe easement shaH stete cleariy tetno otiier easennente or activities tet woukl resuh in sofl distutence and/or vegetetion removal, except as i^jproved by te Corps, shaH be alfowed witfiin te ^^oL<^^?nservationeaseaentarea. The permittee shafl submit te final easement witiun 10 days of lecenong Corps approval of te draft easement 5 ?3 Further Informafion: 1. Cbngiesstonal Authorities. You have been authorized to undertake te activity described above puisuant to: 0 Section 10ofteRiverandHaterActofl899p3U5.C403). (X) Section404of teClean Water Ad(33U5.C 1344). 0 Sectfon 103 of te Marine Protection, Researdi and Sanctuaries Act of 1972 (33 U.SC 1413). Z Limite of this authorization. a. Ihis pennit does not obviate te need to obtain otfier Federal state, or focal auteiizalfons required by law. b. Ihis pemtit does iu)t grant ariy praperty righte or exclusive privileges. c Ihis perxmt does riot auterize any in|iiiy tote property or rig^ of others. d. This permit does not authorize interierence witfi any existing, oc proposed Federal project 3. limite of Federal Liability. Ih issuing this pennit, te Federal Government does not assume any liabiHty for te following: a. Damages to te pemtitted projed or uses tfiereof as a result of otfier pernutted or m tpemuUed activities or from natural causes. b. Damages tote pennitted project or tises thereof as a result of cuxxeiit or futore activities undertaken by or on bdialf of te United States in te public interest c Damages to persons, property, or to otfter pennitted or unpennitlad activiliee or structures caused by te activity authorized by this peimit d. Derign or coristructiondefidendes assodated with teperrxiitted woric. e. Damage daims assodated with ai^ future modification^ su5pensioga> or xevocatf on of this pennit" * . 4. Reliance on Applicant's Data. Ihe detmninatfon of tfiis office tet issuance of tills permit is not contrary to te pubhc iriterest was inade in reliaiKe on te infoitnation you provided 5. Reevaluation of Peimit Decision. This office may reevaluate ite dedston on tfiis pennit at ariy time te dicumstances warrant Qicuiristances tet could require a reevaluation include, but are not limited to, te foHowing: a. Youfail to comply with te terms and conditions of tfus peimit b. Ihe infomiatton provided by you in support ofyour peimit appHcati^ been felse, incomp^te, or inaccurate (See 4 aboveX c Significant riewiriforination surfaces whidi tfds office did not co^^ original public interest decision. Such a reevaluation may result in a detemdnation tfiat it is appropriate to use te suspenrioiv niodiflcatioiv and revocation procedures contained in 33 CFR 325.7 or cnfo«»n^ such as tfioee contained in 33 CFR 326.4 and 3265. Ihe referenced enfonxment procedures provide for te issuance of an administrative order requiring you to con^ly witfi te ternis and conditions of your peimit and forte initiation of legal adkm where iq^^ YouwiHbe required to pay for any conective measure ordered by tfiis office, and if you fidl to coolly with such directive, tfiis office may m certain situations (sudi as those spedfied m 33 CPR 209.170) accoriipHsh te corxedive rneasures by cortect or othenvise and biU you for te cost 6. Extensions. General condition 1 estabHshes a time Hmit for te cco^letion of te activity authorized by this peimit IMIess tere are drcuznsfamces re^pnring dther a prornpt corru>letion of te autfiorized activity or a leevahiation of te pubKc interest de^ion, te (:orps give you favord>fo conskleration to a request for an extension of this ti^ Your signature befow, as peimittee, indicates that you accept and agree to con^ty with te tenons arid conditions of tfiis pexmit Ihis peimit becomes effedhre when te Federd official derignated to ad for te S Army, has signed befow. DATE ^ Geoigis L Beanns Chwt Construction- Operations Divison When te structures or work authorized by tfiis permit are stiH in existence at te time te propeity is tcansferxed, te terms and condxtforis of this peimit wiU contmue to 1^ new owner(s) of te property. To vaUdate te txansfer of tfiis pennit and te assodated liabilities associated wfih compliance witfi ite tenns and conditkms, have te transferee sign and date befow. TRANSFEREE DATC .Apr-25-05 02:25pt Froa-fim «»4 P^TB OF Q»U>^^«Mm-"« MS00»C» AomcT 0.1 If ror EXHIBIT E-4 AXNOLO CALIFORNIA COASTAL COMMISSION U4DiB0OAltaA 7» MflrnorouTviM pwvt, sum i(o City of Carisbad Atin: John Cahill 1635 Faraday Avenue Carlsbad, CIA 92008 ^"^'^ I^pril25.2005 ApT^'""^ rj^ of garlsbad NQTICE OF ACCEPTANCE p^Hiyi P«>t Me^irm^^t Plan dated Auaiist 17.2004 X Tedimgrf AdvimV n^I^IJ^^^ 4. FtoaldeydopiafinUglyiytlatinglff^^ Ln^liUp «^ e«Html Plans hridwi nlsns. romfOiT fftetimi i^g. driyniR PmgO iurWoari^Planf^*"^faQtg^'^^«^^™°^ r^r*^??^??"^^. nfffff y% Dedjftfl^g Open 3p*^ "TH* f^"naervation Basement. ^ Submitted in compliance with Special ConditfoiKs)No(s).: Ii ?i 4-. Sc^t 7i St 10.14 of Coastal Development Peimit No. A:^CII-QQ-087 Remaining Special Condition(s): None Material submitted in conqiKance witfi said Spedal CooditiCRi(s) ofyour devdopment nennit has been reviewed by te District Director and found to fixlfill te rcqunttnente of 8ddcondirion(s). Your submitted material and a copy of ttiis tetter have been made a part of te pennanent file. Sincerely, (a:«Hl OleprtLBEVCiirhted Oolf Come HOA^) Deborah Lee Deputy Doector STATE OF CALIFORNIA - THE RESOURCES AtigNCy GRAY DAVIS, fioi^ CAUFORNIA COASTAL COMMISSION San Oiego Coast ATM OMce T^SPS MelropoUtMi Dffva. Sidls 103 ^tan Oiego. GA 921(»4421 ^19)767-2370 Page: 1 Date: August 28,2003 Pemnit Application No.: A-6-CII-00-087 COASTAL DEVELOPMENT PERMIT On August 8,2003, the Califomia Coastal (Emission granted to City Of Carlsbad, Attn: Michael Holzmiller this permit subjed to ttie atf^ed Standard and Special conditions, for development consisting of Devetopment of ari IB hole championship golf course, clubhouse, parking lot, maintenance facilities, driving range, conference center and pads for future industrial/golf relatSd uses on 397 acre site. more specifically described iff te application filed in the Commission offices. The development is within ttYe coastal zone at North of Palomar Airport Road and east and west of College Boulevard, Mello II Carlsbad, (San Diego County) ' PETER M. DOUG Executive Dlredoi Issued on behalf of the Califbmia Coastel Commission by By: Keri Akerj Coastal Pro ACKNOWLEDGMENT: The undersigned permittee acknowledges receipt of this pemiit and agrees to abide by all terms and conditions tereof. The undersigned pemiittee acknowledges that Govemment Code Section 818.4 whfch stetes In pertinent part that: *A Public entity is not liable for Injury caused by ttie issuance... of any permit .." applies to ttie issuance of this pennit. IMPORTANT: THIS PERMIT IS NOT VALID UNLESS AND UNTIl^ COPY OF THE PERMIT WITH THE SIGNED ACKNOWLEDGMENT HAS BEEN RETURMiri TO THE COMMISSION OFFICE. 