HomeMy WebLinkAbout2015-11-10 - ORDINANCES - WATER FRANCHISE VALENCIA WATER (2)ORDINANCE NO. 15-09
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA CLARITA, CALIFORNIA,
GRANTING A WATER FRANCHISE
TO VALENCIA WATER COMPANY
WHEREAS, on February 26, 1991, the City of Santa Clarita (City or Grantor),
pursuant to Ordinance No. 91-5, granted to Valencia Water Company (Grantee) a
franchise for 10 years with a 15 -year extension right to maintain and operate pipelines
and equipment for the transportation and distribution of water in the public right-of-way,
including streets, roads, and highways (Previous Franchise);
WHEREAS, on May 8, 2001, the City accepted a renewal notice acknowledging
the grant of a 15 -year extension to the Previous Franchise, which will expire on
December 17, 2015;
WHEREAS, Grantee desires for the City to grant a new franchise to Grantee
pursuant to the terms and conditions in this ordinance;
WHEREAS, pursuant to Chapter 2 of Division 3 of the California Public Utilities
Code (commencing with Section 6201, (Chapter 2), of the Franchise Act of 1937, the
State of California authorizes cities to issue franchises with terms and conditions, so long
as those terms and conditions are not in conflict with the standards set forth therein; and
WHEREAS, the City desires to permit the continued operation of the franchise in
the public right-of-way for the benefit of the residents and businesses that are customers
of Grantee subject to this Franchise, the Franchise Act of 1937, and the terms and
obligations of Santa Clarita Municipal Code Title 4 Franchises.
THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA,
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Franchise Term: Grant - The right, privilege, and franchise
(Franchise) is granted to Valencia Water Company (hereinafter referred to as Grantee),
its successors and assigns for the period of ten (10) years to lay, construct, reconstruct,
maintain, operate, repair, renew, change the size of, remove, or abandon in place pipes
and pipelines for the transportation and distribution of water, waste water, mud, steam
and other liquid substances, excluding any hazardous substances or hazardous waste
within the meaning of the "Comprehensive Environmental Response Compensation and
Liability Act of 1980," 42 U.S.0 section 9601 et seq., as it may hereafter be amended, the
"Federal Pollution Water Control Act," 33 U.S.C. 1251 et seq., as may hereafter be
amended and the "Solid Waste Disposal Act," 42 U.S.C. 6901 et seq., as it may hereafter
be amended, (provided, however, that the exclusion shall not apply to substances in such
amounts that are generally accepted as appropriate for the treatment of water) together
with all manholes, valves, appurtenances, and service connections necessary or
convenient for the operation of said pipes and pipelines, including poles, conduits, wires,
cables, and other appurtenances and equipment for telegraph or telephone lines or both,
necessary or appropriate solely for the Grantee's operations in, under, along, or across
those portions of the streets, roads, and highways now or hereafter dedicated to public use
in the City of Santa Clarita, State of California.
Grantee shall have the right to renew the Franchise for one additional
15 -year period by providing written notice to the City at any time during the 12 -month
period preceding the end of the original 10 -year period. Upon renewal of the Franchise,
the City and the Grantee shall review the past operation of the Franchise and make such
changes to the Franchise as the parties may mutually agree. Grantor and Grantee agree to
act in good faith in negotiating any changes to the Franchise at the time of renewal.
Notwithstanding the above, the City shall not impose an additional granting of renewal
fee upon renewal of the Franchise.
SECTION 2. Consideration; Payment of Fees - As provided for under Section
6231 of the Franchise Act of 1937, as consideration for the Franchise granted, the
Grantee shall pay to the City in lawful money of the United States the following:
A. Two percent (2%) of the gross annual receipts of the Grantee arising from the,
use, operation, or possession of the Franchise; provided, however, that such payment
shall in no event be less than one percent (1%) of the gross annual receipts of the Grantee
derived from the sales within the Franchise area(s) of the commodity or service for which
the Franchise is awarded. Such percentage shall be paid annually during the life of the
Franchise, including the year of granting the Franchise. In the event this amount is
increased by Federal or State Law or the City of Santa Clarita is otherwise empowered to
increase the rate, the City reserves the right to increase the rate up to the maximum
amount permitted by Federal, State, or local law. Payments shall be due for the period
commencing with the effective date without deferral
The annual payments under this paragraph 2A shall be prorated for the calendar
years in which this Franchise begins and is terminated based upon the period of time the
Franchise has been in effect during those years.
