HomeMy WebLinkAbout09 CONSIDER GRANTING A FRANCHISE TO WICKLAND PIPELINES LLC IT Agenda
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AGENDA REPORT Reviewed:vm 9
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MEETING DATE: JULY 21, 2015
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: DOUGLAS S. STACK, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
SUBJECT: INTRODUCTION AND FIRST READING OF ORDINANCE NO. 1459 TO
GRANT A FRANCHISE TO WICKLAND PIPELINES, LLC FOR THE
RIGHT TO CONSTRUCT, MAINTAIN, AND OPERATE ONE 12-INCH
PIPELINE TO TRANSMIT JET FUEL WITHIN CERTAIN PUBLIC ROADS
OF THE CITY OF TUSTIN
SUMMARY
Wickland Pipelines, LLC (Wickland) is requesting approval to construct, maintain, and
operate an approximately 5-mile long 12-inch California Public Utilities Commission (CPUC)
regulated common carrier jet fuel pipeline connecting John Wayne Airport to an existing 16-
inch products pipeline operated by Kinder Morgan Energy Partners (Kinder Morgan). The
route through the City of Tustin would connect to the Kinder Morgan pipeline adjacent to
Tustin Ranch Road just north of Edinger Avenue, continue westward in Edinger Avenue,
then proceed south in Red Hill Avenue, through the City of•Irvine, to the Airport. The
County of Orange has conducted an Initial Study and approved Mitigated Negative
Declaration CPP #2013-00087. On July 7, 2015 the City Council adopted Resolution No.
15-35 declaring the City's intent to grant a franchise to Wickland.
RECOMMENDATION
It is recommended that the City Council introduce and have the first reading of Ordinance
No. 1459 to grant a franchise to Wickland Pipelines, LLC to construct, maintain, and
operate one 12-inch pipeline within certain public roads, streets, and ways of the City of
Tustin, California and set a hearing date of August 4, 2015 at which the Ordinance would
have its' second reading and be adopted.
FISCAL IMPACT
Benefits associated with the proposed action include:
1. A yearly franchise fee paid annually to the City pursuant to Public Utilities
Code Section 6231.5 adjusted by the Consumer Price Index — All Urban
Consumers for the Los Angeles-Riverside-Orange County area; and
2. A voluntary one-time payment of $100,000 due and payable at the time of the
first year annual franchise fee payment.
CORRELATION TO THE STRATEGIC PLAN
This Ordinance contributes to the fulfillment of three goals in the City's Strategic Plan. First,
is contribution to the fulfillment of the City's Strategic Plan Goal A: Economic and
Neighborhood Development. Secondly, is implementation of Goal D, Strategy #2 by
Wickland Pipelines Ordinance to Grant Franchise
July 21, 2015
Page 2 of 2
working collaboratively with agencies to address issues of mutual interest and concern.
Lastly, the Agreement addresses Goal B, Strategy #3 to ensure public safety and protection
of assets through continuous. maintenance and improvement of public facilities.
DISCUSSION AND BACKGROUND
Wickland is proposing to construct an approximately 5 -mile long 12 -inch CPUC regulated
common carrier jet fuel pipeline connecting John Wayne Airport to an existing 16 -inch
products pipeline operated by Kinder Morgan. This project will provide airline companies
operating at John Wayne Airport with an enhanced jet fuel storage and transportation
system.
The proposed pipeline would connect to the existing Kinder Morgan products pipeline at a
location near the intersection of Edinger Avenue and Tustin Ranch Road. The 5 -mile
pipeline route predominately traverses adjacent developed office and industrially -zoned
land in the Cities of Tustin and Irvine and will be located in Cities of Tustin and Irvine public
streets, and County of Orange John Wayne Airport property.
The proposed pipeline will provide the airlines operating at John Wayne Airport access to
jet fuel from all Long Beach area refineries and terminals without the need for highway truck
transportation resulting in the elimination of approximately 44 tank truck trips per day to and
from the Airport. This will reduce truck traffic by over 500,000 truck -miles per year, and
truck generated carbon dioxide and other air pollutants by approximately 2,200,000 pounds
annually. Elimination of truck traffic will also significantly increase operational safety and
security at the Airport. The proposed project also includes new onsite jet fuel storage which
will be located on the northwest side of Airport property in close proximity to the existing jet
fuel storage tanks.