14 Cal. Admin. Code Section 13; TdSte Page: 2 Date: August 28,2003 Permit Application No.: A-6^11-00-087 STANDARD CONDITIONS: 1. Notice of Receipt and Acknowfedoment The pemiit is not valkJ and development shaH not commence until a copy of the penmit, signed by te pemiittee or auttiorized agent, acknowledging receipt of te pernilt and acceptance of te terms and conditions, is retumed to ttie Commissfon offfce. 2. Expiration. If devetopment has not commenced, te penmit will expire two years from te date on which te Commission voted on ttie applfcation. Development shall be pumued in a diligent manner and completed in a reasonable period of time. Application for extonsfon of the penmit must be made prior to the expiratton date. 3. Interpretatten. Any questions of intent or interpretetton of any conditk>n will be resolved by the Executive Director or the Commlsston. 4. Assignment The pemiit may be assigned to any qualified person, provided assignee files with ttie Commissfon an affktevit accepting all temis and conditfons of ttie permit 5- Terms and Conditions Run with the Land. These temis and conditions shall be perpetual, and it is te intention of tfie Commission and the permittee to bind all future owners and possessors of the sub|ect property to the tenms and conditfons. SPECIAL CONDITIONS; The permit is subject to ttie folfowing conditions: 1. Final Development Plans. PRIOR TO ISSUANCE OF THE COASTAL DEVELOPMENT PERMIT, ttie applfcant shaH submit to tfie Executive Director for review and written approval, deteiled final plans for te proposed devetopment ttiat indude site. buHdlng. grading and drainage plans. Said plans shall be In substantial conformance with ttie plan entitied 'City of Carlsbad Golf Course Revisions" submitted with LCPA 1-03B (Habitet Management Plan) on Febniary 7,2003 and shall comply with the foliowing: a. There shall be no impacts to soutem maritime chaparral habitet wittiin te Coastal Zone portion of ttie prpject. Impacte to coastel sage scrub shall be consistent with ttie approved development plan and shall be mitigated as addressed in Condition #2 below. Any temporary impacts to wettand and/or riparian areas for tfie purpose of constructing golf cart path crossings shall be restored as addressed in Condition #3 below. b. The consen/ation and development areas for the golf course property shall be consistent witti ttie golf course hardline map (Rgure 8 Revised) in te City of Cartsbad Habitat Management Plan (HMP). Areas shown for conservation shall not be Impacted or disturtjed except for revegetetion, restoration and ottier similar activities related to mitigation. Areas shown for impad may be fully developed with appropriate mitigation. The pemiittee shall undertake the devefopment in accordance with ttie approved plans. Anv proposed changes to te approved plans shall be reported to te Executive Director. No changes ff Page: 3 Date: August 28,2003 Penmit Applfcation No.: A-6-CII-00-087 to te plans shall occur witeut a Coastal Commission approved amendment to this coastal devefopment penmit unless te Executive Diredor detenmines tet no amendment is legally required. 2. Mitioation for Upland Habitat Impact^: PRIOR TO ISSUANCE OF THE COASTAL DEVELOPMENT PERMIT, the applfcant shall submit to te Executive Director for review and written approval, a final detailed coastel sage scrub mitigation plan. SakI plan shall be devetoped in consultation with tiie U.S. Rsh and Wildlife Servfce and te CaWHofnla. Departinent of Fish and Game, and shall indude te folfowing: a. Preparation of a deteiled site plan dSllneating all areas and types of impact to uptend habitet spedes (botti permanent sind temporary) and tiie exact acreage of each impact. In addition, a detailed site plan of te mitigation sites shall also be Induded. b. Impacts to coastal sage scrub shaii be mitigated at not less than a ratio of 2:1. c. Mitigation methods shall be consistent with those approved In Section 7-9 of te second addendum to the Carisbad HMP and Policy 7-1.10 of te Mello II Land Use Pten of te Carisbad LCP, as provkJed in Exhibit 10. d. A minimum buffer of 20 feet shall be provkied between devefopment as defined In Section 30106 of the Coastal Ad. and native upland habitet, except as oterwise provkted In Section 7-11 of te second addendum te Carlsbad HMP and Pdfcy 3-1.12 of the Mello II Land Use Plan of the Carlsbad LCP, as provided in Exhibit 10. e. Location where the seeds will be collected and identiffcatfon of plant spedes to be used for the restoration area; f. Application rate (e.g. pounds per acre of seeding effort); g. Methods of weed eradfcation. No Weed whips shall be pemnitted after insteltation of the seed mixes; h. Designation of a qualified botanist to-supervise the restoration effort; I. Goals, objectives and success criteria. The plan shall include quantitetive success criteria that deariy relate to te goals and dDjectives of te habitet restoration program. Ttiese quantitetive success criteria shall be based on sampling reference sites or on pertinent published reporte. The success critieria siiall include minimum requiremente for spedes diversity and cover of shmbs, subshrubs, and herbaceous species. At minimum, five years after te initial planting the restored areas shall support at least 10 native spedes appropriate to characterize the vegetetion type and have evidence of recruitment of at least one-half of these spedes. Weeds shall be controlled as specified in (g) above and never constitute more than 10 percent of the total cover. j. At completion of the mitigatfon/restoration effort, the restoration spedalist shall prepare a letter report indicating tet ttie instiedlation is finished and that te five-year monitoring period has begun. Monitoring reports shaU be submitted to te City and te Executive Director annually for five years. If at the end of five years, any of tiie restored areas fail to meet tfie success criteria as conteined in the final mitigation plan, the monitoring and AO maintenance perioc AVI be extended one full year for ttiat atw J Rnal monitoring for success shall occur after at least a three-year period during whfch there has been no remediation or mafntenance,.oter than weeding. If te success critieria are not met after 6 years, an amendment to te penmit shall be required. The pemiittee shall undertake devefopment In accordance witti te approved mitigation/restoration plan. Any proposed changes to te approved plans shall be reported to te Executive Director. No changes to ttie plans shall occur without a C^stel Commission approved amendment to this coastal devefopment pemnit unless the Executive Diredor determines tet no amendment is legally required. 