B. In addition to the foregoing annual payments, the Grantee shall:
1. Pay the Grantor, care of the City Director of Administrative Services,
within sixty (60) days after the end of each calendar year, for each year during the life of
the Franchise, an initial construction charge calculated at a rate of Two Hundred Dollars
($200) per mile or fraction thereof for all new mains laid during the preceding year.
2. Pay the Grantor, care of the City Director of Administrative Services,
within sixty (60) days after the end of each calendar year for each year during the life of
the Franchise, an annual fee of Fifty Dollars ($50) per pole mile or portion thereof, and
Fifty Dollars ($50) per mile or portion thereof of underground conduit for telephone or
telegraph lines maintained under the Franchise.
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3. Pay the Grantor care of the City Director of Administrative Services,
within thirty (30) days of the effective date of this Ordinance, a onetime granting fee of
$10,000.
4. Upon demand, reimburse the City for its cost in administrating the
Franchise. Reimbursement shall include, but not be limited to, such items as the cost of
inspecting Grantee's books and records, in order to determine the correct reporting of
revenues to the City. The reimbursement fee shall not exceed $1,000 per calendar year.
The City shall have the right annually to inspect the books and records of the
Grantee for the purpose of verifying the accuracy of the fees paid to the City under this
Section 2. Such inspections shall take place during normal business hours and following
at least five working days' written notice from City to Grantee.
SECTION 3. Reports - The Grantee shall during the life of the Franchise:
A. File with the City Director of Administrative Services, within sixty (60) days
after the expiration of the calendar year, or fractional calendar year, following the date of
the granting of the Franchise and within sixty (60) days after the expiration of each
calendar year thereafter, two copies of a report verified by the oath of the Grantee or by
the oath of a duly authorized representative of the Grantee showing the total gross
receipts of the Grantee for the immediately preceding Franchise payment period, received
or accrued in connection with the furnishing of the commodity or service arising from the
use or operation of the Franchise, together with such data as is necessary or in the opinion
of the Revenue Collector to calculate or verify the calculation of the annual payment
required by Section 2-A, supra (or the pro rata amount thereof, for the first period if the
first period is less than one year).
B. On this report, the Grantee shall also show any change in Franchise footage
since the last Franchise report, segregating such footage as to new mains laid, old mains
removed, old mains abandoned in place, and the footage of mains in territory annexed or
incorporated since the last Franchise report.
C. File with the City Director of Public Works, within sixty (60) days after the
end of the calendar year, a report, in duplicate, showing the permit number of each permit
obtained for the installation of new mains during the immediately preceding Franchise
report period, together with the length and size of said mains.
D. File with the City Director of Public Works a report of customer complaints
and disposition thereof on an annual basis.
SECTION 4. Late Payments
A. The Grantee during the life of the Franchise shall make the annual payments
to the City, as provided in Sections 2 and 3, supra, within sixty (60) days after the end of
each calendar year. In the event the Grantee fails to make any payments for the
Franchise on or before the dates due as hereinabove provided, Grantee shall pay as
additional consideration the following amount: ten percent (10%) of the amount due.
Said amount has been set by both parties hereto in recognition of the difficulty in affixing
actual damages arising from a breach of said time and performance requirements.
B. For each period of late payment of any rate, payment or fee, including the ten
percent (10%) late charge, extending beyond thirty (30) days of the due date, an
assessment of interest shall accrue at one and one-half percent (1 %2%) per month.
SECTION 5. Indemnification, Insurance, and Bonding - Grantee shall meet the
following indemnification, insurance, and bonding requirements:
A. Grantee agrees to indemnify, defend, and save harmless City, its agents,
officers, and employees from and against any and all liability, expense, including defense
costs and legal fees, and claims for damages of any nature whatsoever, including, but not
limited to, bodily injury, death, personal injury, or property damage, including property
of the Grantee, arising from or connected with Grantee's operations, or its services
hereunder, including any Workers' Compensation suits, liability, or expense, arising from
or connected with services performed on behalf of Grantee by any person pursuant to this
Franchise. Grantee shall also indemnify, defend, and hold harmless the Grantor, its
agents, officers and employees, from and against any and all pollution liability,
contamination, or environmental degradation liability, including any and all expenses,
claims, and lawsuits for injuries or damages of any nature whatsoever, defense costs,
legal fees, and workers' compensation benefits, arising from or relating to any
threatened, actual, or alleged discharge, dispersal release, or escape of any substance
into or upon any person, thing, or place, including the land, soil, atmosphere, man-made
structure, and/or any above- or below -ground watercourse or body of water, in
connection with this Franchise. The Grantee shall not be obligated to indemnify the
Grantor and Grantor's agents for liability and expense arising from the active negligence
of the Grantor or Grantor's agents.
