HomeMy WebLinkAbout2012-05-22 - AGENDA REPORTS - CRIMSON PIPELINE FRANCHISE (2)Agenda Item: 20
CITY OF SANTA CLARITA
AGENDA REPORT
UNFINISHED BUSINESS City Manager Approval:
Item to be presented by: Elena Galvez
DATE: May 22, 2012
SUBJECT: ADOPT AN ORDINANCE GRANTING A FRANCHISE TO
CRIMSON CALIFORNIA PIPELINE, L.P.
DEPARTMENT: Administrative Services
RECOMMENDED ACTION
City Council conduct second reading and adopt an ordinance entitled, "AN ORDINANCE OF
THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, GRANTING A
FRANCHISE TO CONSTRUCT AND USE AN OIL PIPELINE TO CRIMSON CALIFORNIA
PIPELINE, L.P."
BACKGROUND
On March 27, 2012, the City Council adopted a Resolution to declare the City's intent to adopt
the proposed franchise with Crimson California Pipeline, L.P., and introduced and passed to
second reading and public hearing an ordinance for adoption by City Council granting a franchise
to Crimson California Pipeline, L.P. (Crimson).
On May 8, 2012, a Public Hearing on the ordinance to grant a franchise to Crimson California
Pipeline was held, and a motion was passed to conduct the Public Hearing and reintroduce the
ordinance to grant a franchise to Crimson California Pipeline L.P., contingent upon the City's
ability to get insurance coverage from Crimson that is equal to or exceeds the insurance coverage
previously provided by Shell California Pipeline Company, LLC (Shell).
In reference to the Crimson insurance coverage being equal to Shell, the City's insurance broker
as well as the City's Risk Manager vetted the language contained in the proposed Crimson
franchise. Staff conferred with the City's insurance broker of Arthur J. Gallagher Risk
Management who confirmed the coverage amounts identified in the proposed Crimson franchise
of May 8, 2012 were equal to the insurance coverage that was originally required of Shell.
In regards to obtaining increased insurance coverage, negotiations have resulted in increasing the
Excess or Umbrella Liability Insurance coverage from $5,000,000 to $9,000,000 per occurrence
for underlying coverages, including commercial general liability and business auto coverage,
which is the maximum Umbrella coverage authorized by its current insurance carrier.
The insurance language in Section 15.A(4) Excess or Umbrella Liability Insurance (Over
Primary) has been revised as follows to reflect the increased insurance coverage (changes and
additions are in italics).
(4) Excess or Umbrella Liability Insurance (Over if used
shall provide coverage at least as broad as specified for the
underlying coverages including, but not limited to, commercial general liability insurance and
business auto coverage. Such policy or policies shall include as insureds those covered by the
underlying policies, including additional insureds. The insurance shall be maintained in an
amount not less than $9, 000, 000 per occurrence throughout the term of the Franchise.
Pursuant to Public Utilities Code Section 6235, when the ordinance is adopted, the franchise will
become effective once written acceptance from the Grantee is filed with the City Clerk.
ALTERNATIVE ACTIONS
Other action as determined by City Council.
FISCAL IMPACT
There is no fiscal impact upon the City through the recommended action.
ATTACHMENTS
Ordinance
Exhibit A - Map
JZ
ORDINANCE NO. 12 -
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA CLARITA, CALIFORNIA, GRANTING A FRANCHISE TO CONSTRUCT AND
USE AN OIL PIPELINE TO CRIMSON CALIFORNIA PIPELINE, L.P
WHEREAS, on November 9, 2004, the City of Santa Clarita (the "City") had, pursuant to
Ordinance No. 04-16, granted to Shell California Pipeline Company, LLC, a Delaware limited
liability company, together with its successors and assigns ("Shell"), effective December 10,
2001, a franchise for the purposes of transporting hydrocarbons and related substances by
pipeline in certain designated areas of the City; and
WHEREAS, the City and Shell continued to abide by the terms and conditions of
Ordinance No. 04-16, and Shell continued to operate pipelines located in the City pursuant to the
franchise set forth in Ordinance No. 04-16; and
WHEREAS, on May 1, 2005, Crimson California Pipeline, L.P., purchased the pipeline
operated by Shell under Ordinance No. 04-16, and has continued to abide by the terms of
Ordinance No. 04-16; thus the City wishes to grant an oil pipeline Franchise to Crimson
California Pipeline, L.P.; and
WHEREAS, pursuant to Chapter 2 of Division 3 of the California Public Utilities Code
(commencing with Section 6201, ("Chapter 2"), 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, among other things, Chapter 2 regulates the manner of granting a franchise,
the application process, the amount of the fee to be paid to the City; and
WHEREAS, the terms of this Franchise are not in conflict with Chapter 2, and are in the
public interest.
THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DOES
HEREBY ORDAIN AS FOLLOWS:
SECTION 1. NATURE OF FRANCHISE. The City of Santa Clarita
hereby grants a non-exclusive Franchise to Crimson California Pipeline, L.P., a California
limited partnership (hereinafter referred to as "Grantee"). This Franchise is hereby granted to
Grantee, under and in accordance with the provisions of the Franchise Act of 1937 and the City's
Municipal Code. This Franchise shall include the right, for the period and subject to the
conditions hereof, to so maintain, operate, repair, renew, and change the size of the pipeline
system, if any, of Grantee, as already laid and constructed in said streets.
