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HomeMy WebLinkAboutORD-27-97 Franchise Agreement Between the City of Orange and Arco Pipeline Co.ORDINANCE NO. 27- 97 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ORANGE APPROVING A FRANCHISE AGREEMENT BETWEEN THE CITY OF ORANGE AND ARCO PIPELINE COMPANY.WHEREAS, the City of Orange is authorized to enter into franchise agreements with pipeline 1ransporters of oil, gas and other petroleum products; and WHEREAS, ARCO Pipeline Company has submitted an application to renew its franchise for such purposes.NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE HEREBY ORDAINS AS FOLLOWS:SECTION I:That the Franchise Agreement attached hereto is approved and shall be deemed effective on November 27, 1997, when executed by the City and upon receipt of all bonds,certificates of insurance and endorsements required by the Franchise Agreement.SECTION II:A summary of this Ordinance shall be published and a certified copy of the full text of this Ordinance shall be posted in the Office of the City Clerk at least five (5) days prior to the City Council meeting at which this Ordinance is to be adopted. A summary of this Ordinance shall also be published once within fifteen (15) days after this Ordinance's passage in a newspaper of general circulation, published, and circulated in the City of Orange. The City Clerk shall post in the Office of the City Clerk a certified copy of the full text of such adopted Ordinance along with the names of those City Council members voting for and against the Ordinance in accordance with Government Code Section 36933. This Ordinance shall take effect thirty (30) days from and after the date of its final passage.ADOPTED this 9th day of December' 1997 lI:- or of the City of Orange LATTEST: df4.4~A-fAb JCcArAf'J: l!City Clerk oftM City of STATE OF CALIFORNIA) COUNTY OF ORANGE ) CITY OF ORANGE ) I, CASSANDRA J. CATHCART, City Clerk of the City of Orange, California, do hereby certifY that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the 25th day of November ,1997, and thereafter at the regular meeting of said City Council duly held on the _9th day of December, 1997, was duly passed and adopted by the following vote, to wit: AYES: COUNCIL MEMBERS: Murphy, Slater, Coontz, Spurgeon, Alvarez NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None ABSTAIN: COUNCIL MEMBERS: None llA-OAAAf}A~/j; UUZ-City Clerk ofth ity of Orange DAD:ajj 2 Ord, No, 27, FRANCHISE AGREEMENT This franchise agreement between the City of Orange ("City") and ARCO Pipe Line Company ("Grantee") is entered into to this 23rd day of November, 1997 (hereinafter referred to as "Agreement"). Recitals: I. Grantee operates and maintains a pipeline: system within the City and elsewhere for the purpose of distribution of oil, gas and other petroleum products, 2. Grantee has submitted an application to renew its franchise with the City to use City streets and other public ways for the purposes set forth in this Agreement. 3. The parties desire to enter into this Agreement which shall govern the terms of the franchise granted to Grantee by Ordinance No. 27-97 of the City.In consideration of the above, the parties agree as follows:Section I: Definitions.For the purposes of this Agreement the following terms shall be defined as follows:A. "~" means the City of Orange, and all the territory within its present and future boundaries and including any area over which the City exercises jurisdiction.B. "Grantee" means ARCO Pipe Line Company.C. "Franchise Property" means all property constructed, installed, operated or maintained in any public highway, street, alley or other public place pursuant to any right or privilege granted under this SectiolllI: Nature and Extent of Grant. A, The franchise granted by this Agreement to Grantee, constitutes authority to use the public streets, other public right-of-ways or public places in the City, to engage in the business of transporting crude oil, petroleum, natural gas, gasoline and liquid hydrocarbons within the City subject to all of the terms and conditions contained in this Agreement. Pursuant to such authority, until lawfully revoked, Grantee may construct,maintain, remove and replace pipelines for the transportation of those substances identified.This Agreement shall not, except as otherwise provided herein, in any way, impact any rights the City now has to regulate such matters.Section III: Duration of Grant.A. The franchise shall become effective on November 27, 1997, upon execution by the City and upon receipt of all bonds, certificates of insurance and endorsements required by this Agreement and shall continue thereafter until November 27, 2017,m IV: Limitations Upon Grant.A, No privilege or exemption is granted or conferred by this Agreement except as specifically prescribed herein.B. The franchise granted by this Agreement is a personal privilege to the Grantee. It may not in any event be sold, transferred, leased, assigned or disposed in whole or in part, either by merger, consolidation, operation oflaw, or otherwise, without the prior consent of the City expressed by resolution, and then only under such conditions as may be prescribed. However, no such consent shall be required for a transfer in trust, mortgage, other hypothecation, as a whole, to secure an indebtedness or for transfer to an entity under common control with Grantee. Nor shall such consent be required in the event of consolidation or transfer of ARCa Pipe Line Company's franchise rights to an affiliated Atlantic Richfield Company. The requirements of this subsection shall apply to any change in control of Grantee. The word "control" as used herein is not limited to major stockholders or partnership interests, but includes actual working control in whatever manner exercised. In the event that Grantee is a corporation, there shall be a rebuttable presumption of a change in control where ownership or control of more than fifty percent 50%) of the voting stock of Grantee is acquired by a person or group of persons acting in concert, none of whom own or control fifty percent (50%) of the voting stock of the Grantee as of the effective date of the franchise, singularly or collectively.C. Prior approval of the City Council, expressed by resolution, shall be required prior to any transfer. Any such acquisition occurring without prior approval of the City Council shall be null and void and constitute grounds for revocation of the franchise.Approval of any transfer request shall not be deemed to constitute a waiver of any prior violations of this Agreement by Grantee. Any subsequent Grantee which accepts the benefits of this Agreement shall be responsible for correcting any previous violations by Grantee which have not been rcctified at the time of transfer and within the time period given th,~ transferring Grantee to correct. Transfer requests may be denied for reasonable cause. 