SR-03-18-2014-7Adodlill City Council Report
City of
Santa Monica
City Council Meeting: March 18, 2014
Agenda Item: 7'-A
To: Mayor and City Council
From: Martin Pastucha, Director of Public Works
Subject: Public Hearing and First Reading of an Ordinance Granting a Franchise
Agreement to Crimson California Pipeline, L.P. for a Crude Petroleum
Pipeline
Recommended Action
Staff recommends that the City Council hold a public hearing for a first reading of the
attached proposed ordinance to grant Crimson California Pipeline, L.P., a franchise to
maintain a crude petroleum pipeline in the public right of way.
Executive Summary
Staff recommends that Council hold a public hearing for a first reading and public
comment regarding the adoption of an ordinance granting a franchise agreement to
Crimson California Pipeline, L.P. to operate an existing crude petroleum pipeline that
runs north to south beneath the City. The franchise agreement would allow Crimson to
continue to operate and maintain the pipeline for the purpose of transporting crude
petroleum products. The proposed franchise agreement is for a 20 -year term. Upon
acceptance of the franchise and within 30 days of the franchise's effective date,
Crimson will pay the City a franchise fee of $148,705. In addition, within this same time
period Crimson will reimburse the City $20,000 for the City's administrative costs.
Discussion
On September 12 1989, Council adopted Ordinance No. 1492 (CCS) entitled: "An
ordinance of the City of Santa Monica granting a franchise to Shell California Pipeline
Company to operate, maintain, inspect, repair, remove, replace and abandon a pipeline
and appurtenant facilities in certain public streets of the City of Santa Monica."
This franchise was granted for a term of twenty years.
On April 7, 2005, the California Public Utilities Commission authorized Shell California
Pipeline Company LLC (Shell) to sell certain public utility pipeline assets, rights of way
and permits to Crimson California Pipeline L.P., (Crimson) including the portion of the
Ventura 10" crude line within the Santa Monica City boundaries (Pipeline).
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The 10" diameter steel pipeline runs 3.9 miles long within the City along 26th Street from
the northerly City border south to Colorado Ave., then west along the latter to
Cloverfield Blvd., then south along the latter to Ocean Park Blvd., then west along the
latter to 23`d Street, then south to Dewey Street, then east to the southerly City border
(see Figure 1 below).
Figure 1.
City of Santa Monica
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Crimson is a common carrier and continues to operate and maintain the Pipeline in
accordance with Ordinance No. 1492 (CCS), as the lawful successor to Shell although
the franchise agreement expired on September 12, 2009.
State law significantly governs common carrier petroleum pipelines. The proposed
franchise with Crimson would be in accordance with California Public Utilities Code
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Section 6201 et seq. Among other things, state law establishes the franchise payment
for common carrier pipelines. The proposed franchise would be substantially similar to
Ordinance No. 1492 (CCS). The proposed franchise would be for a 20 -year term and
set the rules under which Crimson would operate the pipeline. Ultimately, the City
Council has the option to reject a pipeline franchise agreement with Crimson. However,
should a franchise be rejected, Crimson, operating as a regulated common carrier
pipeline utility, may have eminent domain and other rights under state law that may
allow it to continue to operate the pipeline.
The Pipeline carries crude petroleum products from Ventura County to refineries in the
Wilmington area of the County of Los Angeles, a distance of nearly 85 miles. The
Pipeline first began operation in 1941. At that time the City entered into a 40 year
franchise agreement with the predecessor to Shell. The 1941 franchise agreement
granted a subsurface easement in, under, along, and across certain City streets for a 10
inch diameter pipeline. As indicated in Figure 1 and in Exhibit A to the Franchise
agreement, within the City the Pipeline travels approximately 3.9 miles, and runs
roughly north to south in the eastern portion of the City. Although Ordinance No. 1492
(CCS) changed some of the terms of the original 1941 franchise, the purpose of the
Pipeline to transport crude petroleum products, the Pipeline's location and its size have
remained mostly the same since 1941.
While state law establishes the formula for annual pipeline franchise fees, under the
proposed franchise Crimson will prepay the City the franchise fee. Upon acceptance of
the franchise and within 30 days of the franchise's effective date, Crimson will pay the
City a franchise fee of $148,705. In addition, within this same time period Crimson will
reimburse the City $20,000 for the City's administrative costs. The proposed franchise
establishes a procedure to alter the franchise fee, should state law change the way
pipeline fees are calculated.
With respect to pipeline safety, Crimson must comply with all state and federal laws and
regulations that apply to this type of pipeline. At all times, Crimson must maintain a 24
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hour fully- operational emergency response system, designed to control and monitor
rates of flow, pressures and fluid characteristics. The City's Office of Emergency
Management will be provided a copy of Crimson's emergency preparedness plan. The
City's Fire Department will be immediately notified of any break in the pipeline or any
release. Crimson has not informed the City and the City is unaware of any release from
the Pipeline. The Pipeline has emergency shut off valves just north of the City's
boundaries before the Pipeline enters the City. The Pipeline also has emergency shut
off valves within the City.
Crimson must regularly test the integrity of the pipeline as required by applicable
federal, state or local law. The City can also inspect the Pipeline. If the Pipeline needs
to be relocated or removed to accommodate any public improvement, Crimson alone
must pay for this.
Crimson must pay all damage and other compensation arising from any spill or release
Crimson is also required to maintain various amounts of insurance coverage totaling at
least $45,000,000 in the aggregate.
A copy of the proposed franchise is attached.
Iv
Financial Impacts & Budget Actions
There is no immediate financial impact or budget action necessary as a result of holding
a public hearing and receiving public comment. If the City Council later approved a
franchise ordinance, the City would receive a franchise payment in accordance with the
provisions of the franchise. Staff would budget fees and other revenue at account
01274.400110 for fiscal year 2013 -14.
