HomeMy WebLinkAbout2018-01-16; Public Financing Authority; Resolution 75RESOLUTION NO. 75
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD PUBLIC
FINANCING AUTHORITY AUTHORIZING THE CHAIRMAN TO EXECUTE A FIVE-
YEAR AGREEMENT FOR GOLF COURSE MANAGEMENT AND OPERATIONS
WITH JC MANAGEMENT, IN AN AMOUNT NOT TO EXCEED $270,000 PER
AGREEMENT YEAR
WHEREAS, the Public Financing Authority of the City of Carlsbad, California (Authority) has
determined that accomplishing municipal golf course management and operations through
competitive negotiations, consistent with Administrative Order No. 12, allows staff to ensure the
receipt of top quality services; and
WHEREAS, the Authority currently has an agreement with Kemper Sports Management, Inc.
(KSM), to manage The Crossings at Carlsbad Municipal Golf Course (the Golf Course); and
WHEREAS, that agreement ends on Jan. 28, 2018; and
WHEREAS, on Sept. 5, 2017, a Request for Qualifications and Proposals (RFQP) was advertised
for Management and Operations of the Golf Course; and
WHEREAS, the RFQP detailed that the chosen firm would be responsible for the management
of the entire operations of the Golf Course, including administration, budgeting, marketing, course
maintenance, tournaments, food and beverage, and community events; and
WHEREAS, on Oct. 12, 2017, staff received two responsive submittals, one each from KSM and
JC Management LLC (JCM); and
WHEREAS, after reviewing and rating the submittals, the selection committee -consisting of
the staff on the Golf Course Steering Committee -conducted interviews with KSM and with JCM; and
WHEREAS, upon the conclusion of all of the interviews, the selection committee determined
that JCM was the best qualified firm for recommendation of execution of a new agreement for
Management and Operations of the Golf Course; and
WHEREAS, management fee negotiations were subsequently entered into with JCM; and
WHEREAS, fees for this agreement are comprised of two parts: Fixed Management Fees and
Percentage Management Fees; and
WHEREAS, the Percentage Fee is based on gross revenues -not net revenues, and cannot
exceed the Fixed Fee; and
January 16, 2018 Item #2 Page 5 of 148
WHEREAS, JCM representatives committed to a Fixed Management Fee of $135,000 in the first
agreement year, and adjusted by the Consumer Price Index (CPI) each agreement year thereafter, and
WHEREAS, JCM will remit up to fifty percent of the Fixed Management Fee for the first full
operating year of the agreement, if it fails to maintain gross revenues at equal to or exceeding gross
revenues of the last full operating year of the Golf Course's previous management firm; and
WHEREAS, JCM will likewise remit up to fifty percent of the Fixed Management Fee in future
operating years if it fails to meet budgeted gross revenues for those operating years; and
WHEREAS, JCM representative additionally committed to a Percentage Management Fee of
5.5% of the gross revenues in excess of $5,000,000 in each operating year of the agreement; and
WHEREAS, the Percentage Management Fee will not exceed each agreement year's Fixed
Management Fee; and
WHEREAS, based on the results of the RFQP process, the selection committee recommended
execution of a Management and Operations Agreement for the Golf Course with JCM; and
WHEREAS, said agreement is for a five-year initial term, with one five-year extension term; and
WHEREAS, there are sufficient funds available in the Golf Course Operating Budget to address
this management and operations agreement; and
WHEREAS, staff will work diligently with JCM representatives to ensure a smooth transition in
management and operations of the Golf Course from KSM on Mar. 1, 2018; and
WHEREAS, KSM has agreed to a 30-day extension of the current agreement, which can be
executed by the Executive Director of the Board, to assist with this transition; and
WHEREAS, JCM has developed a management transition plan for the Golf Course, and has
substantial experience assuming management of other golf courses.
NOW, THEREFORE, BE IT RESOLVED by the Public Financing Authority Board of the City of
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. That the Chairman of the Board is hereby authorized and directed to execute the
Agreement for the Golf Course Management and Operations with JC Management LLC,
in an amount not to exceed $270,000 for the first agreement year, to be adjusted
annually thereafter by the Consumer Price Index, per the terms of the Agreement
attached hereto as Attachment "A."
January 16, 2018 Item #2 Page 6 of 148
3. That the Executive Director is authorized to execute amendments to said agreement
deemed to be in the best interest of the Authority, and to extend it for one additional
five-year term.
PASSED, APPROVED AND ADOPTED at a Special Meeting of the Public Financing Authority of
the City of Carlsbad on the 16th day of January, 2018, by the following vote, to wit:
AYES:
NOES:
ABSENT:
M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard.
None.
None.
(SEAL)
January 16, 2018 Item #2 Page 7 of 148
AGREEMENT FOR GOLF COURSE MANAGEMENT AND OPERATIONS
(JC MANAGEMENT LLC)
This AGREEMENT (Agreement) is made and entered into as of the 4th day of January 2018, by
and between the CARLSBAD PUBLIC FINANCING AUTHORITY, California, a public entity and joint
powers authority, ("Authority"), and JC MANAGEMENT LLC, a California limited liability company
("JCM"). Authority and JCM are sometimes hereinafter referred to as the "parties."
RECITALS
A. WHEREAS, the City of Carlsbad, a municipal corporation ("City"), is the Owner of certain
property located in the city of Carlsbad, California, 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 at Carlsbad Municipal
Golf Course", located in the City of Carlsbad, California, consisting of an 18-hole golf course, a driving
range, a clubhouse, restaurant, player's lounge, sunset patio, pro shop, and maintenance facility
( collectively, "the Golf Course"); and
C. WHEREAS, the Authority requires the professional services of a firm that is experienced
in golf course management and operations; and
D. WHEREAS, JCM has the necessary experience in providing professional services and
advice related to golf course management and operations; and
E. WHEREAS, JCM has submitted a proposal to the Authority and has affirmed its
willingness and ability to perform such work.
NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained herein,
the Authority and JCM agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the respective meanings indicated below:
1.0 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 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
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 8 of 148
of California, and the Carlsbad Municipal Water District, a public agency organized and existing under the
Municipal Water Act of 1911, and a Subsidiary District of the City of Carlsbad.
1.5 City -The City of Carlsbad, California, a chartered municipal corporation
1.6 City Council -The City Council of the City of Carlsbad, California.
1. 7 City of Carlsbad -The City of Carlsbad, California, a chartered municipal corporation.
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 ICM 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 accruing for the
benefit of the management staff and all other persons employed by ICM at the Golf Course, 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 ("FICA"), 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 detennined
by ICM and as set forth in the approved Annual Plan.
1.11 Environmental Laws -All current and future federal, state, and local statutes, regulations,
ordinances, and rules 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, transportation, handling, removal, remediation, or investigation of
a Hazardous Material; or (iii) the protection of human health, safety, or the indoor or outdoor environment,
including, without limitation, the Clean Air Act, the Federal Water Pollution Control Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability
Act, the Occupational Safety and Health Act, all amendments thereto, all regulations promulgated
thereunder, and their state or local statutory and regulatory counterparts.
1.12 Executive Director of Carlsbad Public Financing Authority -The person holding the
position 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 furniture, furnishings, 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 operation of the Golf Course, other than
Operating Inventory.
1.14 Golf Course Expenses -The total of (a) all expenses specifically identified as "Golf
Course Expenses" in Section 5.7 of this Agreement (see Section 5.7); and (b) all other expenses incurred
by JCM in connection with the Golf Course or this Agreement, which expenses were not reasonably
anticipated by the parties or otherwise provided in this Agreement provided that, except for emergency
expenditures as described in Section 2.8(p) below, any such unplanned expense which exceeds Five
Thousand Dollars ($5,000.00) must have prior written approval from the Executive Director, which
approval shall not be unreasonably withheld.
2
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 9 of 148
1.15 Golf Course Operations and Maintenance Evaluation Form -The form, attached to this
Agreement within Exhibit "A", to be used to evaluate JCM's adherence to the Golf Course Operations and
Maintenance Standards. The Golf Course Operations and Maintenance Evaluation Fonn includes a "Golf
Course Clubhouse Audit form." This form may be modified from time to time by mutual written agreement
of the Executive Director and JCM's representative identified in Section 9.0.
1.16 Golf Course Operations and Maintenance Standards -Those written maintenance
standards described in Section 2.25, attached to this Agreement as Exhibit "A," to be agreed upon by the
parties, which may be modified from time to time by mutual written agreement of the Executive Director
and JCM's representative identified in Section 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 governmental 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, pennit fees, inspection fees and other authorization fees and charges,
which at any time may be assessed, levied, confinned or imposed on the Golf Course or the operation 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 Statistics and equal
to 257.223 for October 2017.
1.21 Insurance Requirements -All requirements of each insurance policy, and all orders, rules,
regulations and other requirements of the Authority applicable to the Golf Course or the operation of the
Golf Course.
1.22 JCM -JC Management LLC, or any successor in interest under this Agreement.
1.23 Legal Requirements -All laws, statutes, ordinances, orders, rules, regulations, permits,
licenses, authorizations, directives and requirements of governments and governmental 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 March I, 2018 and end
on February 28, 2023.
1.25 Notice of Golf Course Deficiency -The Golf Course Maintenance and Operations Form
attached to this Agreement within Exhibit "A" to be used to notify JCM of Deficiency Items (as that term
is defined in Section 2.26).
1.26 Operating Inventory -Consumable items used in or held in storage for use in the
operation of the Golf Course, including scorecards and cart tickets, driving range balls, golf pro shop
merchandise, food and beverage inventory, kitchen supplies, paper and plastic ware, locker room and
3
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 10 of 148
bathroom supplies, towels, fuel, cleaning materials, fertilizers, pesticides, seed, maintenance parts and
supplies, office supplies, and other similar items.
1.27 Operating Year -An Operating Year shall be a twelve (12) month Fiscal year during the
Tenn of this Agreement commencing on July I and continuing through June 30.
1.28 Real Property-As designated in the Legal Description as Exhibit "D".
1.29 Technical Advisory Committee ("TAC") -The advisory group required by the California
Coastal Commission Permit with respect to the Golf Course.
1.30 Termination Date -February 28, 2023.
1.31 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 March I, 2018 and terminate on
February 28, 2023 ("Management Term"). This Agreement may be terminated by the Authority, without
penalty or cause, at any time after the third anniversary of the Agreement if the Authority delivers written
notice to JCM of its intention to terminate. Such notice shall be given at least ninety (90) days prior to such
third anniversary, or one hundred twenty (120) days prior to tennination if after the third 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 of the parties; provided that
such extension be finalized no less than ninety (90) days prior to the Termination Date.
2.1 Management of the Golf Course by JCM. The Authority hereby contracts with JCM,
during the Management Term, to manage and operate the Golf Course, pursuant to the terms of this
Agreement, and JCM agrees it shall manage and operate the Golf Course in such manner. Subject to the
tenns of this Agreement, and further subject to the approved Annual Plan, JCM shall have authority and
responsibility to: (a) implement the policies and standards for the Golf Course as reasonably determined by
the Authority; (b) manage and supervise all day-to-day operations of the Golf Course including starting,
course marshals, volunteers, pro shop, player's lounge, building and course maintenance, security, cart
rental, driving range, food and beverage service, golf instruction, administration and budgeting; ( c) subject
to Section 2.1 7, 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 JCM's
responsibilities, including with Authority approval, the General Manager and Course Superintendent; (e)
acquire all goods and services necessary to carry out JCM's responsibilities; (f) acquire all necessary
licenses and pennits for the operation of the Golf Course including those related to food preparation and
alcoholic beverages; (g) manage all course reservations, tee times, and tournaments, including special
events or other activities reasonably 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 JCM to pennit and assist JCM to carry out its duties under this Agreement.
2.2 Authority to Set Fees, Charges and Prices. Notwithstanding any authority given in this
Agreement to JCM 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.
4
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 11 of 148
ANNUAL PLAN
2.3 Preparation and Approval. Annually on or before April 1 of each year, JCM shal1 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 al1 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)
Furnishings 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 shal1 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 shal1 use commercially reasonable efforts to limit the increase
in total Golf Course Expenses during the tenn of this Agreement to the increase in the Index or increases
due to increases in Gross Revenues, as defined in Section 4.3. 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 written
approval of the Executive Director. It is contemplated by the parties that the Annual Plan wil1 be agreed
upon by JCM and the Executive Director not later than ninety (90) days fol1owing delivery of the Annual
Plan by JCM to the Authority. If the Executive Director fails to either approve the Annual Plan within said
90-day period or to advise JCM 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, JCM 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.
JCM 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, JCM shal1 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 of the 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, JCM shal1 be required to obtain prior written consent of
the Authority, if the actual amount expended per calendar month for Golf Course Expenses shall be greater
than two percent (2%) or higher than the amount budgeted for that calendar month in the Annual Plan.
JCM is authorized to take al1 action reasonably deemed necessary by JCM 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 JCM's judgment
and the facts and circumstances known by JCM at the time of preparation and that JCM has not made any
guarantee or warranty concerning 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 Quarterly Review of Annual Plan. Every three (3) months, the Executive Director and
JCM shal1 meet and discuss the operating results 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 JCM 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, which approval shal1 not be unreasonably withheld.
5
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 12 of 148
CAPITAL EXPENDITURES
2.5 Capital Improvement Funds. Subject to the availability of funds in the "Golf Course
Account" (as defined in Section 5.0 below) after maintenance of the Operating Expense Minimum, JCM,
as provided in Section 5.2 below, shall disburse to Authority monthly from the Golf Course Account an
amount equal to five percent (5%) ("Capital Improvement Fund Percentage") of that portion of the Gross
Revenues for the previous month attributed to green fees ("Capital Improvement Funds"). If available,
accrued Capital Improvement Funds shall be disbursed to Authority within ten ( I 0) 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 of the Capital
Improvement Funds for any particular month, then the unpaid Capital Improvement Funds shall be accrued
and paid in the next succeeding month or months when sufficient funds exist in the Golf Course Account
to pay such accrued 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 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.
