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ORDINANCE NUMBER
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
THE CITY COUNCIL OF THE CITY OF SANTA MONICA ORDAINS AS FOLLOWS:
SECTION 1. Interpretation of Franchise.
(a) The word "Grantee" shall mean the Shell California Pipeline
Company, a California corporation and a pipeline corporation within the
meaning of California Publ1C Utilities Code ~ 228, to Wh1Ch the franchise
is granted by this Ordinance as well as its lawful successors or ass1gns.
(b) The word IICityll 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 1S now conducted under the statutes of the State af
California and the Charter of the City.
(c) The word "use" shall mean to operate, maintain, inspect, repair~
remove, replace and abandon a pipeline system together with all manholes~
valves~ appurtenances and service connections therew1th and necessary and
convenient for operation of the pipeline 1n, under~ along and across
certain publ1C streets (here1nafter collectively referred to as "street"
or "streets") located 1n C1ty, described 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-th1rd Street; thence
on Twenty-th1rd Street to Dewey Street; thence on Dewey
Street to the southeast boundary of City.
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(d) The word IIfranchlse" or "franchise property" shall mean this
franchise to use a plpe1ine system ln those streets set forth in
subsection (c) of this Sectlon.
(e) The word "plpellne" shall mean the existing pipeline system
lncluding all manholes~ valves and appurtenances.
SECTION 2. Grant of Franchise.
The right, privilege and franchise, subject to each and all terms
and conditions contained in this Ordinance to continue to use the pipe-
line for the use of transporting petroleum~ as defined in Grantee's
Callfornia P.U.C. Tariff No.1 effective September 16, 1988~ in those
streets contalned in Section 1(c} is hereby granted to Grantee pursuant
to Section 1600, Article XVI of the Santa Monica Municipal City Charter.
SECTION 3. Term of Franchise.
ThlS franchise shall be for a term of 20 years from the effectlve
date of thlS franchise, however, said franchise may be sooner terminated
by voluntary surrender or abandonment by Grantee, or by forfeiture for
noncompliance with the terms and provisions hereof. Grantee shall further
have an option to extend this franchise for an additional 20-year term
for a reasonable fee, to be negotiated by the parties hereto prlor to the
end of the inltial 20 year term of this franchise. The parties shall
commence negotiations on such fee upon notification from Grantee to
City, WhlCh notice shall be given no sooner than eighteen (18) months
nor later than twelve (12) months prior to expiratlon of the inltial
term.
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SECTION 4. Compensatlon to the Clty.
(a) Grantee shall pay to the City a fee of $12,000 per year. The
first fee shall be paid upon acceptance of the franchise and annually
thereafter on the anniversary of this franchise.
(b) The compensatlon provided for in Section 4(a) shall be subJect
to an increase after the first year of the franchise on the anniversary
date of the franch'se~ and each subsequent year thereafter during the
term of this franchlse. The amount of increase shall be computed
pursuant to the Producer Prlce Index for All Commodities In the following
manner:
The base for computing the adjustment is the Producer Price Index
for All Commodities, published by the United States Department of
Labor~ Bureau of Labor Statlstics (1Index"), which is published for
the month nearest the date of the commencement of the term of this
franchise ("Beginning Index"). If the Index published nearest the
anniversary date ("Extension Index") has increased over the
Beginnlng Index~ the franchlse fee for the followlng year (until the
next adjustment) shall be set by multiplying the franchise fee set
forth in Sectlon 4(a) by a fractlon, the numerator of which lS the
Extension Index and the denominator of which is the Beginning Index.
In no case shall thlS increased compensation be less than the
franchise fee set forth in Section 4(a). If the Index is
dlscontinued or revised during the term, such other mutually
agreeable governmental index or computation with which it is
replaced shall be used In order to obtain substantially the same
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result as would be obtalned lf the Index had not been discontinued
or revised.
(c) The franchlse fee set out in this sectlon shall in no way limit
Grantee's obllgatlon to compensate City or any private cltizen for any
damage, clalm, expense, or loss whatsoever as set forth in this
franchlse.
(d) Grantee shall pay to the Clty, on demand, the cost of all
repairs to public property made necessary by any operatlon of the Grantee
under this franchise.
(e) Any payment due from Grantee to City under any provision of
thlS franchlse which is not paid when due shall bear interest at the
highest amount allowable by law, but the payment of such interest shall
not excuse or cure any default by Grantee under this franchise. Such
interest is separate and cumulatlve and is in addition to and shall not
diminlsh or represent a Substltute for any or all of City's rights or
remedles under any other provislon of this franchise.
SECTION 5. Abandonment.
Should Grantee elect to abandon all or any part of the pipeline,
Grantee shall water wash the pipeline, fill the pipeline with an inert
envlronmentally acceptable gas or other material and cap the plpeline.