This hearing is the first reading and introduction of the Ordinance for the City Council to
determine whether to grant the franchise pursuant to Public Utilities Code Section 6234. If
approved at the next meeting (August 4, 2015) the Ordinance would be adopted and
effective 30 days thereafter or upon acceptance by Wickland, whichever is later.
Stack, P.E.
Public Works/City Engineer
Attachment 1: Ordinance No. 1459 to Grant A Franchise to Wickland Pipelines LLC
5.\City Council Items@015 Council lardfA07-21-2015\Introduction and First Reading of Ordinance Granting Franchise to Wickland Pipelines, LLC\Introduction and First
Reading of Ordinance Granting Franchise to Wickland Pipelines, LLC. doox
ORDINANCE NO. 1459
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF TUSTIN, CALIFORNIA GRANTING A
FRANCHISE TO WICKLAND PIPELINES, LLC, TO
CONSTRUCT, MAINTAIN AND OPERATE PIPELINES
WITHIN CERTAIN PUBLIC ROADS, STREEETS AND
WAYS OF THE CITY OF TUSTIN, CALIFORNIA
WHEREAS, Wickland Pipelines, LLC ("Wickland"), a California public utility
under Public Utilities Code Section 216(a), has applied to the City of Tustin ("City") for
the right to construct, maintain and operate one 12 -inch pipeline along a route within the
City to transmit jet fuel to John Wayne Airport; and
WHEREAS, City is authorized to grant a franchise upon the public streets, ways,
alleys and places within the City for, among other purposes, transmitting and distributing
oil pursuant to Sections 6201, et seq. of the Public Utilities Code of the State of
California (the Franchise Act of 1937); and
WHEREAS, the City Council of City adopted a Resolution of Intent to grant the
franchise and held a hearing on July 7, 2015, for the purpose of hearing objections to
the granting of the franchise; and
WHEREAS, the City Council finds and determines that it is in the best interest
and welfare of the City to grant the franchise upon the terms and conditions hereinafter
set forth in this Ordinance.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUSTIN DOES
ORDAIN AS FOLLOWS:
Section 1: Grant of Franchise
The City grants to Wickland, hereafter sometimes referred to as "Franchisee",
the non-exclusive right, privilege and franchise to construct, maintain, inspect, operate,
protect, repair and replace facilities (the "Facilities") consisting of a pipeline with an
internal diameter of twelve (12) inches, including control facilities, connection
improvements and equipment, and other appurtenances, and any facilities necessary
for the cathodic protection thereof, for the transportation of jet fuel in, under, along, over
and across the public streets, roads, highways, alleys and other public ways described
in Exhibit "A", attached hereto and incorporated herein by this reference (the
"Franchise").
Section 2: Term of Franchise
The Franchise shall be for a period of thirty (30) years from and after the effective
date of this Ordinance.
Section 3: Conditions
A. Reasonable Regulation
1041831.1
City reserves the right to enforce reasonable regulations concerning the
construction and maintenance of Facilities located in, under, along, over and across
public streets, roads, highways, alleys, and other public ways and the placement of
such Facilities, including the appropriate depth of the pipelines, subject to valid and
applicable federal and state laws and regulations.
B. Performance Bond
Franchisee shall, concurrent with the filing of its written acceptance of the
Franchise, file with the City Clerk, and at all times thereafter maintain in full force and
effect for the entire term of the Franchise, at its expense, a faithful performance bond
executed by a surety company approved by the City Attorney in the amount of Two
Hundred Fifty Thousand Dollars ($250,000.00), renewable annually, and conditioned on
the faithful performance by Franchisee of all the terms, conditions and covenants
contained in the Franchise. If Franchisee fails to comply with any one or more of the
provisions of the Franchise, there shall be recoverable jointly and severally from the
principal and surety of such bond any damages or losses suffered by City as a result
thereof. Such bond shall provide that thirty (30) days prior written notice of cancellation,
material change, or intention not to renew such bond be given by the surety company to
City. The City Manager may increase such bond amount if in his reasonable
determination the bond amount is insufficient due to inflation or other factors.