2.6 Capital Improvement Plans. During the Management Term, JCM 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 JCM'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 Projects. 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, JCM shall be
responsible for the construction or purchase of the Capital Improvements, unless otherwise instructed by
the Authority.
JCM acknowledges that Capital Improvement Projects are subject to the procurement
requirements in Carlsbad Municipal Code section 3.28.080 and that any construction, alteration,
demolition, installation or repair work implemented by JCM may constitute "public work" under Labor
Code section 1720 et seq. JCM shall be responsible for complying with the applicable procurement
requirements and prevailing wage law. JCM shall include the following provisions in any contract for
construction of Capital Improvement Projects:
The general prevailing rate of wages for each craft or type of worker needed to execute
the Contract shall be those as determined by the Director of Industrial Relations
pursuant to Sections 1770, 1773 and 1773.1 of the Labor Code. Pursuant to Section
1773.2 of the Labor Code, a current copy of the applicable wage rates is on file in the
Office of the City Engineer. Contractor shall not pay less titan the said specified
prevailing rates of wages to all workers employed by him or her in execution of the
Contract.
6
US-DOCS\9793 I I 74.4 January 16, 2018 Item #2 Page 13 of 148
Contractor shall be responsible for insuring compliance with provisions of section
1777.5 of the Labor Code and section 4100 et seq. of the Public Contracts Code,
"Subletting and Subcontracting Fair Practices Act." The City Engineer is the City's
"duly authorized officer" for the purposes of section 4107 and 4107.5.
The provisions of Part 7, Chapter 1, of the Labor Code commencing with section 1720
shall apply to the Contract for work.
A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal,
subject to the requirements of Section 4104 of the Public Contract Code, or engage in
the performance of any contract for public work, unless currently registered and
qualified to perform public work pursuant to Section 1725.5. This project is subject to
compliance monitoring and enforcement by the Department of Industrial Relations.
Contractor and any subcontractors shall comply with Section 1776 of the California
Labor Code, which generally requires keeping accurate payroll records, verffying and
certifying payroll records, and making them available for inspection. Contractor shall
require any subcontractors to comply with Section 1776.
2.8 Responsibilities of JCM. Without in any way limiting JCM's right to manage and operate
the Golf Course in accordance with the tenns of this Agreement, JCM shall, in addition to other obligations
and responsibilities set forth in this Agreement and subject to the availability of sufficient funds, 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 JCM
and costs and expenses incurred by JCM in perfonning these services, including the "Management Fees"
(as defined in Section 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 furnishing 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;
JCM acknowledges that this work is subject to the procurement requirements in
Carlsbad Municipal Code section 3.28.080 and that any construction, alteration, demolition, installation or
repair work implemented by JCM may constitute "public work" under Labor Code section 1720 et seq.
JCM shall be responsible for complying with the applicable procurement requirements and prevailing wage
law. JCM shall include the following provisions in any contract for this work:
The general prevailing rate of wages for each craft or type of worker needed to execute
the Contract shall be those as determined by the Director of Industrial Relations
pursuant to Sections 1770, 1773 and 1773.1 of the Labor Code. Pursuant to Section
1773.2 of the Labor Code, a current copy of the applicable wage rates is on file in the
Office of the City Engineer. Contractor shall not pay less than the said specified
7
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 14 of 148
Plan;
prevailing rates of wages to all workers employed by him or her in execution of the
Contract.
Contractor shall be responsible for insuring compliance with provisions of section
1777.5 of the Labor Code and section 4100 et seq. of the Public Contracts Code,
"Subletting and Subcontracting Fair Practices Act." The City Engineer is the City's
"duly authorized officer" for the purposes of section 4107 and 4107.5.
The provisions of Part 7, Chapter 1, of the Labor Code commencing with section 1720
shall apply to the Contract for work.
A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal,
subject to the requirements of Section 4104 of the Public Contract Code, or engage in
the pe,formance of any contract for public work, unless currently registered and
qualified to perform public work pursuant to Section 1725.5. This project is subject to
compliance monitoring and enforcement by the Department of Industrial Relations.
Contractor and any subcontractors shall comply with Section 1776 of the California
Labor Code, which generally requires keeping accurate payroll records, verifying and
certifying payroll records, and making them available for inspection. Contractor shall
require any subcontractors to comply with Section 1776.
(f) Manage payment of Golf Course operating expenses as identified in the Annual
(g) Maintain a level of Operating Inventory deemed appropriate by JCM 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 ofJCM in connection with the operation and management of the Golf Course; and Authority agrees
to execute any and all applications and such other documents as shall be reasonably required and to
otherwise cooperate, in all reasonable respects, with JCM in the application for, and obtaining and
maintenance of, such licenses and permits. Upon termination or expiration of this Agreement, JCM shall
cooperate in transferring all licenses, permits and accreditations in the name of JCM 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 of the 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
construction 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 construction at the Golf Course. In the event, at any time during the Management Tenn,
repairs, additions, changes, or corrections in the Golf Course of any nature shall be required by reason of
any Legal Requirements, JCM 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, JCM 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;
8
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 15 of 148
(j) Pay all Impositions and insurance premiums when due;
(k) Implement a marketing, advertising, and promotional plan for the Golf Course;
(I) Purchase Furnishings 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 JCM will represent JCM, and the Golf Course on all questions
relating to Legal Requirements, will defend any claims or actions brought against JCM 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 tenninate any
lease, license or concession agreement on the grounds of default by the tenant, licensee, or concessionaire,
or to contest property taxes. JCM shall notify Authority and its General Counsel of any claims or lawsuits
relating to the Golf Course within two (2) business days after JCM receives notice of such claims or
lawsuits. Any legal fees for outside counsel shall be paid by JCM and charged as a Golf Course Expense
and shall not include any JCM corporate overhead or administrative fee or charge. The Authority's General
Counsel shall have the right to reasonably approve any legal counsel retained by JCM to defend JCM and
the Golf Course in connection with such matters.
For all claims naming the Authority and/or City, JCM shall cooperate with the
Authority's General Counsel/City Attorney who at his or her 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, JCM shall: (i) maintain all books, records, and
other data associated with the financial activities 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 JCM'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, JCM 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, JCM shall have all rights
ordinarily accorded to a JCM 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 ofleases and contracts. JCM shall not be obligated to advance any of its own funds
to or for the account of the Authority, nor to incur any financial liability, unless the Authority shall have
furnished JCM with funds necessary for the full discharge thereof. However, if for any reason JCM 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 JCM within a reasonable time upon demand
for the full amount of such payments.
9
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 16 of 148
PERSONNEL
2.9 General. Subject to Section 2.1 ( d), JCM shall employ all of the employees of the Golf
Course. JCM shall recruit, 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 JCM shall
supervise through the management staff the recruiting, hiring, training, discharge, promotion and work of
all other employees of the Golf Course. All employees of the Golf Course shall be properly qualified for
their positions.
2.10 Employee Benefit Plans. JCM shall have the right to provide eligible employees of the
Golf Course with 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 JCM,
and the allocable share of such employee benefits shall be a Golf Course Expense.
2.11 Temporary Assignment of Other JCM Personnel. If the position of General Manager,
Course Superintendent, or other Key Management Employee positions of the Golf Course are not filled for
whatever reason, JCM may temporarily assign to these positions the staff of other golf courses and country
club Golf Courses operated by JCM or other qualified JCM 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 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 JCM intends to hire to fill the positions of
General Manager and Course Superintendent (regardless of the titles given for such positions by JCM)
(collectively, the "Key Management Employees"), which approval shall not be unreasonably withheld.
2.13 JCM Acknowledgment of Regulatory and Permit Documents: Easements. JCM
acknowledges that it has been provided copies of the Regulatory Pennits pertaining to the Golf Course
property, attached hereto as Exhibit E, consisting of:
1. State Water Resources Control Board, WDID No. 937C337203, dated 10/17/05;
2. California 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 1/5/05,
modifying permit No. 972020600-MAT, dated September 30, 2000;
4. California Coastal Commission Coastal Development Permit No. A-6CII-00-087,
Notice of Acceptance, dated April 25, 2005;
10
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 17 of 148
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 Pennission for Grading and
Construction oflmprovements, 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 JCM
as manager of the Golf Course as provided in this Article II, JCM shall operate and manage the Golf Course
in accordance with 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 nonnal maintenance requires temporary closure. The driving range may be open
when the Golf Course is closed, subject to the conditions of the Conditional Use Pennit. The inside food
and beverage services of the Golf Course Clubhouse shall be open as determined in the Annual Plan. The
permitted hours for food and beverage services in the Golf Course Clubhouse restaurant shall be as provided
in the Conditional Use Pennit.
FEES AND CHARGES
2.17 Setting of Fees. JCM 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 JCM 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, if applicable, and secondarily, to provide a benefit to residents of Carlsbad. The
green fees shall be recommended in the Annual Plan. JCM acknowledges that Authority obtained public
and/or private financing for construction of the Golf Course, and that such financing required 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. JCM shall establish a "Resident Green Fee Discount,"
whereby Carlsbad residents shall receive a discount on green fees. JCM shall recommend the amount of
the resident green fee discount and include the recommended discount in the Annual Plan. JCM shall
develop all necessary rules 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. JCM may also
recommend discounted rates for other specified groups, as approved by the Authority or as set forth in the
Annual Plan.
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.
JCM shall provide a staffed food service and beverage cart for the service of players on the Golf Course
11
US-DOCS\97931 I 74.4 January 16, 2018 Item #2 Page 18 of 148
during peak hours of operation. JCM shall comply with all requirements of state and local law governing
the sale and distribution of alcoholic beverages. JCM shall obtain and maintain all pennits 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 JCM or a JCM Affiliate. JCM 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. JCM, 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. JCM shall employ sufficient administrative staff at the Golf Course
to permit JCM to competently perfonn JCM's obligations under this Agreement. Upon Authority's written
request, JCM shall provide the Executive Director with a written job description 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. JCM shall maintain at the Golf Course copies of all
JCM 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 regulations of federal,
state, and local governmental agencies, including without limitation any requirements imposed by
California Labor Code Section 6300 et seq. and regulations promulgated with respect thereto, and
applicable federal occupational, health, and safety laws and regulations. JCM 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 alann systems,
motion detection sensors for after-hours control, and locks for the maintenance yard and perimeter gates.
The alann system at the Golf Course shall be tied into an airtight monitoring station. JCM 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. JCM shall negotiate, consummate, enter into, and perform,
on behalf of Authority, such agreements as JCM may deem necessary or advisable for the furnishing of all
food, beverages, utilities, concessions, entertainment, operating supplies, equipment, repairs and other
materials and services as JCM determines are needed from time to time for the management and operation
of the Golf Course. JCM shall not be obligated to sign any leases or other agreements in JCM's name
except for any employment related agreements, if any, which shall be in JCM's name ( or the name of JCM's
Affiliate). Notwithstanding the above, any contract which exceeds Thirty-Five Thousand Dollars ($35,000)
in total payments over the tenn of such contract or which has a term of over one (1) year shall be negotiated
by JCM but provided to Authority for its approval and signature.
2.24 Alterations to Buildings. JCM shall not make any substantial alterations, additions, or
changes to the exterior appearance or the structural 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, California; and Encinitas Ranch -City of Encinitas California, as they existed
on the Effective Date of this Agreement. In addition to all other responsibilities of JCM under this
Agreement, JCM 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 JCM
12
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 19 of 148
(the "Golf Course Operations and Maintenance Standards," Exhibit "A"), consistent with the approved
budget and Annual Plan.
2.26 Authority Inspection and Evaluation. At any time during the tenn of this Agreement,
the Authority Executive Director may 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 shall complete the Golf Course Operations and
Maintenance Evaluation Form, or applicable portions thereof, and shall promptly thereafter provide JCM 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 JCM's obligation to correct Deficiency Items as set forth below, JCM
shall be in compliance with the Golf Course Operations and Maintenance Standards unless an overall rating
is determined to be "Unacceptable." The Executive Director's rating of an item as "Unacceptable" or
"Needs Improvement" shall, upon JCM'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 JCM intends to take to correct the
Deficiency Item(s). JCM 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 are subject to reasonable approval
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 JCM's Failure to Take Corrective Action. Except as provided in Section
2.28 below, if JCM 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 Evaluation Fonn indicates that JCM's management of the Golf Course has obtained an overall
rating of "Unacceptable," the Authority shall be entitled 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 (I st) of the two (2) consecutive months and shall continue until
JCM's management of the 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 tenninate 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
timely 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
13
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 20 of 148
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 Deficiency Items. 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 JCM is diligently 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 JCM. 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 JCM is unable to correct because of. or any rating of
"'Unacceptable" caused by. the occurrence of a "Force Majeure Event" (as defined in Section 8.2 of this
Agreement) but only to the extent JCM, 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 JCM is unable to correct due to. or any rating of ·'Unacceptable" caused
by. the Authority's failure to provide sufficient funds 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 .ICM 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 RIGHT 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 EXPLAINED THE CONSEQUENCES OF THE DEDUCTION PROVISIONS AT OR PRIOR
TO THE TIME EACH EXECUTED THIS.
By: JC Management LLC L
~
2.30 JCM Performance Evaluation Deposit. Not later than commencement of the
Management Term. and as a condition to commencement of the Management Term . .ICM shall deposit with
the Authority in cash the sum of Twenty-Five Thousand Dollars ($25,000) as security for the performance
of JCM's obligations pursuant to Section 2.27 ("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 2.27. The Performance Evaluation Deposit shall not be a Golf Course Expense. In the event of
failure of JCM to timely correct Deficiency Items as provided in Section 2.27, the Executive Director shall
have the authority to deduct from the Performance Evaluation Deposit the amounts set forth in Section 2.27.
In the event the Authority is required to make deductions from the Performance Evaluation Deposit. JCM
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
14
llS-DOCS\97931174.4 January 16, 2018 Item #2 Page 21 of 148
the Performance Evaluation Deposit, along with all accrued interest, shall be returned to JCM within sixty
(60) days after such expiration or termination.