Prepared by: Greg de Vinck, PE, Principal Civil Engineer
Approved:
wa -
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Martin Pastucha
Director of Public Works
Forwarded to Council:
Rod Gould
City Manager
Attachment: 1 — Ordinance and Proposed Franchise with Exhibits A, B and C
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City Council Meeting: March 18, 2014 Santa Monica, California
ORDINANCE NUMBER (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY OF SANTA MONICA GRANTING A FRANCHISE TO
CRIMSON CALIFORNIA PIPELINE, L.P. TO OPERATE, MAINTAIN, INSPECT,
REPAIR, REMOVE, REPLACE AND ABANDON AN EXISTING TEN (10) INCH
DIAMETER CRUDE PETROLEUM PIPELINE AND APPURTENANT FACILITIES IN
CERTAIN PUBLIC STREETS OF THE CITY OF SANTA MONICA
WHEREAS, on September 12, 1989, the City of Santa Monica ( "City ") granted a
franchise to Shell California Pipeline Company ( "Shell') to operate, maintain, inspect,
repair, remove, replace and abandon a pipeline by enacting Ordinance No. 1492 (CCS)
( "1989 Franchise "); and
WHEREAS, following approval by the California Public Utilities Commission,
Shell sold its pipeline interests ( "Shell Pipeline ") that were subject to the 1989 Franchise
to Crimson California Pipeline, L. P. ( "Crimson "); and
WHEREAS, after purchasing the Shell Pipeline, Crimson has complied with the
terms of the 1989 Franchise; and
WHEREAS, Crimson has requested a franchise renewal from the City of Santa
Monica for the same pipeline as was covered by the 1989 Franchise; and
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WHEREAS, before granting any franchise, City Charter Section 1601 requires
the City Council of the City of Santa Monica to pass a resolution declaring its intent to
grant the franchise; and
WHEREAS, on February 25, 2014 the City Council adopted a resolution in
accordance with City Charter 1601 and set a hearing date for March 18, 2014 to hear
and consider all persons with interests, including any objections and protests, before
granting or denying the proposed franchise; and
WHEREAS, pursuant to California Public Utilities Code Section 6201 et seq., the
State of California authorizes cities to issue pipeline franchises with terms and
conditions, so long as those terms and conditions are not in conflict with state law
standards; and
WHEREAS, the terms of this Franchise are not in conflict with the California
Public Utilities Code, adhere to Article XVI of the City Charter and are in the public
interest.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. The franchise agreement between the City of Santa Monica and
Crimson California Pipeline, L.P., attached as Exhibit 1 to this Ordinance, is
incorporated fully into this Ordinance.
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SECTION 2. The City Council has considered all interests, objections and
protests to the franchise agreement between the City of Santa Monica and Crimson
California Pipeline, L.P. and through this Ordinance awards a franchise to Crimson
California Pipeline, L.P., as is set forth in Exhibit 1, and in accordance with City Charter
Article XVI.
SECTION 3. The acceptance of this Franchise by the Grantee must be filed
within 10 days after adoption of this Franchise. Upon the filing of the acceptance, and
provided this Franchise has become effective, all franchises and privileges heretofore
granted to the Grantee or its predecessors in interest in respect to the "Pipeline" or
"Pipeline System" (as defined in the Franchise Agreement), including the Shell Pipeline,
shall immediately terminate. By accepting this Franchise, Grantee expressly
acknowledges that, to the best of its knowledge, it has complied with each of the terms
of the 1989 Franchise and that all provisions of the 1989 Franchise and this Franchise
comply with applicable law.
SECTION 4. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent with the provisions of this Ordinance, including Exhibit 1, to the
extent of such inconsistencies and no further, is hereby repealed or modified to that
extent necessary to effect the provisions of this Ordinance and Exhibit 1, including
without limitation the provisions of Ordinance No. 1492 (CCS).
SECTION 5. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of competent jurisdiction, such decision shall not affect the validity of the
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remaining portions of this Ordinance. The City Council hereby declares that it would
have passed this Ordinance and each and every section, subsection, sentence, clause,
or phrase not declared invalid or unconstitutional without regard to whether any portion
of this Ordinance would be subsequently declared invalid or unconstitutional.
SECTION 6. The Mayor shall sign and the City Clerk shall attest to the passage
of this Ordinance. The City Clerk shall cause the same to be published once in the
official newspaper within 15 days after its adoption. This Ordinance shall become
effective 30 days from its adoption.
APPROVED AS TO FORM:
S kAm
MAR HA JO S MOU RIE
City A torney
0
EXHIBIT 1
A FRANCHISE AGREEMENT BETWEEN THE CITY OF SANTA MONICA AND
CRIMSON CALIFORNIA PIPELINE, L.P. TO OPERATE, MAINTAIN, INSPECT,
REPAIR, REMOVE, REPLACE AND ABANDON AN EXISTING TEN (10) INCH
DIAMETER CRUDE PETROLEUM PIPELINE AND APPURTENANT FACILITIES IN
CERTAIN PUBLIC STREETS OF THE CITY OF SANTA MONICA
TABLE OF CONTENTS
Paqe
SECTION1.
Definitions ..................................................................... ..............................1
SECTION 2.
Grant of Franchise.... ............................................. ....................................
2
SECTION 3.
Surrender of Other Franchises ..................................... ..............................4
SECTION 4.
Rights Reserved to City ................................................ ..............................4
SECTION 5.
Term of Franchise ......................................................... ..............................4
SECTION 6.
Franchise Fee and Compensation to the City ............... ..............................5
SECTION 7.
Construction, Operation and Maintenance of Pipeline and Pipeline System.8
SECTION 8.
Testing and Emergency Preparedness ......................... ..............................8
SECTION9.
Reporting ...................................................................... ..............................9
SECTION 10. Inspection of Facilities and Records .......................... .............................10
SECTION11.
Repairs ...................................................................... .............................10
SECTION 12.
Changes Required by Public Improvements .............. .............................12
SECTION 13.
Restoration of Streets ................................................ .............................13
SECTION14.
Maps and Data .......................................................... .............................13
SECTION 15.
Abandonment ............................................................ .............................13
SECTION 16.
Completion of Work ................................................... .............................14
SECTION 17.
Insurance ................................................................... .............................15
SECTION 18. Indemnification of City ............................................... .............................15
SECTION 19. Assignment ................................................................ .............................16
SECTION 20. Receivership or Foreclosure ...................................... .............................18
SECTION21. Waiver ........................................................................ .............................19
SECTION 22.
Default .......................................................................
.............................19
SECTION 23.
Cumulative Remedies ................................................
.............................20
SECTION 24.
Faithful Performance Bond ........................................
.............................20
SECTION 25.
Notice .........................................................................
.............................21
SECTION 26.
Costs of Litigation ......................................................
.............................22
SECTION 27.
Counterparts ..............................................................
.............................23
SECTION 28.
Captions for Convenience ..........................................
.............................23
SECTION 29.
Governing Law ...........................................................
.............................23
SECTION 30.
Acceptance of Franchise... .....................................................................
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SECTION 1. Definitions.
(a) The word "Grantee" shall mean Crimson California Pipeline, L.P.
( "Crimson "), a California limited partnership and a pipeline corporation within the
meaning of California Public Utilities Code § 228, to which the franchise is granted by
this Ordinance as well as its lawful successors or assigns.