B. The Grantor shall be immediately notified by Grantee of all discharge, release,
or escape of any water, waste water, mud, or other substances from Grantee's pipelines
and appurtenances within the Franchise area. All actions to investigate, remove, or
remediate any substance reasonably demonstrated to be discharged, dispersed, released,
or escaped from Grantee's pipelines, and to repair or restore Grantee's pipelines and
appurtenances, shall be the sole responsibility of Grantee and shall be conducted by
Grantee or Grantee's agents, in conformance with any and all laws, ordinances, rules,
regulations, requirements, and orders whatsoever, present or future, of the federal, state,
county or City, or other local government at Grantee's sole cost and expense, and shall be
immediately undertaken. If Grantee fails to take any action required pursuant to this
Section 5, Grantor may but shall not be obligated to, take all actions it deems appropriate
at Grantee's expense. Upon written demand by Grantor, Grantee shall reimburse Grantor
for all Grantor expenses reasonably incurred in connection with the Grantor's actions
including, but not limited to, all direct and indirect costs relating to investigations,
remediation, and removal.
C. Without limiting Grantee's indemnification of Grantor, Grantee shall provide
and maintain at its own expense during the term of this Franchise the programs of
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insurance covering its operations hereunder set forth herein below. Such insurance shall
be provided by insurer(s) satisfactory to City and evidence of such programs satisfactory
thereto shall be delivered to City Director of Administrative Services, on or before the
effective date of this Franchise; provided, however, that any insurer admitted to issue
insurance in the State of California that has a B -X rating or higher by Best Key Rating
Guide shall be deemed satisfactory to the City. Insurance policies and certificates
evidencing coverage shall name the City of Santa Clarita, its officers, agents, and
employees as additional insureds with respect to Grantee's operations under the
Franchise. Such evidence shall specifically identify this Franchise and shall contain
express conditions that City is to be given written notice by registered mail at least sixty
(60) days in advance of any modification or termination of any program of insurance.
The required coverage is as follows:
1. Liability: Such insurance shall be primary to and not contributing with
any other insurance maintained by City, shall name the City of Santa Clarita as an
additional insured, and shall include, but not be limited to:
(a) Comprehensive General Liability Insurance endorsed for Premises —
Operations, Products Completed Operations, Pollution Liability, Contractual,
Broad Form Property Damage and Personal Injury with a combined single limit of
not less than Five Million Dollars ($5,000,000) per occurrence, and Ten Million
Dollars ($10,000,000) products/completed operations aggregate. If the above
insurance is written on a claim made form, Grantee shall provide the City with
sufficient evidence to establish that Grantee will be able to pay all claims that are
reported to Grantee during the two (2) years following the termination date of the
subject policy. If the Grantee reasonable concludes that the premium for the
Pollution or other Liability coverage portion of the above described insurance is
unreasonably expensive in light of the coverage provided, the City agrees to
consider reasonable alternatives to obtaining such Liability coverage, including
allowing the Grantee to self -insure for this coverage.
(b) Comprehensive Auto Liability insurance endorsed for all owned, non -
owned, and hired vehicles with a combined single limit of at least One Million
Dollars ($1,000,000) per occurrence.
2. Workers' Compensation: A program of Workers' Compensation
insurance in an amount and form to meet all applicable requirements of the Labor Code
of the State of California, including Employers Liability with a $150,000 limit, covering
all persons providing services on behalf of Grantee and all risks to such persons under.
this Franchise." If applicable, such insurance shall also provide for every benefit and
payment under obligation of the Federal U.S. Longshoreman and Harbor Worker
Compensation Act, paying particular attention to Public Law 92.572. In lieu of the
policy of Workers' Compensation Insurance required in this Section, Grantee may
substitute and provide a certificate of consent to self, -insurance, issued by the Director of
Industrial Relations of the State of California.
D. Grantee shall furnish to the City Director of Administrative Services within
thirty (30) days of the adoption of this Ordinance granting the Franchise, either certified
copies of such policies or a certificate of insurance for each of the required policies
executed by the company issuing the policy, certifying that the policy is in force.