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The terms and conditions of this Franchise shall also apply to any pipe or other facilities
of Grantee which are located within the right-of-way of any road or highway at the time such
road or highway becomes a City highway.
SECTION 2. TERM. The term of this Franchise shall be for a period of
twenty (20) years from and after December 11, 2011 ("Effective Date"), to lay and use pipelines,
not to exceed twenty-four (24) inches in internal diameter, for the transportation of oil and
products thereof, in, under, along and across the public streets, highways, and alleys (collectively
"streets"), in the City of Santa Clarita (hereinafter referred to as "City"), as described in Exhibit
"A" attached hereto and made a part hereof (hereinafter referred to as the "Franchise"). The
Grantee may request, by written notice, up to two (2) five (5) year extensions to the term of this
Franchise prior to its expiration, as may be extended from time to time. Such extensions shall be
subject to approval by the City in its sole discretion. The City shall provide written notice to the
Grantee of its approval or disapproval of any extension request.
SECTION 3. APPURTENANCES. The Grantee shall have the right,
subject to the prior approval of the City Engineer, to construct and maintain such traps,
manholes, conduits, valves, appliances, attachments, and appurtenances (hereinafter for
convenience collectively referred to as "appurtenances"), as may be necessary or convenient for
the proper maintenance and operation of the pipelines under the Franchise. Said appurtenances
shall be kept flush with the surface of the streets and so located as to conform to any order of the
City Engineer in regard thereto and not to interfere with the use of the street for travel. The
Grantee shall have the right, subject to such ordinances, rules, or regulations as are now or may
hereafter be in force, to make all necessary excavations in said highways for the construction and
repair of said pipelines and appurtenances subject to the prior approval of the City Engineer.
Such approval may be conditioned by the City Engineer, including, without limitation, the
issuance to Grantee of certain encroachment permits.
SECTION 4. LOCATION OF PIPELINES. So far as is practicable, any
pipelines thereinafter laid shall be located along the edge or shoulder of the streets or in the
parking areas adjacent thereto so as not to unreasonably disturb the flow of traffic and where
possible shall be laid in the unpaved portion of the street. All work that involves lane closures
shall be reviewed by the City Engineer prior to commencement of work.
If the pipelines shall be laid across or along the paved portion of a street, the repair of the
street, after the pipelines have been laid, shall be made by the Grantee within ten (10) days of the
completion of the laying of such pipeline, at the expense of the Grantee and in accordance with
all applicable provisions of the City's Municipal Code, the City encroachment policy, and any
other generally applicable policy or procedure established by Santa Clarita pertaining to street
excavations, and all other applicable laws.
SECTION 5. CONSTRUCTION OF PIPELINES.
A. Terms of Construction. The pipelines and appurtenances laid,
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constructed or maintained under the provisions of this Franchise shall be installed, maintained,
and inspected by the Grantee in a satisfactory, safe, and workmanlike manner, of good material,
and in conformity with all ordinances, rules, or regulations in effect at the time of such work as
now or hereafter adopted or prescribed by the City Council, State, or Federal authorities.
B. Restoration of Streets. The work of laying, constructing,
maintaining, operating, renewing, repairing, changing and moving any of the pipeline system
contemplated by this Franchise and all other work in exercise of this Franchise shall be
performed in compliance with all applicable provisions of the City's Municipal Code pertaining
to street excavations and restoration, including but not limited to the City's encroachments
ordinance, and any current or future generally applicable policies, and other applicable laws and
shall be conducted with the least possible hindrance or interference to the use of City roads by
the public or by the City of Santa Clarita, and Grantee shall provide all necessary warning, safety
and traffic control devices as are or may be required by City, County, State or Federal
regulations. All excavations shall be back filled and adequately compacted. The surface of City
roads shall be placed in a condition that is as good and as serviceable as existed at the beginning
of this work and must be to the satisfaction of the City Engineer. If the City has an applicable
road restoration ordinance, policy or other standard, then the City Engineer's discretion shall be
consistent with that ordinance, policy, or other standard.
SECTION 6. MAPS AND DATE TO BE FURNISHED. Within ninety
(90) days following the date in which any pipelines or additional pipelines have been laid or
constructed under this Franchise, the Grantee shall file a map in such form as may be required by
the City Engineer showing the accurate location and size of all its facilities then in place, and
shall, upon installation of any additional facilities or upon removal, change or abandonment of all
or any portion thereof, file a revised map or maps showing the location and size of all such
additional and/or abandoned facilities as of that date. If cathodic protection is to be used for
facilities installed or maintained pursuant to this Franchise, a description of all the protective
devices shall be furnished to the City Engineer which shall show the location and types of
anodes, including a description of methods to be used as protection against corrosion and
electrolytic leakage.