Neither the provisions of any bond accepted by City pursuant hereto nor any
damages recovered by City thereunder shall be construed to excuse faithful
performance by Franchisee or limit the liability of Franchisee under the Franchise or for
damages, either to the full amount of the bond or otherwise, or preclude exercise of any
other right or remedy given to City by law, whether exercised concurrently or
subsequently.
C. Indemnity
To the fullest extent permitted by law, Franchisee shall indemnify, hold harmless
and defend, with counsel reasonably acceptable to the City, the City, its boards,
commissions, officers, and employees, acting pursuant to City authority within the scope
of their employment, against any and all loss, damage or liability for injury to or death of
any person or any damage to any property caused by Franchisee, its officers, agents, or
employees, in the construction, operation, or maintenance of the pipelines, or arising
out of the exercise of any right or privilege under the Franchise.
D. Insurance
(a) Franchisee shall maintain during the term of this Franchise,
comprehensive general liability insurance or commercial general liability insurance
written on an occurrence basis providing for a minimum combined single limit of $10
million for bodily injury, death and property damage.
(b) Franchisee shall maintain during the term of this Franchise,
automotive liability insurance on a comprehensive form written on an occurrence basis
covering all owned, non -owned and hired automobiles providing for a combined single
limit of $1 million for bodily injury, death and property damage.
(c) Each policy of general liability and automotive liability shall provide
that City, its officers, agents, and employees are declared to be additional insureds
under the terms of the policy with respect to any rights granted by this Franchise. A
2
1041831.1
policy endorsement to that effect shall be provided to the City along with the certificate
of insurance, which endorsement shall be on Insurance Services Office, Inc. Form CG
20 10 07 04, or equivalent. In lieu of an endorsement, the City will accept a copy of the
policy(ies) which evidences that the City is an additional insured as a contracting party.
(d) The insurance policies maintained by Franchisee shall be primary
insurance as respects City, its officers, employees and agents, and any insurance held
or owned by City, its officers, employees and agents shall be excess of, and shall not
contribute to, Franchisee's insurance.
(e) Before Franchisee performs any work or exercises its rights under
this Franchise, it shall furnish certificates of insurance and endorsements, as required
by City, evidencing the aforementioned general liability and automotive insurance on
forms acceptable to City. Said certificates of insurance shall be issued on, and conform
to, ACORD 25 (2014/01), or any update of said form.
(f) All insurance maintained by Franchisee shall be issued by
companies admitted or otherwise allowed to conduct the pertinent line of insurance
business in the State of California and having a rating of Grade A- (excellent) or better
and Class VII or better by the latest edition of Best's Key Rating Guide.
(g) Franchisee shall immediately notify the City if any required
insurance lapses or is otherwise modified and cease performance of this Agreement
unless otherwise directed by the City. In such a case, the City may procure insurance
or self insure the risk and charge Franchisee for such costs and any and all damages
resulting therefrom.
(h) All insurance required by this Franchise shall contain a waiver of
subrogation running in favor of City, its officers, employees and agents.
(i) The City Manager may, in his reasonable discretion, increase the
minimum amounts of insurance required under this Franchise due to inflation or other
factors; provided such insurance is reasonably commercially available.
E. Limitation of Franchise
No privilege or exemption is granted or conferred upon Franchisee by the
Franchise except those specifically prescribed herein. Any privilege claimed under the
Franchise by Franchisee in any place described in Exhibit "A" shall be subordinate to
any occupancy of same by City and to prior lawful occupancy of same by any other
public or private entity or person.