(b) The word "City" shall mean the City of Santa Monica a municipal
corporation duly organized and validly existing under the general laws of the State of
California with corporate power to carryon its business as it is now conducted under the
statutes of the State of California and the Charter of the City.
(c) The word "use" shall mean to operate, maintain, inspect, renew, repair,
remove, replace and abandon, as provided for in this Franchise Agreement, a ten (10)
inch diameter pipeline for collection, transportation or distribution of crude petroleum
and its constituent products, including ancillary water, wastewater, mud, steam and
other liquid substances normally and customarily used in the operation and
maintenance of a crude petroleum pipeline, together with all traps, manholes, conduits,
valves, appliances, attachments, equipment, cathodic protection devices, wires, cables
and other appurtenances and service connections (collectively "Pipeline System ")
necessary and appropriate for operation of the Pipeline and Pipeline System in, under,
along and across certain public streets and public rights of way as described in Section
1(e) of this Franchise agreement;
(d) The word "franchise" shall mean those rights, privileges and obligations
arising from the Ordinance and grant of this Franchise to use a Pipeline and Pipeline
System in those streets and public rights of way set forth in Section 1(e) of this
Franchise Agreement.
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(e) The word "Pipeline" shall mean the ten (10) inch diameter crude petroleum
pipeline existing on the effective date of this Franchise, as more fully described in
Exhibit "A ", located in City, as follows:
On Twenty -sixth Street from the Northwesterly boundary of
the City of Santa Monica to Colorado Avenue; thence on
Colorado Avenue to Cloverfield Boulevard; thence on
Cloverfield Boulevard to Ocean Park Boulevard; thence in
Ocean Park Boulevard to Twenty -third Street; thence on
Twenty -third Street to Dewey Street; thence on Dewey
Street to the southeast boundary of City.
SECTION 2. Grant of Franchise.
2.1. The City of Santa Monica grants a non - exclusive franchise to Crimson for
the term set forth in Section 5.1 below to use the Pipeline and Pipeline System for the
transportation of crude petroleum and its ancillary normal and customary constituent
products, such as water, wastewater, mud, as described in Grantee's tariff filed and as
approved by the California Public Utilities Commission, in, under, along and across the
public streets, highways, and alleys, as described in Section 1(e) above and in Exhibit
"A" ( "Franchise "). Grantee may not increase the length or the internal size of the
Pipeline, in whole or in part, without applying for and being granted permission to do so
by amendment to this Franchise.
2.2. This Franchise is granted to Grantee, under and in accordance with the
provisions of the Franchise Act of 1937, California Public Utilities Code Section 6201 et
seq. and the City's City Charter and Municipal Code.
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2.3. During the term of this Franchise, Grantee has the right to maintain,
operate, repair or replace the Pipeline, including the right, subject to the prior approval
of the Director of Public Works, to construct and maintain such elements of the Pipeline
System as may be necessary for the proper maintenance and operation of the Pipeline
under the Franchise. The Pipeline and the Pipeline System shall conform to any order
of the Director of Public Works and shall not interfere with the use of the City streets
and public rights of way for travel. Grantee shall have the right, subject to generally
applicable ordinances, rules, regulations or fees, as are now or may subsequently be in
force, to make all necessary excavations for the construction and repair of the Pipeline
and the Pipeline System subject to the prior approval of the Director of Public Works.
Any approval may be conditioned by the Director of Public Works, including, without
limitation, the issuance to Grantee of applicable permits. The City expressly reserves
the right to impose and collect from Grantee, on a non- discriminatory basis, applicable
fees for street or sidewalk cutting and excavation permits or for any other activity to the
extent those fees are imposed generally on all applicants for similar permits within the
City.
2.4. Grantee is neither granted nor conferred any privilege or exemption from
any City law, rule, regulation, custom or practice by this Franchise except those
specifically prescribed in this Franchise.
2.5. Any privilege granted Grantee under this Franchise is subordinate to any
lawful occupancy of the street or other public rights of way by City.
2.6. If any provision of this Franchise or any application of the Franchise to any
person or circumstance is held invalid in whole or in part by a court of competent
jurisdiction, the Franchise shall terminate immediately and Grantee shall remove the
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Pipeline and any Pipeline System within ninety (90) days of the entry of judgment. No
provision of this Franchise is severable from any other provision.
2.7. The granting of this Franchise is expressly conditioned upon payment of
all Franchise and other fees due and owing the City from Grantee as of the effective
date of this Ordinance, including all fees due and owing under the terms of the 1989
Franchise, Ordinance No. 1492 (CCS).
2.8. So far as is practicable, any pipes and appurtenances laid pursuant to this
Franchise will be located along the edge or shoulder of the streets or in the parking
areas adjacent to the streets so as not to unreasonably disturb the flow of traffic and
where possible will be laid in the unpaved portion of the street. All pipes, Pipelines and
Pipeline Systems will be located in conformity with the orders of the Director of Public
Works.
SECTION 3. Surrender of Other Franchises
3.1. By accepting this Franchise, Grantee agrees that all other of its pipeline
franchises, including the 1989 Franchise, within the City are immediately surrendered
and terminated and that Grantee made all payments and satisfied all terms and
obligations arising under the 1989 Franchise and that those payments, terms and
obligations were at all times lawful and properly imposed by the City.
SECTION 4. Rights Reserved to City
4.1. The City reserves every right and power, which is not expressly
relinquished by the terms of this Franchise.
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4.2. Neither in granting this Franchise nor in agreeing to any of its terms does
the City waive right or in any way relinquish any of its governmental rights, powers or
prerogatives.
4.3. Nothing contained in this Franchise shall 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 of any specific rights reserved shall not be construed as exclusive, or as
limiting the general reservation or as limiting such rights as the City may now or
hereafter have.
SECTION 5. Term of Franchise.
5.1. This Franchise shall be for a term of twenty (20) years from the adoption
of this Ordinance ( "effective date "). However, the Franchise may be terminated sooner
by voluntary surrender or abandonment by Grantee, or by breach or forfeiture for
noncompliance with the terms of this Franchise.
SECTION 6. Franchise Fee and Compensation to the City.
6.1. In consideration for the granting of this Franchise and to reimburse the
City for its administrative expenses in preparing and approving this Franchise, Grantee
shall pay the City Twenty Thousand Dollars ($20,000.00) within thirty (30) days of the
effective date of this Franchise.
6.2. As consideration for the Franchise hereby granted, the Grantee shall pay
a Franchise Fee to the City. Subject to the provisions of Section 6.8 below, the
Franchise Fee shall be calculated in accordance with the provisions of Exhibit "C"
attached hereto and 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
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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 %).