SECTION 7. COMPENSATION TO THE CITY
A. Amount of Franchise Fee. As consideration for the Franchise
hereby granted, the Grantee shall pay a Franchise Fee to the City. The Franchise Fee shall be
paid annually to the City in lawful money of the United States within sixty (60) days after the end
of each calendar year and a penalty at the rate of two percent (2%) per month or fraction thereof
beyond the payment date shall be charged, but in no event shall said penalty exceed fifty percent
(50%). The payments due to the City shall be computed as follows:
The length of the pipe expressed in feet located within the franchised area, rounded to the
nearest foot shall be multiplied by the applicable base rate, as adjusted pursuant to subdivision
(B), in accordance with the following schedule:
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Pipe Size
(internal diameter in inches)
Base rate per lineal foot
0-4
$0.088
6
0.132
8
0.176
10
0.220
12
0.264
14
0.308
16
0.352
18
0.396
20
0.440
22
0.484
24
0.528
26
0.572
28
0.616
30
0.660
For pipelines with an internal diameter not listed above, the Fee shall be in the same
proportion to the Fee of a 12 -inch -diameter pipe as the diameter of the unlisted pipe is to 12
inches.
B. Computation of Payments. Such payments shall be computed from
the Effective Date of this Franchise, to and including the date of either actual removal of the
facilities or the effective date of a properly approved abandonment "in place" authorized by the
City, and until the Grantee shall have fully complied with all the provisions of this Franchise and
of all other applicable provisions of law or ordinance relative to such abandonments. All such
payments shall be made payable to the City, and shall be supported by the Grantee's verified
statement concerning the computation thereof. In the event of installation or abandonment of
facilities with the approval of the City as elsewhere in this Franchise provided, or in the event of
removal of such facilities by the Grantee, the payments otherwise due to the City or occupancy of
the streets by such facilities shall be prorated for the calendar year in which such installation,
removal or abandonment occurs as of the end of the calendar month in which installed, removed
or abandoned.
Provided, however, that the amount of each annual payment shall be computed and
revised each calendar year as follows:
(1) The applicable base rate shall be multiplied by the Consumer
Price Index (CPI -U), All Items for the Los Angeles -Riverside -Orange County areas, as published
by the United States Department of Labor, Bureau of Labor Statistics for the month of September
immediately preceding the month in which payment is due and payable, and divided by the
Consumer Price Index for June 30, 1989, which is declared to be 100.0. Under no circumstances
shall the multiplying factor be less than one.
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(2) If the United States Department of Labor, Bureau of Labor
Statistics discontinues the preparation or publication of a Consumer Price Index for the area, and
if no translation table prepared by the Department of Labor is available so as to make those
statistics which are then available applicable to the index of June 30, 1989, the City shall
prescribe a rate of payment which shall, in its judgment, vary from the rates specified in this
Section in approximate proportion as commodity consumer prices then current vary from
commodity consumer prices current in December 1988. On this point, the determination by the
City shall be final and conclusive.
(3) If said Bureau revises the said Index, the parties hereto shall
accept the method of revision or conversion recommended by the said Bureau.
C. Right of Inspection. The City shall have the right to inspect
Grantee's pipeline records relating to its annual report and to audit and recompute any and all
amounts payable under this Franchise. Costs of audit shall be borne by Grantee when audits
result in an increase of more than five percent of Grantee's annual payments due the City.
Acceptance of any payment shall not be construed as a release, waiver, acquiescence, or accord
and satisfaction of any claim the City may have for further or additional sums payable under this
Ordinance or for the performance of any other obligation hereunder.
D. Granting Fee. In consideration for the granting of this Franchise,
and to reimburse the City for its administrative expenses in preparing and approving the
Franchise documents, Grantee shall pay the City Fifteen Thousand Dollars ($15,000) within
thirty (30) days of the date the City Council approves this Franchise.
SECTION 8. EMERGENCY PREPAREDNESS.
A. Equipment and Crews. At all times during the term of this
Franchise, the Grantee shall either; (1) maintain on a twenty-four (24) hour -a -day basis a
fully -operational computer-aided system, such as Supervisory Control and Data Acquisition
(SCADA), or a similar system designed for the purpose of controlling and monitoring rates of
flow, pressures and fluid characteristics; or (2) provide adequate emergency equipment and a
properly trained emergency crew or representatives within a radius of fifteen (15) miles from any
facilities installed or maintained pursuant hereto for the purpose of shutting off the pressure and
the flow of contents of such facilities in the event of an emergency resulting from any
earthquake, act of war, civil disturbance, flood or other cause.
B. Plans. Within ninety (90) days of the effective date of this
Ordinance, Grantee shall submit an emergency preparedness plan. Grantee shall obtain approval
from the California State Fire Marshall and City Engineer of the plan, and update it to the
satisfaction of the State Fire Marshall and City Engineer every five (5) years.
SECTION 9. REPAIRS. Grantee shall pay to City on demand the cost of
all repairs to City property made necessary by any of the operations of Grantee under the
Franchise, provided however that Grantee may make repairs to streets, sidewalks, curbs and
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gutters itself at its own cost in accordance with City specifications, if the same can be done
without undue inconvenience to the public use of the streets.
