HomeMy WebLinkAboutCC AG PKT 2012-03-12 #GAGENDA STAFF REPORT
DATE: March 12, 2012
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Sean P. Crumby, Assistant City Manager /Public Works
SUBJECT: PIPELINE FRANCHISE
SUMMARY OF REQUEST:
Staff requests that the City Council conduct a public hearing and introduce first
reading of Ordinance No. 1616 entitled "AN ORDINANCE OF THE CITY OF
SEAL BEACH, CALIFORNIA, GRANTING TO DCOR, LLC, ITS SUCCESSORS
AND ASSIGNS, A FRANCHISE TO CONSTRUCT FROM TIME TO TIME AND,
FOR A PERIOD OF 15 YEARS TO MAINTAIN, OPERATE, REPAIR, RENEW,
CHANGE THE SIZE AND NUMBER OF AND REMOVE OR ABANDON IN
PLACE, PIPES, PIPE LINES, CONDUITS, WIRES, CABLES AND OTHER
APPURTENANCES, TOGETHER WITH ALL MANHOLES, SERVICE
CONNECTIONS AND APPURTENANCES USED IN CONNECTION
THEREWITH, FOR THE TRANSPORTATION OF OIL, PETROLEUM, LIQUID
HYDROCARBON SUBSTANCES, GAS, NATURAL GASOLINE, WATER,
WASTE WATER, MUD, STEAM, AND OTHER SUBSTANCES, AND FOR THE
TRANSMITTAL OF ELECTRICAL POWER AND COMMUNICATION SIGNALS
TO OR FROM DCOR, LLC'S STATE LEASE P.R.C. 3095.1, IN, UNDER,
ALONG OR ACROSS CERTAIN PUBLIC STREETS AND PUBLIC PLACES IN
THE CITY OF SEAL BEACH FOR THE PURPOSE OF SERVING DCOR, LLC'S
OPERATIONS ON STATE LEASE P.R.C. 3095.1."
BACKGROUND AND ANALYSIS:
On January 27, 1997 the City adopted Franchise Ordinance 1412, granting Torch
Operating Company the right to operate various pipelines and an electrical
conduit underlying City of Seal Beach streets. These pipelines and conduit are
operated in connection with and in support of its Platform Esther. The initial term
of the rights granted to Torch Operating Company was fifteen (15) years,
commencing on February 26, 1997 and continuing until February 26, 2012.
In 2005, DCOR, LLC, became the successor to Torch Operating Company's
interest in the franchise granted by Ordinance 1412, and has requested a new
franchise on substantially the same terms and conditions for an additional fifteen
Agenda Item G
(15) year term, commencing on March 26, 2012 and continuing until March 26,
2027.
ENVIRONMENTAL IMPACT:
This project has complied with all requirements of the California Environmental
Quality Act (CEQA).
LEGAL ANALYSIS:
The City Attorney has reviewed and approved as to form.
FINANCIAL IMPACT:
There is no cost to the City and the City will be receiving revenue only. The
proposed franchise fee will allow a 4% return to the City based upon the annual
royalty paid by the franchisee, DCOR, to the State of California pursuant to State
Lease P.R.C. 3095.1.
RECOMMENDATION:
Staff requests that the City Council approve first reading and introduction of
Ordinance No. 1616 and place on the next agenda the adoption of Ordinance
No. 1616.
SUBMITTED BY:
Sean P. Crumby,
Assistant City Manager /Public Works
NOTED AND APPROVED:
R. Ingram, 4anager
Prepared by: Patrick Gallegos, Administrative Manager
Attachments:
A. City Council Ordinance
Page 2
ORDINANCE NUMBER 1616
AN ORDINANCE OF THE CITY OF SEAL BEACH, CALIFORNIA,
GRANTING TO DCOR, LLC, ITS SUCCESSORS AND ASSIGNS,
A FRANCHISE TO CONSTRUCT FROM TIME TO TIME AND,
FOR A PERIOD OF 15 YEARS TO MAINTAIN, OPERATE,
REPAIR, RENEW, CHANGE THE SIZE AND NUMBER OF AND
REMOVE OR ABANDON IN PLACE, PIPES, PIPE LINES,
CONDUITS, WIRES, CABLES AND OTHER APPURTENANCES,
TOGETHER WITH ALL MANHOLES, SERVICE CONNECTIONS
AND APPURTENANCES USED IN CONNECTION THEREWITH,
FOR THE TRANSPORTATION OF OIL, PETROLEUM, LIQUID
HYDROCARBON SUBSTANCES, GAS, NATURAL GASOLINE,
WATER, WASTE WATER, MUD, STEAM, AND OTHER
SUBSTANCES, AND FOR THE TRANSMITTAL OF ELECTRICAL
POWER AND COMMUNICATION SIGNALS TO OR FROM
DCOR, LLC'S STATE LEASE P.R.C. 3095.1, IN, UNDER, ALONG
OR ACROSS CERTAIN PUBLIC STREETS AND PUBLIC
PLACES IN THE CITY OF SEAL BEACH FOR THE PURPOSE
OF SERVING DCOR, LLC'S OPERATIONS ON STATE LEASE
P.R.C. 3095.1.
