HomeMy WebLinkAbout2000-03-14 - AGENDA REPORTS - PACIFIC PIPELINE FRANCHISE (2)CITY OF SANTA CLARITA
AGENDA REPORT
City Manager Approval
Item to be presented by: Frank Oviedo
CONSENT CALENDAR
DATE: March 14, 2000
SUBJECT: PACIFIC PIPELINE SYSTEMS FRANCHISE
DEPARTMENT: Administrative Services
RECOMMENDED ACTION
City Council adopt an ordinance granting an oil pipeline franchise to Pacific Pipeline
Systems LLC.
BACKGROUND
At the February 22, 2000 City Council meeting, the Council conducted a public
hearing and passed to a second reading an ordinance granting a pipeline franchise
to Pacific Pipelines Systems LLC. As a result, staff is asking Council to adopt
the ordinance, granting the franchise to operate an oil i elfin U -
right -of -way.
p p e n e City s
By way of background, ARCO Pipeline Company currently has a franchise with the
City of Santa Clarita to operate an oil pipeline within the City's right-of-way. As
part of the changes occurring, they are asking the City to provide a franchise to a
newly formed company for a portion of the existing pipeline that is currently
included in the existing franchise.
ARCO Pipeline Company (ARCO) has joined with Pacific Pipeline Systems, Inc.
(PPSI) to form a new entity for the operation of its Line 63 -pipeline system. The
joint venture will necessitate the issuance of a new franchise to the new operating
company, Pacific Pipeline Systems LLC, a Delaware Limited Liability Company
(PPS LLC), as only a portion of the pipelines under the current franchise granted to
ARCO are being transferred.
It should be noted that ARCO will be retaining its current franchise (Ordinance No.
83-0013F), as only a portion of its pipeline system will be transferred to PPS LLC.
The City Attorney has reviewed the existing franchise in order to update the
franchise fees and modify any language in the agreement to reflect changes that
have occurred since to the City's incorporation in 1987.
Adopted., WI -4r, /
PACIFIC PIPELINE SYSTEMS FRANCHISE
March 14, 2000 — Page 2
Staff is asking the Council to introduce and pass to second reading the ordinance
granting a franchise to Pacific Pipeline Systems LLC. Since the pipeline has been in
operation for over fifty years this change will not affect the City or its residents in
any noticeable way. The pipelines that exist will continue to operate as usual. The
change will simply mean that a portion of the pipeline will have a new owner.
All the rules and regulations that existed under the former company and franchise
will still be in place. The action, for the most part, is procedural in nature.
However, as mentioned above, the franchise has been updated to reflect increases in
franchise fees and changes related to incorporation of former unincorporated areas
Previously located with the County of Los Angeles.
ALTERNATIVE ACTION
The City Council may choose not to adopt an ordinance granting an oil pipeline
franchise to Pacific Pipeline Systems LLC.
Other action as determined by City Council.
FISCAL IMPACT
Currently the City collects franchise fees from the existing oil pipeline franchise.
The fees are deposited in the general fund revenue. Under the new franchise, the
rate of franchise fee will be going up 34% in order to reflect the CPI. The City will
collect an additional $5,600. This is the maximum that the City is allowed to collect
under the Public Utility Code Section 6231.5. In addition, Pacific Pipelines Systems
LLC agrees to reimburse the City for its administrative expenses up to $5,000.
ATTACHMENT
Location Map of Pipeline
Ordinance granting an oil pipeline franchise to Pacific Pipeline Systems LLC
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