SECTION 10. REARRANGEMENT OF FACILITIES.
A. Expense of Grantee.
(1) If any of the Grantee's facilities, in the discretion of the City,
shall endanger the public in the use of the public streets or interfere with or obstruct the use of
any street by the public or for public purpose, the City shall have the right to require the Grantee,
and the Grantee shall move, alter or relocate the same (hereinafter called "rearrangement") to
avoid such danger interference or obstruction, in conformity with the written notice of the City
Engineer, at the Grantee's sole expense.
(2) Whenever, during the existence of this Franchise, the City or
any other agency or entity established by the City (now or in the future), shall change the grade,
width, alignment or location of any street, way, alley or place or improve any said street in any
manner, including but not limited to the laying of any sewer, storm drain, conduits, gas, water or
other pipes, pedestrian tunnels, subway, viaduct or other work of the City (the right to do all of
which is specifically reserved to the City without any admission on its part that it would not
otherwise have such rights), the Grantee shall, at its own cost and expense, do any and all things
to effect such change in position, or location in a timely manner and in conformity with the
written approval of the City Engineer and any applicable City policies, including without
limitation the acceptance of encroachment permits, and the removal or relocation of any facilities
installed, if and when made necessary by the determination of the City Engineer.
B. Expense of Others
(1) The City shall also have the right to require the Grantee to
rearrange any part of the Grantee's facilities for the accommodation of any private person, firm,
or corporation, but not for the accommodation of any other public entity or public utility. When
such rearrangement is done for the accommodation of any private person, firm or corporation, the
cost of such rearrangement shall be borne by the accommodated party. Such accommodated
party, in advance of such rearrangement, shall deposit with the Grantee funds in an amount as, in
the reasonable discretion of the Grantee, shall be required to pay the costs of such rearrangement.
(2) The rearrangement referred to in subsection (1) of Subsection
B of this Section shall be accomplished in conformity with the written notice of the City
Engineer.
C. Rearrangement of the Facilities of Others. Nothing in this
Franchise contained shall be construed to require the City to move, alter or relocate any of its
facilities upon said streets, at its own expense, for the convenience, accommodation or necessity
of any other public utility, person, firm or corporation now or hereafter owning a public utility
system of any type or nature, or to move, alter or relocate any part of its system upon said streets
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for the convenience, accommodation or necessity of the Grantee.
D. Notice. The Grantee shall be given not less than thirty (30) days
written notice of any rearrangement of facilities that the Grantee is required to make herein.
Such notice shall specify in reasonable detail the work to be done by the Grantee and shall
specify the time that such work is to be accomplished. To the extent local, state or federal
permits are required for the rearrangement of Grantee's facilities, the City shall provide Grantee
with a reasonable amount of time, as determined by the City in consultation with the Grantee, to
obtain such permit(s) and accomplish such work. In the event that the City shall change the
provisions of any such notice given to the Grantee, the Grantee shall be given an additional
period not less than sixty (60) days to accomplish such work.
SECTION 11. REMOVAL OR ABANDONMENT OF FACILITIES. At
the time of expiration, revocation or termination of this Franchise or the permanent
discontinuance of the use of its facilities, or any portion thereof, the Grantee shall, within thirty
(30) days thereafter, make a written application to the City Engineer to either: (1) abandon all, or
a portion, of such facilities in place, or (2) remove all, or a portion, of such facilities as the City
Engineer, in his discretion, shall consider to be appropriate. Such application shall describe the
facilities desired to be abandoned by reference to the map or maps required by Section 5 of this
Ordinance and shall also describe with reasonable accuracy the relative physical condition of
such facilities. Thereupon, the City Engineer shall determine whether any abandonment or
removal which is thereby proposed may be effected without detriment to the public interest or
under what conditions such proposed abandonment or removal may be safely effected and shall
then notify the Grantee, according to such requirements as shall be specified in the City
Engineer's order, and within ninety (90) days thereafter, to either:
(a) Remove all or a portion of such facilities, or
(b) Abandon in place all or a portion of such facilities.
If any facilities to be abandoned in place subject to prescribed conditions shall not be
abandoned in accordance with all such conditions, then the City Engineer may make additional
appropriate orders, including, if he deems desirable, an order that the Grantee shall remove all
such facilities in accordance with applicable requirements.
A request of the Grantee to abandon in place any facilities shall be deemed an offer of
transfer of such facilities to the City and by resolution authorizing Grantee to abandon any
facility in place, the City shall succeed to all right, title and interest of Grantee in said facilities.
If Grantee has applied for a new franchise agreement following expiration of this
Agreement as provided for in Section 2, Grantee shall not be required to apply for abandonment
or removal of its facilities.
Facilities which are idle or maintained in a condition defined as Out -of -Service by the
California State Fire Marshal, for any amount of time, do not constitute permanent
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discontinuance of the use of such facilities or a revocation, termination or abandonment of the
Franchise.