2.31 JCM Purchases. In connection with any purchases made by JCM or an Affiliate of JCM
for the account of the Authority, it is understood that JCM or such Affiliate may perform services as a
representative of the 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 accrue 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 JCM, 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, JCM 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 California providing all statutory benefits and covering all Golf Course
volunteers and employees who are JCM employees . JCM may elect to go with a large deductible program
wherein the Golf Course will share loss( es) under the deductible but benefit from the savings in premiums.
(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 JCM), shall be named as an
additional insured as respects liability arising out of work or operations perfonned by or on behalf of JCM
but only with respect to the legal liabilities or claims caused by, arising out of or resulting from acts or
omissions by or on behalf of the named insured with respect to the Golf Course.
(c) Automobile Liability and Garage Keeper's Liability. Automobile Liability
coverage shall apply to all automobiles, trucks and other motor vehicles utilized or controlled by JCM in
connection with the Agreement, and shall include all owned, hired and non-owned vehicles in the amount
of $2,000,000 combined single limit per occurrence. JCM 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
15
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 22 of 148
value basis) for "all risk", including specifically irrigation and/or sprinkler system leakage damage,
vandalism and malicious mischief. The Authority shall provide JCM with the appropriate written
specifications for all such property to be insured under such policy. The Authority must notify JCM 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 Interruption, Loss of Income
and Extra Expense Insurance in such amounts as will reimburse Authority for direct and indirect loss of
earnings attributable to the annual value oflost 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 JCM 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) Employment Practices Liability. Employment Practices liability insurance in an
amount of not less than $2,000,000.
(h) Cyber Insurance. Technology, Privacy and Protection Insurance in an amount of
not less than $2,000,000.
(i) 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, JCM will furnish
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 JCM 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 JCM 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 furnished per the Notice requirements in
Section 9.2.
(d) Insurance required under this Agreement shall be maintained with California
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 JCM. The parties acknowledge and understand that as of the
Effective Date the following applies to insurance maintained by JCM:
16
US-DOCS\9793 I I 74.4 January 16, 2018 Item #2 Page 23 of 148
(a) Ten Thousand Dollars ($10,000.00) deductible per occurrence for property
damage insurance;
(b) Five Thousand Dollars ($5,000.00) 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. JCM 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 JCM under this Section 3.3. The Executive Director
shall have the right to approve an increase in the amount of any deductible.
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 Attorney, JCM (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 attorneys' 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 JCM's obligations to indemnify Authority/City pursuant to Section 3.5(a).
INDEMNITIES.
3.5 JCM's Indemnity.
(a) JCM agrees to defend (with legal counsel reasonably satisfactory to the Authority's
General Counsel/City Attorney), indemnify and hold harmless Authority and City and Authority's and
City's officers, officials, members, employees, volunteers, agents, and representatives from and against any
and all claims, demands, actions, lawsuits, proceedings, damages, liabilities, judgments, penalties, fines,
expert witness fees, attorneys' fees, costs, and expenses, which results from or is connected with one or
more of the following:
(i) Any act or omission by JCM or any shareholder, director, officer, or
employee of JCM in connection with JCM's perfonnance under this Agreement that constitutes gross
negligence or willful misconduct; or
(ii) Any action taken by JCM relating to the Golf Course (i) that is expressly
prohibited by this Agreement, or (ii) that is not within the scope of JCM's duties under this Agreement, or
(iii) that is not within JCM's delegated authority under this Agreement.
JCM'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 JCM of Golf Course trade names, trademarks, logos or other intellectual property used in
connection with the Golf Course, or (ii) claims, to the extent arising out of the negligence or willful
17
US-DOCS\9793 I I 74.4 January 16, 2018 Item #2 Page 24 of 148
misconduct of Authority, City, or their officers, officials, members, employees, agents, representatives or
volunteers.
(b) Survival. The defense and indemnification obligations of JCM 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, JCM 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 Compliance with Turf and Pest Management Plan I Integrated Pest Management
Plan. In performing its responsibilities under this Agreement, JCM shall comply with the City of Carlsbad
Municipal Golf Course Turf and Pest Management Plan, dated August 17, 2004, and the City of Carlsbad
Integrated Pest Management Plan, dated November 30, 2017, attached hereto as Exhibit C-1 and C-2,
respectively. In cases where the provisions of the two plans may differ, the more restrictive of the plans'
provisions shall govern.
3.8 Environmental Remediation. Throughout the Management Tenn, if JCM 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 JCM, 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, JCM shall, at
Authority's sole expense, use all commercially reasonable efforts to carry out and complete any required
investigation, removal, remediation, repair, closure, detoxification, decontamination or other cleanup of the
Golf Course; provided, that such remediation activities shall be at JCM'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 JCM, its agents, contractors or employees.
ARTICLE IV
JCM FEES DURING MANAGEMENT TERM: AVAILABLE FUNDS.
4.0 Forms of JCM Compensation. JCM 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.
(a) During the Management Tenn, JCM shall receive from Authority a Fixed
Management Fee in the annual amount of One Hundred Thirty Five Thousand Dollars ($135,000) (plus any
annual adjustments as provided herein). 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 29 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 mandated adjustments in operations.
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.
18
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 25 of 148
(b) JCM shall remit to the Authority up to fifty percent (50%) of the Fixed
Management Fee in the first full Operating Year of the Agreement, defined as July I, 2018 to June 30,
2019, if JCM fails to maintain Gross Revenues, as defined in Section 4.3 of this Agreement, at equal to or
exceeding Gross Revenues of the last full Operating Year of the Golf Course's previous management and
operations firm (defined as July 1, 2016 to June 30, 2017). JCM will likewise remit up to fifty percent
(50%) of the Fixed Management Fee to the Authority in future Operating Years if JCM fails to meet
budgeted Gross Revenues in those Operating Years. Authority will review JCM's accounting of each
Operating Year by September 30 following the end of the Operating Year in order to determine if actual
Gross Revenues met budgeted Gross Revenues. The remittance will be calculated as $1 in remittance for
every $1 that the actual Gross Revenues for the Operating Year falls below the budgeted Gross Revenues
for the Operating Year, up to a maximum of fifty percent (50%) of the Fixed Management Fee in effect for
the Operating Year.
4.2 Percentage Management Fee. During the Management Term, JCM shall also receive
from Authority, as Percentage Management Fee, five and one-half percent (5.5%) of that portion of Gross
Revenues in excess of 5,000,000 in each Operating Year. The Percentage Management Fee amount shall
not exceed the Fixed Management Fee in any Agreement year. For example, if the total Gross Revenues
in the year of the Agreement were $7,250,000, JCM would receive a Percentage Management Fee of
$123,750 (5.5% of $2,225,000 = $123,750). The viable annual Percentage Management Fee is capped at
the amount of the annual Fixed Management Fee, or $135,000 in the first year of the Agreement. Therefore,
the total compensation for JCM in the year of the Agreement will not exceed $270,000. If applicable, the
Percentage Management Fee shall be paid to JCM, 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 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 accrual 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,
tournaments, and other group gatherings; food and beverage operations; golf instruction fees; revenues
from golf schools; and proceeds from business interruption insurance. Gross Revenues shall be reduced by
any cash refunds or credits allowed on returns 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 instruction which are not paid by the golf professional to the Golf
Course operation;
( c) Receipts in the form of refunds from, or the value of merchandise, supplies or
equipment returned to, shippers, suppliers or manufacturers;
19
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 26 of 148
(d) The amount of any gratmt1es 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 of insurance other than business interruption insurance or similar types
of insurance;
(g) Receipts from public telephones and vending machines, except to the extent of
commissions paid to JCM or Authority;
(h) Proceeds of any borrowings by JCM or Authority;
(i) Any amount received by JCM in connection with any claim, demand, or lawsuit,
except when such amount is for interruption or loss of Golf Course business;
(i) Any additional funds provided by the Authority for, or paid by the Authority for,
any Golf Course purpose; or
(k) Interest earnings on any Golf Course funds.
ARTICLE V
ACCOUNTS: WORKING FUNDS; DISBURSEMENT OF
FUNDS; RECORDS AND REPORTS; GOLF COURSE EXPENSES
5.0 Golf Course Accounts. JCM 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 JCM 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 JCM. JCM 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 funds in the Golf Course
Accounts shall be disbursed by JCM for the purposes set forth in Section 5.1 below. Notwithstanding the
provisions of the foregoing sentence, JCM 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 JCM's incurrence of any Golf Course Expenses), the Authority
shall fund 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. JCM 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. JCM shall provide Authority with statements infonning 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 JCM of unanticipated Golf Course Expenses. JCM 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
20
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 27 of 148
Date. All Golf Course funds held by JCM, whether the Advances or monies held by JCM 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 funds available at the Golf Course), JCM 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) JCM 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 JCM 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 JCM shall be paid in arrears on not more
than an annual basis pursuant to Section 4.2, and
(2) JCM 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 JCM. The
Percentage Management Fee shall be adjusted if necessary to agree with audit.
( d) All accrued (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.
JCM 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, JCM shall only disburse
funds from the Golf Course Accounts to pay accrued Capital Improvement Funds when there are sufficient
funds available in the Golf Course Account to satisfy the daily working capital needs of the Golf Course.
In the event 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 Gross Revenues to meet the obligations to pay (a), (b ), and ( c) above, shall remit to JCM
such funds as necessary for (a), (b), and (c) to be paid.
5.2 Available Funds. If after payment of the Golf Course Expenses, the Fixed Management
Fee, and the Percentage Management Fee (if applicable), maintenance of the Operating Expense Minimum,
and all accrued Capital Improvement Funds, then any excess funds in the Golf Course Accounts "Available
Funds" shall be disbursed by JCM 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 JCM to Authority within
21
US-DOCS\9793 I I 74.4 January 16, 2018 Item #2 Page 28 of 148
ten (10) days after JCM 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. JCM shall keep full and accurate books of account and such other
records as are necessary to reflect the results of the operation of the Golf Course. For this purpose, Authority
agrees it will make available to JCM, or JCM'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 construction records. All books and records for the Golf Course shall be located JCM's
centralized accounting office at the Rancho Bernardo Inn. All accounting records shall be maintained in
accordance with generally accepted accounting principles and shall be maintained on an accrual basis. All
such books, records, and reports shall be maintained separately from other facilities operated by JCM. JCM
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, JCM, and Authority. The cash registers used by JCM shall be approved by the
Executive Director. JCM 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.
5.5 Inspection. The Authority or its authorized agents, auditors, or representatives shall have
the right during normal business hours and upon at least thirty six (36) hours' prior written notice to review,
inspect, audit, and copy the books, records, invoices, deposit receipts, canceled checks, and other
accounting and financial information maintained by JCM 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 JCM 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 JCM's corporate office.
5.6 Reports to Authority. JCM 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 accrual basis, including, but not limited to,
the following items:
(a) Salaries, wages, employee benefits, and payroll expenses, including payroll
processing fees, payroll taxes, 401 (k) benefit plans, and insurance for all employees employed on-site in
22
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 29 of 148
the direct operation of the Golf Course, excluding, however, service charges, which are defined as
percentage gratuities added to billings (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;
(f) The costs ofIT 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) Accrual 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 JCM 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 JCM
hereunder, air express, costs of recruitment (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 JCM 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 JCM of the amount of the payroll payment prior to the date of
such payroll payment.
23
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 30 of 148
5.9 JCM Accounting Software. The parties acknowledge and understand if the accounting
software to be used at the Golf Course is owned or licensed by JCM, 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 JCM.
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) JCM fails to keep, observe or perfom1 any material covenant, agreement, term or
provision of this Agreement to be kept, observed or performed by JCM, and such default continues for a
period of thirty (30) days after written notice of such default by Authority to JCM; or
(b) (i) JCM applies for or consents to the appointment of a receiver, trustee or
liquidator of JCM or of all or a substantial part of its assets; (ii) JCM files a voluntary petition in bankruptcy
or commences a proceeding seeking reorganization, liquidation, or an arrangement with creditors; (iii) JCM
files an answer admitting the material allegations of a bankruptcy petition reorganization proceeding, or
insolvency proceeding filed against JCM; (iv) JCM admits in writing its inability to pay its debts as they
come due; (v) JCM 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 JCM a
bankrupt or insolvent or approving a petition seeking reorganization of JCM or appointing a receiver,
trustee or liquidator of JCM 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 the Authority sells or transfers all or any portion of the Golf Course to a third
party during the Management Term, Authority shall deliver to JCM 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
JCM is not retained by the Authority's successor to manage the Golf Course, JCM shall receive from the
Authority, not as a penalty but as compensation for the damages caused to JCM 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 JCM within thirty (30) days after the closing of such sale or transfer.
(d) Authority acknowledges that JCM or its Affiliate may have an obligation under
federal, state, or local law to give advance notice to employees of the Golf Course of any termination of
their employment, and that failure to comply with any such notification obligation could give rise to civil
liabilities. If such a legal obligation exists, notwithstanding anything to the contrary contained in this
Agreement, (i) the date of termination of this Agreement, other than upon expiration of the Management
Tenn (provided Authority has provided JCM with adequate notice not to extend the Term of the
Agreement), shall be extended so that the date of tennination after notice of termination is given to or by
JCM shall be on a date which is not earlier than ten (] 0) days plus the number of days, if any, JCM is
required to give its employees advance notification of termination of employment by JCM as required by
the Worker Adjustment and Retraining Act, 29 U.S.C., § 2101 et. seq., as hereafter amended ("WARN
Act"), or any similar federal or state statute; (ii) Authority shall indemnify, hold harmless and defend JCM
and its Affiliates from and against any such liabilities based on Authority's actions (including terminating
this Agreement) which give rise to such a notification obligation on the part of JCM or any of its Affiliates,
if Authority fails to extend the date of termination as required by, and in accordance with, subsection (i) of
this Section 6( e ); and (iii) JCM shall continue to employ such Golf Course employees as are necessary and
24
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 31 of 148
for so long as is necessary to not cause a "mass layoff," "plant closing," or other violation relating to the
termination of Golf Course employees under the WARN Act. Authority shall have no responsibility under,
nor any liability to JCM and its Affiliates with respect to, the WARN Act, or any similar federal or state
statute, provided Authority has complied with its obligations under this Section 6( e ).