F. Installation and Maintenance
Any Facilities laid, located or maintained pursuant to this Franchise shall be so
placed and maintained as not to interfere with the use of any such public ways by the
traveling public to any greater extent than is reasonably necessary, and in laying any
pipeline or pipelines the Franchisee shall fill the trench and leave the surface of said
public ways in as good condition as it was prior to the excavation for said pipelines and
in accordance with City specifications and standards. Franchisee shall comply with
federal, state and City laws and regulations applicable thereto.
1041831.1
G. City Improvement or Repairs in Public Ways
City reserves the right to improve, widen, vacate, or re -locate or to cause same,
any such public ways or portion thereof, over and within which this Franchise is granted,
including the widening, change of grade, construction or reconstruction of such public
ways or portion thereof. Upon reasonable written notice given by City to Franchisee that
work is to be done pursuant to the right reserved herein, Franchisee shall, at its sole
expense, do all things reasonably necessary to protect, remove or relocate the Facilities
as required in order to accommodate such work. All such things to be done and work to
be performed by Franchisee shall be without any expense to the City or its authorized
agents. Any damage done directly or indirectly to any public ways or public
improvement by the Franchisee, in exercising directly or indirectly any right, power or
privilege under this Franchise, or in performing any duty under or pursuant to the
provisions of this Franchise, shall be promptly repaired by Franchisee at its sole cost
and expense, to the reasonable satisfaction of City. Franchisee shall pay to City on
demand the cost of all repairs to public property made necessary by any operations of
Franchisee under the Franchise. In the event that Franchisee is required to relocate or
rearrange any portion of the Facilities pursuant to this subparagraph 3(G), City shall
provide Franchisee with a reasonable alternative route or area within which the
relocation or rearrangement can be accomplished; provided that City has an existing
property right in such route or area that is compatible with purposes of this Franchise
and the use thereof by Franchisee will not unreasonably interfere with any City use.
H. Other Utilities
Franchisee shall, in the installation, maintenance, repair, replacement or
reconstruction of its Facilities authorized by this Franchise, cooperate and coordinate
with all other utilities in determining the location of and protecting and supporting their
facilities existing at the time of installation, replacement or reconstruction of the
Facilities in the public rights of way and shall bear the entire cost of any necessary
relocation, repair or reconstruction made necessary by reason of damage to such
utilities caused by Franchisee.
Franchisee is and expects to continue to be on the basis currently in existence a
member of Underground Service Alert of Southern California, and otherwise agrees to
take advantage of equivalent available emergency communication arrangements.
Plans and Specifications
Franchisee shall submit detailed plans of the intended installations for advance
approval by the City Director of Public Works. Upon completion of construction,
Franchisee shall furnish to the Director of Public Works a complete set of "as built'
plans and specifications, including depictions of shutdown locations and facilities. Any
modifications to the Facilities during the term of the Franchise shall be subject to all of
the requirements of this subparagraph.
J. Commencement and Completion of Construction
Franchisee shall commence construction within 180 days from the effective date
of this Ordinance, provided, however, the City Manager may, upon request of
Franchisee, extend the commencement date for a reasonable period of time. Once
commenced, construction shall be completed within six (6) months, exclusive of any
delay caused by act of God, calamity, labor unrest or any other cause outside the
control of Franchisee.
1041831.1
Section 4: Consideration
Franchisee shall, during the life of this Franchise, pay to City an annual franchise
fee computed in accordance with the table attached as Exhibit "B" and increased each
year by the methodology provided in California Public Utilities Code Section 6231.5(b)
or its successor. In making the payment, Franchisee shall file with the City Director of
Finance, a detailed verified accounting of how the franchise fee was computed in
accordance with this Section 4. Any neglect, omission or refusal of the Franchisee to
file such verified accounting or to pay such annual franchise fee, at the time or in the
manner hereinbefore provided, shall be grounds for the declaration of a forfeiture of this
Franchise and of all rights of Franchisee hereunder, if not corrected within thirty (30)
days after written demand therefor by City.
Section 5: Default
If Franchisee shall fail, neglect or refuse to comply with any of the provisions or
conditions hereof or shall not, within ten (10) days after written demand for compliance,
begin the work of compliance, or, after beginning such work, not prosecute the same
with due diligence to completion, then the City may declare this Franchise forfeited.