Grantee shall not owe the Clty any compensation for the privilege of said
abandonment.
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SECTION 6. Insurance.
Grantee at all tlmes during the term of this franchise shall
malntain liabi1lty insurance in an amount not less than $50,000,000 to
cover any claim, expense, or loss arising out of the operation, use,
malntenance or other privilege exercised under this franchise, lnc1uding
Grantee's contractual liability to indemnify Clty. The City, its Clty
council, boards and commissions, officers, agents, servants and employees
shall be named as additional insureds in said policy of insurance for all
operations of Grantee relating to the operation of the pipeline within
the City. Said policy of insurance shall contain the following prOVl-
sions or endorsements:
(a) The naming of an additional insured shall not affect any
recovery to which such additional insured would be entitled under this
POllCY if not named as such additlona1 lnsured.
(b) An additional lnsured named herein shall not be held liable for
any premium or expense of any nature on this policy or any extension
thereof.
(c) The provislons of the policy will not be changed, suspended,
cancelled or otherwise terminated as to the interest of an additional
insured named her~in without first delivering to City twenty (20) days
notice of such intentlon.
(d) Grantee shall furnish to City a Certlficate of Insurance showlng
insurance as herein required.
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SECTION 7. Maintenance and Repalr.
(a) Grantee shall mainta1n the p1peline 1n a good, workerlike manner
and in conformity wlth all applicable and lawful federal, state and local
rules and regulatlons and shall perform any necessary repairs. City
agrees to process all permlt and excavation applications in a timely
manner and for a reasonable fee not to exceed the time periods and fees
charged to other public utilities serving the cltizens of the City.
(b) Grantee shall conduct maintenance and repair of the pipeline
with the least possible hindrance to the use of the streets for purposes
of travel, and as soon as such work is completed, all portions of the
streets WhlCh have been excavated or otherwise damaged thereby shall be
placed in as good condition as the same were before the commencement of
such work, to the satisfaction of the Clty, and any damage or injury
suffered by any person by reason of any excavation or obstruction being
lmproperly guarded during said work shall be borne by Grantee.
(c) Grantee, upon completing any street opening, shall restore all
streets, highways, private and public property to at least as good
condition as the same existed in, lmmediate1y prior to said opening, and
does by thlS franchise, guarantee that the work of restoration shall be
good against all faulty workmanship and materials and shall, for a period
of one (1) year thereafter, maintain all such street surfaces in as good
condltion as other portions of said street, not disturbed by said
opening.
(d) Grantee shall make such deposlts of money or shall file such
bonds wlth the City as may be requlred to insure satlsfaction and
completion of all constructlon activity within public rights of way.
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SECTION 8. Safety Requirements.
Grantee shall comply with all of the requirements of 49 C.F.R. Part
195 and all other applicable federal and state regulatlons.
SECTION 9. Pipeline Accidents.
If any portion of any street shall be damaged by reason of breaks or
leaks in any pipe or conduit constructed under this franchise, Grantee
shall, at ltS own expense, repair any such damage and put such street in
as good conditlon as it was in before such break or leak, to the reason-
able satlsfaction of the City.
SECTION 10. Indemnification of City.
(a) Grantee shall indemnlfy 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
and expenses, whatsoever, lncluding reasonable attorneys I fees,
regardless of the merit or outcome of any such claim or suit, arising
from or in any manner connected to the actlvities or work conducted
pursuant to the franchise.
(b) Grantee ~hall indemnify, defend and save harmless the City, its
city council, boards and commissions, officers, agents, servants and
employees, from and against any and all claims and losses whatsoever,
including reasonable attorneys' fees, accruing or resulting to any and
all persons, firms or corporations furnishing or supplying work,
services, materials, equipment or supplies ln connection with activities
or work conducted or performed pursuant to this franchise and arising out
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of such activities or work, and from any and all clalms or losses what-
soever, includlng reasonable attorneys' fees, accrulng or resulting to
any person, flrm or corporation for damage, lnJury or death arislng out
of Grantee's operations.
SECTION 11. Relocatlon of Pipeline Upon City.s Request.
Grantee shall relocate without expense to the City any facilities
installed, used, or maintained under this franchise if necessary to
accommodate the construction of any public street, hlghway, alley or
other publlC improvement.
SECTION 12. City.s Reserved Rlghts.
{a} The granting of this franchise or any of the terms or conditions
contained herein shall not be construed to prevent the City from granting
over the route herel" specifled or elsewhere any identical, slmilar, or
other type of franchlse to any person, flrm or corporatlon other than
Grantee.