3 D, Any privilege claimed under this Agreement by Grantee in any public street or other public property shall be subordinate to: <( I) any prior or subsequent lawful occupancy or use thereof by the City or any other governmental entity; (2) any prior lawful occupan,;y or use thereof by any other person; and (3) any public use thereon, whether created prior to or subsequent to the granting of the franchise. E. Grantee shall notify City in writing (in advance, if possible) of any foreclosure or any other forced sale of all or a substantial portion of the franchise property or assets of the Grantee, including action by a financial institution having a claim against the Grantee or its assets, Such notification shall be: considered by City as notice that a change in control of ownership of the franchise has taken place and the provisions under this Section governing the consent of City to such change in control of ownership shall apply. F.At the time of filing a written request for any transfer, Grantee and transferee shall provide City with all relevant information and documents regarding the transfer. Section V: Rights Reserved to City. All rights and privileges granted hereby are subject to the police power of the City to adopt and enforce generally applicable local laws, rules and regulations necessary to the health, safety and general welfare of the public. However, this shall not be deemed a waiver by Grantee of any right to compensation or damages resulting from the City's exercise of said power. Expressly reserved to the City is the right to adopt, in addition to the provisions of this franchise and existing laws, ordinances and regulations, such 4 reasonable additional laws and regulations as it may find necessary in the exercise of its police power which are not materially in conflict with the privileges granted in this franchise. Section VI: Franchise Fee. A. As compensation for the use of valuable public right-of-ways and to defray a portion of the costs associated with regulation during the franchise term, Grantee shall pay the City in accordance with the following schedule:Pipe Size (internal diameter in inches Base rate per lineal foot 0- 4 6 8 10 12 14 16 18 20 22 24 26 28 30 0. 0880, 132 0. 176 0. 220 0. 264 0, 308 0. 352 0. 3960. 440 0. 484 0. 528 0. 572 0. 616 0.660 For pipelines with an internal diameter not listed above, the fees shall be in the same proportion to the fees of a 12-inch-diameter pipe as the diameter of the unlisted pipe is to 12 inches.B. The annual payment for each lineal foot of pipeline shall be computed and revised , each I. The applicable base rate shaH be multiplied by the Consumer Price Index for the area, as published by the United States Department of Labor, Office of Information 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 100.0. Under no circumstances shaH the multiplying factor be less than one. 2. If the United States Department of Labor, Office of Information 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, City shaH prescribe a rate of payment which shaH, 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 City shaH be final and conclusive. C. Grantee shaH not make any deductions from the franchise fee for costs incuned in complying with any of the provisions ofthis Agreement. D. Within 60 days of the close of each of Grantee's calendar years the City shaH be furnished a statement, either audited and certified by an independent certified public accountant or certified by a financial officer of the Grantee, reflecting the total amount of the franchise fee and aH computations for the year covered by the payment. City shaH have the right to conduct an independent audit of Grantee's records which are reasonably 6 necessary to compute the franchise fee. If such audit indicates a franchise fee underpayment of three percent or more, the Grantee shall assume all costs of the audit. E. Absent fraud or intentional misrepresentation or failure to provide the applicable financial reports, acceptance of a franchise fee payment for more than four years after its receipt shall amount to a release and accord and satisfaction as to a particular claim the City may have for additional sums payable. The Grantee shall maintain gross revenue records for a minimum of five years. F, Any delinquent franchise fee payment shall be subject to an interest charge of one and one-half percent per month. In addition, failure to pay a franchise fee payment which is due and payable within IS days after receipt of notice of delinquency from the City shall subject the annual payment to a five percent penalty.G. The franchise fee shall be received by City within 60 days after the close of each cale:ndar year. A franchise fee shall be considered delinquent on the 61st day after the end of each calendar year.H. The franchise fee payment is not a payment in lieu of any other tax, fee or assessment.I. Should the maximum franchise fee permitted by state law increase, City may by resolution of the City Council increase the franchise fee to that maximum upon 45 days written notice to Grantee or as permitted by such law" whichever is longer. Section VII: Failure to Perform Street Work. Upon failure of Grantee, after reasonable notice to commence, pursue or complete any work required by law or by the provisions of this Agreement to be done in any street, within the time prescribed and to the satisfaction of the City, the Director of Public Works/City Engineer may direct completion of the work by the City or its contractor. Grantee shall pay all costs incurred by the City in performing such work within 30 days after receipt of an itemized report of such costs. A. All franchise property to be constructed and operated under this Agreement shall be built and constructed