6.1 Termination by JCM. JCM shall have the right to terminate this Agreement upon the
following events:
(a) If the Authority fails to keep, observe, or perfonn 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 default by JCM to Authority, JCM's
right to tenninate this Agreement pursuant to this Section 6.l(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. JCM's tennination notice shall specify the effective date of
such tennination, which date shall not be less than sixty (60) days after the date of JCM'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 of ten (10) days after
written notice thereof from JCM to the Authority. JCM's right to terminate this Agreement pursuant to this
Section 6. I (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, including payment of the Performance Evaluation Deposit as set forth in Section 2.30 of this
Agreement.
6.3 Curing Defaults. Any default by JCM or Authority under the provisions of Sections 6.0
or 6.l(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
result of any breach of this Agreement, nor shall it affect the rights of either party with respect to any
liability or claims accrued, or arising out of events occurring, prior to the date of termination.
6.5 Remedies.
(a)
the Authority may:
The Authority's Remedies. Upon the occurrence of an event of default by JCM,
( 1) 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 JCM's event of default; and
(2) Proceed to remedy the event of default. All sums so expended or
obligations incurred by the Authority in connection therewith, with the exception of attorneys' fees, shall
be paid by JCM to the Authority within thirty (30) days after written demand by the Authority, and in the
25
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 32 of 148
event of a failure of JCM 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 JCM from the Authority under the terms of this Agreement; and
(3) Terminate this Agreement by written notice of tennination to
JCM. Upon proper termination of this Agreement, JCM shall surrender occupancy of the Golf Course to
the Authority.
(b) JCM Remedies. Upon the occurrence of an event of default by the
Authority, JCM may:
(1) Demand payment of all amounts due JCM under the terms of this
Agreement and demand the payment of all costs, damages, expenses, fees of JCM due to the Authority's
event of default;
(2) Terminate this Agreement by JCM's written notice of termination
to the Authority. In such event, the Authority shall pay to JCM within sixty (60) days of tennination an
amount equal to the total unpaid Management Fees that JCM would have earned 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 ICM as liquidated
damages for its breach which is a fair and reasonable estimate of the damage caused thereby to JCM in
addition to the unpaid management fees to be paid in accordance with the preceding sentence.
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.
6.7. Consequential Damages. NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT OR UNDER APPLICABLE LAW, IN ANY EXPERT
RESOLUTION, LAWSUIT, LEGAL ACTION OR PROCEEDING BETWEEN THE PARTIES
ARISING FROM OR RELATING TO THIS AGREEMENT OR THE GOLF COURSE, THE
PARTIES UNCONDITIONALLY AND IRREVOCABLY WAIVE AND DISCLAIM TO THE
FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW ALL RIGHTS TO ANY
CONSEQUENTIAL, LOST PROFITS, PUNITIVE, EXEMPLARY, STATUTORY OR TREBLE
DAMAGES (OTHER THAN STATUTORY RIGHTS AND MANAGER'S RIGHT TO
RECEIVE ANY TERMINATION FEE IN ACCORDANCE WITH SECTION 6.5, AND
EXCEPT FOR A CLAIM FOR RECOVERY OF ANY SUCH DAMAGES THAT THE
CLAIMING PARTY IS REQUIRED BY A COURT OF COMPETENT JURISDICTION OR
THE EXPERT TO PAY TO A THIRD PARTY), AND ACKNOWLEDGE AND AGREE THAT
THE RIGHTS AND REMEDIES IN THIS AGREEMENT, AND ALL OTHER RIGHTS AND
REMEDIES AT LAW AND IN EQUITY, WILL BE ADEQUATE IN ALL CIRCUMSTANCES
FOR ANY CLAIMS THE PARTIES MIGHT HAVE WITH RESPECT TO DAMAGES.
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 Furnishings 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 Furnishings and Equipment or Operating
Inventory are purchased.
26
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 33 of 148
7.1 No JCM Assignment or Subcontracting. JCM shall not assign this Agreement, except
to an Affiliate of JCM, or subcontract any work, without the prior written consent of the Executive Director.
Any assignment by JCM, whether or not requiring the prior consent of Executive Director, shall not be
effective unless and until JCM and such assignee execute an assignment and assumption in a form
acceptable to the Authority's General Counsel. It is understood and agreed that any consent granted by the
Executive Director to any such assignment by JCM shall not be deemed a waiver of any consent required
under this Section as to any future assignment. Any assignment by JCM 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.
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. JCM may
identify the Golf Course as a golf course managed and operated by JCM; provided, however, that any
display of any JCM 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 JCM 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 JCM, 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 satisfactory 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
destruction 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 of the 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 JCM, after such date if it is reasonably necessary
27
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 34 of 148
to incur additional expenses in the wind-down of operations of the Golf Course). If such taking of a portion
of the 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 alter 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 modification of the Golf Course as provided in this Section, the responsibilities
of JCM under 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 tenn "Force Majeure Event"
means a disruption in the operation of the Golf Course due to, or the cause of the failure to perfonn by a
party hereto due to, declared or undeclared war, sabotage, riot or acts of civil disobedience, acts or
omissions of governmental agencies ( except acts of governmental 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 JCM and not caused by the gross negligence or intentional wrongful conduct of JCM. 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 JCM in writing of the person who will serve as the Project Manager and any change of the
Project Manager. JCM has designated John G. McNair as the individual who is responsible for
administering this Agreement on behalf of JCM. JCM 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 JCM. The parties acknowledge that except as otherwise expressly provided
herein (a) the Executive 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) JCM's foregoing designated person or such other individual
designated by JCM in writing to the Authority has the authority to approve or consent to those matters
identified in this Agreement as requiring JCM's approval or consent and to make all other decisions on
behalf of JCM regarding the administration of this Agreement. The Authority's management direction to
JCM shall be given by the Executive Director.
9.1 Compliance. JCM shall comply with all applicable Jaws of governmental bodies having
jurisdiction with respect to the Golf Course site and JCM performance of this Agreement. JCM 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, JCM shall cooperate in transferring all licenses, pennits
and accreditations in the name of JCM 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 three percent (3%) higher than the amount budgeted in the Annual Plan. Notwithstanding the foregoing
sentence, JCM 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
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 35 of 148
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 return receipt requested, postage prepaid to the addresses
stated below; or ( c) by deposit with a same-day or overnight 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 overnight 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 The City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, California 92008
Attention: Executive Director
For purposes of Notices hereunder, the address of JCM shall be:
JC Management LLC
533 Coast Blvd. South
La Jolla, California 92037
Attention: Paul L. Reed, President
Each party shall have the right to designate a different address by the giving of notice in confonnity with
this Section.
9.3 Independent Contractor. JCM 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 JCM and its
successors and assigns, on the other part.
9.4 Modification and Changes. This Agreement may be amended or modified only by a
writing 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 JCM pertaining to the subject matter hereof.
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 construed to permit the making
of unreasonable requests.
29
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 36 of 148
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 tennination.
9.9 Third Parties. None of the obligations under this Agreement of either party shall run 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 result of an assignment pern1itted pursuant to the terms of this Agreement.
9.10 Waivers. No failure by JCM or Authority to insist upon the strict perfonnance 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
of the same covenant, agreement, term or condition. No covenant, agreement, tenn or condition of this
Agreement and no breach of this Agreement shall be waived, altered or modified except by a written
instrument. 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 governed by, the laws of the State of California. The parties
agree that the Superior Court of the State of California, County of San Diego shall have jurisdiction of any
litigation between the parties relating to this Agreement. Service of process on Authority shall be affected
in such manner as required by California Jaw for service on public entities. Service of process on JCM shall
be made in any manner permitted by California law.
9.12 No Presumption Regarding Drafter. Authority and JCM acknowledge and agree that
the terms and provisions of this Agreement have been negotiated and discussed between Authority and
JCM, 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 J CM 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 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. JCM agrees that in connection with its performance
under this Agreement, there shall be no discrimination by JCM against any person on account of race, color,
creed, religion, sex, marital status, national origin or ancestry. JCM agrees to include a provision similar to
this Section in all subcontracts entered into by JCM 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 JCM, 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 JCM or any successor, or for breach of any obligation of the terms of this Agreement.
30
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 37 of 148
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 JCM that (i) the Authority has and will retain
the property interests in the Golf Course necessary to enable JCM to perform its duties pursuant to this
Agreement peaceably and quietly; and (ii) that JCM'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 California Revenue and Taxation Code Section 107.6,
Authority hereby informs JCM that this Agreement may create a possessory interest subject to property
taxation, and in such event JCM may be subject to the payment of property taxes levied on such interest.
9.22 Proprietary Information. All specifically identifiable infonnation developed by JCM for
the Authority at the expense of the Authority shall be the property of the Authority. All materials, software
programs and technology developed by JCM at JCM's expense, shall be the exclusive property of JCM 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 JCM. 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 Employee of JCM 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 JCM.
For purposes hereof, a "Key Employee" of JCM shall mean the General Manager of the Golf Course, the
Golf Course Superintendent, or any corporate employee of JCM.
9.24 Conflict oflnterest. JCM shall file a Conflict oflnterest Statement with the City Clerk of
the City of Carlsbad, California, in accordance with the requirements of the City of Carlsbad Conflict of
Interest Code. JCM shall report investments or interests in all categories.
9.25 Authority Acknowledgment. Authority acknowledges and agrees that (i) JCM and its
Affiliates own and/or operate hotel, resort, golf course and other properties some of which may be in
competition with the Golf Course and (ii) no Affiliate of JCM shall have any obligation to promote the
value and profitability of the Golf Course at the expense of such other properties. JCM and its Affiliates
shall be permitted to: engage in commercially reasonable cross-marketing and cross-promotional activities
with JCM's and its Affiliates' other properties.
31
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 38 of 148
The individuals executing this Agreement and the instruments referenced in it on behalf of Contractor each
represent and warrant that they have the legal power. right and actual authority to bind Contractor to the
terms and conditions of this Agreement.
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the day
and year first written above.
CONTRACTOR
By:
JC MANAGEMENT LLC.
a California limited liability company
DA~
Chief Financial Officer
OHN G. MCNAIR.
Vice President of Golf Operations
CITY OF CARLSBAD. a municipal
corporation of the State of California
By:
Carlsbad Public Financing Authority,
Public Entit); and oint Powers Authority
Chairman of the Board
Attest:
Secretary
If required by City, proper notarial acknowledgment of execution by contractor must be attached. If a
corporation. Agreement must be signed by one corporate officer from each of the following two groups.
Group A Group B
Chairman. Secretary,
President. or Assistant Secretary.
Vice-President CFO or Assistant Treasurer
Otherwise. the corporation must attach a resolution certified by the secretary or assistant secretary under
corporate seal empmvering the officer(s) signing to bind the corporation.
32
l iS-DOCS\97931174.4 January 16, 2018 Item #2 Page 39 of 148
APPROVED AS TO FORM:
CELIA A. BREWER, General Counsel
BY: __ -----"~--------
Deputy General Counsel
EXHIBITS:
Exhibit A -
Exhibit B
Exhibit C
Exhibit D -
Exhibit E
Golf Course Operations and Maintenance Standards Evaluation Form
Habitat Preserve Area
Turf and Pest Management Plan I Integrated Pest Management Plan
Legal Description of Real Property
Regulatory Pennits
33
US-DOCS\97931174.4 January 16, 2018 Item #2 Page 40 of 148
I
I
I
I
I
'
'
'
'
'
Potassium
Turf requirements for potassium are intermediate to high in relation to nitrogen and
phosphorus levels. Although applied to maximize efficiency of uptake, potassium does
not pose the same extent of environmental risk as nitrogen or potassium. Proper levels of
potassium are an important component of plant disease resistance and contribute to the
ability of turf to withstand wear and traffic.
Minor Nutrients
In general, turfgrass requirements for the minor nutrients--calcium, sulfur, iron, boron,
copper, manganese, magnesium, and zinc--are substantially lower than those for nitrogen,
phosphorus, and potassium. Minor nutrients are essential for optimal turf performance,
and. are typically available in the soil in sufficient quantities to support health turf.
However, when turf conditions or soiVtissue testing results indicate deficiencies, these
nutrients may be applied at the discretion of the Superintendent.
pH
Maintenance of the proper soil pH is essential in optimizing the availability of nutrients,
and is also important in minimizing overall turfgrass stress. When the soil pH requires
adjustment to a more alkaline pH, lime will be added until the targeted pH is obtained.
When soil requires adjustment to a more acidic pH, ammonium sulfate will be added
until the targeted pH is obtained.
5.2.3 Fertilizer Treatment Areas
The rate and frequency of fertilizer application is dependent upon the area of the course.
Fertilizer application is most frequent on greens and tees, with less _frequent application
made to fairways. Minimal fertilizer will be applied to the playable rough under this
plan. No fertilizer will be used on the nonplayable rough.
5.2.4 Fertilizer Application
Fertilizer application equipment will be calibrated prior to use to ensure the proper rate of
application. Fertilizer will not be applied if heavy rain is forecast following the potential
application event. Quickly-available sources wi11 not be applied before irrigation.
City of Carlsbad Municipal Golf Course
Turf and Pest Management Plan
11 January 16, 2018 Item #2 Page 75 of 148
I
I
I
I
I
I
I
I
I
I
5. 7 Overseeding
Overseeding is the selective application of turfgrass seed to improve areas of turf
depletion and to bolster turf density. Overseeding will be performed at the discretion of
the Superintendent.
5.8 Sod Replacement
Occasionally, problems with diseased, damaged, or weedy turf cannot be remedied by
cultural practices. Under these circumstances, affected areas of turf will be removed, and
fresh turf obtained to replace the removed section.
6.0 TREE MANAGEMENT
The Carlsbad Municipal Golf Course incorporates existing trees within the design of the
golf course, and includes the planting of additional species. Trees will require routine
maintenance ( e.g., trimming), and the general management practices for trees are
described below.
6.1 Tree Selection
The landscape plan prepared for the Carlsbad Municipal Golf Course incorporates some
of the existing trees at the proposed site. Additional trees to be planted within the golf
course include modell pine, white alder, red ironbark, California sycamore, Torrey pine,
and coast live oak.