In the event of such forfeiture, Franchisee shall forfeit and surrender to City all
Facilities that may be located along, over, or under any streets, alleys, or other public
places within the corporate limits of the City unless at the option of City (i) such
Facilities are removed within sixty (60) days from the date of forfeiture or (u) such
Facilities are abandoned in place with proper cleaning and filling. In the event of such
removal, Franchisee hereby agrees, as a covenant and condition of this Franchise, that
the streets, alleys and public places from which such Facilities are removed shall be
restored and placed in as good condition as they were prior to such removal and in
accordance with City specifications and standards.
Section 6: Abandonment
In the event that the use and maintenance of the Facilities pursuant to this
Franchise is permanently abandoned for any reason, Franchisee shall promptly give
written notice thereof to City and shall thereafter, upon being given ten (10) days notice
by City, either abandon such Facilities in place to City or commence and diligently
prosecute the timely removal from the public ways of all such Facilities and promptly
repair and restore the area from which the Facilities have been removed in as good
condition as it was prior to such removal and in accordance with City specifications and
standards.
Section 7: Assignment
The provisions of this Franchise and all rights, obligations and duties thereof
shall inure to and be binding upon Franchisee, its successors and assigns. Franchisee
shall not sell, transfer or assign this Franchise or any of the rights or privileges hereby
granted without the prior written consent of City, which consent will not be unreasonably
withheld. If consent is given, Franchisee shall promptly file a copy of the duly executed
sale or transfer instrument in writing with the City Clerk. Notwithstanding the foregoing,
Franchisee may, without the consent of City, mortgage, pledge and/or otherwise
hypothecate all or any portion of Franchisee's interest in the Facilities and/or
Franchisee's rights hereunder. In no event shall Franchisee have the right to
encumber, in any manner whatsoever, City's fee or other underlying ownership interest
1041831.1
in the property subject to this Franchise.
Section 8: Miscellaneous
A. Applicable Law
All pertinent provisions of Division 3, Chapter 2 of the Public Utilities Code, as
they now exist or are hereafter amended, shall be applicable to the Franchise granted
hereunder. Franchisee shall comply with all other valid, applicable state, federal and
City laws (including, but not limited to, the mitigation measures listed in the County of
Orange's Mitigated Negative Declaration CPP #2013-00087), which are incorporated
herein by this reference, concerning the construction, maintenance, repair and
replacement of the equipment and facilities installed pursuant to this Franchise.
B. Citv's Publication Expenses
Franchisee shall pay to City a sum of money sufficient to reimburse City for all
publication expenses incurred by it in connection with the granting of this Franchise.
Such payment shall be made within thirty (30) days after City furnishes Franchisee with
a written statement of such expenses.
Section 9: Effective Date
This Ordinance shall become effective the later of thirty (30) days from its
adoption, or upon filing by Wickland of its acceptance of the Franchise with the City
Clerk, pursuant of Public Utilities Code Section 6235.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Tustin, California, held on this 21St day of July, 2015.
CHARLES E. PUCKETT
Mayor
ATTEST:
JEFFREY C. PARKER,
City Clerk
APPROVED AS TO FORM:
DAVID E. KENDIG,
City Attorney
(City Clerk Certification continued on page 7)
1041831.1
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF TUSTIN )
ORDINANCE NO. 1459
I, JEFFREY C. PARKER, City Clerk and ex -officio Clerk of the City Council of the City of
Tustin, California, does hereby certify that the whole number of the members of the City
Council of the City of Tustin is 5; that the above and foregoing Ordinance No. 1459 was
duv and regularly introduced at a regular meeting of the Tustin City Council, held on the
21 day of July, 2015 and was given its second reading, passed, and adopted at a
regular meeting of the City Council held on the 4`h day of August, 2015 by the following
vote:
COUNCILPERSONS AYES:
COUNCILPERSONS NOES:
COUNCILPERSONS ABSTAINED:
COUNCILPERSONS ABSENT:
JEFFREY C. PARKER
City Clerk
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Exhibit A
Those portions of the rights•of--way for Tustin Ranch Road, Edinger Avenue and Red Hill
AVC11LIC as generally depicted on the pipeline atign-nient sheets attached to this Exhibit A and
hereby incorporated herein by this reference.