(b) The City reserves the right to lmprove any highway, street,
alley, or other public place or portion thereof over and within which
thlS franchise is-granted, including the widening, change of grade,
construction or reconstruction of such highway, street, alley or other
public place or portion thereof, and there is further reserved to the
Clty and any political subdivision or district within the City, the rlght
to construct, reconstruct, lnstall, repair and maintain in any such
highway, street, alley or other publlC place or portion thereof, any
public improvement.
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(c) The Clty reserves the rlght to give the Grantee any d1rections
for the maintenance, construction, and repair of the pipeline as may be
reasonably necessary to avoid sewers, water pipes, and conduits in other
structures lawfully placed 1n or under the streets; and before the work
of maintenance, construction or repairs of the pipellne is commenced, the
Grantee shall f,le with the City Engineer plans showing the location
thereof, which shall be subJect to the approval of the City Engineer.
(d) Nothing herein shall be deemed to make the City or any offlcer
or employee of the Clty responsible or liable to said Grantee by reason
of the approval of plans for the maintenance, construction and repair of
the pipeline. The City, by grant1ng this franchise, does not warrant the
accuracy of such approval or information as suppl1ed or given to the
Grantee.
SECTION 13. Prohibltion Agalnst Transfer.
Grantee shall not assign, hypothecate or transfer this franchise or
any lnterest therein directly or indirectly, by operation of law or
otherwise without the prior written consent of the City, said consent to
not be unreasonably withheld. Grantee may however assign this franchise
to any subsidiary~ parent or affillate company without obtaining the
consent of City.
SECTION 14. Condemnation.
Notwithstanding anything to the contrary contained herein, this
Ordinance shall not in any way affect the right, under law, of either
party to commence eminent domain proceedings at any time.
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SECTION 15. Forfeiture.
If the Grantee of this franchise shall fail, neglect or refuse to
comply with any of the provisions of thlS franchlse or conditlons thereof
unless due to a cause beyond Grantee1s control and shall not withl"
thlrty (30) days after written demand for compllance, begin the work of
compliance, or after havlng such beginning, shall not prosecute the same
wlth due dlligence to completion, then the City may declare this
franchlse and all rights and privileges forfeited and upon written notice
to Grantee, this franchise shall be void and the rights of the Grantee
shall cease.
SECTION 16. Termination of Franchise.
At the time of the expiration, forfeiture or other termination of
this franchise, or the permanent discontinuance of the use of the
pipeline, or any portion thereof, Grantee shall abandon the pipeline, or
portion thereof, pursuant to Section 5 of this franchise.
SECTION 17. Cumulative Remedies.
No provision herein made for the purpose of securing the performance
of the terms and conditions of this franchise shall be deemed an exclu-
sive remedy, or to afford the exclusive procedure for the enforcement of
said terms and conditlons, but the remedies and procedures herein
provided, ln addition to those provided by law, shall be deemed to be
cumulative.
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SECTION 18. Notice.
All notices, demands, requests or approvals to be glven under this
franchlse shall be glven in writing and conclusively shall be deemed
served when dellvered personally or when received in the United States
Mall, postage prepaid, registered or certified, addressed as herelnafter
provlded.
All notlces, demands, requests or approvals from Grantee to City
shall be addressed to City at:
Santa Monica Clty Hall
1685 Main Street
Santa Monlca, California 90401
Attn: City Attorney
All notices, demands, requests or approvals from City to Grantee
shall be addressed to Grantee at:
Shell California Pipeline Company
c/o Shell Pipe Line Corporation
P. O. Box 4848
Anaheim, California 92803
Attn: Division Manager
SECTION 19. 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 thlS
franchise, the pr~vailing party shall be entltled 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.
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SECTION 20. Counterparts.
This franchise may be executed 1n several counterparts, each of
which 1S an original, and all of which together constitute but one and
the same document.
SECTION 21. Captions for Convenience.
The captlons herein are for convenience and reference only and are
not a part of thlS franchise and do not ln any way limit, define or
amplify the terms and provisions hereof.
SECTION 22. Governlng Law.
This franchlse has been made and shall be constructed and
interpreted in accordance with the laws of the State of California.
SECTION 23. Acceptance of Franchlse.
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 franchlse has become effective, all
franchises and privileges heretofore granted to the Grantee or its
predecessors in interest in respect to the pipeline shall terminate.
SECTION 24. Execution.
The Mayor of Clty shall sign and the City Clerk shall attest to the
passage of this Ordinance. The City Clerk shall cause the same to be
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published once in the official newspaper wlthin 15 days after its
adoptlon. This Ordlnance shall become effectlve 30 days from its
adoption.
IN WITNESS WHEREOF the parties hereto have executed this Ordlnance
on this
day of
, 1989.
Approved as to form:
City of Santa Monlca
ROBERT M. MYERS
Clty Attorney
Shell California Pipellne
Company
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