6.2 Planting Locations
Trees are concentrated primarily along the cart path, adjacent to roadways, and also along
the western boundary of the practice range.
6.3 Tree Planting
Trees will be planted in planting holes appropriate for the root ball/root mass and planting
holes will be backfilled with native materials. The planting areas wi11 be mulched and
receive irrigation, as required, to become fully established. Irrigation requirements for
specimen oak trees wi11 be modified so that only half-circle irrigation is used.
City of Carlsbad Municipal Golf Course
Turf and Pest Management Plan
15 January 16, 2018 Item #2 Page 79 of 148
r/
I ,
,
' ' I
I
I
I
I
I
6.4 Tree Maintenance
Trees will be routinely monitored for overall health, influence on playing characteristics,
the presence of insects and diseases, influence on surrounding turf and native plantings,
and hazard potential. In general, insect and disease pests are tolerated. Established trees
do not require supplemental watering, except in situations of extreme drought.
6.5 Tree Removal
Factors that wi11 determine if a tree is a candidate for removal ( e.g., disease, age, hazard)
will be evaluated by the Superintendent in consultation with a certified arborist. Upon
determination that tree removal is necessary, every effort should be made to remove the
trees during the non nesting season, as these trees may act as a nesting habitat for
migratory birds.
In the event that the removal must occur within the breeding season for migratory birds
or raptors (January 15 -August 31), a migratory bird survey shall be performed by a
qualified biologist. If nests are found within the tree proposed for removal, the removal
must be postponed until the nest is abandoned.
7.0 COMPOSTING/ORGANIC MATERIAL MANAGEMENT
Where appropriate, grass clippings and/or aeration cores will be spread onsite as mulch.
Materials will be spread out in a thin layer to prevent damage to the underlying plants and
will not be applied in the riparian buffer zones.
8.0 PEST POPULATION DEFINITION
· Based upon information from the University of California Statewide Integrated Pest
Management Program, a summary of potential fungal diseases, weeds, insects, and
vertebrates that may impact the turfgrass at the Carlsbad Munidpal Golf Course are
summarized in Table 4.
9.0 PEST THRESHOLD LEVEL
The damage threshold level for fungal diseases, weeds, and insects are shown in Table 5.
Damage threshold level is defined as the number of pests detected within a specific area
City of Carlsbad Municipal Golf Course
Turf and Pest Management Plan
16 January 16, 2018 Item #2 Page 80 of 148
~
' ' ' I I
' I
I.
I
I
I
I
that may lead to corrective action to reduce the density of the specific pest below the
damage threshold level.
10.0 PEST MONITORING AND PEST CONTROL
10.1 Scouting
Scouting is the regular monitoring of all turf areas on a programmed basis. Regular
monitoring provides an exce11ent record of pest population and their resulting damage,
which can be used for future planning and program development.
Table 4
Summary of Potential Pests
Category
Fungal Disease
Weeds and Sedges
Insects
Vertebrates
City of Carlsbad Municipal Golf Course
Turf and Pest Management Plan
Pest
Dollar Spot
Fairy Ring
Fusarium Blight
Leaf Spot
Pythium Blight
Rhizoctonia Blight
Spring Dead Spot
Summer Patch
California burclover
Black medic
Common knotweed
Spurges
White clover
Creeping woodsorrel
Dandelion
English daisy
Buckhorn plantains
Broadleaf plantains
Green kyllinga
Nutsedge
Armyworms/Cutwonns
Black turf grass
Lawn moths/Sod Webwonns
Southern Chinch Bug
White grubs
May and June beetles
Moles
Pocket Gophers
17 January 16, 2018 Item #2 Page 81 of 148
~
' ' ,
' ' ' I '
I
I I
i
The goal is early observation of a turfgrass abnormality and/or change. All golf course
maintenance staff will be trained in the golf course IPM to monitor for evidence of pest
infestation. The intensity and :frequency of monitoring will be adjusted based on the
likelihood or presence of pest infestation or in situational/site specific instances. The
greens and tees will require the most monitoring, with the fairway and rough areas
monitored less frequent.
All monitoring observations of potential pest infestations shall be recorded and reported
directly to the Superintendent. Monitoring summaries will include, at a minimum, the
following information:
• Monitoring date
• Weather condition
• Soil temperatures
• General comments on the turf's overall condition
• Reporting shall include both normal and abnormal turf grass observations .
Table 5
Pest Damage Thresholds
Pest Greens Tees
Fungal Diseases 2% affected 10% affected
Weeds II 1,000 t't2 1-511,000 rr
Armyworms/ Cutworms 5 larvae/ ft2 5 larvae/ tt2
Black turfgrass Over 7 5 larvae/ Over 75
ft:2 larvae/ ff
Lawn Moth/ Sod 5 larvae/ yard2 5 to l O larvae/
Webworms on stressed yard2
greens
Southern Chinch Bug 135/ yard2 135/yard2
White grubs (immature 1 grub/ ff 2-4 grubs/ ft2
chaf ers and June
beetles)
Vertebrates Evidence of Evidence of
mounding mounding
or tunneling or tunneling
Note: (1) No pesticides will be applled m the rough.
City of Carlsbad Municipal Golf Course
Twf and Pest Management Plan
Fairways Rought'J
20-25% NIA
affected
5-10/1000 ft2 NIA
5 larvae/ ff NIA
Over75 NIA
larvae/ ft2
15 larvae/yard2 NIA
135/ yard2 NIA
4-6 grubs/ ft2 NIA
Evidence of Evidence of
mounding mounding
or tunneling or tunneling
18 January 16, 2018 Item #2 Page 82 of 148
I
I
I
I
I
I
When turfgrass abnormalities are noted, the next step is to diagnose the specific cause,
determine the threshold, and then· develop a pest control strategy. The pest control
strategy consists of using cultural practices as the first line of defense. Pest control
strategy will be developed on a case-by-case basis with all potential control options given
consideration, and an emphasis placed upon cultural practices. In some instances, when
cultural practices have not achieved the desired results, and the long-term health of the
turf is at stake, it will be appropriate to use chemical measures (pesticides). The decision
to implement chemical pest control measures beyond cultural, biological, or mechanical
practices will be based upon the review of relevant safety, scientific, economic, and
environmental information.
Based upon permitting requirements from the California Coastal Commission (CCC),
notification shall be provided to the Executive Director of the CCC prior to the use of
pesticides strategies. Further details regarding this notification are provided in Section
11.3 of this document.
10.2 Fungal Disease
Fungal diseases represents the most serious and consistent threat to turf grass health, and
is of concern primarily on the greens and tees. Greens and tees .will be inspected
regularly for symptoms of fungal disease. The primary means of identifying fungal
diseases will be diagnosis by the Superintendent. Soil samples will also be taken in
affected areas, since, in some instances, symptoms consistent with fungal disease may
have alternate causes (nutrient deficiency, insects). When uncertainty regarding potential
fungal diseases is encountered, samples will be sent to a plant pathology lab for
confirmation of the presence of fungal pathogens.
An important aspect of preventing the development of fungal disease is the optimization
of turf vigor through routine cultural practices. Specific cultural practices will be used to
minimize the potential for fungal diseases, which are described below. Several factors,
including season, weather, and turf health contribute to the determination whether
fungicide treatment may or may not be necessary. Fungicide treatment is only to be
considered after a11 cultural practices have been exhausted, and the long-term health of
the turf is at stake. Any application of fungicide will follow the procedures identified in
Section 11 of this TPMP.
City of Carlsbad Municipal Golf Course
Tu,f and Pest Management Plan
19 January 16, 2018 Item #2 Page 83 of 148
I
I
I
I
I
I
I
I
I
symptoms; soil wetting agents may improve water penetration. Proper thatch
management and regular dethatching can contribute to a reduction in the disease. Fairy
ring can be eliminated by removing the turf and root zone with the soil containing the
white, cottony, mycelial mass. If fairy ring symptoms consist only of mushrooms and
there is no zone of dark green grass, the mushrooms can be raked off and disposed.
Wfole this will not weaken or control the fungus, it will improve the turf's appearance.
10.2.3 Fusarium Blight
Disease Conditions: Daytime temperatures of 85° to 95°F; drought-stressed areas in full
sun; survives in thatch and grass residues.
Disease Symptoms: Small, circular, grayish green areas, ranging from a few inches up to
a foot in diameter; some plants in center may survive, giving a frog-eye appearance; the
crown or basal area of dead stems has a reddish rot and is hard and tough; dead foliage
appears bleached.
Cultural Controls: Water appropriate length of time; do not apply more than 1 lb
nitrogen/1,000 sq ft/application or more than 6 lb annually; mow at highest recommended
height; verticut if more than 1/2-inch thatch.
10.2.4 Leaf Spot
Disease Conditions: Warm temperatures (70° to 90°F), high humidity, and closely
clipped turf grass; most severe with high nitrogen fertilization.
Disease Symptoms: Circular to elongated brownish spots with brown centers and dark
brown or purple borders on leaf blades, sheaths, and stems; crowns and roots frequently
have a dark brown rot; crown-infected plants may die in hot, windy weather, leaving
thinned areas throughout the turf; spores are windbome.
CuJturaJ Controls: Reduce shade and improve soil aeration and water drainage. Avoid
dry spots, overfertilizing with nitrogen, and maintain as high a cutting height as possible.
Avoid prolonged ]eaf wetness by irrigating in pre-dawn, or early morning hours. If
possible, increase air movement.
City of Carlsbad Municipal Golf Course
Twf and Pest Management Plan
21 January 16, 2018 Item #2 Page 85 of 148
I
I
I
I
I
I
I
10.2.5 Pythium Blight
Disease Conditions: Low spots that remain wet; temperatures in the 80° to 95°F range.
Disease Symptoms: Small, circular spots (2-6 inches) that run together; blackened leaf
blades rapidly wither, tum reddish brown, lie flat, stick together, and appear greasy; roots
may be brown; under humid conditions, masses of fungal mycelium may appear; survives
as spores in soil for long periods.
Cultural Controls: Avoid overwatering; irrigate only when needed to a depth of 4 to 6
inches. Avoid mowing wet grass or applying high levels of nitrogen during hot, humid
weather. Reduce shading and improve soil aeration and water drainage. Time
establishment of new turf from seed or overseeding for periods when environmental
conditions are not favorable for the development of this disease.
I 0.2-.6 Rhizoctonia Blight
Disease Conditions: excess thatch and mat along with high temperatures (80° to 95°F);
high humidity; soft, lush growth due to excessive nitrogen; most common in warm,
inland areas.
Disease Symptoms: First appears as small, irregular brown patches or rings that may
enlarge to many feet in diameter; centers may recover resulting in rings of diseased grass;
leaves and sheaths become watersoaked, wilt, tum light brown, and die; in light
infestations, roots usually not infected and plants often recover; soil-inhabiting fungus
that forms fine, fungal threads in soil or on turf grass.
Cultural Controls: Cultural practices that improve water and fertility management are
useful in preventing the development of rhizoctonia blight. Reduce shading and improve
soil aeration and water drainage. Irrigate in the pre-dawn or early morning hours to
promote leaf drying. Irrigate only when needed to a depth of 4 to 6 inches. Remove dew
from leaves by poling or light irrigation. A void nitrogen fertilization that results in a soft
foliage growth. Maintain thatch at less than 0.5 inch.
City of Carlsbad Municipal Golf Course
Turf and Pest Management Plan
22 January 16, 2018 Item #2 Page 86 of 148
I
I
I
l
I
t
I
I
I
I
I
I
I
I
I
I
10.2. 7 Spring Dead Spot
Disease Conditions: Affects dormant plants; most severe when temperatures 50° to
57°F; survives as sclerotia and in infected plant parts.
Disease Symptoms: Circular areas of dead grass 6-I 2 inches in diameter appear in spring
when growth resumes; spots may coalesce to fonn large areas; typically affects turfgrass
more than 2 years old.
Cultural Controls: Establish new turf plantings with clean sod from areas where spring
dead spot has not been a problem. Irrigate according to evapotranspiration needs of the
turfgrass. Dead grass can be raked out and replanted with new Bennudagrass seed or
stolons; alternately, Bermudagrass can be overseeded with ryegrass in fall or winter to
hide disease symptoms in spring.
Thick thatch and ]ow mowing heights favor the development of the disease. Manage
thatch and keep it less than 0.5 inches thick with regular dethatching and aerification.
Provide adequate irrigation based on evapotranspiration needs to promote vigorous
growth during summer months and reduce drought stress damage. Raise mowing height
in ]ate summer or early fall to reduce pre-dormancy stress.
Maintain adequate levels of potassium in the soil and apply potassium fertilizers in fall to
promote winter hardiness. Use adequate nitrogen fertilization programs in spring and
summer, but minimize nitrogen applications in late summer and fall. Late summer and
fall applications may contribute to disease severity because the added nitrogen promotes
the growth of leaves at the expense of roots and may delay the Bennudagrass from
entering dormancy, resulting in both a reduction in cold hardiness and carbohydrate
reserves. Loss of carbohydrate reserves is detrimental to plants when they are emerging
from dormancy in spring. Use ammonium-based nitrogen sources versus nitrate-or urea-
based fertilizers. Maintaining a low soil pH (5.2 to 5.3) appears to reduce the severity of
the disease.
10.2.8 Summer Patch
Disease Conditions: High temperatures (85° to 95°F) in late spring; most severe when
turf is mowed low or when soil moisture is excessive.
City of Carlsbad Municipal Golf Course
Turf and Pest Management Plan
23
January 16, 2018 Item #2 Page 87 of 148
I
I
I
I
I
I
I
f
I
I
and spreading. Seed leaves are oblong. The first true leaf is simple and rounded.
Subsequent leaves are compound and have 3 egg-shaped leaflets with somewhat toothed
margins. Flowers are small and yellow and are arranged in short, spherical heads.
Cultural Controls: Fertilize with nitrogen.
10.3.3 Knotweed
Weed Conditions: Compacted soil.