The City Council of the City of Seal Beach does ordain as follows:
SECTION 1.
The City Council hereby finds and determines the following facts to be
true:
A. Article XI of the Seal Beach City Charter (hereinafter the "Charter")
authorizes the City Council to grant by ordinance a franchise to any person, firm,
or corporation, whether operating under an existing franchise or not, to furnish
the City and its inhabitants with water or to use the public streets, ways, alleys,
and places subject to the terms of the Charter and such Ordinances adopted by
the City Council goveming the terms and manner of granting a franchise.
B. Chapter 6.15 of the Seal Beach Municipal Code sets forth the
minimum terms and conditions for granting pipeline franchises.
C. On January 27, 1997, the City of Seal Beach (hereinafter "City ")
adopted Ordinance 1412, granting a franchise to Torch Operating Company and
to its successors and assigns, to construct from time to time and, for a period of
15 years, to maintain, operate, repair, renew, change the size and number of and
remove or abandon in place, pipes, pipe lines, conduits, wires, cables and other
appurtenances, together with all manholes, service connections and
appurtenances used in connection therewith, for the transportation of oil,
petroleum, liquid hydrocarbon substances, gas, natural gasoline, water, waste
water, mud, steam, and other substances, and for the transmittal of electrical
power and communication signals to or from Torch Operating Company's State
Lease P.R.C. 3095.1, in, under, along or across certain public streets and public
places in the City for the purpose of serving Torch Operating Company's
operations on State Lease P.R.C. 3095.1. That franchise expired by its own
terms on February 27, 2012.
D. DCOR, LLC, a Texas limited liability company, (hereinafter
"Grantee ") was the successor to Torch Operating Company's interest in the
franchise granted by Ordinance 1412, and has requested a new franchise on
substantially the same terms and conditions for an additional 15 year term.
E. Pursuant to Section 6.05.005 of the Seal Beach Municipal Code,
the City of Seal Beach (hereinafter "City") gave notice of its intent to hold a public
S7296- 1056 \1419837x2 doc
Ordinance Number 1616
hearing regarding whether to grant a franchise to Grantee under and pursuant to
the provisions of the Seal Beach Charter and ordinances of the City, which now
or may hereafter exist, relating to the granting of franchises, for the purposes
described in the title of this Ordinance. Pursuant to Section 6.05.005 of the
Municipal Code, a duly noticed public hearing was held at the regular meeting of
the City Council on March 12, 2012 to consider objections to the proposed
franchise.
F. All legal prerequisites to the enactment of this Ordinance have
occurred.
SECTION 2.
The City Council hereby finds and determines that it can be seen with
certainty that there is no possibility the granting of the franchise contemplated
herein will have a significant effect on the environment because it is granted for
the same locations as and on substantially the same terms and conditions as the
franchise granted by Ordinance 1412. Accordingly, pursuant to the provisions of
§ 15061(b)(3) of Division 6 of Title 14 of the California Code of Regulations, the
adoption of this Ordinance is not subject to the requirements of the California
Environmental Quality Act of 1970, as amended.
SECTION 3.
A. The City hereby grants to Grantee, its successors and assigns, a
non - exclusive franchise to construct from time to time, and, for a period of 15
years, to maintain, operate, repair, renew, change the size and number of, and
remove or abandon in place, pipes, pipe lines, conduits, wires, cables, and other
appurtenances, together with all manholes, service connections and
appurtenances used in connection therewith, for the transportation of oil,
petroleum, liquid hydrocarbon substances, gas, natural gasoline, water, waste
water, mud, steam, and other substances, and for the transmittal of electrical
power and communication signals to or from Grantee's operations on State
Lease P.R.C. 3095.1, in, under, along or across (1) those certain public streets or
highways known as Central Avenue, First Street, Ocean Avenue, Seal Way, and
(2) that portion of the public beach bounded by the San Gabriel River, Ocean
Avenue, the southwesterly extension of the centerline of Second Street and the
mean high tide line, all in the City for the purpose of serving Grantee's operations
on State Lease P.R.C. 3095.1.
