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Home My WebLink AboutItem 5d. Adopt a Resolution of Intention to approve a renewed Franchise Agreement with Phillips 66 Pipeline, LLC Item 5d Department: Public Works Cost Center: 5001 For Agenda of: 1/11/2022 Placement: Consent Estimated Time: N/A FROM: Matt Horn, Public Works Director Prepared By: Paul Fields, Administrative Analyst SUBJECT: ADOPT A RESOLUTION OF INTENTION TO APPROVE A RENEWED FRANCHISE AGREEMENT WITH PHILLIPS 66 PIPELINE, LLC FOR EXISTING PIPELINES LOCATED WITHIN THE CITY RIGHT-OF-WAY RECOMMENDATION Adopt a Resolution of Intention entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, declaring the City’s intent to approve an Ordinance, superseding Ordinance 1564 (2011 Series), to continue to allow the use of the City’s right of way for the continued operation and maintenance of existing pipelines for the transportation of oil and other specified materials in the City of San Luis Obispo by Phillips 66 Pipeline LLC and setting a public hearing for February 15, 2022” to consider a renewed franchise agreement with Phillips 66 Pipeline LLC pursuant to the provisions of Article X of the City Charter and Section 6232 of the California Public Utilities Code. DISCUSSION On June 24, 2021, Phillips 66 Pipeline LLC requested to renew its existing franchise agreement pertaining to common carrier pipelines located in the City’s right-of-way. Common carrier pipelines transport the products of other companies as well as the products of the franchisee. Background The City has several franchise agreements with utility companies to allow the use of public rights of ways for both the transmission and distribution of different products or services. For example, currently the City has franchise agreements with Pacific Gas and Electric, the Gas Company, and Charter Communications. On July 10, 2001, the City Council adopted Ordinance No. 1391 granting a franchise to Union Pipeline Company (UNOCAP) for a period of ten years (Attachment A). On April 17, 2007, the City Council adopted Ordinance No. 1504 transferring the franchise from UNOCAP to ConocoPhillips Pipeline Company (Attachment B). On June 21, 2011, the City Council adopted Ordinance No. 1564 to renew the franchise agreement with ConocoPhillips Pipeline Company (Attachment C). On February 5, 2013, the City Council adopted ordinance 1587, transferring the franchise from ConocoPhillips Pipeline Company to Phillips 66 Pipeline LLC (Attachment D). Page 25 of 466 Item 5d This agreement expired on June 20, 2021 and Phillips 66 Pipeline LLC is subject to encroachment permit requirements until a new franchise agreement is approved. The City received an application for renewal from Phillips 66 Pipeline LLC on November 5, 2021 (Attachment E). Additional Franchise Agreement Held by Phillips 66 Company Phillips 66 Pipeline LLC is a wholly owned subsidiary of Phillips 66 Company. Phillips 66 Company holds a separate franchise with the City pertaining to proprietary pipelines. Those pipelines exclusively used for transferring the products of the franchisee. The public hearing following this Resolution of Intention, would be for the “common carrier” pipelines franchise held by Phillips 66 Pipeline LLC, not the proprietary pipelines franchise held by Phillips 66 Company. The franchise agreement for proprietary pipelines expired on October 17, 2021, and the City is awaiting a renewal proposal from Phillips 66 Company. Scope of Franchise Agreement The proposed renewed franchise agreement would provide Phillips 66 Pipeline LLC the non-exclusive right to “construct, erect, maintain, operate, repair, renew and change the size of and remove pipelines … for the transportation of oil, products, thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines…” The application requests approval of a three-year term as Phillips 66 Pipeline LLC is planning to divest operations within the San Luis Obispo region. Currently, Phillips 66 has no plans to install new pipelines. The franchise agreement will require Phillips 66 Pipeline LLC to provide the City with plans for the decommissioning and removal of pipelines form the City right of way. All its existing pipelines are shown in an exhibit attached to the application requesting franchise approval (Attachment F). Franchise Fee Franchise fees for distribution pipelines are set by the Public Utilities Code Section 6231.5. The fee ranges from $0.088 to $0.66 per lineal foot based on pipeline diameter, with CPI adjustments added since 1989 when these rates wer e first established. The proposed franchise agreement limits pipeline diameter to 12 inches, which corresponds to a fee of $.264 (plus CPI) per lineal foot. The majority of the pipeline length installed has an 8-inch internal diameter, resulting in a fee of $.176 (plus CPI) per lineal foot. Based on the Phillips 66 Pipeline facilities that are installed within City Rights of Way, the resulting annual revenue is approximately $6,700. In addition to the annual franchise fee, the City is proposing a granting fee of $10,000 to cover staff costs associated with preparing the agreement, advertising the request, holding the required public meetings (three total and described below), and managing the franchise agreement after adoption. Page 26 of 466 Item 5d Previous Council or Advisory Body Action The City Council renewed the franchise agreement for common carrier pipelines in July 2011 and approved the transfer of the franchise from ConocoPhillips Pipeline Company to Phillips 66 Pipeline LLC in February 2013. No other advisory body review is required for this action. Policy Context The process for adoption of a new franchise agreement is prescribed by the Public Utilities Code (Section 6232-6234). The following schedule is proposed:  January 11, 2022: Introduce and pass resolution of intent  February 15, 2022: Hold public hearing and introduce ordinance  March 15, 2022: Second reading and final adoption or ordinance  April 14, 2022: Ordinance becomes effective Per the above schedule, the proposed renewal agreement will be presented to the Council on February 15. The resolution proposed as part of this agenda report simply indicates the Council’s intent to renew the franchise (Attachment F). The February 15, meeting would serve as Council and the Community’s public hearing at which public comment and Council discussion on the merits of this renewed franchise agreement would occur. At that meeting, staff will come prepared with additional alternatives for Council’s consideration. Article X of the City Charter empowers the City Council to grant by ordinance a franchise to furnish the City and its inhabitants with public utilities. In line with the Public Utilities Code, the City Charter requires the adoption of a resolution declaring an intention to grant the franchise and the setting of a public hearing. Public Engagement Adoption of the resolution would schedule a public hearing on February 15, 2022, to allow for public comment on the agreement. CONCURRENCE The finance department concurs with this recommendation. ENVIRONMENTAL REVIEW The renewal of the franchise agreements is categorically exempt from the provisions for the California Environmental Quality Act in accordance with section 15061(b)(3). FISCAL IMPACT Budgeted: No Budget Year: 2021-22 Funding Identified: Yes Page 27 of 466 Item 5d Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $ $ $ $ State Federal Fees Other: Total $ $ $ $ There is a minor positive fiscal impact to the General Fund in the amount of $6,700 associated with granting of the proposed franchise agreement for pipeline services. ALTERNATIVES The City Council may reject the application by Phillips 66 Pipeline LLC for a new franchise agreement. This alternative is not recommended because it is in the City’s best interest to have a qualified company operate and maintain the existing pipeline infrastructure within the City’s right-of-way. Should the City Council express its intention to not award the franchise to Phillips 66 Pipeline LLC, the applicant would have three available options. The first would be to request City approval to physically rem ove the pipeline from the City’s right-of-way. The second option would be to leave the pipeline in its current location but seal it where it enters and leaves the City, thereby rendering it unusable. The third option would be to initiate a condemnation act ion against the City under the Public Utilities Code in order to obtain through eminent domain a subsurface easement or other rights to utilize the pipeline within the City. The proposed $10,000 granting fee is sufficient to cover the staff time associated with preparing the franchise agreement and holding and advertising the associated public hearings. ATTACHMENTS A - Ordinance No. 1391 granting a franchise to Union Pipeline Company (UNOCAP) B - Ordinance No.1504 transferring the franchise from UNOCAP to ConocoPhillips Pipeline Company. Phillips 66 Franchise Application C - Ordinance No. 1564 to renew the franchise agreement with ConocoPhillips Pipeline Company. Proposed Resolution of Intention to approve a new franchise agreement D - Ordinance No. 1587, transferring the franchise from ConocoPhillips Pipeline Company to Phillips 66 Pipeline LLC E - Phillips 66 Pipeline LLC Franchise Application F - Draft Resolution of Intention to approve a new franchise agreement with Phillips 66 Pipeline LLC Page 28 of 466 council7/10/01 j acEnba REpoRt m"°m C 2 C I T Y OF SAN LUI S OBI S PO FROM: Jeffrey G. Jorgensen, City Attorney Prepared By: Gilbert A. Trujillo, Assistant City Attorney C 0" SUBJECT: FINAL ADOPTION OF ORDINANCES 1390 and 1391GRANTING FRANCHISES TO CONSTRUCT, OPERATE, AND MAINTAIN PIPELINES TO TOSCO CORPORATION AND UNION PIPELINE COMPANY. CAO RECOMMENDATION Give final passage to Ordinance No. 1390 (2001 Series), Granting a Franchise to Construct, Operate, and Maintain Pipelines for the Transportation of Oil and Other Specified Materials in the City of San Luis Obispo to Tosco Corporation; and to Ordinance No. 1391 (2001 Series) Granting a Franchise to Construct, Operate, and Maintain Pipelines for the Transportation of Oil and Other Specified Materials in the City of San Luis Obispo to Union Pipeline Company. DISCUSSION On June 19, 2001, the Council voted 4-1 to introduce Ordinance No.1390 (2001 Series) which grants to Tosco Corporation a non-exclusive ten year franchise to construct, operate and maintain pipelines for the transportation of oil and hydrocarbons within the City of San Luis Obispo. Council also voted 4-1 to introduce Ordinance No. 1391 (2001 Series) which grants to Union Pipeline Company a non-exclusive ten year franchise to construct, operate and maintain pipelines for the transportation of oil and hydrocarbons within the City of San Luis Obispo. The Ordinances are now ready for adoption and will become effective thirty days after the date of their final passage. ATTACHMENTS 1.Ordinance No. 1390, Granting Franchise to Tosco Corporation 2.Ordinance No. 1391, Granting Franchise to Union Pipeline Company Ca- 1 Page 29 of 466 ORDINANCE NO. 1390 (2001 Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO GRANTING TO TOSCO CORPORATION, A NEVADA CORPORATION, A FRANCHISE TO CONSTRUCT, OPERATE, AND MAINTAIN PIPELINES FOR THE TRANSPORTATION OF OIL, AND OTHER SPECIFIED MATERIALS, IN THE CITY OF SAN LUIS OBISPO, STATE OF CALIFORNIA WHEREAS, the City of San Luis Obispo adopted Ordinance No. 1038 on April 2, 1985 granting a franchise to Union Oil Company of California for a term of 25 years for the transportation and distribution of oil and other specified materials in the City of San Luis Obispo; and WHEREAS, Union Oil Company of California sold or transferred a portion of its pipelines subject to Ordinance No. 1038 to TOSCO Corporation and Unocal California Pipeline Company; and WHEREAS, Union Oil Company of California informed the City of San Luis Obispo that it intends to commence the abandonment process for its remaining interests under Ordinance No. 1038 that have not been sold or transferred to TOSCO Corporation and Unocal California Pipeline Company; and WHEREAS, Union Oil Company of California's remaining pipeline interests in the City of San Luis Obispo are still subject to the existing franchise agreement granted in Ordinance No. 1038 until such time that Union Oil Company of California has abandoned such pipelines pursuant to applicable law; and WHEREAS, TOSCO Corporation and Unocal California Pipeline Company have requested the City of San Luis Obispo to enter into new franchise agreements for the oil transportation and distribution pipelines acquired from Union Oil Company of California. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo to grant a franchise to construct, operate, and maintain pipelines for the transportation of oil, and other specified materials in the City of San Luis Obispo to TOSCO Corporation, a Nevada corporation as follows: 2): SECTION 1: Terms and Conditions of Franchise (Table of Contents begins on page 01390 Page 30 of 466 Ordinance No. 1390 (2002 series) Page 2 of 29 TABLE OF CONTENTS K Page ARTICLE I NATURE OF FRANCHISE 4 A. Grant of Franchise 5 B. Limitations Upon Grant 6 C. Rights Reserved to the City of San Luis Obispo 6 ARTICLE 2 APPURTENANCES 6 ARTICLE 3 LOCATION OF PIPELINES 6 ARTICLE 4 CONSTRUCTION OF PIPELINES 7 A. Terms of Construction 7 B. Restoration of Streets 7 ARTICLE 5 COMMENCEMENT OF CONSTRUCTION 7 ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED 8 ARTICLE 7 COMPENSATION TO THE CITY 9 ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS 10 ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAIR OF DAMAGE TO CITY STREETS 10 ARTICLE 10 REARRANGEMENT OF FACILITIES 11 A. Expense of Grantee 11 B. Expense of Others 12 C. Rearrangement of the Facilities of Others 13 D. Notice 13 ARTICLE I I GRANTEE'S REMOVAL OR ABANDONMENT OF FACILITIES 13 ARTICLE 12 COMPLETION OF WORK 13 K Page 31 of 466 Ordinance No. 1390 (2002 6eries) Page 3 of 29 TABLE OF CONTENTS, CONTINUED Page ARTICLE 13 RECOVERY OF COSTS OF REPAIRS AND 3 UNPAID FEES 16 ARTICLE 14 BOND 18 ARTICLE 15 INSURANCE 19 ARTICLE 16 INDEMNIFICATION BY GRANTEE 20 ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE 21 ARTICLE 18 WAIVER OF BREACH 24 ARTICLE 19 DEFAULT 24 ARTICLE 20 SCOPE OF RESERVATION 25 ARTICLE 21 NOTICE 25 ARTICLE 22 SUCCESSORS 25 ARTICLE 23 ACCEPTANCE OF FRANCHISE 26 ARTICLE 24 FORCE MAJEURE 26 ARTICLE 25 LIQUIDATED DAMAGES 26 ARTICLE 26 ATTORNEYS' FEES 28 ARTICLE 27 CONDEMNATION 28 3 Page 32 of 466 Ordinance No. 1390 (2002 series) Page 4 of 29 ARTICLE I NATURE OF FRANCHISE A. Grant of Franchise. 