3. Restoration for Qyistmction Impacte. PRIOR TO ISSUANCE OF THE COASTAL DEVELOPMENT PERMIT, if any temporary wetland and/or riparian Impads are proposed, the applicant shall submit a detailed revegetation plan indicating te type, size, extent and location of all plant matertals, any proposed irrigation system and any oter landscape features necessary to revegetete any proposed temporary wetiand and/or riparian impacte. The restoration program shall be developed in consultetion with the U.S. Departtnent of Rsh and Wildlife and te Califomia Department of Rsh and Game, and at a minimum shall indude: Before/After Survev. The condition of te wetiand andfor riparian revegetetfon and substrate under the two approved golf cart crossing kx^tions shall be documented prior to consttrudion, and ttie extent of proposed temporary impacte shall be kientified. The extent of impads to tiie vegetetion and substrate shall be assessed and documented after completion of the repairs. Temporary wetiand and/or riparian impacts shall be revegeteted at a ratio of 1:1. There shall be no wetiand impads except for those temporary impacte assodated with construdion of the two approved golf cart crossings. No permanent wetiand or riparian impacte shall be alfowed. a. The folfowing goals, objedives and perfomiance stendards for the restoration sites: 1. Full restoration of all wetland and/or riparian Impacts that are identified as temporary. Restoratfon of temporarily impeded areas shall indude. at a minimum, restoration of before-impad elevations, restoratfon of before-impad hydrofogy, removal of all non-native plant spedes, and reptenting witti locally colleded native wettend and/or riparian plant species. 2. After construdfon and restoration, a permanent minimum buffer of 100 feet shall be provkled between devefopment and wetiands, and a minimum buffer of 50 feet Shan be provided bete^een devefopment and riparian area, except as shown on ttie "City of Carlsbad Golf Course Revisions" plan dated February 7, 2003. For the two approved golf cart path crossings and the golf course playirig areas adjacent to the riparian area as shown on ttie plan, an average minimum post-consttudion buffer of 50 feet shall b|e provkied between new development and wettands. and an average minimum post-construction buffer of 25 feet shall be provkied between new development and riparian areas, consistent with Policy 3-1.12 of te Melto II Land Use Plan and Sedfon 7-11 of the Carisbad HMP, as provided in Exhibit 10, unless ottienMse approved by te Executive Diredor in a manner consistent with te final, approved development plans and mitigation/restoration plans. The buffer between devefopment and riparian/wetiand habitet for these referenced areas shall not be less than 10 feet in widtti at any one point 3. As shown on ttie plan entitied "City of Carisbad Golf Course Revisions" submitted with LCPA 1-03B (Carlsbad HMP) on February 7,2003, and consistsi. intti the golf course hardline map (Rgu. b Revised) in the Carisbad HMP, golf cart patti crossing #1 shall utilize te existing farm road, and crossing #2 ShaH utilize a bridge span stmdure. No penmanent riparian impacte shaH occur for either crossing. 4. Success criteria and final peribmiance monitoring shall provkte at teast a 90% coverage of areas disturbed by constmction activities wittiin 1 year of completion of construction adivities. 5. The final design and constmction mettiods tet will be used to ensure the restoration sites achieve the defined goals, objectives and performance standards. 6. Submittal, within 30 days of completion of initial restoratfon work, of post- restoratfon plans demonstrating tet ttie redoration sites have been established in accordance witti ttie approved design and constiudfon methods. Constmdion impads to sensitive habitet areas (e.g.. coastel sage and oter native uptend habitet, wetiands, and riparian areas) shall be avokied by kientifying and steking an sensitive habitete outeide tfie projed footprint and educating ttie consttuction crews about te importance of these habitats and need for protection. The permittee shall undertake devefopment in accordance witti the approved restoration pten. Any proposed changes to the approved plans shall be reported to ttie Executive Director. No changes to the plans shaH occur witiiout a Coastel Commissfon approved amendment to thte coastal development permit unless the Executive Diredor determines tet no amendment is legally required. 4. Rnal Landscape Plans. PRIOR TO ISSUANCE OF THE COASTAL DEVELOPMENT PERMIT, the applfcant shaH submit to te Executive Director for review and written approval, a detailed final landscape pten for the proposed development SakI plan shaU show the type, size, extent and focation of att proposed vegetetion and any necessary imgation, and shaH provkte the following information anchor commit to ttie foilowing requiremente: a. The instaHation of plant materials on ttie site, except for golf course tori wittiin the playing and practice areas, shall consist only of drought-tolerant native or non-invasive plant materials. Within buffers adjacent to native habitet only native plant materials shall be installed. To ttie extent feasible, native grasses shall be utiilized In "rough" areas. b. Required habitet buffers, as provided in Special Condition #2. shall be identified. The applfcant shall provkie a list of proposed plants to be used in ttie buffer areas, and shall indicate te type and focation of any proposed baniers, signage or otiier methods that will be utilized to separate gott course adivities from proteded native habitet, wetlands and/or riparian area. c. A planting sdiedufo that indicates the planting plan will be implemented within 60 days of completion of consttiidion. d. A written commitment by ttie applicant ttiat aH required plantings wlH be mainteined In good growing condition, and whenever necessary, will be replaced with new ptent materials to ensure contt'nued compliance. e. A written commitment by the applicant tet five years from the date of opening of ttie golf course, the applfcant will submit for the review and written approval of the Executive Diredor, a landscap. .Wtltoring report, prepared by a Ifcens. Landscape Archlted or qualified Resource Specialist, tet certifies ttie on-site landscaping is in confonmance witti ttie landscape pten approved pursuant to this Spedal Condition. The monitoring report shall indude photographfc documentetion of plant spedes and plant coverage. f. If the landscape moniforing report indfcates ttie landscaping is not In conformance witti or has failed to meet te performance standards spedfied in the landscaping plan approved pursuant to this pennit ttie applfcant, or successors in interest, shall submit a revised or supplementel landscape plan for te review and approval of the Executive Diredor. The revised landscaping plan must be prepared by a Ifcensed Landscape Architect or a qualiffod Resouroe Spedalist and shall spedfy measures to remediate those portions of ttie original plan that have failed or are not in conformance with the original approved plan. The permittee shaH undertake devefopment In accordance with te approved landscaping ptens. Any proposed changes to te approved landscaping plans shaH be reported to tfie ExectJtive Director. No dianges to the plans shaH occur without a Coastel Commissfon approved amendment to ttiis coastel development penmit unless ttie Executive Diredor determines tet no amendment is legally required. 