6.2.1. 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.
6.2.2. 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.
6.2.3. If said Bureau revises the said Index, the parties hereto shall accept
the method of revision or conversion recommended by the said Bureau.
6.3. Franchise Fee 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
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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.
6.4. 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.
6.5. The Franchise Fee provided for under the terms of this Franchise is solely
for the privilege granted by the Franchise and the Franchise Fee shall in no way limit
any obligation of Grantee to compensate City or any other person for any damage,
claim, expense, or other loss whatsoever.
6.6. Grantee shall pay to the City, on demand and no later than thirty (30) days
following receipt of any invoice or bill, the cost of all repairs to any street, public rights of
way or public property arising from or related to by any operation or omission of the
Grantee under this Franchise, as well as all permit or other fees.
6.7. Except as set forth in Section 6.2 above, any payment due from Grantee
to City under any provision of this Franchise which is not paid when due shall bear
interest at the rate of ten (10) percent, but the payment of such interest shall not excuse
or cure any default by Grantee under this Franchise. The payment of interest is
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separate and cumulative and is in addition to and shall not diminish or represent a
substitute for any or all of City's rights or remedies under any other provision of this
Franchise or any other applicable law.
6.8. Notwithstanding the provisions of Section 6.2 above, the City has
requested and the Grantee has agreed to prepay the Franchise Fee for the entire
twenty (20) year term of this Franchise. Based on the net present value calculation set
forth in Exhibit "D" attached hereto, the net present value of the prepayment of the
Franchise Fee would be One Hundred Forty -Eight Thousand Seven Hundred Four
Dollars and Seventy -One Cents ($148,704.71). City and Grantee have agreed to round
that net present value figure up to One Hundred Fifty Thousand Dollars ($150,000.00).
Therefore, the prepaid amount of the Franchise Fee shall be One Hundred Fifty
Thousand Dollars ($150,000.00). The prepayment of the Franchise Fee shall be made
within thirty (30) days of the effective date of this Franchise.
6.9. The City and the Grantee each reserve the right to alter the Franchise Fee
in the event that California Public Utilities Code Section 6231.5 or other law permits a
revised (higher or lower) franchise fee to be charged or imposed, including if Section
6231.5 ceases to be applicable to the Franchise. Any revised franchise fee so altered
shall be due and payable within thirty (30) days of one party's written notification to the
other party of the change; provided, however, in determining the revised franchise fee,
the City and the Grantee shall take into account and credit the Grantee's pre - payment
of the Franchise Fee.
SECTION 7. Construction, Operation and Maintenance of Pipeline and Pipeline System.
7.1. The Pipeline and any Pipeline System laid, constructed or maintained
under the terms of this Franchise shall be installed, maintained, and inspected by the
Grantee in a satisfactory, safe, and workmanlike manner. The Pipeline and Pipeline
E.
System shall be of good material, and in conformity with all ordinances, rules, or
regulations now or hereafter adopted or prescribed by any State or Federal law. All
Pipeline and Pipeline Systems shall be designed, manufactured, installed, constructed
and inspected in accordance with applicable law.
7.2. Adequate protective facilities shall be provided for the Pipeline and
Pipeline Systems in accordance with applicable law so as to immediately locate any
operating difficulty or irregularity so as to minimize the risk to public health, safety and
welfare. If, at any time during the term of this Franchise, protective facilities on any
Pipeline or Pipeline System are found or determined to be inadequate by any State or
Federal regulatory authority, Grantee shall at its own expense promptly make all
corrections required.
SECTION 8. Testing and Emergency Preparedness
8.1. During the term of the Franchise, the Pipeline and Pipeline Systems shall
be tested in accordance with the provisions of any State or Federal law and regulations,
including as may be required by the State Fire Marshal or any other State or Federal
official. The City reserves the right to require testing for any facility over which the City
has lawful authority.
8.2. At all times during the term of this Franchise, the Grantee shall maintain
on a twenty -four (24) hour -a -day basis a fully - operational emergency response system,
such as a 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. Grantee shall provide adequate emergency equipment and properly
trained emergency personnel so as to immediately respond to any emergency, including
being capable of stopping the flow of contents of the Pipeline or Pipeline System.
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8.3. Within ninety (90) days of the effective date, Grantee shall provide the City
with an emergency preparedness plan. Grantee shall obtain approval of the plan from
the City's Office of Emergency Management, and Grantee shall update its plan to the
satisfaction of the City.
SECTION 9. Reporting
9.1. The Grantee shall provide to the Director of Public Works annually on July
1 st of each year a report verified under oath or penalty of perjury by a duly authorized
officer of the Grantee, which describes in full for the immediately preceding Franchise
year the following information:
(i) The length of lines prescribed in this Franchise;
(ii) The nominal internal diameter of such lines;
(iii) The method used to calculate the Franchise Fee, including the total
amount due to the City; and
(iv) Maps or suitable diagrams indicating the accurate "as- built"
location, depth, and size of the Pipeline and /or Pipeline System and contingency plans
for any pipeline emergencies.
The City reserves the right to revise and to amend the safety and reporting
requirements prescribed in this Franchise in conformity with all rules, or regulations now
or hereafter adopted or prescribed by any State or Federal law.
SECTION 10. Inspection of Facilities and Records
10.1. At all reasonable times, Grantee shall permit any duly authorized
representative of the City to examine all Pipeline or Pipeline System facilities and to
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examine and copy any and all maps, books, accounts, papers and other records kept or
maintained by Grantee or under its control, which pertain to the Franchise or to its
operations, affairs, transactions and facilities. If any of the maps, books, accounts,
papers or other records are not kept in the City, and if the City determines that an
examination of these is necessary or appropriate to the performance of any of its duties,
then all travel and any other related expenses necessarily incurred in making the
examination shall be paid by Grantee.
10.2. Grantee shall prepare and furnish to the City, in the form prescribed by the
Director of Public Works, such data and reports, with respect to its operations, affairs,
transactions, finances or facilities, as may be reasonably necessary or appropriate to
the performance of any of the duties of the City in connection with this Franchise.
10.3. Grantee shall maintain and make reasonably available to the City all
records as may be required by any regulatory authority, including the California Public
Utilities Commission, the California State Fire Marshal or any other Federal or State
body or official.