Weed Symptoms: Summer annual weed which can thrive even on poor and compacted
soil. The seed leaves are long, very narrow, rounded at the tip and light green with a
white cast. The true leaves are much broader, emerging from an encircling, membranous
sheath at the leaf base. The mature plant grows prostrate to erect with slender, tough
stems, which are extensively branched, giving it a zigzag appearance. The tiny, green
flowers with white or pink margins sit in clusters of 2 to 5 on short stalks in leaf axils.
Cultural Controls: Aerate.
10.3.4 Spurges
Weed Conditions: Closely mowed turf grass with open areas; low nitrogen fertility.
Weed Symptoms: Low-growing summer annual plant that often forms a dense mat. The
oval seed leaves are bluish green, powdery, or mealy on the upper surface and have a
reddish tinge underneath. Leaves on mature plants grow oppositely on short stalks. The
leaves are marked with a characteristic dark, reddish spot found midway down the center
of the leaf vein. When broken, a milky, sticky sap oozes from the stem. Flowers are
small, pink, and inconspicuous. They are formed in small clusters between the stem and
the upper leaves.
Cultural Controls: Check mowing height, remove plants before they spread.
City of Carlsbad Municipal Golf Course
Turf and Pest Management Plan
25 January 16, 2018 Item #2 Page 89 of 148
I
~
I
I
I
I
I
I
I
J
I
I
10.3.8 Eng1ish Daisy
Weed Conditions: Moist turfgrass, mostly in cool coastal climates.
Weed Symptoms: Low-growing perennial with oval basal leaves. Prominent upright
flower stalks with showy white or pinkish daisylike flowers are seen throughout the
season
CuJtural Controls: Keep turfgrass on dry side; improve turfgrass management practices.
10.3.9 Buckhorn plantains
Weed Conditions: Overwatering, compacted soil, poorly maintained open turfgrass
areas; shaded areas in warm climates.
Weed Symptoms: Seedlings have very long, needle-like seed leaves. Broader, pale
green, true leaves have prominent parallel veins. The mature plant, reaching up to 1.5
feet ( 45 cm) tall, is stemless. Leaves are 3 to 10 inches (8 -25 cm) Jong and cluster
around the base of the plant. They taper to slender flowering stalks, 6 to 20 inches (15 -
50 cm) tall. The flowering stalks are tipped with flower spikes that have protruding white
stamens. In apples, buckhorn plantain is a special problem because it serves as a host for
rosy apple aphid.
Cultural Controls: Reduce irrigation; aerate; improve turf grass management practices.
10.3.10 Broadleaf plantains
Weed Conditions: Overwatering, poor drainage; sun and heat.
Weed Symptoms: Perennial that grows in areas of inconsistent irrigation. Leaves are
smooth and oval and they narrow to a well-defined reddish petiole. Leaf blades are large,
3 to 6 inches (7.5 -15 cm) long, with prominent veins. Roots are fibrous and shallow.
Flowers are produced on stalks, 3 to 6 inches (7.5 -15 cm) in length.
CuJtural Controls: Reduce irrigation.
City of Carlsbad Municipal Golf Course
Turf and Pest Management Plan
27 January 16, 2018 Item #2 Page 91 of 148
I
' ' ' '
' '
'
'
'
' l
I
J
10.3.11 Green kyl1inga
Weed Conditions: Overwatering, poor drainage; sun and heat.
Weed Symptoms: Perennial sedge with narrow, grass-like leaves. The plant grows best
in moist or wet areas that receive full sun but it can survive some shade and drying once
established. Mature plants may reach 15 inches (38.2 cm). Green_kyllinga flowers from
May to October. Flower stalks are triangular in cross-section and produce a green, 3/8
inch (9.5 mm). A group of three leaves radiate out from the stalk. There are 30 to 75
spikelets within each flower, each one capable of producing one seed. The plant's flat,
oval seeds are about 1/8 inch (3 mm) long and half as wide, germinating from spring
through summer.
Cultural Controls: Reduce irrigation.
10.3.12 Nutsedge
Weed Conditions: Overwatering; poor drainage; sun and heat, nearby infestation.
Weed Symptoms: Perennial that superficially resembles grasses. Grows mainly from
tubers or "nutlets" formed on rhizomes, mostly in the upper foot of soil. Leaves are V-
shaped in cross section and arranged in sets o( three at the base. Stems are triangular in
cross section. Tubers of yellow nutsedge are produced singly while purple nutsedge
tubers are produced in chains, several on a single rhizome.
Cultural Controls: Reduce irrigation; remove plants before they spread.
10.4 Insects
Turfgrass areas are vulnerable to damage from insect infestations. Monitoring for insects
will consist of routine visual inspection of susceptible areas on a regular basis. General
turfgrass cultural practices leading to optimal turf vigor are the primary means of
minimizing the potential for insect infestation. The best way to prevent damage from
turfgrass pests is to keep the turfgrass healthy. Healthy turfgrass requires few, if any,
insecticide treatments. Also, if the turf grass is under stress and a pesticide is applied, it
stands a greater chance of suffering phytotoxic damage from the pesticide itself
Insecticide treatment is only to be considered after all cultural practices have been
City of Carlsbad Municipal Golf Course
Turf and Pest Management Plan
28 January 16, 2018 Item #2 Page 92 of 148
I
l
f
I
r
I
I
I
I
I
I
I
I
I
' !
'
' I' l
I
11.9 Clean Up and Disposal
Pesticide containers, mixing tanks, and equipment will be rinsed in accordance with
recommended procedures and rinse water will be disposed of in accordance with state
and local ordinances.
11.10 Pesticide Documentation
Current pesticide labels and MSDS will be compiled and maintained in a location
accessible to all employees. All pesticide documentation will be in accordance with
federal and state regulations. All pesticide purchases and usage will be documented in a
pesticide log book as a means of monitoring inventory control. The Superintendent will
develop a standard pesticide application information record that will detail, at minimum,
the foJlowing information for each pesticide application:
• Date of application and time of day.
• Certified applicator's name and registration number (if applicable).
• Name of the staff member applying the pesticide.
• Specific turfi'omamental area where the pesticide was applied.
• Target pest(s).
• Application equipment used.
• List of protective gear worn by applicator.
• Pesticides used ( common name, trade name, formulation, active ingredient).
• Lot number of the material applied.
• Name and address of the pesticide supplier.
• Total amount of formulation added to the tank or hopper.
• Amount of mixture used.
• Size of the area or number treated (acres, trees, etc.).
• Weather conditions (temperature, wind, speed and direction).
• Description comments (location, severity of infestation).
• EPA establishment and registration numbers.
City of Carlsbad Municipal Golf Course
Turf and Pest Management Plan
35 January 16, 2018 Item #2 Page 98 of 148
Section VI -Pest Control Tactics
Integrated Pest Management uses a variety of pest control tactics in a compatible manner that minimize
adverse effects to human health and the environment. A combination of several control tactics is usually
more effective in minimizing pest damage than any single control method. The type of control(s)
selected will likely vary on a case-by-case basis due to differing site conditions.
The primary pest control tactics to choose from include:
• Cultural
• Mechanical
• Environmental/Physical
• Biological
• Pesticide
A. Cultural Controls
Cultural controls are modifications of normal plant care activities that reduce or prevent pests. Cultural
control methods include adjusting the frequency and amount of irrigation, fertilization, and mowing
height. For example, spider mite infestations are worse on water-stressed plants; over-fertilization may
cause succulent growth which then encourages aphids; too low of a mowing height may thin turf and
allow weeds to become established.
B. Mechanical Controls
Mechanical control tactics involve the use of manual labor and machinery to reduce or eliminate pest
problems, such as handpicking, physical barriers, or machinery. Other examples include hoeing and
applying mulch to control weeds, using trap boards for snails and slugs, and use of traps for gophers.
C. Environmental/Physical Controls
The use of environmental/physical controls such as altering temperature, light, and humidity, can be
effective in controlling pests. Although in outdoor situations these tactics are difficult to use for most
pests, they can be effective in controlling birds and mammals if their habitat can be modified such that
they do not choose to live or roost in the area. Other examples include removing garbage in a timely
manner, and using netting or wire to prevent birds from roosting.
D. Biological Controls
Biological control practices use living organisms to reduce pest populations. These organisms are often
also referred to as beneficials, natural enemies or biocontrols. They act to keep pest populations low
enough to prevent significant economic damage. Biocontrols include pathogens, parasites, predators,
competitive species, and antagonistic organisms. Biocontrols can occur naturally or they can be
purchased and released.
4
January 16, 2018 Item #2 Page 103 of 148
The most common organisms used for biological control in landscapes are predators, parasites,
pathogens and herbivores.
• Predators are organisms that eat their prey (e.g. Ladybugs)
• Parasites spend part or all of their life cycle associated with their host. Common parasites lay
their eggs in or on their host and then the eggs hatch, the larvae feed on the host, killing it (e.g.
tiny stingless wasps for aphids and whiteflies)
• Pathogens are microscopic organisms, such as bacteria, viruses, and fungi that cause diseases in
pest insects, mites, nematodes, or weeds (e.g. Bacillus thuringiensis or BT)
• Herbivores are insects or animals that feed on plants. These are effective for weed control.
Biocontrols for weeds eat seeds, leaves, or tunnel into plant stems (e.g., goats and some seed
and stem borers)
In order to conserve naturally occurring biocontrols, broad-spectrum pesticides should not be used since
the use of these types of pesticides may result in secondary pest outbreaks due to the mortality of
natural enemies that may be keeping other pests under control
E. Pesticide Controls
As defined in California Food and Agriculture Code Section 12753, "Pesticide" includes any of the
following: (a) any spray adjuvant; (b) any substance, or mixture of substances which is intended to be
used for defoliating plants, regulating plant growth or for preventing, destroying, repelling or mitigating
any pest ... which may infest or be detrimental to vegetation, man, animals, or households, or be present
in any agricultural or nonagricultural environment whatsoever. The term pesticides includes organic
products and chemical products. Insecticides, herbicides, fungicides and rodenticides are all pesticides.
Pesticides may be used when other methods fail to provide adequate control of pests and before pest
populations cause unacceptable damage. When pesticides are to be used, considerations will be made
for how to apply them most effectively.
Pesticides that are broad-spectrum and persistent shall be avoided, since they can cause more
environmental damage and increase the likelihood of pesticide resistance. The overuse of pesticides
can cause beneficial organisms to be killed and pest resistance to develop. In addition, considerations
should be given to the proximity to water bodies, irrigation schedules, weather, etc., that may result in
the pesticide being moved off-site, into the environment.
1. Criteria for Selecting Treatment Strategies
Once the 1PM decision making process is in place and monitoring indicates that pest treatment is
needed, the choice of specific strategies can be made. Strategies will be chosen that are:
a) Least hazardous to human health
b) Least disruptive of natural controls in landscape situations
c) Least toxic to non-target organisms other than natural controls
d) Most likely to be permanent and prevent recurrence of the pest problem
e) Easiest to carry out safely and effectively
f) Most cost effective in the long term
g) Appropriate to the site and maintenance system
5
January 16, 2018 Item #2 Page 104 of 148
5. Employee Training
Staff and contractors must know the information on the chemical label and the MSDS before using or
handling the chemical. In addition, they will be trained annually and when a new pesticide is to be used.
The certified pest control applicators must know:
• The immediate and long-term health hazards posed by chemicals to be used, the common
symptoms of chemical poisoning, and the ways poisoning could occur; and
• The safe work practices to be followed, including the appropriate protective clothing,
equipment, mixing, transportation, storage, disposal and spill cleanup procedures applicable to
the chemical used
• In addition to the training and annual continuing education required for certification, staff will
be encouraged to participate in pesticide application programs that are above and beyond
minimum compliance requirements.
6. Record Keeping
Monitoring the effectiveness of the 1PM plan over time requires diligent tracking of several items: pest
populations and locations; management strategies employed; quantities and types of chemicals or other
products used; and the outcome of pest management activities. The certified pest control applicator is
responsible for maintaining, and submitting to the city as requested, records that include the following:
a) Target pest
b) Prevention and other non-chemical methods of control used
c) Type and quantity of pesticide used
d} Location of the pesticide application
e) Date of pesticide application
f) Name of the pesticide applicator
g) Application equipment used
h) Summary of results
7. Materials for Use -Least Toxic Pesticides
Pesticides are considered a secondary resort under the tenets of 1PM. This control strategy is to be used
on city owned or controlled properties and rights of way after general preventative practices and non-
chemical options -including organic pesticides -have been fully explored. Least-toxic pesticides meet
the following criteria:
a) Products contain no known, likely, or probable carcinogens -as listed by the CA Office of
Environmental Health Hazard Assessment.
b) Products contain no reproductive toxicants (CA Prop 65).
c) Products contain no items listed by the CA Department of Toxic Substance Control as known,
probable, or suspected endocrine disrupters
d) Active ingredients have soil half-life of thirty days or less.
e) Products are labeled as not toxic to fish, birds, bees, wildlife, or domestic animals.
7 January 16, 2018 Item #2 Page 106 of 148
The term "least toxic" refers to pesticides that have low or no acute or chronic toxicity to humans, affect
a narrow range of species and are formulated to be applied in a manner that limits or eliminates
exposure of humans and other non-target organisms. Examples of least toxic pesticides include products
formulated as baits, pastes or gels that do not volatilize in the air and that utilize very small amounts of
the active ingredient pesticide, and microbial pesticides formulated from fungi, bacteria or viruses that
are toxic only to specific pest species but harmless to humans.
Least toxic pesticides include:
• Boric acid and disodium octobrate tetrahydrate
• Silica gels
• Diatomaceous earth
• Nonvolatile insect and rodent baits in tamper resistant containers
• Microbe based pesticides
• Pesticides made with essential oils (not including synthetic pyrethroids) without toxic synergists
• Materials for which the inert ingredients are nontoxic and disclosed.
The term least toxic pesticides does not include a pesticide that is:
a) Determined by the U.S. EPA to be a possible, probable or known carcinogen, mutagen,
teratogen, reproductive toxin, developmental neurotoxin, endocrine disrupter or immune
system toxin.
b) A pesticide in the U.S. EPA's Toxicity Category I or II.
c) Any application of the pesticide using a broadcast spray, dust, tenting, or fogging application.