1. The City of San Luis Obispo (hereinafter referred to as "City "), hereby grants to TOSCO Corporation, a Nevada corporation, (hereinafter referred to as "Grantee "), pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9(b) of the California Constitution, and Section 39732(b) of the California Government Code, the non- exclusive right, privilege and franchise, subject, however, to all the limitations and restrictions herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change the size of and remove pipelines, not to exceed twelve (12) inches nominal internal diameter, for the transportation of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, movable by pipeline, in, under, along, and across the public streets, ways, alleys and places within the City of San Luis Obispo (hereinafter collectively referred to as "streets "), as described in Exhibit No. 1, attached hereto and made a part hereof. 2. The term of the franchise granted under this Ordinance shall be for a term often (10) years, commencing with the date on which it is accepted by Grantee. 3. Unless otherwise specifically stated, the following provisions shall govern the interpretation and construction of the franchise granted herein: a) This franchise shall include the right, for the period and subject to the conditions hereof, to construct, erect, maintain, operate, repair, renew, abandon and change the size and remove the said pipelines, if any, of Grantee, as laid and constructed in said streets. b) The terms and conditions of this franchise shall also apply to any pipe or other facilities of Grantee which are located within the right of way of any existing public road or street at the time such road or street becomes a City street through annexation or otherwise, subject to any other existing rights enjoyed by Grantee. c) Grantee shall not be relieved of its obligation to promptly comply with any provision of this franchise by failure of the City to enforce prompt compliance. d) Any right or power conferred, or duty imposed upon any officer, employee, department, or other City entity, by the terms of this franchise, may be legally transferred to any other City officer, employee, department, or other City entity. e) Grantee shall have no recourse whatsoever against the City for any loss, cost, expense, or damage suffered by Grantee and arising out of any provision or requirement of this franchise or its lawful enforcement by the City. f) This franchise does not relieve Grantee of any applicable requirements of the San Luis Obispo Municipal Code or of any federal, state, or City law, ordinance, rule, 4 Page 33 of 466 Ordinance No. 1390 (2002 beries) Page 5 of 29 regulation, or specification, including, but not limited to, any requirement relating to street work, street excavation permits, or the use, removal or relocation of property in streets, except as specifically prescribed herein. g) This franchise is non - exclusive. Neither the granting of this franchise nor any of the provisions contained herein shall be construed to prevent the City from granting any identical or similar franchise to any other person. h) The compensation provided for in this franchise is for (i) the rights and privileges granted by this franchise, and (ii) the right and privilege granted to the Grantee to construct, erect, maintain, operate, repair, renew, abandon and change the size of and remove the said pipelines pursuant to this franchise within the City's streets. The City expressly reserves the right to impose and collect from Grantee, on a non - discriminatory basis, its normal, duly established processing and inspection fees from street cutting and excavation permits to the extent such fees are imposed generally on all non - governmental applicants for such permits within the City. i) Any activities involving the use of a pipeline system for the transmitting of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, which are not specifically authorized under this franchise are prohibited under this franchise. Except as provided in Article 2, any telecommunication or other uses not authorized in this franchise Ordinance must be approved by the City under a separate franchise. 0) If any provision of this franchise, or the application of this franchise to any person or circumstance is held invalid by a court of competent jurisdiction or is not in compliance with any requirement of the City, or any other federal or state body or agency having jurisdiction over Grantee's franchise activities, the remainder of this franchise Ordinance, or the application of this franchise to persons or circumstances other than those to which it is held invalid or not in such compliance, shall not be affected thereby. B. Limitations Upon Grant. 1. No privilege or exemption is granted or conferred by this franchise except those specifically prescribed herein. 2. Any privilege claimed under this franchise by Grantee in any street shall be subordinate to any prior lawful occupancy of the street. 3. The rights and privileges of this franchise are granted solely to Grantee except as provided within this franchise Ordinance. This franchise is not be to sold, transferred, leased, assigned, or disposed of as a whole or in part, either by forced sale, merger, consolidation, or otherwise, without the City's prior consent as described in Article 17, infra, or as otherwise expressly provided herein. The City agrees that such prior consent shall not be unreasonably withheld or conditioned. Page 34 of 466 Ordinance No. 1390 (2002 series) Page 6 of 29 C. Rights Reserved to the City. 1. The rights reserved to the City under this franchise Ordinance are in addition to all other rights of the City, whether authorized by the San Luis Obispo City Municipal Code, San Luis Obispo City Charter, or any other federal, state, or City law, rule, or regulation. No action, proceeding or exercise of a right shall affect any other rights which may be held by the City. Grantee, by acceptance of this franchise, shall be bound thereby and shall comply with any action or requirement of the City in its exercise of any such right or power. 2. The City shall have the power and right at all times during the term of this franchise to require Grantee to conform to the laws, rules and regulations governing the operation of pipelines now or hereafter adopted by the City Council to the extent permitted by law. 3. The City may enforce, to the maximum extent permitted by law, the inspection and testing of pipelines, pursuant to state and federal standards and require appropriate remuneration and fees to cover such enforcement activities. ARTICLE 2 APPURTENANCES The Grantee shall have the right, subject to the prior approval of the City Public Works Department, to construct and maintain such traps, manholes, conduits, valves, appliances, attachments, and appurtenances (hereinafter for convenience collectively referred to as appurtenances "), as may be necessary or convenient for the proper maintenance and operation of the pipelines under said franchise. Said appurtenances shall be so located as to conform to any order of the City Public Works Department in regard thereto and not to interfere with the use of the streets for travel. The Grantee shall have the right, subject to such ordinances, rules, or regulation as are now or may hereafter be in force, to make all necessary excavations in said street for the construction and repair of said pipelines and appurtenances subject to the prior approval of the City Public Works Department. "Appurtenances" shall also include any adjunct communications lines and/or conduits as coaxial cable, optical fiber, wire, or other transmission lines or forms of transmission, and associated equipment and devices located in, upon, along, across, under or over the streets of the City, the sole function of which is to monitor or control the operation or safety of the pipeline system via the distribution of video, audio, voice, or data signals. An adjunct communications line shall not include any facility which distributes, through any means, to subscribers or persons other than Grantee, the signal of one or more broadcast television or radio stations or other sources of video, audio, voice, or data signals. ARTICLE 3 LOCATION OF PIPELINES So far as is practicable and within the requirements of the California State Fire Marshall, any pipeline hereinafter laid shall be located along the edge or shoulder of the streets or in the parking areas adjacent thereto so as not unreasonably to disturb the flow of traffic and where possible shall be laid in the unpaved portion of the street. on Page 35 of 466 Ordinance No. 1390 (2002 aeries) Page 7 of 29 ARTICLE 4 CONSTRUCTION OF PIPELINES A. Terms of Construction. The pipelines and appurtenances laid, constructed or maintained under the provisions of this franchise shall be installed, maintained, and inspected by the Grantee in a satisfactory, safe, and workmanlike manner, of good material, and in conformity with all ordinances, rules, or regulations now or hereafter adopted or prescribed by the City Council, State, or Federal authorities. B. Restoration of Streets. The work of laying, constructing, maintaining, operating, renewing, repairing, changing size and moving any of the pipeline system contemplated by this franchise and all other work in exercise of this franchise shall be conducted according to the provisions of the City's encroachment ordinances from time to time prevailing, and otherwise in accordance with federal and state law and applicable City ordinances, and with the least possible hindrance or interference to the use of City roads by the public or by the City of San Luis Obispo, and Grantee shall provide all necessary warning, safety and traffic control devices as are or may be required by City, State or Federal regulations. All excavations shall be back filled and adequately compacted. As part of any work completed under provisions of this franchise agreement, the surface of City streets shall be repaired and replaced to meet current City standards and specifications. Under no circumstances shall the surface of City streets be placed in a manner less than as good and serviceable condition as existed at the beginning of said work, to the satisfaction of the City Public Works Department. ARTICLE 5 COMMENCEMENT OF CONSTRUCTION The Grantee, in good faith, shall commence with work of laying the pipelines and appurtenances within four (4) months from the date of passage of the approval of this franchise, and if any such pipelines be not so commenced within said time, this franchise shall be declared forfeited; provided, however, that if the Grantee is maintaining and operating an existing pipeline system over the route referred to in Article I herein, it shall be deemed to be in compliance with the foregoing. The Grantee shall not commence the construction of any new pipelines under the provision of this franchise or add to such existing pipeline system, if any there be, until it first shall have applied for and obtained a permit therefore from the City Public Works Department. The application of the Grantee shall show the following facts: the length, approximate depth and proposed location of the pipeline proposed to be laid or constructed, the size and description of the pipeline intended to be used, and such other relevant facts as the City Public Works Department may require. The Grantee shall pay any and all encroachment permit fees of the City. Upon the completion of the construction of any pipelines constructed pursuant to said franchise, the Grantee shall render a statement to the City of San Luis Obispo showing in detail the permit or permits issued and the total length of pipeline, the construction of which was 7 Page 36 of 466 Ordinance No. 1390 (2002 6eries) Page 8 of 29 authorized under such permit, or permits, and the total length of pipeline actually laid, and the Grantee shall make payment to the City for the pipelines which have actually been constructed under said franchise as provided in Article 7, Section C. ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED A. Within six (6) months of the effective date of this franchise for existing pipelines, and within ninety (90) days following the date in which any additional pipelines have been laid or constructed under this franchise, the Grantee shall file a map in such form as may be required by the City Public Works Department showing the accurate location and size of all its facilities then in place, and shall, upon installation of any additional facilities or upon removal, change or abandonment of all or any portion thereof, file a revised map or maps showing the location and size of all such additional and/or abandoned facilities as of this date. Cathodic protection is to be used for all facilities installed or maintained pursuant to this franchise. For facilities previously in liquid service and where the liquids have been removed and the facilities inerted, or for facilities previously in gas service that are not pressurized, cathodic protection shall be maintained consistent with State Fire Marshall or other agency requirements. A description of all the protective devices shall be furnished to the City Public Works Department which shall show the location and types of anodes, including a description of methods to be used as a protection against corrosion and electrolytic leakage. B. Grantee shall file with the City Finance Director, within thirty (30) days after the expiration of the calendar year, or fractional calendar year, following the date of the granting of this franchise and within thirty (30) days after the expiration of each calendar year thereafter, two copies of a report verified by the oath of Grantee or by the oath of a duly authorized representative of Grantee, showing, for the immediately preceding franchise period, the length of main lines in streets, the nominal internal diameter of such main lines, the rate per foot per year (when applicable) and the total amount due to the City. In this report, Grantee shall also show any change in franchise footage since the last franchise report, segregating such footage as to new main lines and adjunct communications lines laid, old main lines and adjunct communications lines removed, old main lines and adjunct communications lines abandoned in place, and the footage of main lines and adjunct communications lines in territory annexed by the City since the last franchise report. C. Grantee shall file with the City Public Works Department within sixty (60) days after the end of the calendar year a report, in duplicate, showing the permit number of each permit obtained for the installation of new main lines during the immediately preceding franchise report period, together with the length and size of said main lines. Page 37 of 466 Ordinance No. 1390 (2002 aeries) Page 9 of 29 ARTICLE 7 COMPENSATION TO THE CITY A. During the term of this franchise, Grantee shall pay to the City an annual fee for this franchise, said fee to be those fees prescribed by the California Public Utilities Code section 6231. 