SECTION 11. Repairs
11.1. Grantee shall promptly repair any damage to or leaks or breaks in the
Pipeline or Pipeline System from whatever cause. If any street or other public rights of
way or property shall be damaged by any accident, spill, discharge, release, escape,
leak or break in the Pipeline or Pipeline System or by reason of any cause arising from
or related to in whole or in part the acts or omissions of Grantee or to the operation or
existence of the Pipeline or Pipeline System, Grantee shall promptly repair, remediate
and restore any damage arising from or related to the accident, spill, discharge, release,
escape, leak or break to the satisfaction of the Director of Public Works.
11
11.2. In addition to any other notifications required by law, the City of Santa
Monica Fire Department shall immediately be notified in the event of any break in or
accident to any portion of the Pipeline or Pipeline System, as well as any spill,
discharge, release, leak, or escape of any petroleum, oil, gas, hydrocarbon, chemical,
water, wastewater, mud or other product or substance of any kind from the Pipeline or
Pipeline System within the boundaries of the City or if the discharge, release or escape
occurs outside the boundaries of the City, it can reasonably be expected to impact the
City.
11.3. If any private property is damaged by any accident, spill, discharge,
release, escape, accident, leaks or breaks in the Pipeline or Pipeline System or from
any cause arising in whole or in part from the operation or existence of the Pipeline or
Pipeline System or from any act or omission of Grantee, Grantee shall pay all damages
or compensation to which the owners are entitled and Grantee shall repair its facilities to
protect the damaged private property from further damage to the extent permitted and in
conformity with Federal, State or local law, rule, regulation or order.
11.4. If Grantee, within ten (10) days after receipt of notice from the City,
instructing it to repair any damage, fails to commence work or to comply with the
instructions, or otherwise fails to diligently prosecute the work to completion, or to the
satisfaction of the Director of Public Works, then the City may immediately do whatever
work is necessary to carry out the work at the cost and expense of Grantee, which cost
and expense, by the acceptance of the Franchise, Grantee agrees to pay upon
demand. If the damage constitutes an immediate danger to public health or safety,
requiring the immediate repair, the City, without notice, may repair the damage, and
Grantee, by the acceptance of this Franchise, agrees to pay all cost and expense upon
demand.
12
11.5. Grantee shall reimburse the City for all direct and indirect expenses
incurred by the City in responding to any spill, discharge, release, escape or accident
arising from the operation or existence of the Pipeline or Pipeline System.
SECTION 12. Changes Required by Public Improvements
12.1. Grantee shall, at its sole expense, disconnect, relocate or remove the
Pipeline or Pipeline System, in whole or in part, when required by the Director of Public
Works by reason of any public improvement.
12.2. If the City in its reasonable discretion determines that the Pipeline or
Pipeline System endangers or threatens the public health, welfare or safety or interferes
with or obstructs the use of any street or other public rights of way, including any utility,
the Grantee, at the Grantee's sole expense, shall move, alter or relocate the Pipeline or
Pipeline System in conformity with the written notice of the Director of Public Works.
12.3. Nothing in this Franchise shall be construed to require the City to move,
alter or relocate any of its facilities for the convenience, accommodation or necessity of
Grantee.
12.4. Except when not practicable, where notice shall be provided as the
circumstances require, Grantee shall be given not less than ninety (90) days written
notice of any requirement that the Grantee move, alter or relocate the Pipeline or
Pipeline System. The 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. Upon
failure of Grantee to promptly comply with such a request, the City may perform the
work after providing written notice to Grantee. Grantee shall reimburse the City for the
work within ten days after receipt of a statement of the City's expense. Grantee shall
hold harmless the City, its City Council, boards, commissions, officers, agents,
13
employees, assigns, and successors in interest from any liability that may arise or be
related to any action of the City under this Section.
SECTION 13. Restoration of Streets.
13.1. Grantee shall maintain, operate, replace or repair the Pipeline or Pipeline
System in compliance with the applicable provisions of the City's Municipal Code
pertaining to street and public right -of -way excavations and restoration, including any
current or future generally applicable policies, and other applicable laws (including
Federal and State laws) pertaining to street and public right of way excavations and
restoration. All such work shall be conducted with the least possible hindrance or
interference to the use of streets and other public rights of way. Grantee shall provide
all necessary warning, safety and traffic control devices and plans as are or may be
required by the City or other authorities. Grantee shall restore the surface of City
streets and public rights of way to a condition that is as good and as serviceable as
existed prior to any work to the satisfaction of the Director of Public Works.
SECTION 14. Maps and Data
14.1. Within ninety (90) days following the date in which any Pipeline or Pipeline
System has been installed, removed or abandoned under the Franchise, the Grantee
shall file a map or maps with the Director of Public Works showing the accurate "as-
built" location, depth, and size of the Pipeline and /or Pipeline System so installed,
removed or abandoned.
SECTION 15. Abandonment
15.1. In the event the use of any Pipeline or Pipeline System is discontinued for
a continuous period of one year, Grantee shall promptly remove from the streets all
facilities involved, unless the Director of Public Works otherwise provides or permits in
14
writing. If any Pipeline or Pipeline System is maintained in a condition defined as Out -
of- Service by the California State Fire Marshall, for any amount of time, such time does
not constitute permanent discontinuance of the use of the facilities or a revocation,
termination or abandonment of the Franchise.
15.2. During the term of this Franchise, Grantee shall obtain permission from
the Director of Public Works to abandon any facilities. No Pipeline or Pipeline System
shall be abandoned in -place without the express written permission of the Director of
Public Works, who in his or her reasonable discretion may set the terms and conditions
of the abandonment, including the amount of payment to the City for the privilege of
such an abandonment.
15.3. At least one hundred eighty (180) days prior to the expiration, revocation
or termination of this Franchise, the Grantee shall make a written application to the
Director of Public Works to remove or abandon the Pipeline or Pipeline Systems. The
application shall describe in detail how the removal or abandonment will occur. The
Director of Public Works shall approve, disapprove, modify or condition the removal or
abandonment so as to best protect the public health, welfare and safety.
SECTION 16. Completion of Work
16.1. If Grantee fails to complete any actor work as required, the City may take
any steps as are appropriate to complete the act or work. Grantee will be charged for
all associated costs and expenses. Within thirty (30) days of receipt of the City's
invoice, Grantee shall either pay the bill or detail in writing to the Director of Public
Works why such bill is inappropriate. If Grantee timely provides this statement to the
City, the Director of Public Works shall consider Grantee's statement, and shall notify
Grantee in writing of the City's determination. If Grantee disagrees with the City's
determination, Grantee may bring an action in court challenging that decision no later
15
than six (6) months from the date of the City's determination. No action may be
maintained concerning the City's determination unless Grantee first pays all amounts
determined by the City within ten (10) days of receipt of City's determination.