B. The franchise is granted on the terms and conditions set forth in
Article XI of the Seal Beach City Charter, in Chapter 6.15 of the Seal Beach
Municipal Code, and as hereinafter stated in this Ordinance. In the event of any
conflict between this Ordinance and the Charter, the Municipal Code, or both, the
Charter shall prevail over the Code and this Ordinance, and the Code shall
prevail over this Ordinance. Grantee shall file with the City Clerk of the City of
Seal Beach a written acceptance of the terms hereof within 30 days after the
passage of this Ordinance as a condition precedent to exercising any of the
rights and privileges granted by this Ordinance.
SECTION 4
The City reserves the right to change the grade or line of any street, alley
or way in which pipe lines are constructed, maintained, or operated under this
franchise and, upon receiving notice from the City Council of its intention so to
do, Grantee shall promptly and at its own cost and expense change the location
of its pipe lines and their appurtenances where necessary to conform to such
change of grade or line. Any damage caused to any public improvement by
Grantee in exercising any right or privilege under this franchise, or in performing
any duty imposed hereby, shall be promptly repaired by Grantee at its own cost
and expense.
Ordinance Number 1616
SECTION 5
A. The work of constructing, maintaining, operating, renewing,
repairing, changing the size or number of, or removing any pipe lines hereafter
constructed, maintained or operated under this franchise shall, at all times during
the term hereof, in all respects comply with all of the rules, regulations,
ordinances and enactments of the City and of such federal, state and county
authorities as may have jurisdiction over said pipe lines, provided, however, that
in each instance the paramount authority shall be binding on Grantee; and the
City hereby reserves all regulatory power by law allowed to it over and with
reference to this franchise and the exercise of rights, power or privileges under
the same by Grantee.
B. The work of constructing, maintaining, operating, renewing,
repairing, changing the size and number of and removing pipe lines shall be
conducted with the least possible obstruction and inconvenience to the public
and with the least possible hindrance to the use of the streets, alleys and ways
for the purposes of travel. All excavations shall be backfilled and the surface
replaced to the satisfaction of the City's Director of Public Works.
C. Grantee shall have the right, subject to such regulations as are now
or hereafter may be in force, to make all necessary excavations in said streets,
alleys and ways for the construction, maintenance, operation, renewal, repair,
change in the size and number of, and removal of said pipe lines, manholes,
valves, appurtenances and service connections used in connection with said pipe
lines. Before any pipe line is constructed or abandoned a permit shall be
secured from the City specifying the best and most desirable routing of said lines,
or the conditions under which they may be abandoned, as the case may be, and
the City's decision on said routing and conditions shall be final and binding on
Grantee.
D. Grantee shall repair at its own cost and expense any damage
caused to any street, alley or way or other public property of the City, or to any
private property, by any breaks, leaks or failure of any of the pipe lines
constructed, maintained, or operated pursuant to this franchise. In the event
Grantee shall fail to make any such repairs within 10 days after a notice and
demand therefor from the City, the City may make such repairs, at the cost and
expense of Grantee which cost, by the acceptance of this franchise, Grantee
agrees to pay upon demand.
E. Grantee shall repair at its sole cost and expense all cuts in City
streets, alleys, roadways, and paved easements held by the City for public
purposes in accordance with the standards set forth in this Section unless
otherwise requested or permitted by the City's Director of Public Works. All
street repair work shall meet then current City standards; including but not limited
to STD 133 -1.
a. Repair standards for streets paved or overlaid within the 5
years preceding the Grantee's work are as follows:
Final resurfacing must include grinding existing
surrounding pavement and repaving at a minimum depth of 1 % inches.
ii. Repair for trenches cut perpendicular to traffic lanes
must include grinding and repaving for the full width of any traffic lane that has
been cut and to 10 feet on either side of the trench line for residential streets, and
50 feet on either side of the trench line for arterial streets.
Repair for trenches cut parallel to traffic lanes must
include grinding and repaving the entire width of the traffic lane for the full length
of the trench, but not less than 100 feet.