in a good workmanlike manner and of good material. Any pipelines laid, located, or maintained shall be piaced so as to not interfere with the use of City streets, alleys, highway and other public places by the traveling public or by the City. The Grantee shall make and backfill all excavations in such a manner as to leave the surface of the public street, alley, highway or public place in as good condition as it was prior Ito the excavation, as well as to conform to state and City laws, as they now exist or may hereafter be amended with respect to the securing of permits and excavation, filling and obstruction of City right-of-ways. Grantee shall, within 30 days following the completion of construction of any franchise property, file with the City plans and profiles showing in exact detail the location of the franchise property as constructed.B. The City and other public agencies reserve the right to improve or construct any highway, street, alley, or other public place or portion within the City, including widening, change of grade, construction or reconstruction of any highway, street, alley, public utility lines and/or facilities, or other public places or any portion thereof, Ifnotice in writing is given to the Grantee thirty (30) days in advance of the fact that work is to be done pursuant to any right reserved in this Agreement, specifYing the general nature of the work and the area in which the same is to be performed, then the Grantee shall do all things necessary to protect its franchise property during the progress of such work. If ordered by the Public Works Director/City Engineer, the Grantee shall temporarily disconnect, remove or relocate its franchise property within the highway, street, alley or other public place to the extent necessary to permit the performance of such work in an economical manner. Grantee shall undertake such work in accordance with the generally recognized engineering and construction methods. All such work to be performed shall be at Grantee's sole cost and expense. Any damage done directly or indirectly to any public street, highway, alley or other public place or public improvement by the Grantee shall be promptly repaired by said Grantee, at its sole cost and expense, to the reasonable satisfaction of the City. Section VITI: Approval of Construction by City: Inspection: Correction of Defects in System: Breach or Default by Grantee. Grantee shall obtain all necessary permits Jrom the City prior to performing any construction, Grantee may make emergency repairs as needed. The City shall have the right to inspect the construction, operation and maintenance of the pipeline system by Grante~: to insure the proper performance of the terms of this Agreement. 9 Section IX: Procedure for Remedying Franchise Violations. In the event that City determines that Grantee has violated any material provision of this Agreement, City may make a written demand on Grantee that it remedy such violation within a reasonable time. If such violation is not corrected, City may terminate this Agreement. If terminated, the City may request the removal of Grantee's facilities at a time and during a manner as reasonably required by City. Section X: Performance Bond. During the life of this Agreement, Grantee shall keep on file with City and maintain in good standing a bond running to the City with surety approved by the City Attorney in the penal sum often thousand dollars ($10,000.00) and conditioned that such Grantee shall well and truly observe, fulfill and perform each term and condition of this Agreement and that in case of any breach of condition of such bond, the whole amount of the penal sum therein named shall be deemed to be liquidated damages and shall be recoverable from the principal and sureties upon said bond. Said bond shall be filed by the Grantee with the City within five (5) days from the effective date of this Agreement. on XI: Alternative Remedies. No provision of this Agreement shall be deemed to bar the right of the City or Grantee to seek or obtain judicial relief for a violation of any provision of this Agreement or uIllder other laws unless the parties agree to binding arbitration, Neither the existence of other remedies nor the exercise thereof, shall be deemed to bar or otherwise limit the right of the City to recover monetary damages. 10 Section XII: Non- Enforcement.Grantee shall not be relieved of any obligation to comply with any of the provisions of this Agreement or any other law or regulation by reason of any failure of the City to enforce prompt compliance,Section XIII: Franchise Renewal.Franchise renewal procedures shall be those as established by state law and as may be amended or as otherwise agreed upon by City and Grantee.Section XIV: Indemnification by Grantee.Grantee shall at its sole expense, fully indemnify, defend and hold harmless the City,its office,rs, agents, employees, or agents from and against any and all claims, suits, actions,liability and judgments which in any way arise out of the acts or omissions, whether negligent or willful, of the Grantee, its officers, agents, employees or contractors, This shall include, but not be limited to the following: '1. Actual or alleged injury or death to persons or property, including loss of use of property due to an occurrence, whether or not such property is physically damaged or destroyed;2. Any failure to comply with the provisions of any statute, regulation or ordinance of the United States, State of California or any local agency applicable to the Grantee in its business, Section XVIII Separability If any provision of this Agreement is held by a court or by any federal or state agency of competent jurisdiction to be invalid as conflicting with any federal or state law, rule or regulation now or hereafter in effect, or is held by such court or agency to be modific~d in any way in order to conform to the requirements of any such law, rule or regulation, such provision shall be considered to be a separate, distinct and independent part of this Agreement, and such holding shall not affect the validity and enforceability of any other provision thereof, CITY OF ORANGE, Dated:By: Mayor of the City of Orange ATTEST: City Clerk of the City of Orange ARCO PIPE LINE COMPANY, Dated:By: Its: APPROVED AS TO FORM: City Attorney DADfAJJ SH:A.GRf~l/ARCO 14