16.2. If the Grantee has not paid the City for such fees and expenses incurred
by or payable to the City, 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.
16.3. For any removal, relocation or modification of the Pipeline or Pipeline
System 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), if
applicable, and all other local, State and Federal laws.
SECTION 17. Insurance
17.1. Grantee at all times during the term of this Franchise shall maintain
insurance for all operations of Grantee relating to the operation of the Pipeline and the
Pipeline System within the City in the amounts and coverages specified and described
in Exhibit "B."
SECTION 18. Indemnification of City
18.1. Grantee shall indemnify, defend and hold City, its City Council, boards and
commissions, officers, agents, servants and employees harmless from and against any
and all loss, damages, liability, claims, suits, costs, fees and expenses of any kind
whatsoever, including reasonable attorneys' fees ( "Claims "), directly or indirectly arising
16
from or in any manner connected or related to any act or omission arising from or
connected or related to the Franchise, the Pipeline or Pipeline System, or the transport
of any hazardous substance or hazardous waste, including but not limited to petroleum
and crude oil, any of their fractions or constituent products or by- products, regardless
whether any act or omission complained of is authorized, allowed, or prohibited by the
Franchise; provided, however, the provisions of this indemnity shall not apply to Claims
arising as a result of the negligence or willful misconduct of the City. This indemnity
includes, but is not limited to any repair, cleanup or detoxification, or the preparation
and implementation of any removal, remediation, 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 any of its
fractions or constituent products 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. This indemnity is intended to
supplement and not replace any other indemnity from any source. This indemnity is
also intended to 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.
18.2. Grantee shall indemnify, protect, defend, and hold harmless the City, its
City Council, officers, officials, employees, servants and agents against any and all
claims, demands, losses, costs, expenses, fees, penalties, damages, or liability of any
kind or nature resulting from, or arising with respect to, the award of the Franchise.
18.3. The indemnity provided for in 18.1 and 18.2 shall survive the termination
of this Franchise.
17
SECTION 19. Assignment
19.1. Grantee shall not transfer, sell, hypothecate, sublet or assign the
Franchise, nor shall any of the rights or privileges therein be hypothecated, leased,
assigned, sold or transferred, either in whole or in part, nor shall title thereto, either legal
or equitable, or any right, interest or property therein, pass to or vest in any person,
except the Grantee, either by act of the Grantee or by operation of law, nor shall there
be any change in control, as defined below, without the prior consent of the City Council
adopted by resolution.
19.2. Any sale, lease, assignment or transfer of this Franchise or the rights or
privileges granted by it, or any change in control of Grantee without the prior written
consent of the City Council first having been obtained, whether by operation of law or-
otherwise, shall be null and void.
193. The City shall not unreasonably withhold its consent to a Franchise
transfer or a change in control of Grantee. For the purpose of determining whether it
shall consent to such transfer, City may inquire into the qualifications of the prospective
transferee or controlling party, and Grantee shall assist City in any such inquiry. In
seeking City's consent to any change of ownership or change in control, Grantee shall
have the responsibility of ensuring that transferee completes an application in a form
and substance reasonably satisfactory to City. An application shall be submitted to City
not less than ninety (90) days prior to the date of transfer. The Grantee shall be
required to establish that it is in material compliance with its Franchise. The transferee
shall be required to establish that it possesses the qualifications and financial and
technical capability to operate and maintain the Pipeline and Pipeline System and
comply with all Franchise requirements for the remainder of the term of the Franchise.
If the City finds that the legal, financial, character, technical and other public interest
M.
qualities of the applicant are satisfactory, and that the proposed transferee has the
capability to operate and maintain the Pipeline and Pipeline System and comply with all
Franchise requirements for the then remaining term, the City shall consent to the
transfer and assignment of the rights and obligations of such Franchise. The City may
condition the transfer to ensure the transferee is in material compliance, and remains in
material compliance with the Franchise. For purposes of this Section 19, a change in
control of Grantee shall be deemed to be a transfer requiring the City's consent.
Nothing in this provision is intended to waive or contract away the City's police power.
19.4. Change in control means (i) any merger, consolidation or other
reorganization of Grantee in which Grantee, or an affiliate of Grantee, is not the
surviving entity, (ii) any transfer or change in ownership of fifty percent (50 %) or more of
the capital stock, capital accounts, equity interests or memberships, as the case may
be, of Grantee, (iii) the acquisition of management control by any owner or new owner
of interests in Grantee that previously did not control the management of Grantee, or
(iv) the sale of fifty percent (50 %) or more of the market value of the assets of Grantee.
19.5. The provisions of this Section shall not apply to Grantee's assignment of
rights, duties and obligations under the Franchise to any affiliate or subsidiary of
Grantee. As used in this Franchise, the term "affiliate" or "subsidiary" 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 20. Receivership or Foreclosure
19
20.1. 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 or her 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.
20.2. 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 place and the provisions of Section 19 above governing such changes shall
apply.
SECTION 21. Waiver
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
20
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 22. Default
22.1. In any event that the Grantee shall default in the performance of any of the
terms, covenants and conditions herein, the City shall give written notice to the Grantee
of such default. In the event that the Grantee does not cure such default within thirty
(30)days after such notice is sent or begin to work diligently to cure the default, Grantee
agrees and acknowledges that 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, in its reasonable discretion, whether such conditions are material and
essential to the Franchise and whether the Grantee is in default with respects thereto
and may declare this Franchise suspended or forfeited through Grantee's default.
Notice of said hearing shall be given to the Grantee by certified written notice to the
Grantee not less than ten (10) days before said hearing.
22.2. If the City Council declares this Franchise forfeited, it may exclude the
Grantee from further occupancy or use of all City streets and other public rights of way
authorized under this Franchise. A forfeiture of the Franchise shall not of itself operate
to release any bond filed for the 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 Director of Public Works and is filed
with the Clerk of the City. The release shall state whether all excavations have been
21
back filled, all obstructions removed, and whether the substratum or surface of City
streets or public rights of way occupied or used by Grantee have been placed in good
and serviceable condition. Any release shall not constitute a waiver of any right or
remedy which the City 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.
SECTION 23. Cumulative Remedies.
No provision 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 the Franchise's terms and conditions. Any
remedy or procedure provided for in the Franchise, in addition to those provided by law
or equity, shall be deemed to be cumulative.