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FDA PIPE 12 75 0 D C 0 375� W T APT PH X-52 14-16 MIT FEE CE 2G -3O
NIT ARE
NOTES--
-
1, SPIN AT” SHALL "LL” THE `=N15ANF `ENEACLNA`PRI '
Pal POSEo wlcrLnNo ,� PI11
Hoer (ouW scuE AT zz'aT4'7
IF
BE REPRODITC
TIE WNEI
WICKLAND PIPELINES LLC
CENTERJU E10 IAL
TD�KN LOA
NlNlllTlJN AREA
aREAs DNALL eE ANIE lLEo RNTM TR[ nR[A NORrzN DIRo FELL WORK PREA Are
N THE wORR Il
T' ®CON
PLETENVER AT THE INFCFNAUIP
JOHN WAYNE AIRPORT JET FUEL PIPELINE PROJECT
FREEAN'-
. N0 TREES SHALL BE REMOVED UNLESS NOTE OTnERwISE.
- - -Hoo PIPE STRING
S ou^� S'�Uo�ne... �'p 103�,E,°oa
1 �,4,°P1Fra �sPEPP-EI-Ell
osS To PER A RESULT o
IT
12• JET FUEL PIPELINE
PIPELINE ALIGNMENT
04/21/15
ISSUED FOR REVIEW
Rws
LNIMEa DAA�No NUMaEA <=oN 000E
.oR/4, q,, 605OA—EX-931 ��
rvo:
0
REP HILL AVE (All of Tu2TIN)
ION
CONTRACTOR NOTICE
lHl,SN
ee wa NTreocLares vererorexl Ne suesurernce erC.vn. r wR
FUTURE IRVA
FAgUTIES
HOD 3
`.
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HDD /15
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Fu RE NYA
METER VAULT
FUTURE FUTURE
R
1
PROPOSED
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HDD /4
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24' STORM DRAIN
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- H2f4�- H+{ E- AVE ------
1720 HOD (15)
FUTURE TUSTIN
33' SEVER
CITY OF TUSTIN
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OPEN CUT
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24' STORM DRAIN
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-
9
I
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PRODLE eLevnRloN
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ISSUED FOR
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--- -- ---
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n below.04/21/15
105+00
naoo
FDA PIPE 12 75 OF P 0 37C W T API PH X-52 14-16 MIT FEE SE
2G-3O MIT
ARO
LINE PIPE 12,15 Q F X 0 315' Wl API
AT X-52 14-16 MIT FEE
LED PIPE 12 7C F D X G 375 W I API 5L X- 52 14-16 MIT FEE & 20-30 MIT ARE
NOTES. - -
I.Erm NORI
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- - - HER PIPE STRING
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a 04/21/15
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4,1,
ALL CONTRACTOR NOTICE
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T LMIILTTD TD ND.MAT �RA�ALAN
IN IN IN ,� AaR= TDS'CHANS ..«, A AND =GD AN
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- - - - - - - - -
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NOTES. - - �
PiP PosEo wlcrLANo ,z PIPELINE
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T
LINE ATHE
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N INE woRH Il
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DP,
IF T11 INF.I.