8. Notification Signs
Chemical pesticide application notification signs shall meet the following criteria:
a) Posted at perimeter of outdoor areas or at building entrances, where chemical pesticides are to
be applied.
b) Posted at least 24 hours prior to application of chemical pesticides and shall remain for at least
72 hours after the application.
c) Include "Notice -Pesticide Treated Area," and product's/manufacturer's name, scheduled date
of application, and pest to be controlled -e.g., weeds, insects, rodents.
9. Revisions
Staff will review this 1PM plan annually at minimum, and update it as needed.
8
January 16, 2018 Item #2 Page 107 of 148
THENCE S.40 42'08"W., 1584.44 FEET TO POINT 12 OF SAID WT F; TIIBNCE
N.89°46'4l''"W., 646.96 FEET TO POINT 11 OF SAID LOT F; THENCE N.59°4T49"W.,
1175.97 FEET TO POINT 10 OF SAID LOT F; IlIENCE S.70 54'2T'W., 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 OFFICIAL RECORDS; ALSO
EXCEPTING THEREFROM THOSE PORTIONS DESCRIBED IN PARCELS A AND C IN
GRANT DEED RECORDED FEBRUARY 15, 2002 AS INSTRUMENT NO. 0135145 OF
OFFICIAL RECORDS; ALSO THE SOUTIIEASTERLY 152.00 FEET OF THE
SOUTHWESTERLY 152.00 FEET OF TIIAT CERTAIN PORTION OF LOT G OF RANCHO
AGUA HEDIONDA, ACCORDING TO SAID PARTITION MAP TIIBREOF 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 PARTITION MAP
NO. 823; THENCE FROM SAID POINT OF BEGINNING, S.51°15'45"E., ALONG THE
NORTHEASTERLY LINE OF SAID LOT G, 1042.27 FEET; THENCE AT RIGHT ANGLES
S.37°44'15"W. 440.57 FEET; TIIENCE 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°00'00"E.
ALONG A PORTION OF THE NORTIIWESTERL Y LJNE OF SAID WT G, 483.29 FEET
TO THE POINT OF BEGINNING OF TIIE PROPERTY HEREIN DESCRIBED, ALL OF
THE AFOREDESCRIBED LAND BEING IN THE CITY OF CARLSBAD, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA.
CONTAJNING A TOTAL OF 396 ACRES MORE OR LESS.
January 16, 2018 Item #2 Page 109 of 148
STREAMtst:D ALTERATION AGREEMENT #5·122-00
1. The following provisions constitute the limit of activities agreed to and resolved by this
Agreement. The signing of this Agreement does not imply that the Operator is precluded
from doing other activities at the site. However, activities not specifically agreed,.to and
resolved by this Agreement shall be subject to separate notification pursuant to Fish and
Game Code Sections 1600 et seq.
Project Location and Description:
2. The Operator proposes to alter the streambed of an unnamed tributary to Agua
Hedionda Lagoon t~ accommodate the construction of a Municipal Golf Course which
will include an 1 a~hole championship golf course, clubhouse, maintenance facility, driving
range, conference center, and pads for lndustriaVgolf related uses. The project is
located approximately one mile to the east of Interstate 5. Palomar Airport Road forms
the southern boundary, Hidden Valley Road forms the western boundary, and the
southern edge of grading for the future extension of Faraday Avenue forms the northern
boundary. The 396-acres project site is located in the northwestern quadrant of the City
of Carlsbad, San Diego County, impacting 0.91 acres of streambed. ·
3. The agreed work includes activities associated with No. 2 above. The project area is
located in an unnamed ephemeral drainage, tributary to Agua Hedfonda lagoon,
San Diego County. Specific work areas and mitigation measures are described on/in the
plans and documents submitted by the Operator, including an Environmental Impact
Report. and shall be implemented as proposed unless directed differently by this
agreement.
4. The Operator sh~II not impact more than 0.91 acres of streambed comprised of 0.46
acres mule fat scrub, and 0.45 acres of unvegetated channel. Impacts are considered
permanent a·nd 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 the project. the Operator shall restore through creation and
enhancement, 1.83 acres of comparable wetland habitat on-site. The Operator shall
submif a final Mitigation and Monitoring Plan within 60 days of signing this Streambed
Alteration Agreement. Department approval of that plan is required prior to project
initiation/impacts.
All revegetation shall be installed no later than March 31. 2009.
6. The Operator shall mitigate at a minimum 5:1 ratio for impacts beyond those
authorized in this Agreement. In the event that additional mitigation is required, the type
of mitigation shall be determined by the Department and may include creation,
restoration, enhancement and/or preseivation.
Vegetation, Revegetatlon and Restoration:
7. All mitigation planting shall have a minimum 100% survival the first year and 80%
survival thereafter and/or shall attain 75 % cover of native wetland species after 3 years
and 90% cover of native wetland species after 5 years. If the suivival and cover
requirements have not been met, the Operator is responsible for replacement planting to
achieve these requirements. Replacement plants shall be monitored with the same
survival and growth requirements for 5 years after planting. At the completion of the
monitoring period, the mitigation site shall have received NO supplemental irrigation for a
period of two consecutive years, nonnative plants shall not make up more than 5% of the
Page 2 of 5 January 16, 2018 Item #2 Page 113 of 148
and 0.45 acre ol non-wetland Watets of the U.S. Thi:I replaces Spedal Condition 2. of the
original pe:nnit. dated August 2, 2000. ·
The permiffee shall mitigate impacts to 0.91 acre of waters of the U.S. (including wetland
and non-wetland watezs) by the on-site aeation of 1..83 aaes ol riparian habitat, in accordance
with the City of Carlsbad Revised Golf Course Riparian Mitigation Plan. dated December 2003,
This replaces Special Condition 3 of the original pemdt, dated August 2, 2000.
The tmns and coraditicms of Pemut No, 9~, except as cha1\ged herein, Amain
in .tun force and effect.
Pleue note that a copy of this letter fs being .forwarded. to Field Supervisor, Ecological
Services Field Office, U.S. Fish and Wildlife Service, 6010 Hidden. Valley Road, Cadsbad,
Califo,:nia 92009; U.S. Envlrozu:nental Protection Age.nq1 Attn: Mr. Tim V~
Supervisor, Wetlands Regulatory Office (M'R..S), 75 Hawthon.e Stieet San Ftandsco,
Ca!ifonuJ. 941.0S; California Ocpartment of Fish and G.uxte, Attn: Charles Rayslnook,. .&949
Vfew,Ridge Ave., Sm Diego, California 92123. Califomia Reg1ona1 Water Quality Confml
Board, Region 9, San Diego, Attn: Mr. Michael M~ Manager, Watel:shed ~ 9l.74Sky
Pa.rk Court, Suite 100, San Diego, Califomia 92123
January 16, 2018 Item #2 Page 118 of 148
Pennlttee:
Permit Number:
Issuil'lg Office:
·• LOS ANGELES DISTRICT
U.S. ARMY CORPS OF ENGINEERS
DEPARTMENTOFTIIEARMYPERMIT
City of Carlsbad ·
972020600-MAT. ·
Los Angeles District
i
Note: 1he tenn "youu and its derivatives, as used in this permit, means the pemuttee or any
future transferee. The teIXl\ "this office!'! refers to the appropriate <listrict or division office o£ the
Cotps of Engineers having jurisdiction over the pennitted activity or the appn:,prlate offid.al
acting under the authority of the commanding officer. . ·
You are authorlred to perform wOI:k in accordance with the terms and conditions specified below.
f.
Project Description: To construct the Carlsbad Municipal Golf Course project in the City of
Carlsbad, San Diego Cotmty, Califomi~~ as shown on the attached drawings.
Project Location: In unnamed tr.ibutarles to Agua Hedionda Cteek and Enemas Creek in the City
of Carlsbad, San Diego County, Califomia. 1he 418-acre site is located in the northwestern
quadrant of the City of Carlsbad. Palolitar Aiiport Road forms the southern bounduy of the .
site, Hidden Valley Road forms the ~t.em boundary, and the southern edge of grading for the
future extension of Faraday Avenue~ the northem bounduy. The northern. portion of the
site is in the Agua Hedionda watershed and drains into Agua Hedionda Lagoon. The
remainder of the site is in the .Encinas Creek wacen;hed, which drains through End.tuas Canyon
(located on the south side of Palomar R;oad) to.the Pacific Ocean.
Permit Conditions:
1 Your use of the permitted activity must not interfere with the public's right to free navigation
on all navigable waters of the United States. .
2 You must have a copy of this permit available on the vessel used for 1he authorized
transportation and disposal of dredged material
3 You must advise this office in wpting, at least two weeks before you start maintenance
January 16, 2018 Item #2 Page 119 of 148
transfer of this authorization.
5. H a conditioned water quality certifi~tion has been issued for your projec~ you must comply
with the conditions specified in the cei:tification as speda1 conditions to this permit. For your
<:onvenience, a copy of the certification i,% attached if it contains such conditions.
6. You must allow representatives fro1* this office to inspect the authorized activity at any time
deemed necessary to ensure that it is: being or has been accomplished with 1he tem,s and . ' conditions of yourpemut
Special Conditions:
1. The permitlee shall obtain w~" authorization under the Endangered Species Act for
any and all impacts to threa~ or endangered species prior to itutiating,
waters/wetlands impacts au~ by this IP. The pem,ittee shall submit verification
of compliance w:ith this permit condition prior to initiating watets/wetlands impacts
authorized by this IP. This a~thorization may be obtained by the following mean;; a)
Adoption and approval of the;Oty's Habitat Management Plan by the USFWS and
CDFG. (the City would th.en i;;sue their own take authorization), orb) Individual
Section 10 permit issued by the USFWS.
.·:
2. The pennittee shall impact I\~.more than 2.95 acres of waters of the United States
(including wetlands and non-:wetland waters) •. The~ shall .fence (with silt
. barriers) the limits of the c~huction corridor to prevent additional waters /wetlands
impacts and the spread of silf from the construction zone in.to adjacent
waters/wetlands. Ii waters/Yietlands impacts occur outside these limits, all work
shall cease, and the Co.rps s~ be notified .immediately. Any waters/wetlands
impacts that occur outside the fenced and marked limits shall be mitigated at a
minimum 5:1 ratio, and slJ.a.ll--be subject to the requirements of all the special
conditions listed below. ·
3. The pemdttee shall mitigate irppacts to 2.95 acres of waters of the United Stabs
(induding wetlands and nOJ\"wetland waters) by a) creating 45 acres of riparian
habitat on-site adjacent to the.Cannon road riparian site and existing Macario Creek
riparian corridor; and b) restQring/ enhancing 4.0 acres of wetland habitat offsite at the
Carltas site. Mitigation grad.h)g, planling, and irrigation shall begin prior to and/ or
concurrent with the planned date of initiating watets/wetlands impacts authorized by
this IP.
4. A final conceptual wetland mi.ligation plan based on the Carlsbad Golf Course
Composite Wetlands Mitigatio~-Plan (P&D Environmental Services, May 2000) shall be
s~~ ... to the Cotps for review and approval 30 days prior to initiating
waters/wetland impacts (cc; :USFWS and EPA). These .ffn.a1 conceptual plans shall
be prepared in strict accordance with the Corps' Habitat Mitigation and Monitoring
Proposal Guidelines (June :t;,.1993). In addition to the infon:nation presented in
P&D' s draft May 2000 mitig~on plan, it is the Corp's understanding that the
Carlsbad Golf on--site mitiga~on will conform, to the extent practicable, to the
speci£ications outlined in the .. Cannon Road Mitigation Plan (specifically the ·
"Addendum to the Conceptutz.l Mitigation Plan for Cannon Road Extension Project Re.aches 1
3
January 16, 2018 Item #2 Page 121 of 148
and 2" dated Febrwuy 20, 1998). The final conceptual mitigation plan shall include
and incorporate all sections of, the Canon Road mitigation plans that pertain to the
Carlsbad Golf project. In addition, all addmdums submitted to the Corps shall be
.included in the final conceptual plan. The final conceptual plan shall include details
of the offsite restonition/enhancement including locatio~ methods of removal,
replanting strategies and techniques., success criteria (performance standards),
monitoring/maintenance tnelhods and schedules. Additional content and
requirements for the final conceptual plan are listed below in special condition
number five. The final conceptual plan shall be submitted as one complete and
comprehensive document for Coips ~view 30 days prior fl? the plaruled date of
initiating waters/wetlands i;a\pads authorized by this JP. No impacts to
waters/wetlands shall occur ~til after the Coips approves ihe conceptual plan.
,,: .
5. Final wetland construction plans, spedfications and drawings based on the Cmps-
Appt'OVed final conceptual wetland mitigation plan shall be submitted to the Corps for
review and approval IO days·pr.ior to initiating wetland impacts. The final p~ ~
specifications shall also include:
a) All final specifications. and topography-based layout grading, planting, and
irrigation.
b) A provision that all wetland creation ~as shall be graded to ihe same
elevation as the adjac~t existing wetlands an.di or within one loot of the
groundwater table, and shall be left in a rough grade state~ topographic
relief (including ~Is) that mimics natwal wetland topography.
c) Planting pallets (plant species., size, and number per acre) and seed mix (plant
species and pounds pe.r aae). All planting shA1l be installed in a manner that
mimics natural plant d.istnbution (e.g., random and/ or aggregate distributions
rather than uni.form rf;>ws). Plantings shall generally be placed within the
mitigation areas along hydrologic gradients that make ecological sense in
relation to each plant's facultative category (e.g. obligate, facultative, etc.).
d) A provision that on the first anniversazy of the initial planting,. all dead plants
shall be replaced unless their function has been replaced by natuml
recruitment as verified by the Cotps.
e) A final implementation schedule that indicates when all wetland/waters
impacts, as well as mitigation site grading, planting.. and irrigation will begin
and end. .. ..
f) Five years of explicit imd measurable success criteria £or wetland creation,
restoration,. and ~cement a:reas. The pennitec shall conduct a minimum of
five years of maintenance and monitoring of wetland mitigation areas. If success
criteria are met earlicn~nd all artificial water" supply to the site bas ctased fOI:' a
minimum of two yeaD/ the site may be considered, at the Corps discretion, for
early approval. In addition to the success criteria outlined in the final mitigation
~onitoring plan. ·evidence1>f wetland hydrology and natural reemitmcnt of
native wetland vegetation must be present on-site in order to obtain final Coq,
approval of the mitigaifon areas. Annual mitigation mamtenance and monitoring
reports shall be submitted to the Corps (cc: USFWS and EPA).
l
6. Planting and irrigation shalt'~ot be installed until the Corps has approved the
:rru6g~ti01'I. $1tQ, g,::idi'l'\8· Thci parnutte& idw.ll contact !:he Cotpa for veri.6.c:at::i.on oE
4
January 16, 2018 Item #2 Page 122 of 148
proper grading of the mitigation site a minimum of 15 days prior to the planned date
of initiating planting.