E. Within thirty (30) days of the adoption of this Ordinance granting the
Franchise, Grantee shall provide to the City Director of Administrative Services a faithful
performance bond in the sum of not less than Fifty Thousand Dollars ($50,000), payable
to the City of Santa Clarita and executed by a corporate surety licensed to transact
business as a surety in the State of California. Such bond shall be conditioned upon the
faithful performance by the Grantee of the terms and conditions of the Franchise and
shall provide that, in case of any breach of condition, the whole amount of the penal sum
shall be deemed to be liquidated damages and shall be payable to the City by the
principal and sureties of the bond.
1. The faithful performance bond shall continue to exist for one (1) year
following the City Council's approval of any sale, transfer, assignment, or other change
of ownership of the Franchise, or of the expiration of termination of Franchise. The City
Council may release said bond prior to the end of the one (1) year period upon
satisfaction by Grantee of all the obligations under the Franchise.
2. At its sole option, the City may accept Certificates of Deposit, Cash
Deposits, or U.S. Government Securities in lieu of commercial bonds to meet above
bonding requirements. Such alternative bonds shall be made payable to the City and
shall be deposited with the City Director of Administrative Services.
F. The types and amounts of said insurance coverages and bond shall be subject
to review and reasonable adjustment by the City, at City's sole discretion, which shall not
be unreasonably exercised, at any time during the term of the Franchise. In the event of
such adjustment, Grantee agrees to renew required insurance coverages and bonds, in
types and amount(s) as determined by the City, within thirty (30) days after written notice
to do so from the City.
G. Failure on the part of the Grantee to procure or maintain required insurance
and bonding shall constitute a material breach of this Franchise upon which the City may
immediately terminate or suspend this Franchise.
H. The obligation of providing evidence of current insurance policies and
bonding shall be on the Grantee.
SECTION 6. Transfers and Assignments
A. The Grantee shall not sell, transfer, assign, lease, hypothecate, place in trust, or
change the control of the Franchise or any part thereof, except with the prior consent of
the City Council, and after payment of a transfer fee as detailed in Subsection 6 F., infra
except as excluded in Subsection 6 E. As used in this section, "transfer" includes stock
transfer and "control" includes actual working control in whatever manner exercised.
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B. Grantee shall inform the City Council of any pending sale, transfer, lease,
assignment, hypothecation, placing in trust or change in control of the Franchise, except
as excluded in Subsection E, and shall provide all documents on which the sale, transfer,
assignment, lease, hypothecation, trust, or change in control is predicated.
C. Grantee shall provide the City Council with written notice of any pending sale,
transfer, lease, assignment, hypothecation, placing in trust, or change in control of the
Grantee, as required hereunder, at least 60 days prior to the closing of the proposed
transaction and shall provide the City Council with all relevant documents and
information requested by it regarding the proposed transaction.
D. As a condition to the granting of consent to such sale, transfer, assignment, lease,
hypothecation, trust, or change in control, the City Council may impose such additional
terms and conditions upon the Franchise and upon the grantee or assignee, which the City
Council deems to be in the public interest. Such additional terms and conditions shall be
expressed by ordinance. Nothing herein contained shall be construed to grant the Grantee
the right to sell, transfer, assign, lease, hypothecate, place in trust, or change control of
the Franchise or any part thereof, except in the manner aforesaid. This section applies to
any assignment, whether by operation or by law, by voluntary act of the Grantee or
otherwise.
E. Shareholders and/or partners of the Grantee may transfer, sell, exchange, assign
or divest themselves of any interest they may have therein. However, in the event of any
such sale, transfer, exchange, assignment, divestment, or other change is effected in such
a way as to give control of or twenty-five percent (25%) or more interest in the Grantee
to any persons, corporation, partnership, or legal entity other than the controlling interest
therein or the effective date of the Franchise or the effective date of the last assignment,
sale, transfer or other action which required the City Council's consent, consent thereof
shall be required. Notwithstanding anything to the contrary contained in this Section 6,
no consent of the City Council shall be required for any assignment or transfer of the
Franchise by the Grantee to an affiliate. For purposes of this Agreement, the term
"affiliate" shall mean any person or entity that, directly or indirectly, controls or is under
common control with Grantee. The proposed transferee (assignee) of the Franchise shall
provide the City all information and documents that it may consider relevant and
necessary for its review of the proposed transaction and the capability of the proposed
transferee to operate and maintain the Franchise.
F. The transfer fee shall be submitted with the applicant's request for the City's
consent to any action described in Subsection A, supra, and shall be determined as
follows:
1. Consent to sale, transfer, transfer of stock, assignment or lease, or any other
action not requiring modification of the Franchise by adoption of an amending ordinance:
$2,000.