SECTION 24. Faithful Performance Bond
On or before the effective date of the Ordinance, the Grantee shall file and at all
times during the term of the Franchise keep on file with the City Clerk a corporate surety
bond approved by the City Attorney running to the City in the penal sum of seventy -five
thousand dollars ($75,000.00), with a surety licensed to do business in California and
approved by the Director of Public Works. The bond shall provide that Grantee shall
well and truly observe, fulfill and perform each condition of the Franchise and that in
case of any breach of condition of the bond the whole amount of the penal sum shall be
deemed to be liquidated damages and shall be recoverable from the principal and
sureties of the bond. If the bond is not filed prior to the effective date of the Ordinance,
the award of the Franchise may be set aside and the Ordinance may be repealed at any
time prior to the filing of the bond and any money paid in consideration for the award of
Franchise shall be deemed forfeited. In the event that the bond, after it has been so
`A
filed, shall at any time during the life of the Franchise become insufficient, in the
reasonable opinion of the City Council, the Grantee shall renew said bond within twenty
(20) days after written notice to do so is provided by the City.
SECTION 25. Notice.
All notices, demands, requests or approvals to be given under this Franchise
shall be given in writing and conclusively shall be deemed served when delivered
personally or when received in the United States Mail, postage prepaid, registered or
certified, addressed as hereinafter provided.
All notices, demands, requests or approvals from Grantee to City shall be addressed to
City at:
City of Santa Monica
1685 Main Street
Santa Monica, California 90401
Attn: City Manager
with a copy to:
City of Santa Monica
1685 Main Street
Santa Monica, California 90401
Attn: Director of Public Works
and with a copy to:
City of Santa Monica
1685 Main Street
Santa Monica, California 90401
Attn: City Attorney
All notices, demands, requests or approvals from City to Grantee shall be addressed to
Grantee at:
Crimson California Pipeline, L.P.,
ATTN: April Harvey, Land Department
3780 Kilroy Airport Way, Suite 400
Long Beach, CA 90806
23
with a copy to:
Cox, Castle & Nicholson LLP
2049 Century Park East, Suite 2800
Los Angeles, CA 90067
Attn: Ronald I. Silverman, Esq.
(or such other address as may from time to time be furnished in writing by one party to
the other and depositing the notice in the United States mail, postage prepaid.)
When the service of any such notice is made by mail, the time of such notice will
begin with and run from the date of the deposit of the notice in the United States mail.
SECTION 26. Costs of Litigation.
If any legal action is necessary to enforce any provision hereof or for damages by
reason of an alleged breach of any provisions of this Franchise, the prevailing party
shall be entitled to receive from the losing party all costs and expenses and such
amount as the court may adjudge to be reasonable attorney's fees for the costs incurred
by the prevailing party in such action or proceeding.
SECTION 27. Counterparts.
This Franchise may be executed in several counterparts, each of which is an
original, and all of which together constitute but one and the same document.
SECTION 28. Captions for Convenience.
The captions herein are for convenience and reference only and are not a part of
this Franchise and do not in any way limit, define or amplify the terms and provisions
hereof.
SECTION 29. Governing Law.
24
This Franchise has been made and shall be constructed and interpreted in
accordance with the laws of the State of California.
SECTION 30. Acceptance of Franchise.
The acceptance of this Franchise by the Grantee must be filed within 10 days
after adoption of this Franchise. Upon the filing of the acceptance, and provided this
Franchise has become effective, all franchises and privileges heretofore granted to the
Grantee or its predecessors in interest in respect to the Pipeline or Pipeline System,
including the Shell Pipeline, shall immediately terminate. By accepting this Franchise,
Grantee expressly acknowledges that it complied with each of the terms of the 1989
Franchise through the date of acceptance of this Franchise and that all provisions of the
1989 Franchise and this Franchise comply with applicable law.
25
City of Santa Monica
b'IBLLI
Exhibit A
Exhibit A -1
=iI
tom, i�
Legend:
/V10, cfmw�n Pips lino
Exhibit B
Insurance Requirements
Grantee shall procure and maintain for the duration of the Franchise insurance against
claims for injuries to persons or damages to property that may arise from or in
connection with the operation, use, maintenance or any other privilege exercised under
the Franchise:
Minimum Scope /Limits of Insurance
Coverage shall be at least as broad as:
Commercial General Liability (CGL): Insurance Services Office Form CG 00 01
covering GCL on an "occurrence" basis, including products - completed operations
and personal and advertising injury, with limits of no less than $1,000,000 per
occurrence.
2. Excess or Umbrella Liability Insurance at least as broad as specified above for
the CGL coverage. Such policy or policies shall include as insureds those
covered by the underlying CGL policy, including additional insureds. The
insurance shall be maintained in an amount not less than $9,000,000 per
occurrence.
Pollution Legal Liability and /or Asbestos Pollution Legal Liability and /or Errors &
Omissions: Insurance appropriate to the work being performed, with limits of no
less than $35,000,000 per claim or occurrence.
If the Grantee maintains higher limits than the minimums shown above, the City of
Santa Monica requires and shall be entitled to coverage for the higher limits maintained
by the Grantee.
Other Insurance Provisions
The policies are to contain, or be endorsed to contain, the following provisions:
a. Additional Insured Status (all policies): The City of Santa Monica, its
officers, officials, employees and volunteers are to be covered as
additional insureds on the CGL, Umbrella and Pollution policies.
Primary Coverage (all policies): For any claims related to this contract,
the Grantee's insurance shall be primary as respects the City of Santa
Monica, its officers, officials, employees and volunteers. Any insurance or
self- insurance maintained by the City of Santa Monica, its officers,
officials, employees or volunteers shall be in excess of the Grantee's
insurance and shall not contribute with it.
Exhibit B -1
C. Notice of Cancellation (all policies): Each insurance policy required
herein shall state that coverage shall not be cancelled, except after 30
days prior written notice (10 days for non - payment) has been given to the
City of Santa Monica.
d. Waiver of Subrogation (all policies): Grantee hereby grants to the City
of Santa Monica a waiver of any right of subrogation which any insurer of
said Grantee may acquire against the City of Santa Monica by virtue of
payment of any loss. Grantee agrees to obtain any endorsement that may
be necessary to effect this waiver of subrogation, but this provision applies
regardless of whether or not the City of Santa Monica has received the a
waiver of subrogation endorsement from the insurer.
Deductibles and Self- Insured Retentions
Any deductibles or self- insured retentions must be declared to and approved by the City
of Santa Monica. The City of Santa Monica may require the Grantee to reduce or
eliminate the deductible or retention applicable to the contracted work or provide
satisfactory proof of ability to pay losses and related investigations, claim administration,
and defense expenses within the retention.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best rating of no less than
A:VII, unless otherwise acceptable to the City of Santa Monica.