5, provided that the rate is subject to increase to the maximum rate established in subsequent amendments of the California Public Utilities Code. Annual payments to be made pursuant to this franchise shall be due and payable in arrears April 1 of each year of this franchise. The initial payment hereunder shall be prorated for the remainder of the current calendar year based on a 365 -day year. At the time of payment of fees by Grantee, Grantee shall file a verified statement with the Clerk of the City of San Luis Obispo, with a copy to the City Public Works Department showing in detail the number of lineal feet and the diameter thereof, expressed in inches, of pipelines covered by this franchise during the previous calendar year, or portion thereof. The compensation provided for in this Article shall be subject to an increase after the first year of the franchise and each subsequent year during the term of this franchise, based on the provisions of California Public Utilities Code section 6231.5, as amended. The fees set forth will be adjusted annually each year by the annual percentage change in the U.S. Bureau of Labor Statistics (or successor agency) consumer price index for all urban consumers (CPI -U) all cities average for the prior calendar year. Notwithstanding the provisions as otherwise stated in this Article and franchise, the Grantee shall be liable to pay the City the annual fee for the period to and including the date of either actual removal of the facilities or the effective date of the abandonment "in place," and until the Grantee shall have fully complied with all of the provisions of law or ordinances relative to such abandonments. In the event of partial abandonment of facilities as provided in the Ordinance, or in the event of partial removal of such facilities by the Grantee, the payments otherwise due the City for occupancy of the streets by such facilities shall be reduced by the length and diameter of pipelines abandoned or the actual pipeline removed beginning with the first day of the next succeeding franchise year, and for each franchise year thereafter; provided, however, that the base rate shall be modified to reflect the adjustment (per this Article) applicable to such abandoned or removed pipeline at the beginning of the next succeeding franchise year following abandonment or removal. Grantee shall pay to the City, upon demand, the cost of all repairs made by the City to public property arising out of the operations of the Grantee under this franchise. Any fees charged or expenses charged to Grantee by City pursuant to this Article, or any other provision of this franchise Ordinance, unless disputed in good faith, shall be paid when due or shall be deemed delinquent. Any undisputed delinquent amounts shall be charged a 10% penalty and, in addition, shall accrue interest commencing thirty (30) days after the due date, at a rate of one so Page 38 of 466 Ordinance No. 1390 (2002 series) Page 10 of 29 and one -half percent (1.5 %) per month (based upon a 30 -day calendar month) or any lesser amount if required by law. Any neglect, omission or refusal by said Grantee to pay any undisputed delinquent franchise fee with any late charges, within thirty (30) days of delinquency, at the times or in the manner herein provided, shall be grounds for a declaration of a forfeiture of this franchise and of all rights hereunder. Payments are to be made to the City Finance Director, 990 Palm Street, San Luis Obispo, California 93401, or at such place as the City shall, from time to time, designate in writing. B. Grantee shall pay the City a granting fee of $5,000.00 within thirty (30) days after the date the City Council adopts this franchise Ordinance. C. Grantee shall pay the City Public Works Department, within sixty (60) days after the end of each calendar year, for each year during the life of this franchise, an initial construction charge calculated at the rate of One Dollar ($1.00) per foot for all new main lines laid pursuant to this franchise Ordinance during the preceding year. D. Right of Inspection. The City shall have the right to inspect Grantee's pipeline accounting and other records relating to its annual report and to audit and recompute any and all accounts payable under this franchise. Costs of audit shall be borne by Grantee when an audit results in an increase of more than five percent of Grantee's annual payments to 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 franchise or for the performance of any other obligation hereunder. ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS At all times during the term of this franchise, the Grantee shall maintain or arrange for, on a 24- hour -a -day basis, adequate emergency equipment and a properly trained emergency crew within a reasonable distance from any pipelines, appurtenances and facilities installed or maintained pursuant hereto for the purpose of monitoring the leak detection system and the communications systems if applicable, and of shutting off the pressure and the flow of contents of such facilities in the event of an emergency resulting from an earthquake, act of war, civil disturbance, fire, flood, or any other cause or nature whatsoever. ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAIR OF DAMAGE TO CITY STREETS If any portion of any street shall be damaged by any reason related to the Grantee's operations pursuant to this franchise including defective facilities laid or constructed under this franchise, Grantee shall, at its own expense, repair any defect of its facilities and put such street 10 Page 39 of 466 Ordinance No. 1390 (2002 aeries) Page 11 of 29 in as good condition as it was before such damage was incurred, to the satisfaction of the City Public Works Department. If Grantee, within ten (10) days after receipt of written notice from the City Public Works Department instructing it to repair such damage, fails to commence to comply with such instruction, or, thereafter, fails diligently to prosecute such work to completion, then the City Public Works Director immediately may take any actions which are, in the sole judgment and discretion of the City Public Works Director, necessary to repair said damage. Any and all costs and expenses so incurred shall be the sole responsibility of Grantee including the current rate of overhead being charged by the City for reimbursable work, which cost and expense, by the acceptance of this franchise, Grantee agrees to pay upon demand. If such damage constitutes an immediate danger to public health or safety requiring the immediate repair thereof, the City Public Works Department, without notice, may repair such damage and Grantee agrees to pay the cost thereof upon demand. ARTICLE 10 REARRANGEMENT OF FACILITIES A. Expense of Grantee. 1. If any of the Grantee's facilities, in the opinion of the City Public Works Director, shall endanger the public or interfere with the use of any street by the public or, for public purposes, the City shall have the right to require the Grantee, and the Grantee shall repair, replace, move, alter or relocate the same (hereinafter called "rearrangement ") to avoid such danger, interference or obstruction, in conformity with the written notice of the City Public Works Department, at the Grantee's sole expense. 2. The City reserves the right to change the grade, to construct grade separation facilities, to change the width or to alter or change the location, of any street which is located within the service area for which this franchise is granted. If any of the facilities heretofore or hereafter constructed, installed or maintained by Grantee pursuant to this franchise on, along, under, over, in, upon or across any street are located in a manner which prevents or interferes with the change of grade, traffic needs, operation, maintenance, improvement, repair, construction, reconstruction, widening, grade separation, alteration or relocation of the street, or any work or improvement upon the street, Grantee shall relocate permanently or temporarily, as directed at the sole discretion of the City Public Works Director, any such facility at no expense to the City, upon receipt of a written request from the City Public Works Department to do so, and shall commence such work, by beginning engineering, surveying, or other pre - construction activities, on or before the date specified in such written request, which date shall be not less than sixty (60) days from receipt of such written request. Grantee shall thereafter diligently prosecute such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, 11 Page 40 of 466 Ordinance No. 1390 (2002 series) Page 12 of 29 while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California. 3. The City reserves the right to lay, construct, repair, alter, relocate and maintain subsurface, surface or other improvements of any type of description in a governmental but not proprietary capacity within, over or under the streets over which this franchise is granted. If the City finds that the location or relocation of such subsurface, surface or other improvements conflicts with the facilities laid, constructed or maintained under this franchise, whether such facilities were laid before or after the improvements of the City, Grantee shall relocate permanently or temporarily, as directed at the sole discretion of the City Public Works Director, any such facility at no expense to the City upon receipt of a written request from the City Public Works Department to do so and shall commence such work, by beginning engineering, surveying or other pre - construction activities, on or before the date specified in such written request, which date shall not be less than sixty (60) days from receipt of such written request. The Grantee shall thereafter diligently prosecute such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California. 4. If Grantee, after the notice provided for herein from the City, fails or refuses to relocate permanently or temporarily its facilities located in, on, upon, along, under, over, across, or above any street, or to pave, surface, grade, repave, resurface, or regrade as required pursuant to any provision of this franchise, the City may cause the work to be done, and shall keep an itemized account of the entire costs thereof, and Grantee shall hold harmless the City, its officers and employees from any liability which may arise or be claimed to arise from the moving, cutting or alteration of any of Grantee's facilities, or any necessary relocation of the facilities of other utilities. 5. Grantee agrees to, and shall, reimburse the City for such cost within thirty (30) days after presentation to Grantee of an itemized account arising out of the actions taken in this Article 10A. B. Expense of Others. 1) The City shall have the right to require the Grantee to rearrange any part of the Grantees' facilities for the accommodation of the City when such rearrangement is done for the accommodation of any water, electric, gas or other utility system now or hereafter owned or operated by the City. Except as otherwise provided in Article 10A, such arrangement shall be at the City's expense. 12 Page 41 of 466 Ordinance No. 1390 (2002 series) Page 13 of 29 2) The City shall have the right to require the Grantee to rearrange any part of the Grantee's facilities for the accommodation of any person, firm or corporation. When such rearrangement is done for the accommodation of any person, firm or corporation, other than one of said utility systems owned or operated by the City, the cost of such rearrangement shall be borne by the accommodated party. Such accommodated party, in advance of such rearrangement, shall deposit with the Grantee or the City Clerk cash or a letter of credit or other cash equivalent in an amount, as in the reasonable discretion of the City Public Works Department, shall be required to pay the costs of such rearrangement, and such accommodated party shall execute an instrument agreeing to indemnify and hold harmless the Grantee from any and all damages or claims caused by such rearrangement. 3) The rearrangement referred to in subsection (1) and (2) of Section B of this Article 10 shall be accomplished in conformity with the written notice of the City Public Works Department. C. Rearrangement of the Facilities of Others. Nothing in this franchise shall be construed to require the City to move, alter or relocate any of its facilities upon said streets, at its own expense, for the convenience, accommodation or necessity of any other public utility, person, firm or corporation now or hereafter owning a public utility system of any type or nature, to move, alter or relocate any part of its system upon said streets for the convenience, accommodation or necessity of the Grantee. D. Notice. The Grantee shall be given not less than sixty (60) days written notice of any rearrangement of facilities which the Grantee is required to make hereunder. Such notice shall specify in reasonable detail the work to be done by the Grantee and shall specify a reasonable time that such work is to be accomplished. In the event that the City shall change the provisions of any such notice given to the Grantee, the Grantee shall be given an additional period of not less than thirty (30) days to initiate such work. ARTICLE 11 GRANTEE'S REMOVAL OR ABANDONMENT OF FACILITIES A. The City reserves the right to require Grantee to remove its facilities from the City streets and City public property in the event of the non - renewal, revocation or termination of this franchise or at any time thereafter with respect to those facilities abandoned in place, or for the facilities affected by the permanent discontinuance of all or a portion of the facilities. Further, so long as any abandoned facilities installed under the authority of this franchise remain in a City street, Grantee shall maintain a performance bond, security fund, or other form of collateral, acceptable to the City, sufficient to cover the cost of the removal of all such facilities from the City streets. 