5. Erosion Control Plans. PRIOR TO ISSUANCE OFTHE COASTAL DEVELOPMENT PERMIT, the applicant shall submit to ttie Executive Diredor for review and written approval, an erosion and sediment contrd plan for te proposed development prepared by a qualified resource specialist The plan shall be in substential coriformance with te following requiremente: a. The plan shall deHneate ttie areas to be disturtjed by grading or constmction activities and shall include any temporary access roads, steging areas and stockpile areas. The natural areas on the site shall be dearly delineated on the pro|ed site with fencing or survey flags. No grading or steging of equipment or supplies shall occur in te protected areas. b. The plan shall specity that if grading occurs during ttie rainy season (Odober 1 - March 31). the applicant undertake the folfowing protedive measures to assure offsite sedimentetion Is minimized to the maximum extent feasible: insteH or consttud temporary sediment basins (induding debris basins, desilting basins or silt traps), temporary drains and swales, sand bag baniers and/or silt fencing; stabilize any stockpiled fill witti geofabric covers or oter appropriate cover; insteH geotextiles or mate on aH cut or fill slopes; and close and stabilize open tranches as soon as possibte. These erosion and sediment contrd measures shaH be required on te projed site prior to or concun-ent witti te initial grading operatfons and maintained tiiroughout te deveiopment process. All sediment shouki be retained on-site unless removed to an approved dumping location eitiier outeide the coastal zone or to a site wittiin ttie coastel zone permitted to receive fill. c. The plan shall also indude temporary erosion contt'ol measures should grading or site preparation cease for a period of more ttian 30 days, including but not limited to: stabilization of all stockpiled fiU, access roads, distort}ed soils and cut and fill slopes with geotextiles and/or mats, sand bag bamers, and/or silt fendng; and insteliation of temporary drains and swales and sediment basins. These temporaiy erosfon conM measures shall be monitored and maintained until grading or consttuction operatfons resume. The permittee shaH undertake devefopment in accordance with the approved erosfon control plans. Any proposed changes to the approved plans shaH be reported to ttie Executive Diredor. No changes to the plans shajl occur without a Coastal Commission approved amendment to this coastal development pemnii -lless ttie Executive Diredor detemiine^ j^at no amendment Is legally required. 6. Drainace and Polfoted Runoff Contrd Plan. PRIOR TO ISSUANCE OF THE COASTAL DEVELOPMENT PERMIT, te applfcant shall submit for ttie review and approval of ttie Executive Diredor, final drainage and mnoff conttol plans induding supporting cafcutetions. The plan shaU be prepared by a Ifcensed engineer and shall Incorporate structural and non-sttxjctural Best Management Pradlces (BMPs) designed tb reduce te pollutant foad d njnoff to ttie maximum extent feasibfo, and reduce or eliminate any potential increases in the volume or vefodty of runoff leaving ttie site. In addition to ttie specifications above, the plan shaH be in substantial confonnance with the following requiremente: a. Seleded BMPs (or suites of BMPs) shaH be designed to treat infilttate or fitter stormwater from each mnoff event up to and induding te 85* percentile, 24-hour mnoff event for volume-based BMPs, andfor te 85tii percentile. 1-hour mnoff event, witti an appropriate safety fador. for ffow-based BMPs. b. BMPs shall be seleded to address the pdlutente of concem for this devefopment, including sediments, nutriente, pestiddes, fertilizers, motels, petrdeum hydrocaribons. trash and debris, and organfc matter. c. Runoff shall be conveyed off site in a non-erosive manner. Energy dissipating measures shall be insteUed at ttie terminus of aH outf fow drains. d. Drainage from aH roofs, parking areas, driveway area, and ottier impervtous surfaces on the buikling pad shaU l>e direded through vegetetive or other media filter devfoes effective at removing and/or treating conteminante such as pettoleum hydrocartjons. heavy metels and other particulates. ' e. Opportunities for direding mnoff Into penrfous areas located on-site for infilfration and/or percolation of rainfall through grassy swales or vegetath^ filter sfrips. shaH be maximized. f. The plan shaH indude provisions for mainteining the drainage system, induding strudural BMPs. in a functional condition tiiroughout te life of tfie approved devefopment The plan ShaH indude an identiffcatfon of ttie partv or entitv/lesl responsible for maintaining tha various drainage svstems over its lifetime and shall indude written acceotence bv ttia responsibte entih/f tesL Such maintenance shall include te fdfowing: (1) BMPs shall be inspeded, deaned and repaired when necessary prior to and during each rainy season, including conducting an annual inspection no later ttian September 30* each year and (2) shouW any of the project's surface or sut^rface drainage/filtration strudures or ottier BMPs fail or result in increased erosion, te applfcant/landowner or successor-in-interest shall be responsible for any necessary repairs to ttie dralnage/fittration system or BMPs and restoration of ttie eroded area. Should repairs or restoration become necessary, prior to the commencement of such repair or restoration woric, te applicant shall submit a repair and restoration plan to tiie Executh/e Diredor to detemnine if an amendment to this coastal development pemiit or a new coastel development pemitt is legaUy required to authorize such work. g. Periling lote susceptible to stomnwater shouki be swept witti a vacuum regenerative sweeper on a regular basis. h. The gott course shall be equipped with flow reducers or shutoff valves ttiggered by a pressure drop so that broken pipes do not increase flow to tfie storm drains; i. The applfcant shaH >..ovkte, for the revtew and approval of tfL executive Diredor, ptens for a setf-conteined cart washing fadltty tet Is equipped with a pre-treattment fadlity, and, if significant discharge is proposed, is conneded to te sanitery sewer; j. All stonm drain inlet sttudures must be equipped witti ttash racks, whfch shall be mainteined by the applfcant anCUor authorized agent k. Stonm drains shall be stendied vritti water quality warnings indicating that the drain fiows tote lagoon. The permittee shall underteke devefopment in accordance with the approved drainage and mnoff contrd plans. Any proposed changes to te approved drainage and runoff conttol plans shaH be reported to ttie Executive Diredor. No changes to the approved plans shall occur witeut an amendment to tills coastal devetopment penmit unless ttie Executive Diredor detenmines ttiat no amendment Is legaHy required. 