Ordinance Number 1616
iv. Repair for trenches cut other than perpendicular or
parallel to traffic lanes shall be made in consultation with and subject to the
approval of the City Engineer.
v. Transverse paving joints must be perpendicular to the
vi. Longitudinal paving joints are not allowed in vehicle
b. Repair standards for streets sealed (e.g., slurry sealed,
rubberized chip etc.) within the 3 years preceding Grantee's work are as follows:
Sealant must be the same as previously applied and
must be applied to patched areas no sooner than 30 days or later than 90 days
after the completion of the pavement repair.
direction of travel.
wheel paths.
ii. Repair for trenches cut parallel to traffic lanes must
include sealing for the full width of any traffic lane that has been cut and to 10
feet on either side of the trench line for residential streets and 50 feet on either
side of the trench line for arterial streets.
iii. Repair for trenches cut parallel to traffic lanes must
include sealing the entire width of the traffic lane for the full length of the trench,
but not less than 100 feet.
iv. Repair for trenches cut other than perpendicular or
parallel to traffic lanes shall be made in consultation with and subject to the
approval of the City Engineer.
v. Transverse paving joints must be perpendicular to the
direction of travel.
vi. Longitudinal paving joints are not allowed in vehicle
wheel paths.
SECTION 6.
During the term of this franchise, Grantee shall have the right and is
hereby permitted during the construction of the pipes, pipe lines, conduits, wires,
cables and related appurtenances, to be constructed hereunder and from time to
time thereafter for the purpose of repairing said pipe, pipe lines, conduits, wires,
cables and related appurtenances, to use and occupy the surface of, for such
purposes, that portion of the public beach bounded by the San Gabriel River,
Ocean Avenue, the southwesterly extension of the centerline of Second Street,
and the high tide line; provided, however, that at any time Grantee desires to use
and occupy the above - described portion of the public beach for such purpose, (a)
Grantee shall provide the City Manager of the City of Seal Beach with not Tess
than 10 days written notice of Grantee's intention to so use and occupy said
portion of the public beach, (b) Grantee shall obtain in advance all necessary
permits and approvals for said work including, without limitation, the approval of
the California Coastal Commission as required by law, and (c) Grantee shall at
all times conduct its operations on said portion of the public beach in such a
manner as to minimize insofar as is possible interference with the use by the
public of said portion of the public beach, and, to that end, shall restrict the time
used for such construction or repair operations as much as possible.
SECTION 7.
Grantee shall, during the life of this franchise, pay to the City, in, lawful
money of the United States, an amount equal to 4% of the annual royalty paid by
Grantee to the State of Califomia pursuant to State Lease P.R.C. 3095.1. Such
Ordinance Number 1616
percentage shall be payable annually on or before the first day of April in each
year with respect to gross receipts derived by Grantee from its operation of the
pipe lines during the year ending December 31, next preceding; provided,
however, that a minimum annual payment shall be made under said franchise,
commencing with the effective date hereof, which shall be equal to 40 cents per
cubic foot of the street space and space in public places occupied pursuant to
this franchise, which minimum payment shall be payable in advance and
calculated ratably for a number of months in the calendar year during which such
space is occupied, including the month in which installation is made. For the
purposes of this minimum payment, the street space required for a pipe line or
conduit, together with protective covering, pipe connections, cathodic protection
facilities, pipe casings, and other minor appurtenances; shall be taken as
equivalent to the volume occupied by a cylinder of equal length having a
diameter one inch (1 ") greater than the nominal internal diameter of the pipe or
conduit, but in no case with an equivalent cylinder diameter less than six inches
(6 "), and the payment rate therefor shall be computed to the nearest tenth of a
cent per lineal foot of pipe. Street space required by any larger appurtenance
such as manholes, value boxes or gas drip boxes shall be computed from the
outside dimensions of the structure. Grantee shall, at the time of making such
payments, or prior thereto, file with the City Clerk a statement, verified by an
officer or agent of the grantee who is authorized by law to make verified
statements on behalf of Grantee, showing the gross receipts derived by Grantee
from the use, operation and possession of the franchise during the year ending
December 31 next preceding.
SECTION 8.
Grantee shall not permit any right or privilege granted by the franchise to
be exercised by another, nor shall the franchise or any interest therein or any
right or privilege thereunder be in whole or in part sold, transferred, leased,
assigned, or disposed of without the consent of the City expressed by resolution;
provided however, such consent is not required in the case of a sale, transfer,
lease, assignment, or disposal of the franchise to a corporation acquiring or
owning a portion of the assets of Grantee through consolidation, merger, or
reorganization, or to a subsidiary of Grantee, or to any person, firm or corporation
having assets of more than $5,000,000.00; provided, further, that the provisions
of the franchise shall not require the City's consent in those instances in which
Grantee is acting in trust or by way of mortgage or hypothecation covering all or
any part of Grantee's property, and such transfer, mortgage or hypothecation
shall be for the purpose of securing an indebtedness of Grantee or for the
purpose of renewing, extending, refunding, retiring, paying or cancelling in whole
or in part any such indebtedness at any time or from time to time. Any such sale,
lease, assignment, or other disposition of this franchise for which consent of the
City is required hereunder shall be evidenced by a duly executed instrument in
writing filed in the office of the City Clerk.