13 Page 42 of 466 Ordinance No. 1390 (2002 series) Page 14 of 29 B. At the expiration, revocation or termination of this franchise or of the permanent discontinuance of the use of all or a portion of its facilities, Grantee shall, within thirty (30) days thereafter, make written application to the City Public Works Department for authority either: To abandon all or a portion of such facilities in place; or 2. To remove all or a portion of such facilities. Such application shall describe the facilities desired to be abandoned, their location with reference to City streets, and shall describe with reasonable accuracy the physical condition of such facilities. As part of the application for removal or abandonment of these facilities, Grantee shall submit a soil test, taken within thirty (30) days of the submittal of the application, for those materials to be tested annually pursuant to federal, state and local laws. A soil test shall be taken along that portion of the pipeline to be removed or abandoned at such intervals as directed in writing by the City Public Works Department and reasonably consistent with established sampling protocols. The City Public Works Department shall determine whether any abandonment or removal which is thereby proposed may be effected without detriment to the public interest and the conditions under which such proposed abandonment or removal may be effected. The City Public Works Department shall then notify Grantee of the City's determinations. Grantee shall also obtain permits to abandon or remove the pipeline from the City Public Works Department for all pipelines prior to the removal, abandonment or discontinuation of use of all or a portion of Grantee's facilities. The City also reserves the right to require removal of Grantee's abandoned facilities in place at any time following the expiration, revocation or termination of this franchise. Grantee shall be required to meet the bonding, insurance, indemnification and annual franchise fee requirements of this franchise, for facilities abandoned in place. C. Within thirty (30) days after receipt of Notification from the City Public Works Department pursuant to Article 11.B.2 above, Grantee shall apply for a permit from the City Public Works Department to abandon or remove the facility. D. Grantee shall, within sixty (60) days after obtaining such permit, commence and diligently prosecute to completion the work authorized by the City's permit. E. In the event Grantee applies to remove its facilities, and the City Public Works Department determines that any or all of the facilities cannot be removed due to a moratorium preventing work in the City streets, the payment of annual franchise fees shall be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty (30) days of notice to pay. Deferred annual franchise fees shall otherwise be waived. F. Failure to Comply with City's Orders Regarding the Removal or Abandonment of Facilities. 1. If any orders or prescribed conditions relating to the abandonment of any facilities are not complied with, the City Public Works Department may impose such additional orders 14 Page 43 of 466 Ordinance No. 1390 (2002 aeries) Page 15 of 29 and conditions as the City deems appropriate, including an order that the Grantee remove any or all of such facilities. Grantee shall comply with such additional orders. 2. In the event that Grantee fails to comply with the terms and conditions of abandonment or removal as may be required by this franchise Ordinance, and within such time as may be prescribed by the City Public Works Department, then the City may remove or cause to be removed such facilities at Grantee's expense. Grantee shall pay to the City all of the costs of removing and disposing of these facilities, as well as returning the rights -of -way occupied pursuant to this franchise, including, but not limited to: (a) the cost of all environmental testing the City must conduct to determine the environmental condition of any rights -of -way occupied pursuant to this franchise and to ascertain what procedures the City must undertake, if any, to return any such rights -of -way to the environmental condition required by applicable Federal, State or local environmental laws; (b) all cleanup costs, disposal costs, and any other costs associated with returning these rights -of -way to such environmental condition; (c) all costs of removing, storing, and disposing of the Grantee's facilities; (d) all costs of returning all streets to the structural conditions they were in immediately at the beginning of Grantee's use of these streets pursuant to this franchise agreement; (e) plus the current rate of overhead being charged by the City for reimbursable work..: 3. If, at the non - renewal, revocation or termination of this franchise, or of the permanent discontinuance of the use of all or a portion of its facilities, Grantee, within thirty (30) days thereafter, fails or refuses to make written application for the above - mentioned authority to remove or abandon its facilities, the City Public Works Department shall make the determination as to whether the facilities shall be abandoned in place or removed. The City Public Works Department shall then notify Grantee of its determinations. Grantee shall thereafter comply with the applicable provisions of this Article 11. G. For those facilities Grantee abandons in place, Grantee shall be required to maintain an acceptable performance bond, letter of credit or security fund, as determined by the City Public Works Department, to cover the costs for the removal of any such abandoned facilities from the City streets for any and all periods of time, including those periods following the expiration, revocation or termination of this franchise, that Grantee's facilities remain in the City streets. Grantee shall be required to maintain insurance and to indemnify the City pursuant to this Article during any periods the abandoned facilities remain within the City streets. Provided, however, that any pipelines which cannot be removed due to a moratorium preventing work in the City streets, may be deferred from the payment of the annual franchise fee. The payment of annual franchise fees may be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such Facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty (30) days of notice to pay. 15 Page 44 of 466 Ordinance No. 1390 (2002 6eries) Page 16 of 29 ARTICLE 12 COMPLETION OF WORK In the event that the Grantee fails to commence any work or act and diligently proceed therewith or to complete any such act or work required of the Grantee by the terms of this franchise within the time limits required hereby (and except as is otherwise provided in Articles 10 and 11), the City may cause such act or work to be completed by the City or, at the election of the City, by a private contractor. The Grantee agrees to pay the City, within thirty (30) days after delivery of an itemized bill, the cost of performing such act or work plus an amount equal to fifteen percent (15 %) thereof for overhead. If the Grantee is dissatisfied with any decision made by the City Public Works Department hereunder or the determination of the cost of any work performed by the City pursuant to this Agreement, it may petition the City Council to review the same within ten (10) days after such decision or determination. ARTICLE 13 RECOVERY OF COSTS OF REPAIRS AND UNPAID FEES If the Grantee has not paid the City for such fees and expenses and/or liquidated damages incurred by or payable to the City as hereinabove set forth, the City may institute the following collection procedures (which procedures are in addition to any other rights, in law or equity, which the City has to correct amounts due under this franchise and to enforce the terms of this franchise): A. The City Public Works Department shall keep an itemized account of the expenses incurred by the City pursuant hereto, or the fees unpaid by the Grantee. Sixty (60) days after the presentation of the bill to the Grantee therefore, the City Public Works Department shall prepare and file with the City Clerk a report specifying the work done by the City, or the unpaid fees, the itemized and total cost of the work, a description of the work performed, and the name and address of the Grantee entitled to notice pursuant to this Article. B. Upon receipt of said report, the City Clerk shall present it to the City Council for consideration. The City Council shall fix a time, date and place for hearing said report, and any protest or objections thereto. The City Clerk shall cause notice of said hearing to be posted in a newspaper of general circulation in the City, and served by certified mail, postage prepaid, addressed to the Grantee as set forth herein. Such notice shall be given at least ten (10) days prior to the date set for hearing and shall specify the day, hour, and place when the City Council will hear and pass upon the City Public Works Department's report, together with any objections or protests which may be filed as hereinafter provided. C. The Grantee may file written protests or objections with the City Clerk at any time prior to the time set for the hearing on the report of the City Public Works Department. Any such protest or objection must contain a description of the work or unpaid fee or liquidated damages in which the Grantee is contesting and the grounds of such protest or objection and the date it was received by him. He shall present such protest or objection to the City Council at the 16 Page 45 of 466 Ordinance No. 1390 (2002 series) Page 17 of 29 time set for the hearing, and no other protest or objection shall be considered, except as determined by the City Council for good cause shown. D. Upon the day and hour fixed for the hearing, the City Council shall hear and pass upon the report of the City Public Works Department together with any such objections or protests, make such revision, correction or modification to the charge as it may deem just; and when the City Council is satisfied with the correctness of the charge, the report (as revised, corrected or modified), together with the charge, shall be confirmed or rejected. The decision of the City Council on the report and the charge, and on all protests or objections, shall be the final and conclusive decision of the City. E. The City Council may thereupon order that such charge shall be made a personal obligation of the Grantee or assess such charge against the property of the Grantee. 1) If the City Council orders that the charge shall be a personal obligation of the Grantee, it shall direct the City Attorney to collect the same on behalf of the City by use of all appropriate legal remedies. 2) If the City Council orders that the charge shall be assessed against the property of the Grantee, it shall confirm the assessment, cause the same to be recorded on the assessment roll, and thereafter, said assessment shall constitute a special assessment against a lien upon any property held in the City of San Luis Obispo by the Grantee. F. The validity of any assessment made under the provisions of this franchise shall not be contested in any action or proceeding unless the same is commenced within ninety (90) days after the assessment is placed upon the assessment roll as provided herein. G. The City Council, in its discretion, may determine that assessments in amounts of 500.00 or more shall be payable in not more than five (5) equal annual installments. The City Council's determination to allow payment of such assessments in installments, the number of installments, whether they shall bear interest, and the rate thereof shall be adopted by a resolution prior to the confirmation of the assessment. H. Immediately upon its being placed on the assessment roll, the assessment shall be deemed to be complete, the several amounts assessed shall be payable, and the assessments shall be liens against the property of the grantee in the City of San Luis Obispo. The lien shall be subordinate to all existing special assessment liens previously imposed upon the same property, and shall be paramount to all other liens except for state, county, and municipal taxes with which it shall be upon a parity. The lien shall continue until the assessment and all interest due and payable thereon are paid. 1) All such assessments remaining unpaid after thirty (30) days from the date of recording on the assessment roll shall become delinquent and shall bear interest at the highest rate permitted by law from and after said date. 17 Page 46 of 466 Ordinance No. 1390 (2002 series) Page 18 of 29 I. After confirmation of the report, certified copies of the assessment shall be filed with the County Auditor on or before August 10th. The descriptions of the parcels reported shall be those used for the same parcels on the County Assessors map books for the current year. J. The amount of the assessment shall be collected at the same time and in the same manner as ordinary county taxes are collected and shall be subject to the same penalties and procedure and sale in case of delinquency as provided for ordinary county taxes. All laws applicable to the levy collection and enforcement of taxes shall be applicable to such assessment. If the City Council has determined that the assessment shall be paid in installments, each installment and any interest thereon shall be collected in the same manner as ordinary City taxes is in successive years. If any installment is delinquent, the amount thereof is subject to the same penalties and procedure for sale as provided for ordinary county taxes. K. All money recovered by payment of the charge or assessment or from the sale of the property at foreclosure sale shall be paid to the City Finance Director. ARTICLE 14 BOND A. Grantee shall, concurrently with the filing of and acceptance of award of this franchise, file with the City Clerk, and yearly thereafter, maintain in full force and effect, a bond guaranteeing to the City of San Luis Obispo the penal sum of One Million Dollars ($1,000,000.00), with a surety to be approved by the City Public Works Director and City Risk Manager, conditioned that Grantee shall, well and truly observe, fulfill and perform each and every term and condition of this franchise, and in case of a material breach of condition of said franchise, at the discretion of the City Public Works Director, a percentage of