SECTION 12. COMPLETION OF WORK. If Grantee fails to commence
any work or act and diligently proceed or complete any such act or work required of the Grantee
by the terms of this Franchise within the time limits required hereby, the City may cause such act
or work to be completed by the City or, at the election of the City, by a private contractor. The
City agrees that, to the extent reasonably possible, any work by the City or its private contractors
shall be performed in a manner that does not cause damage to Grantee's facilities or disruption to
the transportation of oil and other petroleum products through Grantee's pipeline system. In the
event the City causes such act or work to be completed by the City or a private contractor, the
City shall send an itemized bill to Grantee. Within thirty days (30) of receipt of the bill, Grantee
shall either pay the bill in writing plus an amount equal to fifteen percent (15%) thereof for
overhead, or detail in writing to the City Manager why such bill is inappropriate. If Grantee
timely provides this statement to the City, the City Manager shall consider Grantee's statement,
and shall notify Grantee in writing of the City Managers determination. If Grantee determines
that the City Manager's determination was incorrect, Grantee may bring an action in court
challenging that decision. Regardless of Grantee's position on the accuracy of the City
Manager's decision, Grantee shall pay all amounts determined by City Manager within 10 days
of receipt of City Manager's determination.
For any removal, relocation or modification of Grantee's facilities by the City as provided
for herein, the City shall, to the extent required by law, only conduct such work with the prior
approval of, and in coordination with, the California State Fire Marshal and comply with Chapter
5.5 of Title 5, Division 1, Part 1, of the California Government Code (Elder California Pipeline
Safety Act of 1981) and all other local, State and Federal laws.
SECTION 13. RECOVERY OF COSTS OF REPAIRS AND UNPAID
FEES. If the Grantee has not paid the City for such fees and expenses incurred by or payable to
the City as hereinabove set forth, the City may take any and all reasonable enforcement actions,
including, but not limited to, ordering that the charge(s) be assessed against the property of the
Grantee in the City, that liens be imposed on said property, instituting collection proceedings,
and instituting franchise default proceedings.
SECTION 14. BOND. Grantee shall, within thirty (30) days of the Effective
Date of this Franchise, file with the City Clerk, and yearly thereafter, maintain in full force and
effect, a bond of the required amount for the benefit of the City, with a surety to be approved by
the City Finance Director. The bond shall be surety that the Grantee shall, will and truly observe,
fulfill, and perform each and every term and condition of this Franchise, and in case of a breach
of condition of said Franchise, subject to the default language in Section 20, the whole amount
of the penal sum therein shall be paid to the City in addition to any damages recoverable by the
City and shall be recoverable from the principal and sureties of the bond. If said bond is not so
filed, Grantee agrees and acknowledges that the award of this Franchise will be set aside and any
money paid therefore will be forfeited.
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For the first eight years from the Effective Date, the amount of the bond shall be
One -Hundred Thousand Dollars ($100,000). For each five year period thereafter, the amount of
the required bond shall increase by 20%, compounded at each five year interval.
Whenever a bond is taken and deemed to be liquidated damages for any breach of a term
or condition of this Franchise, the Grantee must immediately file another bond of like amount
and character, and if the Grantee fails to do so within the time set by the City Council, the
Council may, by resolution, declare said Franchise automatically forfeited.
Nothing herein shall insulate Grantee from liability in excess of the amount of said bond
or shall be construed as a waiver by the City of any remedy at law against the Grantee for any
breach of the terms and conditions of this Franchise, or for any damage, loss or injuries suffered
by the City in case of any damage, loss or injury suffered by any person, firm, or corporation by
reason of any work done or any activity conducted by the Grantee in the exercise of this
Franchise.
SECTION 15. INSURANCE.
A. Prior to the beginning of and throughout the duration of this
Franchise, Grantee will maintain insurance in conformance with the requirements set forth
below. Grantee shall furnish proof that it shall provide the following types and amount of
insurance:
(1) Commercial General Liability Insurance using Insurance
Services Office "Commercial General Liability" policy form CG 0001, with an edition prior to
2004 or the exact equivalent. Defense costs must be paid in addition to limits. The insurance
policy shall include, but not be limited to, coverage for premises operations, explosion and
collapse hazard, underground hazards, contractual insurance, property damage, independent
contractors and personal injury. Limits shall be no less than $1,000,000 per occurrence for all
covered losses and no less than $2,000,000 general aggregate.
(2) Workers' Compensation coverage consistent with
California statutory requirements on a state approved policy form with employer's liability limits
no less than $1,000,000 per accident for all covered losses.
(3) Business Auto Coverage on ISO Business Auto Coverage
from CA 00 01 including owned, nonowned and hired autos, or the exact equivalents. Limits
shall be no less than $1,000,000 per accident combined single limit.
(4) Excess or Umbrella Liability Insurance (Over Primary),
shall provide coverage at least as broad as specified for the underlying coverages including, but
not limited to, commercial general liability insurance and business auto coverage. Such policy or
policies shall include as insureds those covered by the underlying policies, including additional
insureds. The insurance shall be maintained in an amount not less than $9,000,000 per
occurrence throughout the term of the Franchise.