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2. Consent to sale, transfer, transfer of stock, assignment or lease, or any other
action requiring modification of the Franchise by adoption of an amending ordinance:
$2,500.
3. In the event the costs to process the application exceed the fees detailed above,
the applicant may be required to pay any additional costs incurred by the City in
processing the applicant's request for consent to sale, transfer, transfer of stock,
assignment, lease, hypothecation, or trust of Franchise. Such costs may include the costs
incurred for hiring consultants to assist in evaluating the application. Such costs shall be
paid by the applicant prior to final consideration of the request by the City Council.
SECTION 7. Relocation of Pipelines - In the event the Grantee receives notice to
relocate its pipelines and appurtenances pursuant to the Santa Clarita Municipal Code or
other applicable ordinance, and the Grantee neglects or fails to relocate its facilities in a
timely manner after receipt of any such notice, Grantee shall be responsible for and shall
reimburse the City, for any and all additional costs or expenses incurred by the City, due
to or resulting from such delay in relocation of the facilities.
SECTION 8. Pipeline Franchise Regulations and Conditions SCMC Chapter 4.04
- In addition to the terms and conditions herein, this Franchise is granted under the same
terms and conditions contained in the Santa Clarita Municipal Code relating to Basic
Franchises at Chapter 4.04, including, but not limited to, the prerequisites set forth in
Santa Clarita Municipal Code Section 4.04.340 that the Grantee obtain excavation
permits and pay any applicable fees then in effect as required by the City, pursuant to the
Highway Permit Ordinance prior to excavation work on any public right-of-way.
Grantee shall use its best efforts to avoid excavating any portion of a highway that
Grantee has excavated within two years of a prior excavation, except to conduct
emergency work, as defined in the Basic Franchise Ordinance. Grantee agrees and
understands that for any permits that may be required from the City for Grantee's
activities undertaken pursuant to this Franchise, all applicable permit fees in effect at the
time of application will be required to be paid to the City. In the event the terms and
conditions hereof conflicts with the terms and conditions of the Santa Clarita Municipal
Code, the terms and conditions hereof shall control.
SECTION 9. Annual Report - Concurrent with the remission of fees as required
under Section 2, the Grantee shall submit a brief written report to the City Council
regarding the operation of the Franchise during the preceding 12 -month period. Such
report will include a discussion of consumer complaints, if any, received by the Grantee,
together with a general description of the Grantee's overall operations within the City,
and such other matters as the City or Grantee deem appropriate to discuss. If requested,
Grantee will make an oral report to the City Council at a public meeting. Such report
shall include water -quality test results during the prior twelve (12) months.
SECTION 10. Enforcement Remedies - In addition to the rights and remedies
available in Santa Clarita Municipal Code Chapter 4.04 and State law, if Grantee shall
fail or refuse to comply with any of the provisions, conditions, obligations or duties set
out in the Franchise, City may notify Grantee in writing to perform such obligations, or
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duties. In the event that Grantee shall fail to comply with said notice within thirty (30)
days, City may, at its option, proceed to perform the duties or obligations itself, provided,
however, the in the case of emergency, City may proceed without notice to Grantee to
perform such duties and obligations. All cost incurred by City thereby shall be charged
to the Grantee. If Grantee fails or refuses to pay the amount of such costs within thirty
(30) days from the date such costs are submitted to Grantee in writing, the City may
proceed to collect such costs by action at law.
SECTION 11. Franchise Effective Date - The effective date of this Franchise
shall be December 10, 2015.
PASSED, APPROVED, AND ADOPTED this 10th day of November 2015.
DATE:
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STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
I, Kevin Tonoian, City Clerk of the City of Santa Clarita, do hereby certify that the
foregoing Ordinance 15- 09 was regularly introduced and placed upon its first reading at
a regular meeting of the City Council on the 27th day of October 2015. That thereafter,
said Ordinance was duly passed and adopted at a regular meeting of the City Council on
the 10th day of November 2015, by the following vote, to wit:
AYES: COUNCILMEMBERS: Kellar, Weste, Acosta, McLean
NOES: COUNCILMEMBERS: Boydston
ABSENT: COUNCILMEMBERS: None
AND I FURTHER CERTIFY that the foregoing is the original of Ordinance No.
15-09 and was published in The Signal newspaper in accordance with State Law (G.C.
40806).
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