Claims Made Policies
If the Pollution Legal Liability and /or Asbestos Legal Liability and /or Errors &
Omissions policy provides 'claims made" coverage:
a. The Retroactive Date must be shown, and must be before the date of this
contract or the start of work.
b. The insurance must be maintained and evidence of insurance must be
provided for at least 5 years after completion of contract work.
C. If the policy is cancelled or not renewed, and not replaced with another
"claims made" policy form with a Retroactive Date prior to the effective
contract date, the Grantee must purchase "extended reporting" coverage
for a minimum of 5 years after completion of contract work.
A copy of the claims reporting requirements must be submitted to the City
of Santa Monica for review.
Verification of Coverage
Exhibit B -2
Grantee shall furnish the City of Santa Monica with original certificates and amendatory
endorsements or copies of the applicable policy language providing the insurance
coverage required herein. All certificates and endorsements are to be received and
approved by the City of Santa Monica before work commences. However, failure to
obtain required documents prior to the work beginning shall not waive the Grantee's
obligation to provide them. The City of Santa Monica reserves the right to require
complete, certified copies of all required insurance policies, including the endorsements
required herein, at any time.
Exhibit B -3
Exhibit C
Franchise Fee Calculations
The length of pipe expressed in feet located within the city, rounded to the nearest foot,
shall be multiplied by the applicable CPUC (California Public Utilities Code) base rate
(see table 2 below). Under the CPUC the base rate is adjusted based on CPI
(Consumer Price Index) series ID CUURA421SAO (see table 1 below):
Consumer Price Index -All Urban Consumers
Original Data Value
Series CUURA421SAO,CUUSA421 SAO
Id:
Not Seasonally Adjusted
Area: Los Angeles- Riverside - Orange County, CA
Item: All item
'Base 1982 -84 =100
(Period:'.
Years: 1989 to 2012
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual HALF1 HALF2
1989 124.6 125.5 126.2. 127.2 128.3'. 128.7 129.0 128.9 130.1 130.0 1300. 130.6'. 128.3', 126.8' 129.8.
1990 132.1 133.6!. 134.5 134.21 1346 135.0. 135.6. 1363 137.7 138.7 1389 139.2 135.9', 134.0'. 137.7
1991 140.0 139.9 139.71 140.7' 140.8! 140.8 141.5 1417 142.6 1429 143.5 143.1 141.4 140.3 142.6'
1992 144.3 144.9 145.5 145.8 146.0' 146.2 146.7' 146.9' 147.4 148.4 148.2 148.2 146.5 145.5 147.6
1993 149.2 150.0 149.8 149.9 150.1 149.7 149.8 149.9 150.2'. 150.9 151.6 151.9 150.3. 149.8 150.7
1994 152.2 152.2' 152.5 152.0. 151.4. 151.3 1517 1520 152.7 153.4 152.9. 153.4 152.3.. 151.9 152.7.
1995 154.3 154.5 154.6 154.7 155.1 154.8 154.5 154.4 154.6 155.2 154.4 154.6 154.6 154.7 154.6
1996 155.7 156.2 157.3. 157.7 157.5 156.7 157.6 157.3 158.2' 158.8 158.4 158.3 157.5 156.9. 158.1
1997 159.1 159.2 159.8 159.9 159.5 159.4 159.5 159.7 160.5 161.1 160.7 161.2 160.0 159.5. 160.5
1998 161.0 161.1 161.4 161.8 162.3 162.2 162.1 162.6 162.6 163.2 163.4 163.5 162.3 161.6' 162.9
1999 164.2 164.6 165.0 166.6 166.2 165.4 165.8 166.3 167.2 167.2 167.1 167.3 166.1 165.31 166.8.
2000 167.9 169.3 170.7 170.6 171.1 171.0 171.7. 172.2 173.3 173.8 173.5 173.5' 171.6 170.1 173.0..
2001 174.2 175.4. 176.2: 176.6! 177.5 178.9 178.3 178.4 178.8. 178.3 178.1' 177.1 177.3 176.5 178.2
2002 178.9 180.1' 181A 182.2 182.61 181.9 !. 182.2 183.0: 183.4 183.71 184.0 183.7 182.2 181.1 183.3
2003 185.2 186.5 188.2 187.6 186.4 186.3 166.3 186.9 188.2'. 187.8 187.1 187.0 187.0. 186.7 187.2
2004 188.5 190.1 191.5 191.9 193.3' 193.7. 193.4! 1931 194.5' 196.3 196.9 195.2 193.2 191.5 194.9.
2006 195.4 197.4 199.2 201.1. 201.5 200.7 201.4 203.1 205.8. 206.9 205.6 203.9' 201.8 199.2 204.5
2006 206.0'. 2075: 2085 210.5 2124,211.1 2114 2119. 212.9 211.4 2111 210.6' 2104! 209.3 211.6,.
12007 212.584 214.7601 216.500 217.845 218.596 217.273 217.454: 217.330 217.697'. 218.696' 219.943 219.373 217.338 216.260 218.416
2008 220.918 221.431 ! 223.606 224.625 ! 226.651 229.033 229.886 228.484 227.449 226.159 222.229. 219.620 225.008 224.377 225.638
2009 220.719 221.439 221.376 221.693 222.522 221906 224.010 224,507 225.226'. 225.264 224.317 223.643 223.219 221.943' 224.495
2010 224.610 224.620'. 225.483 225.916 226.438 225.877 225.991 226.373 226.048 226.794' 225.941 !. 226.639 225894 225.491 226.298
2011 228.652 229.729'. 232.241 233.319 233.367 232.328 231.303 231.833 233,022 233.049. 232.731 231.567 231.928 231.606 232.251
2012 233.441 234.537 236.941 236.866. 237.032 236.025 235.776 237.222 238.104. 240.111 235.807
Exhibit C -1
CPUC 1989 Table
Pipe size (internal
Base rate
diameter in inches)
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
Table 2
Formula for Fee Calculation:
CPI Adjustment = Current Year CPI / Original Year (June 30, 1989) CPI (from
table 1).
Payment Amount= Linear Feet of Pipe x CPUC Base Rate (from table 2) x CPI
Adjustment
Calculation for 2012 for 20,612 feet of 10" pipe:
CPI Adjustment = 238.104 / 128.7 = 1.85
Payment Amount = 20,6121f x $0.220 x 1.85 = $8,389.08
Calculation for 2013 for 20.612 feet of 10" pipe:
CPI Adjustment = 239.742 / 128.7 = 1.86
Payment Amount = 20,612 x $0.220 x 1.86 = $8,434.43
Exhibit C -2