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B. The City and its officers, agents and employees shall be named as
additional insureds on said policy at no cost to the City. The City shall receive thirty (30) days
advance written notice of any proposed reduction in coverage of the insurance policies on which
it is carried as an additional insured, as well as on coverage required to be maintained by this
section. Such advance notice shall also be required as to any proposed or actual cancellation of
any such policies of insurance. Insurance endorsements of such coverage shall be filed with the
City. The City shall approve the form and provisions of the insurance.
SECTION 16. INDEMNIFICATION BY GRANTEE. For all claims
relating to activity taken during the times subject to this Ordinance, including any retroactivity
dates, the Grantee shall indemnify, defend with counsel selected by the City subject to approval
of Grantee whose approval shall not be unreasonably withheld, protect and hold harmless City,
its officers, employees, agents, assigns and any successor or successors to City's interest from
and against all claims, actual damages (including but not limited to special and consequential
damages), penalties, attorneys' fees, consultant's and expert's fees and costs ("Liabilities")
arising as a result of the Grantee's exercise of the Franchise or operation of the pipeline system,
regardless whether any act or omission complained of is authorized, allowed, or prohibited by the
Franchise. This indemnity includes, but is not limited to any repair, cleanup or detoxification, or
preparation and implementation of any removal, remedial, response, closure or other, plan
(regardless of whether undertaken due to governmental action) concerning any facilities or
equipment or the effects of such facilities or equipment authorized by this franchise, and any
hazardous substance or hazardous wastes including petroleum and its fractions as defined in the
Comprehensive Environmental Response, Compensation and Liability Act ["CERCLA"; 42
U.S.C. § 9601, et seq.] the Resource Conservation and Recovery Act ["RCRA"; 42 U.S.C. §
6901 et seq.] and California Health & Safety Code § 25280 et seq. at any place where Grantee
maintains a pipeline for the transportation of substances and liquids pursuant to this Franchise.
The foregoing indemnity is intended to (1) supplement and not replace any other indemnity from
any source, and (2) operate as an agreement pursuant to Section 107(e) of CERCLA and
California Health & Safety Code Section 25364, to assure, protect, hold harmless and indemnify
City from liability. Grantee shall not be liable to the City for any Liabilities resulting from or
arising out of acts, errors, or omissions, or caused by the negligence, or willful misconduct of the
City, its officers, employees, agents, assigns or successors.
SECTION 17. ASSIGNMENT.
A. The Grantee shall not sell, transfer, assign or lease the Franchise,
or any part thereof, except with the consent of the City Council. Such sale, transfer, assignment
or lease shall be made only by filing with the City Council a copy of the duly executed
instrument of such sale, transfer, assignment or lease, and a written request for the consent of the
Council to such sale, transfer, assignment or lease. If such duly executed instrument and such
written request is not filed with the City Council before the expiration of 30 days after the
effective date of such sale, transfer, assignment or lease then, upon the expiration of said 30 days,
the Franchise shall be subject to forfeiture and the City Council may, without notice, by
ordinance, repeal the Franchise.
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B. As a condition to the granting of consent to such sale, transfer,
assignment or lease, the Council may impose such additional terms and conditions upon the
Franchise and upon the Grantee or assignee which the City Council may deem to be in the public
interest. Subject to the provisions of Section 17.13 below, the City may also condition transfer
upon payment of a transfer fee of $10,000 to be paid by the transferee to the City. Such
additional terms and conditions shall be expressed by ordinance.
C. Nothing herein contained shall be construed to grant to the Grantee
the right to sell, transfer, assign or lease the Franchise, or any part thereof except in the manner
aforesaid. This section applies to any assignment, whether by operation of law, by voluntary act
of the Grantee or otherwise. No such consent shall be required to any transfer of the Franchise in
trust or by way of mortgage or hypothecation with all or a part of Grantee's other property for the
purpose of securing any indebtedness of Grantee. A merger will not be deemed a sale, transfer,
assignment or lease of the Franchise under this section.
D. The provisions of this Section shall not apply to Grantee's
assignment of rights, duties and obligations under the Franchise to any affiliate of Grantee. As
used in this Franchise, the term "affiliate" shall mean an entity controlling, controlled by or under
common control with the entity to which the term applies, whether by ownership, contract or
voting control. Franchisee and the entity to whom the rights are to be assigned shall sign an
assignment and assumption agreement whereby the transferee agrees to be bound by and comply
with the terms of this Franchise.
SECTION 18. RECEIVERSHIP AND FORECLOSURE.
A. Subject to applicable provisions of the Bankruptcy Code, the
Franchise shall, at the option of the City, cease and terminate one hundred twenty (120) days
after the appointment of a receiver or trustee to take over and conduct the business of the Grantee
whether in a receivership, reorganization, bankruptcy or other action or proceeding unless such
receivership or trusteeship shall have been vacated prior to the expiration of said one hundred
twenty (120) days, or unless:
(1) Such receiver or trustee shall have, within one hundred
twenty (120) days after his election or appointment, fully complied with all terms of the
Franchise and remedied all breaches of the Franchise or provided a plan for the remedy of such
breaches which is satisfactory to the City; and
(2) Such receiver or trustee shall, within said one hundred twenty
(120) days, execute an agreement duly approved by the court having jurisdiction, whereby such
receiver or trustee assumes and agrees to be bound by each and every term, provision and
limitation of the Franchise.