, .
7. H changes are made to the mitigation design during its implem~tio~ the permittee
shall immediately notify the Corps. If changes are determined to be greater than
minimal by the Corps, as-built drawings of the mitigation.grading, planting, and
irrigation shall be submitted to the Corps (cc: USFWS and EPA) within 30 days of
implementing the redesigned.mitigation.
8. The pennittee shall staff a qualified biologist on site during all phases of construction
and mitigation implemen~ to ensure compliance with the requirements of this.
permit, and shall produ.ce a report that docw:nents the timing and e'Vel\ts of the final
implementation schedule. 1ne pemuttee shall submit the biologist's name, address,
telephone number, email address (if availirb]e), and work schedule on tm? project to the
. Cp,ip$..prlor to the planned date of initiating waters/wetlands impacts authorized by
this IP. The permittee shall tepOJt any violation to the Corps within one day of its
occurtence.
9. The pennittee shall submit a report to the Corps within 30 days of completion of
watezs/wetlands impacts authorized. by this IP that documents compliance with all
permit conditi.01'1$. The report shall include photographs showing fenced and marked
limits of impacts to all Corps. jurisdictional areas, as-built construction drawings and a
summaty of all project activities.
10. The permittee shall not remove/impact vegetation from development areas from
March 15 to September 15 to avoid impacts to nesting birds. Any.habitat restoration
and creation activities also shall be timed to avoid disturbance of Pederally-listed and
other migratory nesting birds (ie., avoid disturbance from March 15 through
September 15). However, the permittee may be authorizeq ~ remove/impact
vegetation within developme.nt and restoration areas during this time if a qualified
biologist surveys the proposed work area immediately prior to the vegetation removal
and concludes that no impacts to nesting birds will occur. The results of the survey
shall be provided to the Corps for review and approval prior to initiation of
vegetation removal. A qualified biologist shall monitor the vegetation removal to
ensure the no impacts to nesting birds will occur.
11. The pemuttee shall ensure that water quality is maintained within the channel at and
dawn.stream of the project site by incorporating appropriate design elements :into the
project {e.g., maintaining a soft bottom channeL insCalling detention basins, etc.)
U. The pennittee shall preserve in perpetuity all mitigation areas by placing a biological
. conservation easement in favot of an agent approved by the Corps on these areas. 1he pemuitee shall submit a dr.ufeasement to the Coxps prior to initiating wetland
impacts. The form and conteftt of the easement shall .follow the enclose4 example, and
must be approved by the Co.rps prior to its execution. lhe easement shall state dearly
that no other easements or activities that would result in soil disturbance a:Ni/ or
vegetation removal, except as approved by the Corps, shall be allowed within the
biological conservation easement area. The permittee shall submit the final easement
'Within 10 days of receiving Corps approval of the draft easement. . 5
January 16, 2018 Item #2 Page 123 of 148
Further Information:
1. Congressional Authorities. You have been authorized to undertake the activity described.
above pursuant to:
( ) Section 10 of the River and Harbor Act of 1899 (3.1 US.C. 403).
(X) Section 404 of the Clean Water Act (33 USC 1344).
() Section 103 of the Marine Protection,, Resemch and Sanci:uaries Act of _1972 (33 USC. 1413).
2. Limits of this authorization.
a. This pemlit does not obviate the need to obblin other Fedenl,. state, or local
authorizations required by law.
b. ThJs permit does not grant any property rights or exclusive privileges.
c. This permit does not authorize any injury to the property or rights of others.
d. This permit does not authorize interference with any existing. or proposed Federal
project.
3. Limits of Federal Liability. In issuing this permit, the Federal Govenmlfflt does not assume
any liability for the following:
a. Damages to the permitted project or uses thereof as a result of other pezmi~ or
unpermitted activities or from natural causes. .
b. Damages to the permitted project or uses 1hereof as a. result of autent or future activities
undertaken by or on behalf of the United States in the public interest.
c. Damages to pers.ons, property, or to other permitted or unpe:rmittad ad:ivit:iea or
sb:uctmes caused by the adivity authorized by this permit
d. Design or construction deficiencies associated with the permitted work.
e. Damage claims associated with any future modification, suspension, or revocation of fhis
permit.. .•.
4. Reliance on Applicant's Data. The determination of this office that issuance of this pennit is
not contrcuy to the public interest was made in reliance on the .information you provided.
s.. Reevaluation of Permit Decision. ~ office may reevaluate its decision on this permit at any
time the d.tcumstances warrant Circumstances that could require a reevaluation include, but are
6
January 16, 2018 Item #2 Page 124 of 148
Page:~
Date: August 28, 2003.
Permit Application ·No.: A-6-Cll-00-087
to the plans shall occur without a Coastal Commission approved amendment to this coastal
development permit unless the Executive Director determines that.no amendment is legally
required.
2. Mitigation for Upland Habitat lmpa~~: PRIOR TO ISSUANCE OF THE COASTAL
DEVELOPMENT PERMIT, the applicant shall submit to the Executive Director for review and
written approval, a final detailed coastal sage scrub mitigation plan. Said plan shall be developed
in consultation with the U.S. Fish and Wildlife Service and the California Department of Fish and
Game, and shall include the following:
a. Preparation of a detailed site plat(~elfneating all areas a~ types of impact to uplar:sd
habitat species (both pennanent anti temporary) and the exact acreage of each impact.
In addition, a detailed site plan of the mitigation sites shall also be included.
b. Impacts to coastal sage scrub sha'li-be mitigated at not less than a ratio of 2:1.
c. Mitigation methods shall be con~i~t~nt with those approved In Section. 7-9 of the second
addendum to the Carlsbad HMP ahd Policy 7-1.1 O of the Mello II Land Use Plan of the
Carlsbad LCP, as provided in Exhibit 10.
d. A minimum buffer of 20 feet shall be provided between development as defined In Section
30106 of the Coastal Act, and native upland habitat, except as otherwise provided In
Section 7-11 of the second addendum the Carlsbad HMP and Policy 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 Identification of plant species to be used
for the restoration area;
f. Application rate (e.g. pounds per acre of seeding effort);
g. Methods of weed eradication. No weed whips shall be permitted after installation 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 quantitative success criteria
that clearly relate _to the goals and objectives of the habitat ~estoratfon program. These
quantitative success criteria shall be based on sampling reference sites or on pertinent
published reports. The success critieria shall include minimum requirements for species
diversity and cover of shrubs. subshrubs, and herbaceous species. At minimum, fNe
years after the initial planting the restored areas shall support at least 10 native species
appropriate to characterize the vegetation type and have evidence of recruitment of at ·
least one-half of these species. Weeds shall be controlled as specified in {g) above and
never constitute more than 1 ~ percent of the total cover.
j. At completion of the mitigation/restoration effort, the restoration specialist shall prepare a
letter report indicating that the installation is finished and that the five-year monitoring .
period has begun. Monitoring reports shall be submitted to the City and the Executive
Director annually for five years. ·If. at the end of five years, any of the restored areas fail to
meet the success criteria as contait:l'ed in the final mitigation plan, the monitoring and
January 16, 2018 Item #2 Page 130 of 148
·, \
maintenance pericx.. .,ill be extended one full year for that ar-.... .• : Final monitoring for
success shall occur after at least a three-year period during which there has been no
remediation or maintenance,.other than weeding. ff the success critieria are not met after
6 years, an amendment to the permit shall be required.
The permittee shall undertake development in accordance with the approved mitigation/restoration
plan. Any proposed changes to the approved plans shall be reported to the Executive Director.
No changes to the plans shall occur without a Coastal Commission approved amendment to this
coastal development permit unless the Executive Director determines that no amendment is
legally required.
3. Restoration for Construction Impacts. PRIOR TO ISSUANCE OF THE COASTAL
DEVELOPMENT PERMIT, if any temporary wetland and/or riparian impacts are proposed, the
applicant shall submit a detailed revegetation plan indicating the type, size, extent and location of
all plant matertafs, any proposed irrigation system and any other landscape features necessary to
revegetate any proposed temporary wetland and/or riparian impacts. The restoration program
shall be developed in consultation with the U.S. Dep~rtment of Fish and Wildlife and the California
Department of Fish and Game, and at. a minimum shall include: . .
Before/After Survey. The condition of th~ wetland and/orriparian revegetation and substrate
under the two approved golf cart crossing locations shall be documented prior to
construction, and the extent of pr:oposed temporary impacts shall be Identified. The extent of
impacts to the vegetation and substrate shall be assessed and documented after completion
of the repairs. Temporary wetland and/or riparian impacts shall be revegetated at a ratio of
1 :1. There shall be no wetland impacts except for those temporary impacts associated with
construction of the two approved golf cart crossings. No permanent wetland or riparian
impacts shall be arrowed.
a. The following goals, objectives and performance standards for the restoration sites:
1. Full restoration of all wetland and/or riparian impacts that are identified as
temporary. Restoration of temporarily impacted areas shall include, at a
minimum, restoration of before-impact elevations, restoration of before-impact
hydrology, removal of all non-native plant species, and repJanting with locally
collected native wetland and/or riparian plant species.
2. After construction and restoration, a permanent minimum buffer of 100 feet shall
be provided between development and wetlands, and a minimum buffer of so ·
feet shall be provided between development and riparian area, except as
shown on the "City of Carlsbad Golf Course Revisions" plan dated February 7,
2003. For the two approved golf cart path crossings and the golf course playing
areas adjacent to the riparian area as shown on the plan, an average minimum
post-construction buffer of.SO feet shall ~e provided between new development
and wetlands, and an average minimum post-construction b_uffer of 25 feet shall
be provided between new development and riparian areas, consistent with
Poliqy 3-1.12 of the Mello II Land Use Plan and Section 7-11 of the Carlsbad
HMP, as provided in Exhibit 10, unless otherwise approved by the Executive
Director in a manner consistent with the final, approved devE!lopment plans and
mitigation/restoration plans. The buffer between development and
riparian/wetland habitat for these referenced areas shall not be less than 1 O feet
· · in width at any one point
s~ As shown on the plan entitled "City of Carlsbad Goff Course Revisions"
submitted with LCPA 1-038 (Carlsbad HMP) on Febrvary 7, 2003, and
January 16, 2018 Item #2 Page 131 of 148
Permission is hereby granted to City of Carlsbad (Pennittee), to grade and construct
improvements as shown on said plan, subject to the following conditions:
1. Expiration:
This "Permission to Grade" shall expire if grading does not commence within 6
months from the date of this letter, or work is not diligently pursued to completion.
2. Submittals:
2.1. Permittee agrees to supply SDG&E with '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-Construction Meeting:
SDG&E's Land Management Representative (I.MR) 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 within said easement shall be approved in writing by
SDG&ELMR.
4.2. Pennittee 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 ground penetration occurs
within the gas transmission easement or within ten (10) feet of the gas line when in a
:franchise position.
4.4. No power-operated equipment shall b.e used within two (2) feet of any portion of the gas
line, only hand digging is allowed and an SDG&E standby is required.
4.5. If any contact is made with the gas line or its coating, SDG&E must be notified
immediately at I-800-411-7343 and the area left exposed.
4.'6. The gas easement shall be staked with ribboned lath at fifty-foot (50') increments and
the staking shall be maintained at all times during grading and construction of the
project.
Carlsbad Golf Course.doc 2 January 16, 2018 Item #2 Page 144 of 148
4.7. SDG&E. reserves the right to inspect ~ perform quality control work during
construction. SDG&E standby personnel are authorized to stop work around the gas
line if all required precautions are not strictly adhered to.
4.8. Equipment crossings of the gas line must be designed to eliminate any possible damage
to the gas line and approved by SDG&E gas transmission engineering.
4.9. Clearance of(35) feet minimum between the SDG&E electric transmission wires and the
natural ground 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 OS~ CAL-:OSHA, ANsi NIOSH, and NEC for clearances when working
around energized electrical facilities must be maintained. ·
4.10. No grading shall be allowed within ten (10) feet of a single wood pole structure or
anchor, or fifteen (15) feet from any multi-wood pole structure (H-.frame, 3-pole, etc),
or twenty (20) feet .from any electric steel lattice towers or thirty (30) feet of steel
poles. All measurements are taken from the face of pole or face of foundation.
5. Special Conditions:
5 .1. All new SDG&E access roads shall be surfaced with an all-weather material. All access
driveways shall have a 30' wide commercial grade apron. Roads shall be compacted
to 90% relative maximum compaction. SDG&E requires that Pennittee 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 the
affected areas from storm water.
5.2. All trees planted within SDG&E's easement, shall be no more than 15.00 feet in height
at maturity and shall not restrict SDG&E' s access to any of its facilities.
5.3. hrigation systems shall not spray directly onto any electric facilty, access road or
maintenance pad.
. 6. Erosion Control:
6. I. All disturbed and created slopes, within the SDG&E electric transmission easement,
shall be hydro-seeded or planted by Permittee with an SDG&E approved mix.
6.2. All drainage shall be designed to prevent erosion ofSDG&E easement and access roads.
7. Storage:
7.1. This permission to grade letter does not permit storage of equipmen~ materials, dirt or
debris on the easement or SDG&E fee owned property.
Carlsbad Golf Course.doc 3 January 16, 2018 Item #2 Page 145 of 148