7. Water Qualttv Monftorino Plan. PRIOR TO ISSUANCE OF THE COASTAL DEVELOPMENT PERMIT, te applfcant shafl submtt for ttie review and approval of ttie Executive Diredor, a water quality monitoring ptan to address te qualify of mnoff prior to leaving te stte or entering te onsite riparian area. The plan shaH describe te methodofogy for monitoring, induding specific ttireshdd levels and sampling protocols, location of monttoring sttes, schedule for monitoring, and reporting d resutts. The monttoring plan shall also indude a contingency plan describing tfie actions to be taken if water qualtty impads are discovered. In addition to speciffcations above, te plan shall be in substantial confonmance witii the folfowing requiremente: a. The pten shall require monitoring d te foHowing pdlutants: nitrates, nttrttes, phosphates, dissolved oxygen. pH. total suspended sdids (TSS), acute and chronfo toxk%. and shall indicate the proposed sampling frequencies. Total suspended sdids (TSS) shall be sampled for at the same frequency as te nutriente. b. The plan shall spedty maximum threshoki levels for each water quality parameter. c. The plan shall spedty sampling protocols to be used for each water quaRty parameter. Measuremente must be precise enough to evaluate compliance wtth applfcable water quality threshold levels. d. Sampling for baseHne data shall be conduded a minimum of three (3) times and during different level storms to acquire a representetive sampte of water qualtty conditions at the stte. e. Results of monitoring shall be submitted to the Executive Diredor annually. f. If any water quality tiireshdd levels refen'ed to above in b) are exceeded, te applicant (or successor interest) shaH notify the Executive Diredor of the exceedances and potential impacte and wtthin 48 hours of receipt of tfie monttoring date. At te same time te appiicant shall consutt witti ttie Executive Diredor regarding ttie need for addttfonal sampling to evaluate the exceedance or corrective action to minimize water qualtty impacte. The appiicant shall report to ttie Executive Diredor on tfie possible causes of ttie exceedance and proposed con*edive actions wittiin 30 days d ttie inttial receipt of ttie date. g. If any water quality impads persist after three years of detedion, not withstanding any corredive actions taken by the applfcant, aU use of the chemicals that exceed water quality threshold levels shall cease. 95- 8. Turf and Pest Management Pten. PRIOR TO ISSUANCE OF THE COASTAL DEVELOPMEf^T PERMIT, ttie applfcant shatt submtt to te Executive Director for revtew and approval, a deteiled turf and pest management pten for te gdf course portion of te development The plan shall compfy with ttie foUowing requiremente: a. Turf management practices shaH utilize stete-of-tfie-art environmental methods to minimize fertilizer use. water use and diemfcal pest conttol to te maximum extent feasit>te, to avokl impads to native uptend habitet, wetiands, riparian areas, and water quaUfy. b. The plan shall favor non-chemfcal sttategtes over diemfcal strategies for managing onstte pests. Chemfcal strategies shall onfy be empfoyed after all oter strategies have been used and proven ineffective. Thte shall be demonstrated by proVkling written notice to the Executh^e Diredor of te non-chemfoal sttategies tet will be used, te reasons for telr ineffectiveness, and the chemical sttategies ttiat are being consktered. The penmittee shall underteke development in accordance wtth tfie approved torf and pest management plan ptens. Any proposed changes to the approved plans shafl be reported to te Executive Diredor. No changes to the approved plans shaH occur witeut an amendment to this coastal development pemntt unless the Executive Diredor determines that no amendment is legatfy required. 9. Publfc Golf Course Fadlitv. The golf course, dubhouse, paridng areas, driving range, conference center and pads for futore industrial/golf related uses shall be operated as fadlttles open to the general public. Any proposed change in te tevd of publfc access andfor publfo use shall require an amendment to ttite permtt. Signage shall be provided indfcating that the onsite fadllties as provkied at)ove are open to te publfc. 10. Open Space and Conservation Easement A. No development, as defined in Sedion 30106 d te Coastal Ad. shall occur In those areas indicated as Preservation Areas in Exhibtt 7 (Ctty Goff Course, Revised Figure 8 of tiie Carisbad HMP. CAR LCPA 1 -OSB), except for temporary Impacte assodated wtth construction d the two approved gott cart patti crossings, consistent with Special Condttion #3, and onsite habttat restoration/revegetetion activities as part of an approved coastal sage scmb mttigation plan, consistent wtth Spedal Condition #2. B. PRIOR TO ISSUANCE OF THE COASTAL DEVELOPMENT PERMIT, te applfcant shaH execute and record a document in a form and content acceptable to the Executive Diredor, Inrevocabfy offering to dedicate to a the Caltfomte Department of Rsh and Game and te U.S. Fish and WikUtte Services, or telr successor agencies, an open space and conservation easement over aH onsite habttat preservation areas, and aH mttigation areas (onsite and/or offstte) that wiU be utilized to address onsite impads to habitet The recorded document shaU indude legal descriptions of both the appifcanf s entire parcel and the easement area(s). The recorded document shaH also refled that development in the easement area(s) is restrided as set forth in this permtt condition. C. The offer to dedicate shall be recorded free of prior liens and encumbrances which the Executive Director detemiines may affed ttie interest being conveyed. The offer shall mn wrth tfie land in favor of te People of the State of Califomte, binding aH successors and assignees, and shall be Inrevocabie for a period of 21 years, such perfod mnning from the date of recording. % 11. Protection d the Coastal Caitfomia Gnatcatcher. To