the amount of the bond shall be paid to the City according to the following schedule, which cumulative amount for any said breach not cured within the time specified below shall not exceed the full amount of the bond, in addition to any damages recoverable by the City and shall be recoverable from the principal and sureties of the bond: Following receipt of notice by Certified Mail sent by the City, failure to cure said breach of condition, within: 10 business days 30 calendar days 60 calendar days 90 calendar days M. Penal sum paid to City: 5% of the amount of the bond 30% cumulative amount of the bond 70% cumulative amount of the bond 100% cumulative amount of the bond Page 47 of 466 Ordinance No. 1390 (2002 series) Page 19 of 29 The amount of time specified above shall be tolled while City and Grantee resolve, or until the City Council rules on, any written appeal, protest or objection to the City Public Works Director's decision as set forth in Articles 12, 13, 19, and 25, and elsewhere in this agreement; however, if Grantee's appeal, protest or objection is found by the City Council to be the result of bad -faith actions or tactics that are frivolous or intended to cause unnecessary delay, such amount of time shall not be tolled. If said bond is not so filed, the award of this franchise and privileges will be set aside and any money paid therefore will be forfeited. Whenever a bond is taken and deemed to be liquidated damages for any breach of a term or condition of this franchise, the Grantee must immediately file another bond of like amount and character, and if the Grantee fails to do so within the time set by the City Public Works Director, the City Council may, by resolution, declare said franchise automatically forfeited. Nothing herein shall insulate Grantee from liability in excess of the amount of said bond or shall be construed as a waiver by the City of any remedy at law against the Grantee for any breach of the terms and conditions of this franchise, or for any damage, loss or injuries suffered by the City of San Luis Obispo in case of any damage, loss or injury suffered by any person, firm, or corporation by reason of any work done or any activity conducted by the Grantee in exercise of this franchise. B. The faithful performance bond shall continue to exist for one (1) year following the City's approval of any sale, transfer, assignment or other change of ownership of this franchise, or of the expiration or termination of this franchise. The City may release said bond prior to the end of the one (1) year period upon satisfaction by Grantee of all the obligations under this franchise. ARTICLE 15 INSURANCE A. The Grantee shall procure and shall keep in force for the term of the franchise, at the sole cost and expense of the Grantee, the following insurance. All insurance coverages are to be placed with insurers which have a Best's rating of not less than B +VIII and are admitted insurance companies in the State of California. Grantee may satisfy the requirements of this Article 15 by showing proof of self - insurance reasonably satisfactory to the City Attorney and Risk Manager. Commercial General Liability Insurance (CGL): Grantee shall maintain in full force and effect Commercial General Liability Insurance with the following coverages: 1. Personal Injury and Bodily Injury, including death resulting therefrom. 2. Property Damage. 3. Automobile coverage which shall include owned, non -owned and hired vehicles. 19 Page 48 of 466 Ordinance No. 1390 (2002 series) Page 20 of 29 The amount of insurance shall not be less than the following: Single limit on the coverage applying to bodily and personal injury, including death resulting therefrom, property damage, and automobile coverage in the total amount of Ten Million Dollars ($10,000,000.00). The following endorsements must be provided in the CGL policy: 1. If the insurance policy covers on an "accident" basis, it must be changed to occurrence." 2. The policy must cover personal injury as well as bodily injury. 3. Blanket contractual liability must be afforded and the policy must contain a cross - liability or severability of interest endorsement. 4. Broad Form Property Damage Liability must be afforded. 5. Products and Completed Operations coverage must be provided. 6. The City, its officers, employees and agents shall be named as additional insured under the policy. The policy shall include the appropriate insurance company endorsement, as required under City regulations. The policy shall provide that the insurance will operate as primary insurance. No other insurance effected by the City, whether commercial or self - insurance will be called upon to contribute to a loss hereunder. The following requirements apply to all insurance to be provided by Grantee: 1. A certificate of insurance shall be furnished to the City. Upon request by the City, Grantee shall provide a certified copy of any insurance policy to the City within forty -five working days of the City's request. 2. Certificates and policies shall state that the policies will not be canceled or reduced in coverage or changed in any other material respect without thirty days prior written notice to the City. B. Failure on the part of Grantee to procure or maintain required insurance and bonding shall constitute a material breach of this franchise upon which the City may immediately terminate or suspend this franchise. ARTICLE 16 INDEMNIFICATION BY GRANTEE The Grantee, by the acceptance or use of the franchise hereby granted, shall defend, indemnify and shall keep and save free and harmless the City, its officers, agents and/or employees against any and all claims, demands or causes of action which may be asserted, prosecuted or established against them, or any of them, for damage to persons, or property, of 20 Page 49 of 466 Ordinance No. 1390 (2002 aeries) Page 21 of 29 whatsoever nature, arising out of the use by it of the City streets hereunder or arising out of any of the operations or activities of the Grantee. pursuant to this franchise, whether such damage shall be caused by its own sole negligence or negligence concurrent with the City, excepting therefrom, however, any claim or demand based on the sole negligence and willful misconduct of the City, and any claim, demand, or cause of action which may be asserted, prosecuted or established against the City under the provision of the Worker's Compensation Act for injury to or the death of any of City's officers, agents or employees while acting within the scope of their employment. Grantee shall not be responsible for any criminal, fraudulent or malicious conduct of the City. ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE A. On and after the Grantee's acceptance of this franchise as provided in Article 23 herein, Grantee, its partners, its shareholders, or any other person or persons holding an interest in Grantee shall not transfer any interest in the franchise where such a transfer would lead to another person achieving a twenty -five percent (25 %) or greater interest in this franchise or change control of this franchise, unless the City approves such a transfer or change in control. The City shall approve a request for transfer or change in control only if doing so serves the public interest. As used in this franchise Ordinance, "control" includes actual working control in whatever manner exercised. 1. The City shall deny any such request for transfer or change in control if the transferor or transferee fails to comply with any applicable provision of this Article of this franchise Ordinance, or if the City determines the transferor is in non - compliance with the terms and conditions of this franchise Ordinance, or if a transferee is lacking in experience and/or financial ability to operate the pipelines authorized by this franchise Ordinance, or if the proposed transfer will be detrimental to the public interest. B. Both the Grantee and the proposed transferee shall inform the City Public Works Department of any pending change in control of this franchise or of any pending transfer of an interest in the franchise requiring the City's consent pursuant to this Article, and each shall provide applications containing all documents on which the transfer or change in control is predicated and all documents which the City Public Works Department determines are necessary to evaluate the transfer or change of control. These applications shall be signed by duly authorized representatives of the Grantee and the proposed transferee, with signatures acknowledged by a notary. The appropriate transfer fee described in Article 17(C), infra shall accompany these applications. 1. Grantee's application shall include: a. Identification and ownership of the proposed transferee in the same detail as if the proposed transferee were an applicant for an initial grant; 21 Page 50 of 466 Ordinance No. 1390 (2002 series) Page 22 of 29 b. Current financial statements showing the financial condition of the Grantee as of the date of the application. In this application, the Grantee shall also agree to submit financial statements showing the condition of the franchise as of the closing. Said financial statements shall have been audited and certified by an independent certified public accountant, and shall be submitted within ninety (90) days of the closing. 2. The proposed transferee's application shall contain current financial statements of the proposed transferee and other such information and data, including but not limited to sources of capital, as will demonstrate conclusively that the proposed transferee has all the financial resources necessary to acquire the pipeline(s), carry out all of the terms and conditions of the franchise, remedy any and all defaults and violations of the provisions of this franchise in the Grantee's past and present operations, make such other improvements and additions as may be required or proposed to maintain and conduct the services and facilities required under this franchise. The proposed transferee will be required to authorize release of financial information to the City from financial institutions relating to information supplied by the proposed transferee in support of the application. The proposed transferee's application shall also include: a. A construction schedule, describing type and placement of construction, detail phases of construction, and include map(s) correlated to the phases of construction. Map(s) shall include detail on the location, length, depth, and internal diameter of any planned pipelines. b. Copies of any agreements with utility companies for the use of any facilities including, but not limited to, poles, lines and conduit. c. A description of plans for emergency equipment and personnel enabling the transferee to meet the emergency equipment personnel requirements in Article 8 herein. d. Any information indicating as specifically as possible that any principal, manager, or associate of the proposed transferee or a parent entity of the proposed transferee has previously been or is currently: i. A party to a criminal proceeding (involving felonies or misdemeanors) in which any of the following offenses have been charged: fraud, embezzlement, tax evasion, bribery, extortion, jury tampering, obstruction of justice (or other misconduct affecting public or judicial officers in the performance of their duties), false /misleading advertising, perjury, antitrust violations (state or federal), violation of environmental laws or regulations, or conspiracy to commit any of the foregoing; ii. A party to a civil proceeding concerning liability for any of the following: unfair or anticompetitive business practice, antitrust violations (state or federal) including instances in which consent decrees were entered, violations of security laws (state or federal), false /misleading advertising, racketeer influences and corrupt organizations, violation of environmental laws or regulations, or contraband forfeitures; 22 Page 51 of 466 Ordinance No. 1390 (2002 Series) Page 23 of 29 iii. Subject to any penalty, criminal or civil, involving failure to comply with the requirements of a pipeline franchise; iv. Involved in instituting legal action against its franchising authorities; v. Involved in revocation/non- renewal of any other franchise; e. Any other details, statements, information or references pertinent to the subject matter of such application which shall be required or requested by the City or by any provision of law. f. An express and unconditional written acceptance of the terms and conditions of this Franchise Ordinance, in its most current form, as a condition to the transfer. C. A fee shall be submitted with the applications for the City's consent to transfer or change of control. 1. Where the City's consent to a transfer or a change of control of this franchise does not result in the modification of this franchise by adoption of an amending ordinance, this fee for each application shall be as set forth in the City's fee ordinance. 2. Where the City's consent to a transfer or a change of control of this franchise results in the modification of this franchise by adoption of an amending ordinance this fee shall be as set forth in the City's fee ordinance. 