JOHN
WAYNE AIRPORT JET FUEL PIPELINE PROJECT
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RELIANCE TIAPEON
12' JET FUEL PIPELINE
PIPELINE ALIGNMENT
H 04/21/15
RATED FOR REVIEW
aws
MEa oPFWNA HUM.PF ATINN ooDE
D6 /L' ;'a 6050A—EX-933 T
„o
o
RED HILL AVE (CITv OF TUSTIN)
RED HILL AVE (CITY DF
IRVINE)
CONTRACTOR NOTICE
THE
i.ALL LNUE—HUND FHE Y EPAPNEDwN
RE
criory
AR T,I
ALL
CANAI AFY` ON ST THE SAFETY YL ALL PERAONE ANDTHAI"LLpo
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- - - - - - - - - - - - - - - - - - - - - - - - REB-FHEE AVS
(46)
m
CITY OF TUSTIN
.—....—....—..—....—....— .—....—...— ...—...—....—
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ISSUED FOR
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CRO NES SH DOVER TAKEN
---
REVIEW
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04/21/15
14-16 MIT FEE & 20-DE MIT ADS API 5L X-52 14-15 MIT FEE
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N THE woRK AREAS DMANIENANIP IN DE EVACUATED FROM THE AREA LEND N DIR, GRILL WORK AREA n6 VEIT' ®NTA
4 ALL &IANNL NOT ALHYIZA TRE A, Il
JOHN WAYNE AIRPORT JET FUEL PIPELINE PROJECT
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FAA'AND- - - - HER PIPE STRING
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svxHSHvs�
DSS TO PER A RESULT o
12' JET FUEL PIPELINE
PIPELINE ALIGNMENT
L 0a/z1/15
ISSUED FOR REVIEW
RWs
FKx `IO
MEa oAAN�No NunnaFA Ar�aN 000E
'ALE. SHOWN DATA-A 6O5OA-EX-934 x�
NrY. DATE
REVISION
DY
Fxhihit B
Colllpwisation to (,itY
As consideration for the Franchise, Franchisee shall annually pay to City, pursuant to Public
Utilities Code § 6231.5(a)(3), a fee which shall be equivalent to the length of Franchisee's pipe
within the Franchise, expressed in feet, multiplied by the applicable base rate, as adjusted
pursuant to subdivision (b) of Public Utilities Code § 6231.5.
The gable of the internal pipe diameter base rates set forth in §6231.5(x)(3) of the Public Utilities
Code follows:
Internal Diameter Base hate Per Lineal Foot
0-4 Inches
$0.088
6 Inches
0.132
8 Inches
0.176
10 Inches
0.220
12 Inches
0.264
14 Inches
0.308
16 Inches
0.352
18 Inches
0.396
20 Inches
0.440
22 Inches
0.484
24 Inches
0.528
26 Inches
0.572
28 Inches
0.616
30 Inches
0.660
for pipes with an internal diameter not listed above, the base rate shall be in the same proportion
to the base rate of a 1.2 -inch -diameter pipe as the diameter of the unlisted pipe is to 12 inches.
Within sixty (60) days after the end of each year of the tern of the Franchise, Franchisee shall
file a a,erified statement with the City's Finance Department. The verified statement shall show
in detail for the previous year or portion thereof the number of lineal feet of Franchisee's pipe
located in the Franchise and the diameter of said pipe expressed in inches. The amount of each
annual payment shall be revised at the time of payment in accordance with the following
formula:
The applicable base rate shall be multiplied by the Consumer Price Index All Urban
Consumers for the Los Angeles -Riverside -Orange County area (hereafter the "CPT"), 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 CPI for June 30, 1989, which is declared to be 100.0. Under no circumstances shall the
multiplying factor be less than one. The resulting per lineal foot rate (the "Adjusted Rate") will
then be multiplied by the lineal feet of the Pipeline located in the Franchise.
If the United States Department of Labor, Office of Information discontinues the preparation or
publication of the C.11% 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 shall prescribe a rate of payment which shall, in its reasonable 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.
The foregoing notwithstanding, in exchange for City granting the Franchise., Franchisee shall pay
to City the additional onetime suln of $100,OOO. This onetime amount shall be added to, and
constitute a portion of, the annual compensation due for the first year of the terin of the
Franchise. Franchisee acknowledges and agrees that payment of the onetime fee of $100,000 is
voluntary, and shall not be considered to be subject to the limitations of California Public
Utilities Code § 6231.5.
With submission of the verified statement, Franchisee shall pay to the Treasurer of City the
compensation outlined in this Exhibit B. City shall have the power and authority to reasonably
dispute any verified statement and to require additional proof with respect to any matters set
forth in the verified statement.