prevent breeding/nesting season impacte to the coastal Cafifomia gnatcatcher (Pdfoptila caiifomfca califomfca), te permtttee shaH not undertake any dearing or grading activttles on ttie gdf course stte between March 1 and August 15, unless approved in writing by tfie U.S. Rsh and Wikiltte Sen/foe and te Califomte Departtnent of Rsh^nd Game. Hert)idde, pestidde and/br fertilizer appHcatfons shaff occur outekie of a 100-foot exdusfon zone to avokl drift towards nesting areas. A woricer educatfon program shaH be implemented to ensure tet aH gdf course constmction and maintenance workers know the focation of aH gnatcatcher nests and are aware of the above-described protection measures. During the non-breeding season (August 16 tiirough Febmary 28), tt constmction activities will produce ndse tevds greater than 60 db, gnatcatcher-occupied habitete wtthin te habitet preserve areas shaU be shielded from the sight and sound d such activities taking ptece wtthin 50 feet of the occupied habitet. using ttie fdlowing technk)ue. During consttuction, te gnatcatcher habitet will be shielded from sight and sound by 8-foot high, sdki 1-inch tiifck baniers. A bfologfoal monitor must be onsite daHy to ensure that tfie consttuction activities are having no negative impad on gnatcatchere. The permittee shall steff a quaHfled monitoring biofogist on-stte during all CSS dearing and any other prqjed-related woric adjacent to CSS to be avokied. The biologist must be acknowiedgeable of gnatcatcher bidogy and ecofogy. The penmittee shall ensure tet prior to and during ttie clearing of ctoastal sage scrub and/or any other suiteble gnatcatcher habttats outside the gnatcatcher breeding season, the bfologtet shall focate any indvkJual gnatt^tchere on-stte and dired ciearirig to begin in an area away from birds. In addition, te biofogist shaH walk ahead of clearing equipment to fiush birds towards areas of habttat that will be avokied andfor which are located within the penmanent preserve areas. 12. Open Space Restrfction. A. No development, as defined in Section 30106 d ttie Coastal Ad, shall occur in habitet buffer areas as required in Spedal Conditions #2 and 4, and as kientified in ttie final landscape ptens. and as described and deplded in an Exhibtt attedied to the Notice of Intent to Issue Permtt (NOI) tet te Executive Diredor issues for ttite penmtt. except for 1. approved landscaping activities and plantings and/or restoration and revegetetion d native habitet according to te final coastel sage scmb mitigation plan; and B. PRIOR TO ISSUANCE BY THE EXECUTIVE DIRECTOR OF THE NOI FOR THIS PERMIT, the applicant shatt submtt for te review and approval of te Executive Director, and upon such approval, for attachment as an Exhibtt to ttie NOI, a formal legal description and graphfc depfction d the portion of the subjed property affeded by thte condition, as generally described above and shown on Exhibtt 7 attached to ttiis steff report. C. PRIOR TO ANY COhiVEYANCE OF THE PROPERTY THAT IS THE SUBJECT OF THIS COASTAL DEVELOPMENT PERMIT, te applicant shall execute and recortf a deed restridfon, in a fonm and content acceptable to ttie Executive Diredor: (1) indicating tet, pursuant to ttiis penmtt, ttie Callfomte Coastal Commission has authorized development on ttie subjed property, subjed to terms and conditfons tet restrid te use and enjoyment d tet properfy (hereinafter referted to as ttie "Standard and Spedal Conditions); and (2) imposing all Standard and Special Conditfons of ttiis permtt as covenante, condttions and restridions on the use and enjoyment of ttie Property. The restridion shall Include a legal description of the applicant's entire parcel or parcels. It shall also indicate ttiat, in ttie event d an extinguishment 97 or tenmination of te dtc j resttlction for any reason, the Stana; J and Speciai Conditions of thte penntt shaH continue to restrict te use and enjoyment d ttie subjed property so tong as eitfier this penntt or te devefopment ft auterizes - or any part, modification or amendment thereof - remains in extetence on or witti resped to te subjed property. 13. Any futtjre revtefons to ttie gott course layout and/or design which may be necessary to address golf course operations or any other reason shaH reqtiire an amendment to thte permit Any such revisions to tiie gott course shaH occur wtthin the approved devefopable area in tfie least environmentaify damaging manner that is most protedive of te sensitive resources wtthin the habttat preserve. No impads to resources within ttie presence shall be permitted. 14. Technfcal Advisory Pand. An independent technical advisory pand of environmentel and agency representatives shall be provkied te opportuntty to review and comment on te management plans and ongoing monitoring reports. Thte wiH alfow for meaningful input by aH parties interested in ttie water qualtty in ttie Agua Hedfonda Lagoon, and will asstet ttie Coastel Commlsston staff and te City in effedh/ely assuring ttie environmental qualtty of te gott course. All revtew and comments will be requested to be submitted wtthin 45 days of receipt of draft plans. The Executive Diredor of tfie Cafifomia Coastel Commission shall have final authority over te determination of condition compliance, unless rt is determined tet ttie rtem shcxjid be referted to the Commissfon. A-6-CI1-00-087P EXHIBIT E-5 CITY OF CARLSBAD PLANNING DEPARTMENT 1635 Faraday Avenue Carlsbad CA 92008 ENDANGERED SPECIES ACT INCIDENTAL TAKE PERMIT 1. Permit Number HMP 04-01 2. Name of Permittee City of Carist)ad. Recreation Department 3. Name of Project Carisbad Municipal Gott Course 4. Contect Name and Phone Number John CahiH 602-2726 5. Location Where Authorized Activity May Be Conducted City owned stte located generally nortti or Pafomar Airport Road, soutfi of Faraday Avenue east of Hidden Valley Road, and west d McCldlan-Palomar Airport. 6. Other Reteted Entitiemente CUP 97-07 Conditions of Permit • The applfcant shaH comply wtth all conditions of approval and mitigatidn measures contained in CUP 97-07, EIR 97-01, and Coastal Devefopment Permtt A-6-CII-00-87 issued by tine Coastal Commissfon. • The applicant shall comply with all applfcabte provisions of the approved Habttat Management Plan. See atteched Rndings. Recommended for approval 8. Signature of Planning Director Date: PLANNING DIRECTC >^INDINGS FOR ISSUANCE OF INCL NTAL TAKE PERMIT These Rndings accompany Cartsbad HMP Permtt No. 04-01. In issuing te pemnit, ttie Ptenning Director finds as fdfows: 1. That ttie Carisbad Munfoipal Gott Course has received aU necessary permite, entitiemente and approvals from the Qty of Carisbad. te Califomia Coastel Commission, and aH ottier agendes having jurisdfction. 