SECTION 9.
On or before the 1st day of May and November of each year during the life
of this franchise, Grantee shall render to the City a statement showing in detail
the total length of any pipe line installed, relocated, abandoned or relocated
under the franchise during the preceding six -month period, together with a map
or maps accurately showing the location in the public streets, alleys or ways of
any such pipe line so constructed, removed or abandoned. Said statement and
maps shall be accompanied by the payment of an amount of money equal to the
rate of $2,350.00 for each one half (1/2) mile of pipeline or fractional part thereof,
if any, installed, replaced, abandoned or relocated on major streets and
$1,550.00 per each one half (1/2) mile of pipeline or fractional part thereof, if any,
installed, replaced, abandoned or relocated on minor streets. The City Engineer
shall designate "major" streets and "minor" streets for the purpose of this
franchise, which designation may be appealed to the City Council. The decision
of the City Council in such matter shall be final.
Ordinance Number 1616
SECTION 10
Grantee shall reimburse the City for all of the City's costs incurred in
preparing, processing, and granting this franchise including, without limitation,
staff costs, actual attorney's fees, and the cost of publishing any notice,
resolution, and /or ordinance required by law to be published. Grantee shall remit
payment to the City for such costs not later than 30 days after receiving a
statement therefor.
SECTION 11
Grantee shall indemnify, defend and hold harmless the City, its City
Council, officials, officers, agents, and employees (collectively "Indemnitees ")
from any and all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries, deficiencies, actions, or injury (collectively "Claims ")
suffered by any person or entity that arises out of the use, operation or
possession of this franchise, or from the use, construction, removal, operation or
maintenance hereunder of any of Grantee's facilities, excepting any such claims
arising from the sole negligence or willful misconduct of the Indemnitees.
SECTION 12.
In the event Grantee shall fail to keep, fulfill, or perform any of the terms or
conditions of this franchise and shall fail to remedy such default within 30 days
after notice from the City, the City Council may, at its option exercised by
ordinance, declare the franchise forfeited. Upon such a declaration of forfeiture
the franchise shall be deemed cancelled and terminated and all of the rights and
privileges of Grantee under this franchise shall be deemed surrendered and
terminated and the City may thereafter exclude Grantee from further use of the
public streets, alleys, and ways of the City under this franchise.
SECTION 13.
This franchise shall be granted upon the further condition that Grantee
shall file within 5 days after the date upon which this ordinance is adopted, and
shall keep on file with the City at all times during the life of this franchise, a bond
running to the City in the penal sum of $10,000.00, with at least two good and
sufficient sureties, or with a corporate surety competent to act as sole surety, to
be approved by the City Council. Said bond shall be conditioned such that
Grantee will well and truly observe, fulfill and perform each and every term and
condition of this franchise, and in case of a breach of condition of this franchise
the whole amount of the penal sum therein named shall be taken as liquidated
damages and shall be paid by the surety or sureties to the City.
SECTION 14.
At all times during the term of this franchise, grantee shall maintain in full
force and effect policies of insurance which meet or exceed the requirements of
Section 6.15.040 of the Seal Beach Municipal Code, or any successor provisions
thereto, as the same may be amended from time to time. Such policies shall be
issued by insurers admitted to do business in the State of California, with a
current A.M. Best's rating of A:VII or better.
SECTION 15
This ordinance shall take effect thirty (30) days after its adoption, provided
that all conditions precedent to this franchise taking effect have been performed
within such time by Grantee, and shall continue thereafter for a period of 15
years, unless sooner terminated as provided within this franchise.
Ordinance Number 1616
SECTION 16
The City Clerk shall certify to the passage and adoption of this ordinance,
and shall cause the same to be published once in a newspaper of general
circulation circulated within the City of Seal Beach.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Seal
Beach at a regular meeting held on the 12th day of March , 2012.
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Linda Devine, City Clerk of the City of Seal Beach, do hereby certify that the
foregoing Ordinance was introduced for first reading at a regular meeting held on
the 12th day of March , 2012 and was passed, approved and adopted by the
City Council at a regular meeting held on the day of , 2012 by the
following vote:
AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members
And do hereby further certify that Ordinance Number 1616 has been published
pursuant to the Seal Beach City Charter and Resolution Number 2836.
City Clerk