B. Upon the foreclosure or other judicial sale of all or a substantial
part of a pipeline system, the Grantee shall notify the City Clerk of such fact, and such
notification shall be treated as a notification that a change in ownership of the Grantee has taken
11 /3--
place and the provisions of this Chapter governing such changes shall apply.
SECTION 19. WAIVER OF BREACH. No waiver of the breach of any of
the covenants, agreements, restrictions, or conditions of this, Franchise by the City shall be
construed to be a waiver of any such succeeding breach of the same or other covenants,
agreements, restrictions or conditions of this Franchise. No delay or omission of the City in
exercising the right, power or remedy herein provided in the event of default shall be construed
as a waiver thereof, or acquiescence therein, nor shall the acceptance of any payments made in a
manner or at a time other than is herein provided be construed as a waiver of or variation in any
of the terms of this Franchise.
SECTION 20. DEFAULT
A. Default. Any neglect, failure or refusal to comply with any of the
conditions of the Franchise shall constitute grounds for the suspension or forfeiture thereof. The
City Council, prior to any suspension or forfeiture of this Franchise, or recovery of the surety
bond, shall give to the Grantee not less than 30 days' notice in writing of any default thereunder.
If the Grantee does not within the noticed period begin the work of compliance, or after such
beginning does not prosecute the work with due diligence to completion, the City Council may
hold a hearing, at which the Grantee shall have the right to appear and be heard, and thereupon
the City Council may determine whether such conditions are material and essential to the
Franchise and whether the Grantee is in default and may declare the Franchise suspended or
forfeited. Notice of the hearing shall be given to the Grantee not less than ten days before the
hearing.
If the City Council declares this Franchise forfeited, it may thereupon and thereafter
exclude the Grantee from further occupancy or use of all City roads authorized under this
Franchise. A forfeiture of said Franchise shall not of itself operate to release the bond filed for
said Franchise. Upon declaring a Franchise forfeited, the City Council may elect to take and
accept the bond as liquidated damages therefor and pursue any other legal remedy for any
damage, loss or injury suffered by the City as a result of such breach. After forfeiture, the bond
shall remain in full force and effect for a period of one (1) year unless exonerated by the City
Council. No bond shall be exonerated unless a release is obtained from the City Engineer of the
City of Santa Clarita and is filed with the Clerk of the City of Santa Clarita. The release shall
state whether all excavations have been back filled, all obstructions removed, and whether the
substratum or surface of City roads occupied or used have been placed in good and serviceable
condition. Release shall not constitute a waiver of any right or remedy which the City of Santa
Clarita may have against the Grantee or any person, firm or corporation for any damage, loss or
injury suffered by the City as a result of any work or activity performed by the Grantee in the
exercise of this Franchise.
B. Cumulative Remedies. No provision herein made for the purpose
of securing the enforcement of the terms and conditions of this Franchise shall be deemed an
exclusive remedy or to afford the exclusive procedure, for the enforcement of said terms and
conditions, but the remedy and procedure herein provided, in addition to those provided by law,
12 -- It'`-
shall be deemed to be cumulative.
SECTION 21. SCOPE OF RESERVATION. Nothing herein contained
shall ever be construed so as to exempt the Grantee from compliance with all ordinances of the
City now in effect or which may be hereafter adopted which are not inconsistent with the terms
of this Franchise. The enumeration herein of specific rights reserved shall not be construed as
exclusive, or as limiting the general reservation herein made or as limiting such rights as the City
may now or hereafter have in law.
SECTION 22. NOTICE. Any notice required to be given under the terms of
this Franchise, the manner of service of which is not specifically provided for, may be served
personally or by United States First Class Mail as follows:
A. Upon the City, by addressing a written notice to:
City Clerk of the City of Santa Clarita
City Hall
23920 Valencia Blvd.
Santa Clarita, California 91355
B. Upon the Grantee, by addressing a written notice to:
Crimson California Pipeline, L.P.
2459 Redondo Avenue
Signal Hill, California
Attention: Alex Morales, Land Agent
C. For such other address as may from time to time be furnished in
writing by one party to the other and depositing said notice in the United States Mail, postage
prepaid.
When service of any such notice is made by mail, the time of such notice shall begin with
and run from three (3) business days after the date of the deposit of same in the United States
Mail.
A summary of this Ordinance shall be published in a newspaper published and circulated
in said City at least five (5) days prior to the City Council meeting at which the proposed
Ordinance is to be adopted. A certified copy of the full text of the proposed Ordinance shall be
posted at City Hall. Within fifteen (15) days after adoption of the Ordinance, the summary with
the names of those City Council members voting for and against the Ordinance shall be
published again, and the City Clerk shall post a certified copy of the full text of such adopted
Ordinance.
SECTION 23. SUCCESSORS. The terms herein shall inure to the benefit
of and shall bind, as the case may be, the successors and assigns of the parties hereto, subject,
however, to the provisions of Section 16 of this Franchise.