2. That ttie Carisbad Munidpal Golf Course is shown as a Proposed Hardline Projed in te final approved Habitet Management Pten as Figure 8 Revised. A Grading Permtt fbr ttie projed will be issued whfch conforms to ttie areas d impad and preservation as shown in Figure 8. 3. That auterization to teke spedes of concem Is subjed to continuous compltenc» wrth ail provisfons of te Habitet Management Plan for Natoral Communities in te Ctty of Carisbad (HMP), te CItywkle Inddentel Take Pemitt issued for ttie HMP. te Implementing Agreement te Tenms and Conditions of the Inddentel Take Permft, and the Biological Opinfon. 4. That authorization to take spedes of concem is subjed to continuous compfiance with ali mitigation measures as steted in EIR 97-01 and all conditions of approval of Coastel Devetopment Penmtt A-6-CII-00-87. induding but not limfted to onsite revegetetion of coastal sage scmb and Soutem Maritime Chapanal, offstte acquteition in te County Gnatcatcher Core Area, recordation of conservation easemente over all conserved areas, seasonal grading restictions, and management and monitoring in perpetutty by a qualified cxxiservatfon entity. 5. That authorization to teke species of concem is subjed to continuous compUance with the provisions of Volumes I. II and III of te Muttipte Habitet Conservation Program and ttie Final Environmentel Impad Stetement/Environmentei impad Report fbr Threatened and Endangered Spedes Due to Urtjan Growtti wrthin ttie Muttipte Habttat Conservation Program Planning Area (SCH No. 93121073). 6. That aH impads to habitet and all take d species will be inddentel to ottienA/ise lawful activities related to construction and operation of a pudic gdf course. 7. That tfie projed design as approved by tiie Crty of Carisbad and the Califomia Coastel Commissfon has avoided and minimized impads to vtrildltfe habitet and spedes of concem to te maximum extent practicable. 8. That adequate funding has been provided to address changed drcumstences and adaptive management needs ttiat may be reasonabfy antldpated in the futore, consistent with tine HMP Implementing Agreement 9. That ttie inddentel take of spedes of concem as a resutt of tine projed will not appredabfy reduce te likelihood of survival and recovery of tine spedes in te wiW due to compliance with all of the above steted requirements, as well as ongdng monitoring and reporting to the wildlife agendes and ttie public. APPROVED Planning Director ^ Date Ul»/U»/Zuea tf»:4d KAI. 7tf0431S90Z us KISM AND WILDLIFE 1^002 United States Departtnent of the Interior FISH AND WILDLIFE SERVICE Eooiopcal Servioea CarisbKl Fisli and WildUfe Offioe 6010 HkUea VaBey Ra«I Carisl»d,Ciliibnia 92009 InReplyRefiBrTo: FWS^DO.1188.1 5£p 0 g 2004 Mr. Nfichael Holzmiller Carisbad Plamnng Depaimient 1635 Faraday Avenue Carisbad, Cahfomia 92008 Re: Nfitigation for te City of Carisbad^s Proposed Muiudpal Golf Course Dear Mr. Holzmiller. The U.S. Hsh and Wildlite Service (Service) has reviewed te infomiation provided by te City of Carlsbad (Qty) regarding te purchase of S1.6 acres of coastal Califomia gnatcatcher {Polioptila cal^omica califbmicar, gnatcaidier) habitat to mitigate for inipacts from te City's proposed municipal golf couiae. This infoimation included an exhiint which identified te exact locaticm of te 51.6 acres and te conservation easement deed. Witfun te Muhiple Habitat Conservation Flan (MHCP) and te City's Subarea Plan (HMP), te Cify has an obligation to effectuato te conservatioa and conveyance of 307.6 acres of land within te MHCP core gnatoatcher area. One means by whfch te Cify proposes to help meet this obUgation is to acquire 51.6 acrea of habitat occupied by five pairs ot gnatoatchers to partially mitigate for impacts that would occur from the development of te munidpal golf course. It is our rmderstanding that tfiis conditicni ia met by te purchase of 51.6 acres mitigation land as identified on te enclosed exhibit for te following reaaoos: 1) te land is located within te area te Service conriders as contributing to te gnatoatcher core area within te MHCP; 2) a conservation easement will ht placed over all 51.6 acres with te Califonua Department of Hsh and Game aa third paify benefidary; 3) records provided by te City indicato that at least five paiis of gnatcatoheis occupy te 51.6 acres tfutt will be preserved; and 4) te lands wiU be managed by te Center for Natural Lands Management with a suffident endowment to ensure te management of land to provide gnatcatoher habitat in perpetuity. In addition, te Service accepts te City's proposal to acquire te ciesignated laixls and upon acquisition and implementatton of te conditfons outlined above, te Cify may appty te 51.6 acres towards te land acquisiticm obhgation under te MHCP and HMP. If for any reason te Cify does not proceed with development of te nunddpal golf course, te Cify shall have te right to apply te 51.6 acres to mitigate for another public project tfiat would require mitigation for impacts to coastal sage scmb. If te Cify desires to apply te 51.6 acres towards mitigation credit for private projects, te Service will woric witfi die Cify to establish an appropriate mitigation bank to fadiitate such a transfer. TAKE PRiori Mr. HolzmUlor (FWS-SDG-1181.1) The Service is pleased to know te City of Carlsbad is moving forward oo such obligations pie- pennit issuance. If you have any questions, please contact Lee Ann Carranza of te Service at (760) 431-9440 extension 292. Sincerely, Enclosure Therese O'Rourke Assistant Field Supervisor U.S. Fish and Wildlife Service EXHIBIT E-6 San Ol«9o Gas & Electric 8335 Century Rarlr Court San Diego, CA 92123 Sempra Energy utility" June 23, 2005 City ofCarlsbad Recreational Department 1200 Carlsbad Village Drive. Carlsbad. CA 92123 Attn: John Cahill, Municipal Projects Manager LETTER OF PERMISSION FOR GRADmG AND CONSTRUCTION OF IMPROVEMENTS Dear Mr. Cahill: San Diego Gas & Electric Company (SDG&E) is te owner of a 100*, 150% & 200* Electric Transmission Easement and a 20' Gas Transmission Easement located in and around te foUowing legal description: THOSE PORTIONS OF SECmON 35. TOWNSHIP 12 SOUTH RANGE 4 WEST AND SECmON 2, TOWNSHIP 13 SOUTH, RANGE 4 WEST, SAN BERNARDINO MERIDIAN. IN IHE CTTY OF CARLSBAD, COUNTY OF SAN DIEGO. STATE OF CALIFORMA, ACCORDING TO THE OFFIOAL PLAT THEREOF. SAID PROPERTY BEING MORE PARTICULARLY DES(3aBED IN EXHIBIT "A" OF QUIT CLAIM DEED RECORDED MARCH 28. 1989 AS FILE NO. 89-157040 OF O.R. (A.P.N. 212-010-05, 07, 11. 12, 13, & 15; A.P.N. 212-041-12 TO 36; A.P.N. 212-082-01 TO 10; A.P.N. 212-081-01 TO 21) (SDG&E Right of Way No. 31580, Recorded April 15. 1954 in Book 5205, Page 419 of O.R.; SDG&E R/W No. 31581, Recorded May 6, 1954 in Book 5230, Page 131 of OR.; SDG&E R/W No. 45062, Recorded August 14, 1957 in Book 6706. Page 514 of O.R.; SDG&E R/W No. 45064, Recorded September 27, 1957 in Book 6767, Page 25 of O.R.; SDG&E R/W No. 31564, Recorded April 15, 1954 in Book 5205, Page 416 of OR.; SDG&E R/W No. 31565, Recorded May 3. 