13 /5'-
SECTION 24. INTERPRETATION. This Franchise is granted upon each
and every condition herein contained, and shall be strictly construed against Grantee. Nothing
shall pass by the Franchise granted hereby to Grantee unless it be granted in plain and
unambiguous terms. Each of said conditions is a material and essential condition to the granting
of the Franchise.
SECTION 25. FORCE MAJEURE. The time within which Grantee is
obligated hereunder to construct, erect, maintain, operate, repair, renew, change the size of and
remove pipelines or other improvements shall be extended for a period of time equal in duration
to, and performance in the meantime shall be excused on account of and for and during the
period of any delay caused by strikes, threats of strikes, lockouts, war, threats of war,
insurrection, invasion, acts of God, calamities, violent action of the elements, fire, impossibility
of obtaining materials, or other things beyond the reasonable control of Grantee.
SECTION 26. ATTORNEYS' FEES. If either party brings an action to
enforce the terms of any covenant, agreement or condition contained in this Franchise, the
prevailing party in such action, in trial or appeal, shall be entitled to reasonable attorneys' fees to
be paid by the losing party as fixed by the court.
SECTION 27. PUBLICATION EXPENSES. The Grantee of this Franchise
shall, pursuant to California Public Utilities Code Section 6293, pay to the City a sum of money
sufficient to reimburse it for all publication expenses incurred by it in connection with the
granting of this Franchise; said payment to be made within thirty (30) days after the City shall
have furnished said Grantee with a written statement of such expenses.
SECTION 28. ACCEPTANCE. The Franchise granted hereby shall not
become effective until written acceptance thereof shall have been filed by the Grantee with the
City Clerk of the City within thirty (30) days of the effective date of this Ordinance.
SECTION 29. SEVERABILITY. The City Council hereby declares that the
provisions of this Ordinance are severable and if for any reason a court of competent jurisdiction
shall hold any sentence, paragraph, or section of this Ordinance to be invalid, such decision shall
not affect the validity of the remaining parts of this Ordinance.
SECTION 30. CERTIFICATION. The City Clerk shall certify to the
adoption of this Ordinance and shall cause the same to be posted as required by law.
SECTION 31. BUSINESS DAYS. As used in the Ordinance, the term
"business days" shall mean days other than Saturdays, Sundays, and legal holidays and closures
observed by the City, and "days" shall mean calendar days. If the time for performance of an
obligation under this Ordinance falls on other than a business day, the time for performance shall
be extended to the next business day.
14 16--
SECTION 32. EFFECTIVE DATE OF ORDINANCE:
FRANCHISE -RETROACTIVITY. This Ordinance shall be in full force and effect thirty (30)
days after its adoption. All conditions precedent having first been met to make this Franchise
effective and binding upon the City and the Grantee, the rights, privileges, limitations,
restrictions, conditions, obligations and duties granted and imposed hereby shall be retroactive to
December 11, 2011, provided however, the Grantee is deemed to be in full compliance with the
requirements and conditions of this Ordinance as of the date of the adoption of this Ordinance.
SECTION 33. EXCLUSION OF PRIOR DRAFTS. Prior drafts and prior
correspondence regarding this Franchise shall not be used by either party as evidence of the
intent of the parties or otherwise be admissible in evidence in interpreting this Franchise.
SECTION 34. ENTIRE AGREEMENT. The parties agree that this
Franchise shall constitute the entire agreement between the parties with respect to the
transactions contemplated hereby. Any and all previous agreements and understandings between
or among the parties regarding the transactions contemplated hereby, whether written or oral, are
superseded by this Franchise.
SECTION 35. NO THIRD PARTY BENEFICIARIES. It is expressly
understood that the provisions of this Franchise do not impart enforceable rights in anyone who
is not a party or a successor or assign of a party hereto. No third party (including an employee or
a contractor of a party) is intended to have or shall have any rights under this Franchise.
SECTION 36. HEADINGS. The headings, subheadings and numbering of
the different paragraphs of this Franchise are inserted for the convenience and for reference only
and shall not be considered for any purpose in construing this Franchise.
15 — ��
PASSED, APPROVED, AND ADOPTED this day of 2012.
MAYOR
ATTEST:
CITY CLERK
DATE:
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
I, Sarah P. Gorman, City Clerk of the City of Santa Clarita, do hereby certify that the
foregoing Ordinance 12- was regularly introduced and placed upon its first reading at a
regular meeting of the City Council on the day of 2012. That thereafter, said
Ordinance was duly passed and adopted at a regular meeting of the City Council on the day
of 2012, by the following vote, to wit:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
AND I FURTHER CERTIFY that the foregoing is the original of Ordinance and
was published in The Signal newspaper in accordance with State Law (G.C. 40806).
CITY CLERK
17 —lj�
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
CERTIFICATION OF
CITY COUNCIL ORDINANCE
1, , City Clerk of the City of Santa Clarita, do hereby
certify that this is a true and correct copy of the original Ordinance 12- , adopted by the City
Council of the City of Santa Clarita, CA on , 2012, which is now on file in my office.
Witness my hand and seal of the City of Santa Clarita, California, this day of
2012.
City Clerk
By
Deputy City Clerk
18 —2-63--
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