1954 in Book 5525, Page 397 of OR.; SDG&E R/W No. 45474, Recorded May 11.1961 as Doc. No. 81362 of O.R.; SDG&E R/W No. 45476, Recorded May 15, 1961 as Doc. No. 82981 of O.R.). We have reviewed and approved the Grading & Improvement Plans for Carlsbad Municipal Golf Course - Phase II, accepted April 4, 2005, which shows the proposed grading and improvements on te property subject to our easement, attached hereto as Exhibit * A* (27 sheets). Carlsbad Ciolf Couisedoc Permission is hereby granted to City of Carlsbad (Permittee), to grade and construct improvemente as shown on said plan, subject to the following conditions: 1. Expiration: This "Pennission to Grade" shall expire if grading does not commence within 6 monte from te date of this letter, or work is not diligentiy pursued to completion. 2. Submittals: 2.1. Permittee agrees to supply SDG&E witfi *as built' grading, improvement, and profile plans to SDG&E specifications, if requested. 2.2. Permittee agrees to submit for review and approval, a blasting plan prior to blasting, if blasting is required. 3. Pre-Constmcdon Meetteg: SDG&E's Land Management Representative (LMR) must be invited with at least three (3) working days prior notice. 4. Grading: 4.1. At least twenty-four (24) hours notice must be given to SDG&E's LMR before start of work. Field changes to plans witfun said easement shall be approved in writing by SDG&E LMR. 4.2. Pemiittee is responsible to call DIG ALERT at 1-800-227-2600 for all underground mark-out locations 48 hours before digging. 4.3. SDG&E standby personnel are required when grading or groimd penetration occurs witfiin te gas transmission easement or witfiin ten (10) feet of te gas line when in a franchise position. 4.4. No power-operated equipment shall be used witfiin two (2) feet of any portion of te gas line, only hand digging is allowed and an SDG&E standby is required. 4.5. If any contact is made witfi te gas line or its coating, SDG&E must be notified immediately at 1-800-411 -7343 and te area left exposed. 4.6. The gas easement shall be staked with ribboned iatfi at fifty-foot (50') increments and the staking shall be maintained at all times during grading and constmction of te project. Carbbad Golf Courscdoc /D 4.7. SDG&E reserves te right to inspect and perform quality control work during constmctioiL SDG&E standby persormel are auterized to stop work around te gas Ime if all required precautions are not stricfiy adhered to. 4.8. Equipment crossings of te gas line must be designed to eliminate any possible damage to te gas line and approved by SDG&E gas transmission engineering. 4.9. Clearance of (35) fed minimum between te SDG&E electric transmission wires and te natural groimd shall be maintained on any given day, noting line sags vary depending on ambient temperature and line current All requirements, including but not limited to OSHA, CAL-OSHA. ANSI, NIOSH. and NEC for clearances when woridng around energized electrical facilities must be maintained. 4.10. No grading shall be allowed witfiin ten (10) feet of a single wood pole stractore or anchor, or fifteen (15) feet from any multi-wood pole structure (H-fi:ame, 3-pole, etc), or twenty (20) fed from any electric steel lattice towers or tfjirty (30) fed of steel poles. All measurements are taken fix»m te face of pole or face of foundation. 5. Special Condirions: 5.1. All new SDG&E access roads shall be surfeced with an all-weather material. All access driveways shall have a 30' wide conmiCTcial grade aproiL Roads shall be compacted to 90% relative maximum compaction. SDG&E requires that Permittee submit a complete compaction report upon completion of all areas of grading within the SDG&E gas transmission easement Appropriate plans must be made to protect te affected areas torn storm water. 5.2. All trees planted witfiin SDG&E's casement shall be no more tfian 15 00 feet in height at maturity and shall not restrict SDG&E's access to any of ite facilities. 5.3. Irrigation systems shall not spray directiy onto any electric facilty, access road or maintenance pad. 6. Erosion Control: 6.1. All disturbed and created slopes, within te SDG&E electric transmission easement shall be hydro-seeded or planted by Permittee witii an SDG&E approved mix. 6.2. All drainage shall be designed to prevent erosion of SDG&E easement and access roads. 7. Storage: 7.1. This permission to grade letter does not permit storage of equipment, materials, dirt or debris on te easement or SDG&E fee owned property. Carisbad Goif Coursedoc }oS 8. Access: 8.1. Access to all SDG&E facilities shall be maintained at all times. All coste associated with restoration of access and all associated damages shall be borne by Permittee. 8.2. All gates shall provide for SDG&E access by padlock, lock-box or kieyed bypass botii during and upon completion of construction. Location and construction of gates to be approved by SDG&E LMR. 9. Outstanding Agreements: Permittee agrees to pay for, sign and/or have signed all Consent Agreements, Consent to Use of Land Agreements and/or Joint Use Agreements between SDG&E and owner or public agencies who encroach upon te SDG&E easements. Said agreements shall be subject to te revocability clause as steted in te California Public Utility's Commission's Geaeral Order 69-C as shown on website http.7/www.cpuc.ca.gov/PUBLISHED/Graphics/645.PDF. 10. Indemnification: 10.1. Permittee agrees to assume all risk of loss, damage to property and/or injury and/or death to persons, and to indemnify and hold SDG&E hannless from any and all liability in any way arising from te proposed grading or construction of improvements. 10.2. SDG&E shall not be responsible in any manner for any maintenance or repair of te proposed grading or improvemente. This includes, but is not limited to. drainage and/or erosion problems or damage caused to improvements tfiat were not constmcted to take te weight or activities of vehicles and equipment owned by or woridng on bdialfofSDG&E. 11. Terms and Conditions: The terms and conditions of tfiis approval shall benefit and bind Permittee its successors, assigns, agents or contractors. 12. Posting: This permission letter shall be posted on tiie job site at all times. Carfsbad Golf Course.doc Should you have any questions or require additional assistance, please caU me at (858) 654-1201. APPROVED BY: San Diego (jas & Electric Company Michael J. WilliT ' Land Management Representative I ACCEPT THE AFOREMENTIONED CONDITIONS: I hereby have te auterity to sign. CityofCarlsb Print Name: Title: /HuM/a/Ac flvrt^s ^^^^ Date: Carlsbad Golf Course.doc /o?