3. In the event the costs to process the applications exceed the fees detailed above, the applicants may be required to pay any additional costs incurred by the City in processing the applicants' requests for the City's consent to the transfer or_change of control of this franchise. Such costs may include the cost incurred for hiring consultants to assist in evaluating the applications. Such costs shall be paid by the applicants prior to final consideration of the request by City Public Works Department, or the City Council, as applicable. D. Within thirty (30) days of the effective date of the City's approval of the transfer or change of control, or within thirty (30) days of the date of the close of the transfer or change of control, the Grantee shall file with the City Public Works Department: (1) a certified copy of each duly executed instrument of such a transfer or change in control; and (2) the submittal of a final accounting and report of all fees due under this franchise. The proposed transferee shall be responsible for any underpayment, and shall be entitled to a credit for any overpayment. Within ninety (90) days of the closing of the transfer or change of control, the Grantee shall submit financial statements, audited and certified by an independent certified public accountant, showing the condition of the franchise as of the closing. If such duly executed instruments are not filed with the City Public Works Department by the deadlines imposed in this Article, or if the final documents are different from the preliminary documents, the City Public Works Department may inform the proposed transferee that the transfer or change in control is not deemed to be in force and effect. The City Public Works Department may then administratively 23 Page 52 of 466 Ordinance No. 1390 (2002 Series) Page 24 of 29 determine that this franchise is forfeited and the City Council may, without notice, by ordinance repeal this franchise. E. As a condition to the granting of consent to such a transfer or change in control, the City Council may impose such additional terms and conditions upon this franchise and upon the proposed transferee as are in the public interest. Such additional terms and conditions shall be imposed by ordinance. Nothing herein contained shall be construed to grant Grantee the right to transfer or change control of this franchise or any part thereof, except in the manner aforesaid. This Article 17 applies to any transfer of this franchise, or of any change in control of this franchise, whether by operation of law, by voluntary act of Grantee, or otherwise. ARTICLE 18 WAIVER OF BREACH 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 succeeding breach of the same or other covenant, 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 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. ARTICLE 19 DEFAULT A. In the event that the Grantee shall default in the performance of any of the terms, covenants and conditions herein, the City may give written notice to the Grantee of such default by certified mail. In the event that the Grantee does not commence the work necessary to cure such default within five (5) business days after such notice is received or prosecute such work diligently to completion, the City may declare this franchise forfeited by giving written notice thereof to the Grantee, whereupon this franchise shall be void and the rights of the Grantee hereunder shall terminate and the Grantee shall execute an instrument of surrender and deliver the same to the City. If the City Council declares this franchise forfeited, it may thereupon and thereafter exclude the Grantee from further occupancy or use of all City roads and streets authorized under this franchise. A forfeiture of said franchise shall not of itself operate to release any bond filed for said franchise. Upon declaring a franchise forfeited, the City Council may elect to take and accept any bond as liquidated damages therefore or pursue any other legal remedy for any damage, loss or injury suffered by the City as a result of such breach or both. After forfeiture, any 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 City Public Works Department and is filed with the City Clerk. The release shall state whether all excavations have been back filled, all obstructions removed, and whether the substratum or surface of City streets occupied or used have been placed in good and serviceable condition. A release shall not constitute a waiver of any right or remedy which the City of San 24 Page 53 of 466 Ordinance No. 1390 (2002 series) Page 25 of 29 Luis Obispo 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. B. No provision herein 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 said terms and conditions, but the remedies and procedure herein provided, in addition to those provided by law shall be deemed to be cumulative. ARTICLE 20 SCOPE OF RESERVATION Nothing herein contained shall ever 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 herein of specific rights reserved shall not be construed as exclusive, or as limiting the general reservation herein made or as limiting such rights as the City may now or hereafter have in law. ARTICLE 21 NOTICE Any notice required to be given under the terms of this franchise, the manner of service of which is not specifically provided for, may be served as follows: Upon the City, by serving the City Clerk, personally or by addressing a written notice to the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, and depositing such notice in the United States mail, postage prepaid. Upon the Grantee, by addressing a written notice to Grantee addressed to Tosco Corporation, c/o Tosco Refining Company, 9645 Santa Fe Springs Road, P.O. Box 2628, Santa Fe Springs, CA 90670 -0628, Attn: Supervisor, R/W Administration, or such other address as may from time to time be furnished in writing by one party to the other and depositing said notice in the United States mail, postage prepaid. When service of any such notice is made by mail, the time of such notice shall begin with and run from the date of the deposit of same in the United States mail. ARTICLE 22 SUCCESSORS The terms herein shall inure to the benefit of and shall bind, as the case may be, the successors and assigns of the parties hereto, subject, however, to the provisions of Article 17. 25 Page 54 of 466 Ordinance No. 1390 (2002 series) Page 26 of 29 ARTICLE 23 ACCEPTANCE OF FRANCHISE A. This franchise is granted and shall be held and enjoyed only upon the terms and conditions herein contained. By accepting this grant of franchise, Grantee shall agree to be bound by each and all of the requirements of Article X, Sections 1001 through 1007 of the San Luis Obispo City Charter. B. Grantee shall, within ten (10) days after the passage of this franchise Ordinance, file with the City Clerk an express and unconditional written letter of acceptance of, and consent to, the terms and conditions of this franchise Ordinance, in its current version, and as subsequently amended pursuant to San Luis Obispo City Charter, Article X, Section 1004. C. The parent entity, or entities, if any, of Grantee, shall file a letter with the City, concurrent with Grantee's letter of acceptance, which guarantees the performance of each and every term, covenant and condition imposed on Grantee pursuant to the franchise Ordinance. D. Grantee's letter of acceptance shall be signed by two (2) duly authorized representatives of Grantee, whose signatures shall be acknowledged by a notary, and shall be accompanied by the performance bond and evidence of insurance required by this franchise Ordinance. ARTICLE 24 FORCE MAJEURE The time within which Grantee is obligated hereunder to construct, erect, maintain, operate, repair, renew, change the size of and remove pipelines or other improvements shall be extended for a period of time equal in duration to, and performance in the meantime shall be excused on account of, and for, and during the period of any delay caused by strikes, threats of strikes, lockouts, war, threats of war, insurrection, invasion, acts of God, calamities, violent action of the elements, fire, action or regulation of any governmental agency law or ordinance, impossibility of obtaining materials, or other things beyond the reasonable control of Grantee. ARTICLE 25 LIQUIDATED DAMAGES A. By acceptance of this franchise, Grantee understands and acknowledges that failure to timely comply with any performance requirements stipulated in this franchise Ordinance will result in damages to the City, and that it is and will be impractical to determine the actual amount of such damage in the event of delay or nonperformance. Each of the amounts set forth below has been set in recognition of the difficulty of affixing actual damages arising from breach of these time of performance requirements. Each of said amounts constitutes a reasonable estimate of these damages. This section does not limit the rights and remedies available to the City for damages other than the timely compliance with performance 26 Page 55 of 466 Ordinance No. 1390 (2002 series) Page 27 of 29 requirements as described in this section. The liquidated damages set forth below shall be chargeable to the bond, letter of credit or security fund provided for in Article 14, supra, should Grantee not make payment within thirty (30) days of written notice by certified mail by the City that the following amounts are due for the following concerns: 1. Failure to provide data, documents, or reports within ten (10) business days after receipt of written request by the City, by certified mail, or such longer time as may be specified in said request: Two Hundred Fifty Dollars ($250.00) per day for each day, or part thereof that each violation continues. 2. Failure to provide to the City within ten (10) business days after receipt of written request by the City, by certified mail, current evidence of insurance and bonding: Two Hundred Fifty Dollars ($250.00) per day for each day, or part thereof, that each noncompliance continues. Nothing in this Section shall preclude immediate termination or suspension of this franchise as provided for under Article 15B., supra. 3. Failure by Grantee to timely restore public or private property after performance of work and following Grantee's receipt of written request by the City to do so within ten (10) business days thereafter by certified mail: Two Hundred Fifty Dollars ($250.00) per day or part thereof, that each non - compliance continues. Any fines paid pursuant to this Subsection 3 shall be paid solely to the Street Fund of the City Public Works Department. B. If the City Public Works Department determines that Grantee is liable for liquidated damages, the City Public Works Department shall issue to Grantee by certified mail written notice of intention to charge liquidated damages. Liquidated damages shall begin to accrue as of the date of the written notice and as set forth in said notice. The notice shall set forth the basis for the liquidated damages and give Grantee a reasonable time in which to remedy the violation. C. Grantee shall have the right to appeal any notice to the City Public Works Department by certified mail, within twenty (20) days after issuance of the notice by the City Public Works Department. The City Public Works Department shall hold an administrative hearing within sixty (60) days after receipt of an appeal. The City Public Works Director's decision shall be the final decision of the City. D. If Grantee does not appeal the notice within said twenty (20) day period, Grantee shall pay the amount(s) of liquidated damages as stated in the notice. If payment is not paid as provided for in this Article, the City may withdraw against the bond provided for in Article 14 herein. 27 Page 56 of 466 Ordinance No. 1390 (2002 series) Page 28 of 29 ARTICLE 26 ATTORNEYS' FEES In the event the City or Grantee brings legal action against the other, or against Grantee's bonding companies or insurance carriers to compel performance of, or to recover for breach of any covenant, agreement or condition contained in this franchise, or for damages, the prevailing party shall be entitled to, in addition to any other relief obtained, such reasonable attorneys' fees as are fixed by the judge of the court in which such action is brought. ARTICLE 27 CONDEMNATION Notwithstanding anything to the contrary contained herein and in accordance with San Luis Obispo City Charter Article X, Section 1005, this Ordinance shall not in any way affect the right of the City to acquire the property of the Grantee thereof either by purchase or through the exercise of the right of eminent domain, and nothing herein contained shall be construed to contract away or to modify or to abridge either for a term or in perpetuity the City's right of eminent domain with respect to any public utility. The City reserves the right to purchase the property of such utility at an agreed price. In fixing the price to be paid by the City for any utility, no allowance shall be made for franchise value (other than the actual amount paid to the City at the time of the franchise acquisition), goodwill, going concern, earning power, increased cost of reproduction, severance damage, or increased value of right -of -way. SECTION 2: If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of San Luis Obispo hereby declares that they would have adopted this ordinance and each sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional. SECTION 3: This ordinance shall take effect and be in full force and effect thirty (30) days after its passage, and before the expiration of fifteen (15) days after passage of this ordinance, it shall be published once with the names of the members of the City Council voting for and against the ordinance in a newspaper of general circulation published in the City of San Luis Obispo, State of California. SECTION 4: A synopsis of this ordinance, approved by the City Attorney, together with the ayes and noes shall be published once in full at least five (5) days prior to its final passage, in a newspaper published and circulated in said City, and at the same time shall go into effect at the expiration of thirty (30) days after its said final passage. A copy of the full final Page 57 of 466 Ordinance No. 1390 (2002 aeries) Page 29 of 29 text of this ordinance shall be on file in the Office of the City Clerk on and after the date following the introduction and passage to print and shall be available to any interested member of the public. INTRODUCED on the 19th day of June 2001 AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the 10' day of July 2001, on the following roll call vote: AYES: Council Members Marx, Mulholland, Schwartz, Vice Mayor Ewan and Mayor Settle NOES: None ABSENT: None e Price; Ciiy Clerk APPROVED: Yef G. Jo,.gens, Ci Attorney 29 Page 58 of 466 ORDINANCE NO. 1391 (2001 Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO GRANTING TO UNION PIPELINE COMPANY, A CALIFORNIA CORPORATION, A FRANCHISE TO CONSTRUCT, OPERATE, AND MAINTAIN PIPELINES FOR THE TRANSPORTATION OF OIL, AND OTHER SPECIFIED MATERIALS IN THE CITY OF SAN LUIS OBISPO, STATE OF CALIFORNIA WHEREAS, the City of San Luis Obispo adopted Ordinance No. 1038 on April 2, 1985 granting a franchise to Union Oil Company of California for a term of 25 years for the transportation and distribution of oil and other specified materials in the City of San Luis Obispo; and WHEREAS, Union Oil Company of California sold or transferred a portion of its pipelines subject to Ordinance No. 1038 to TOSCO Corporation and Union Pipeline Company, a California Corporation; and WHEREAS, Union Oil Company of California informed the City of San Luis Obispo that it intends to commence the abandonment process for its remaining interests under Ordinance No. 1038 that have not been sold or transferred to TOSCO Corporation and Union Pipeline Company, a California Corporation; and WHEREAS, Union Oil Company of California's remaining pipeline interests in the City of San Luis Obispo are still subject to the existing franchise agreement granted in Ordinance No. 1038 until such time that Union Oil Company of California has abandoned such pipelines pursuant to applicable law; and WHEREAS, TOSCO Corporation and Union Pipeline Company have requested the City of San Luis Obispo to enter into new franchise agreements for the oil transportation and distribution pipelines acquired from Union Oil Company of California. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo to grant a franchise to construct, operate, and maintain pipelines for the transportation of oil, and other specified materials in the City of San Luis Obispo to Union Pipeline Company Unocap "), a California corporation as follows: SECTION 1: Terms and Conditions of Franchise (Table of Contents begins on page 2): 01391 Page 59 of 466 Ordinance No. 1391 (2001 series) Page 2 of 28 TABLE OF CONTENTS 2 Page ARTICLE I NATURE OF FRANCHISE 4 A. Grant of Franchise 4 B. Limitations Upon Grant 5 C. Rights Reserved to the City of San Luis Obispo 6 ARTICLE 2 APPURTENANCES 6 ARTICLE 3 LOCATION OF PIPELINES 7 ARTICLE 4 CONSTRUCTION OF PIPELINES 7 A. Terms of Construction 7 B. Restoration of Streets 7 ARTICLE 5 COMMENCEMENT OF CONSTRUCTION 7 ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED 8 ARTICLE 7 COMPENSATION TO THE CITY 9 ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS 10 ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAIR OF DAMAGE TO CITY STREETS 11 ARTICLE 10 REARRANGEMENT OF FACILITIES 11 A. Expense of Grantee 11 B. Expense of Others 12 C. Rearrangement of the Facilities of Others 13 D. Notice 13 ARTICLE I I GRANTEE'S REMOVAL OR ABANDONMENT OF FACILITIES 13 ARTICLE 12 COMPLETION OF WORK 16 2 Page 60 of 466 Ordinance No. 1391 (2001 aeries) Page 3 of 28 TABLE OF CONTENTS, CONT'D. ARTICLE 13 RECOVERY OF COSTS OF REPAIRS k, AND UNPAID FEES 16 ARTICLE 14 BOND 18 ARTICLE 15 INSURANCE 19 ARTICLE 16 INDEMNIFICATION BY GRANTEE 20 ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE 20 ARTICLE 18 WAIVER OF BREACH 23 ARTICLE 19 DEFAULT 23 ARTICLE 20 SCOPE OF RESERVATION 24 ARTICLE 21 NOTICE 24 ARTICLE 22 SUCCESSORS 25 ARTICLE 23 ACCEPTANCE OF FRANCHISE 25 ARTICLE 24 FORCE MAJEURE 25 ARTICLE 25 LIQUIDATED DAMAGES 26 ARTICLE 26 ATTORNEYS' FEES 27 ARTICLE 27 CONDEMNATION 27 k, Page 61 of 466 Ordinance No. 1391 (2001 series) Page 4 of 28 ARTICLE I NATURE OF FRANCHISE A. Grant of Franchise. 1. The City of San Luis Obispo (hereinafter referred to as "City "), hereby grants to Union Pipeline Company, a California Corporation, (hereinafter referred to as "Grantee "), pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9(b) of the California Constitution, and Section 39732(b) of the California Government Code, the non - exclusive right, privilege and franchise, subject, however, to all the limitations and restrictions herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change the size of and remove pipelines, not to exceed twelve (12) inches nominal internal diameter, for the transportation of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, movable by pipeline, in, under, along, and across the public streets, ways, alleys and places within the City of San Luis Obispo (hereinafter collectively referred to as "streets "), as described in Exhibit No. 1, attached hereto and made a part hereof. 2. The term of the franchise granted under this Ordinance shall be for a term often (10) years, commencing with the date on which it is accepted by Grantee. 3. Unless otherwise specifically stated, the following provisions shall govern the interpretation and construction of the franchise granted herein: a) This franchise shall include the right, for the period and subject to the conditions hereof, to construct, erect, maintain, operate, repair, renew, abandon and change the size and remove the said pipelines, if any, of Grantee, as laid and constructed in said streets. b) The terms and conditions of this franchise shall also apply to any pipe or other facilities of Grantee which are located within the right of way of any existing public road or street at the time such road or street becomes a City street through annexation or otherwise, subject to any other existing rights enjoyed by Grantee. c) .Grantee shall not be relieved of its obligation to promptly comply with any provision of this franchise by failure of the City to enforce prompt compliance. d) Any right or power conferred, or duty imposed upon any officer, employee, department, or other City entity, by the terms of this franchise, may be legally transferred to any other City officer, employee, department, or other City entity. e) Grantee shall have no recourse whatsoever against the City for any loss, cost, expense, or damage suffered by Grantee and arising out of any provision or requirement of this franchise or its lawful enforcement by the City. 4 Page 62 of 466 Ordinance No. 1391 (2001 6eries) Page 5 of 28 f) This franchise does not relieve Grantee of any applicable requirements of the San Luis Obispo Municipal Code or of any federal, state, or City law, ordinance, rule, regulation, or specification, including, but not limited to, any requirement relating to street work, street excavation permits, or the use, removal or relocation of property in streets, except as specifically prescribed herein. g) This franchise is non - exclusive. Neither the granting of this franchise nor any of the provisions contained herein shall be construed to prevent the City from granting any identical or similar franchise to any other person. h) The compensation provided for in this franchise is for (i) the rights and privileges granted by this franchise, and (ii) the right and privilege granted to the Grantee to construct, erect, maintain, operate, repair, renew, abandon and change the size of and remove the said pipelines pursuant to this franchise within the City's streets. The City expressly reserves the right to impose and collect from Grantee, on a non - discriminatory basis, its normal duly established processing and inspection fees from street cutting and excavation permits to the extent such fees are imposed generally on all non - governmental applicants for such permits within the City. i) Any activities involving the use of a pipeline system for the transmitting of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, which are not specifically authorized under this franchise are prohibited under this franchise. Except as provided in Article 2, any telecommunication or other uses not authorized in this franchise Ordinance must be approved by the City under a separate franchise. 0) If any provision of this franchise, or the application of this franchise to any person or circumstance is held invalid by a court of competent jurisdiction or is not in compliance with any requirement of the Public Utilities Commission, the City, or any other federal or state body or agency having jurisdiction over Grantee's franchise activities, the remainder of this franchise Ordinance, or the application of this franchise to persons or circumstances other than those to which it is held invalid or not in such compliance, shall not be affected thereby. B. Limitations Upon Grant. 1. No privilege or exemption is granted or conferred by this franchise except those specifically prescribed herein. 2. Any privilege claimed under this franchise by Grantee in any street shall be subordinate to any prior lawful occupancy of the street. 3. The rights and privileges of this franchise are granted solely to Grantee except as provided within this franchise Ordinance. This franchise is not be to sold, transferred, leased, assigned, or disposed of as a whole or in part, either by forced sale, merger, consolidation, or Page 63 of 466 Ordinance No. 1391 (2001 series) Page 6 of 28 otherwise, without the City's prior consent as described in Article 17, infra, or as otherwise expressly provided herein. The City agrees that such prior consent shall not be unreasonably withheld or conditioned. C. Rights Reserved to the City. 1. The rights reserved to the City under this franchise Ordinance are in addition to all other rights of the City, whether authorized by the San Luis Obispo City Charter, San Luis Obispo City Municipal Code, or any other federal, state, or City law, rule, or regulation. No action, proceeding or exercise of a right shall affect any other rights that may be held by the City. Grantee, by acceptance of this franchise, shall be bound thereby and shall comply with any action or requirement of the City in its exercise of any such right or power. 2. The City shall have the power and right at all times during the term of this franchise to require Grantee to conform to the laws, rules and regulations governing the operation of pipelines now or hereafter adopted by the City Council to the extent permitted by law. 3. The City may enforce, to the maximum extent permitted by law, the inspection and testing of pipelines, pursuant to state and federal standards and require appropriate remuneration and fees to cover such enforcement activities. ARTICLE 2 APPURTENANCES The Grantee shall have the right, subject to the prior approval of the City Public Works Department, to construct and maintain such traps, manholes, conduits, valves, appliances, attachments, and appurtenances (hereinafter for convenience collectively referred to as appurtenances "), as may be necessary or convenient for the proper maintenance and operation of the pipelines under said franchise. Said appurtenances shall be so located as to conform to any order of the City Public Works Department in regard thereto and not to interfere with the use of the streets for travel. The Grantee shall have the right, subject to such ordinances, rules, or regulation as are now or may hereafter be in force, to make all necessary excavations in said street for the construction and repair of said pipelines and appurtenances subject to the prior approval of the City Public Works Department. "Appurtenances" shall also include any adjunct communications lines and/or conduits as coaxial cable, optical fiber, wire, or other transmission lines or forms of transmission, and associated equipment and devices located in, upon, along, across, under or over the streets of the City, the sole function of which is to monitor or control the operation or safety of the pipeline system via the distribution of video, audio, voice, or data signals. An adjunct communications line shall not include any facility which distributes, through any means, to subscribers or persons other than Grantee, the signal of one or more broadcast television or radio stations or other sources of video, audio, voice, or data signals. rel Page 64 of 466 Ordinance No. 1391 (2001 6eries) Page 7 of 28 ARTICLE 3 LOCATION OF PIPELINES So far as is practicable and within the requirements of the California State Fire Marshall, any pipeline hereinafter laid shall be located along the edge or shoulder of the streets or in the parking areas adjacent thereto so as not unreasonably to disturb the flow of traffic and where possible shall be laid in the unpaved portion of the street. ARTICLE 4 CONSTRUCTION OF PIPELINES A. Terms of Construction. The pipelines and appurtenances laid, constructed or maintained under the provisions of this franchise shall be installed, maintained, and inspected by the Grantee in a satisfactory, safe, and workmanlike manner, of good material, and in conformity with all ordinances, rules, or regulations now or hereafter adopted or prescribed by the City Council, State, or Federal authorities. B. Restoration of Streets. The work of laying, constructing, maintaining, operating, renewing, repairing, changing size and moving any of the pipeline system contemplated by this franchise and all other work in exercise of this franchise shall be conducted according to the provisions of the City's encroachment ordinances from time to time prevailing, and otherwise in accordance with federal and state law and applicable City ordinances, and with the least possible hindrance or interference to the use of City roads by the public or by the City of San Luis Obispo, and Grantee shall provide all necessary warning, safety and traffic control devices as are or may be required by City, State or Federal regulations. All excavations shall be back filled and adequately compacted. As part of any work completed under provisions of this franchise agreement, the surface of City streets shall be repaired and replaced to meet current City standards and specifications. Under no circumstances shall the surface of City streets be placed in a manner less than as good and serviceable condition as existed at the beginning of said work, to the satisfaction of the City Public Works Department. ARTICLE 5 COMMENCEMENT OF CONSTRUCTION The Grantee, in good faith, shall commence with work of laying the pipelines and appurtenances within four (4) months from the date of passage of the approval of this franchise, and if any such pipelines be not so commenced within said time, this franchise shall be declared forfeited; provided, however, that if the Grantee is maintaining and operating an existing pipeline system over the route referred to in Article I herein, it shall be deemed to be in compliance with the foregoing. The Grantee shall not commence the construction of any new pipelines under the provision of this franchise or add to such existing pipeline system, if any there be, until it first shall have applied for and obtained a permit therefore from the City Public Works Department. 7 Page 65 of 466 Ordinance No. 1391 (2001 series) Page 8 of 28 The application of the Grantee shall show the following facts: the length, approximate depth and proposed location of the pipeline proposed to be laid or constructed, the size and description of the pipeline intended to be used, and such other relevant facts as the City Public Works Department may require. The Grantee shall pay any and all encroachment permit fees of the City. Upon the completion of the construction of any pipelines constructed pursuant to said franchise, the Grantee shall render a statement to the City of San Luis Obispo showing in detail the permit or permits issued and the total length of pipeline, the construction of which was authorized under such permit, or permits, and the total length of pipeline actually laid, and the Grantee shall make payment to the City for the pipelines which have actually been constructed under said franchise as provided in Article 7, Section C. ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED A. Within six (6) months of the effective date of this franchise for existing pipelines, and within ninety (90) days following the date in which any additional pipelines have been laid or constructed under this franchise, the Grantee shall file a map in such form as may be required by the City Public Works Department showing the accurate location and size of all its facilities then in place, and shall, upon installation of any additional facilities or upon removal, change or abandonment of all or any portion thereof, file a revised map or maps showing the location and size of all such additional and/or abandoned facilities as of this date. Cathodic protection is to be used for all facilities installed or maintained pursuant to this franchise. For facilities previously in liquid service and where the liquids have been removed and the facilities inerted, or for facilities previously in gas service that are not pressurized, cathodic protection shall be maintained consistent with State Fire Marshall or other agency requirements. A description of all the protective devices shall be furnished to the City Public Works Department which shall show the location and types of anodes, including a description of methods to be used as a protection against corrosion and electrolytic leakage. B. Grantee shall file with the City Finance Director, within thirty (30) days after the expiration of the calendar year, or fractional calendar year, following the date of the granting of this franchise and within thirty (30) days after the expiration of each calendar year thereafter, two copies of a report verified by the oath of Grantee or by the oath of a duly authorized representative of Grantee, showing, for the immediately preceding franchise period, the length of main lines in streets, the nominal internal diameter of such main lines, the rate per foot per year when applicable) and the total amount due to the City. In this report, Grantee shall also show any change in franchise footage since the last franchise report, segregating such footage as to new main lines and adjunct communications lines laid, old main lines and adjunct communications lines removed, old main lines and adjunct communications lines abandoned in place, and the footage of main lines and adjunct communications lines in territory annexed by the City since the last franchise report. C. Grantee shall file with the City Public Works Department within sixty (60) days after the end of the calendar year a report, in duplicate, showing the permit number of each permit Page 66 of 466 Ordinance No. 1391 (2001 beries) Page 9 of 28 obtained for the installation of new main lines during the immediately preceding franchise report period, together with the length and size of said main lines. ARTICLE 7 COMPENSATION TO THE CITY A. During the term of this franchise, Grantee shall pay to the City an annual fee for this franchise, said fee to be those fees prescribed by the California Public Utilities Code section 6231. 5, provided that the rate is subject to increase to the maximum rate established in subsequent amendments of the California Public Utilities Code. Annual payments to be made pursuant to this franchise shall be due and payable in arrears April 1 of each year of this franchise. The initial payment hereunder shall be prorated for the remainder of the current calendar year based on a 365 -day year. At the time of payment of fees by Grantee, Grantee shall file a verified statement with the Clerk of the City of San Luis Obispo, with a copy to the City Public Works Department showing in detail the number of lineal feet and the diameter thereof, expressed in inches, of pipelines covered by this franchise during the previous calendar year, or portion thereof. The compensation provided for in this Article shall be subject to an increase after the first year of the franchise and each subsequent year during the term of this franchise, based on the provisions of California Public Utilities Code section 6231.5, as amended. The fees set forth will be adjusted annually each year by the annual percentage change in the U.S. Bureau of Labor Statistics (or successor agency) consumer price index for all urban consumers (CPI -U) all cities average for the prior calendar year. Notwithstanding the provisions as otherwise stated in this Article and franchise, the Grantee shall be liable to pay the City the annual fee for the period to and including the date of either actual removal of the facilities or the effective date of the abandonment "in place," and until the Grantee shall have fully complied with all of the provisions of law or ordinances relative to such abandonments. In the event of partial abandonment of facilities as provided in the Ordinance, or in the event of partial removal of such facilities by the Grantee, the payments otherwise due the City for occupancy of the streets by such facilities shall be reduced by the length and diameter of pipelines abandoned or the actual pipeline removed beginning with the first day of the next succeeding franchise year, and for each franchise year thereafter; provided, however, that the base rate shall be modified to reflect the adjustment (per this Article) applicable to such abandoned or removed pipeline at the beginning of the next succeeding franchise year following abandonment or removal. Grantee shall pay to the City, upon demand, the cost of all repairs made by the City to public property arising out of the operations of the Grantee under this franchise. Any fees charged or expenses charged to Grantee by City pursuant to this Article, or any other provision 0 Page 67 of 466 Ordinance No. 1391 (2001 series) Page 10 of 28 of this franchise Ordinance, unless disputed in good faith, shall be paid when due or shall be deemed delinquent. Any undisputed delinquent amounts shall be charged a 10% penalty and, in addition, shall accrue interest commencing thirty (30) days after the due date, at a rate of one and one -half percent (1.5 %) per month (based upon a 30 -day calendar month) or any lesser amount if required by law. Any neglect, omission or refusal by said Grantee to pay any undisputed delinquent franchise fee with any late charges, within thirty (30) days of delinquency, at the times or in the manner herein provided, shall be grounds for a declaration of a forfeiture of this franchise and of all rights hereunder. Payments are to be made to the City Finance Department, 990 Palm Street, San Luis Obispo, California 93401, or at such place as the City shall, from time to time, designate in writing. B. Grantee shall pay the City a granting fee of $5,000.00 within thirty (30) days after the date the City Council adopts this franchise Ordinance. C. Grantee shall pay the City Public Works Department, within sixty (60) days after the end of each calendar year, for each year during the life of this franchise, an initial construction charge calculated at the rate of One Dollar ($1.00) per foot for all new main lines laid pursuant to this franchise Ordinance during the preceding year. D. Right of Inspection. The City shall have the right to inspect Grantee's pipeline accounting and other records relating to its annual report and to audit and recompute any and all accounts payable under this franchise. Costs of audit shall be borne by Grantee when an audit results in an increase of more than five percent of Grantee's annual payments to 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 franchise or for the performance of any other obligation hereunder. ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS At all times during the term of this franchise, the Grantee shall maintain or arrange for, on a 24- hour -a -day basis, adequate emergency equipment and a properly trained emergency crew within a reasonable distance from any pipelines, appurtenances and facilities installed or maintained pursuant hereto for the purpose of monitoring the leak detection system and the communications systems if applicable, and of shutting off the pressure and the flow of contents of such facilities in the event of an emergency resulting from an earthquake, act of war, civil disturbance, fire, flood, or any other cause or nature whatsoever. 10 Page 68 of 466 Ordinance No. 1391 (2001 6eries) Page 11 of 28 ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAIR OF DAMAGE TO CITY STREETS If any portion of any street shall be damaged by any reason related to the Grantee's operations pursuant to this franchise including defective facilities laid or constructed under this franchise, Grantee shall, at its own expense, repair any defect of its facilities and put such street in as good condition as it was before such damage was incurred, to the satisfaction of the City Public Works Department. If Grantee, within ten (10) days after receipt of written notice from the City Public Works Department instructing it to repair such damage, fails to commence to comply with such instruction, or, thereafter, fails diligently to prosecute such work to completion, then the City Public Works Director immediately may take any actions which are, in the sole judgment and discretion of the City. Public Works Director, necessary to repair said damage. Any and all costs and expenses so incurred shall be the sole responsibility of Grantee including the current rate of overhead being charged by the City for reimbursable work, which cost and expense, by the acceptance of this franchise, Grantee agrees to pay upon demand. If such damage constitutes an immediate danger to public health or safety requiring the immediate repair thereof, the City Public Works Department, without notice, may repair such damage and Grantee agrees to pay the cost thereof upon demand. ARTICLE 10 REARRANGEMENT OF FACILITIES A. Expense of Grantee. 1. If any of the Grantee's facilities, in the opinion of the City Public Works Director, shall endanger the public or interfere with the use of any street by the public or, for public purposes, the City shall have the right to require the Grantee, and the Grantee shall repair, replace, move, alter or relocate the same (hereinafter called "rearrangement ") to avoid such danger, interference or obstruction, in conformity with the written notice of the City Public Works Department, at the Grantee's sole expense. 2. The City reserves the right to change the grade, to construct grade separation facilities, to change the width or to alter or change the location, of any street which is located within the service area for which this franchise is granted. If any of the facilities heretofore or hereafter constructed, installed or maintained by Grantee pursuant to this franchise on, along, under, over, in, upon or across any street are located in a manner which prevents or interferes with the change of grade, traffic needs, operation, maintenance, improvement, repair, construction, reconstruction, widening, grade separation, alteration or relocation of the street, or any work or improvement upon the street, Grantee shall relocate permanently or temporarily, as directed at the sole discretion of the City Public Works Director, any such facility at no expense to the City, upon receipt of a written request from the City Public Works Department to do so, and shall commence such work, by beginning engineering, surveying, or other pre - construction activities, on or before the date specified in such written request, which date shall be not less than sixty (60) days from receipt of such written request. Grantee shall thereafter diligently prosecute 11 Page 69 of 466 Ordinance No. 1391 (2001 series) Page 12 of 28 such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California. 3. The City reserves the right to lay, construct, repair, alter, relocate and maintain subsurface, surface or other improvements of any type of description in a governmental but not proprietary capacity within, over or under the streets over which this franchise is granted. If the City finds that the location or relocation of such subsurface, surface or other improvements conflicts with the facilities laid, constructed or maintained under this franchise, whether such facilities were laid before or after the improvements of the City, Grantee shall relocate permanently or temporarily, as directed at the sole discretion of the City Public Works Director, any such facility at no expense to the City upon receipt of a written request from the City Public Works Department to do so and shall commence such work, by beginning engineering, surveying or other pre - construction activities, on or before the date specified in such written request, which date shall not be less than sixty (60) days from receipt of such written request. The Grantee shall thereafter diligently prosecute such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California. 4. If Grantee, after the notice provided for herein from the City, fails or refuses to relocate permanently or temporarily its facilities located in, on, upon, along, under, over, across, or above any street, or to pave, surface, grade, repave, resurface, or regrade as required pursuant to any provision of this franchise, the City may cause the work to be done, and shall keep an itemized account of the entire costs thereof, and Grantee shall hold harmless the City, its officers and employees from any liability which may arise or be claimed to arise from the moving, cutting or alteration of any of Grantee's facilities, or any necessary relocation of the facilities of other utilities. 5. Grantee agrees to, and shall, reimburse the City for such cost within thirty (30) days after presentation to Grantee of an itemized account arising out of the actions taken in this Article I OA. B. Expense of Others. 1) The City shall have the right to require the Grantee to rearrange any part of the Grantees' facilities for the accommodation of the City when such rearrangement is done for the 12 Page 70 of 466 Ordinance No. 1391 (2001'aeries) Page 13 of 28 accommodation of any water, electric, gas or other utility system now or hereafter owned or operated by the City. Except as otherwise provided in Article 10A, such arrangement shall be at the City's expense. 2) The City shall have the right to require the Grantee to rearrange any part of the Grantee's facilities for the accommodation of any person, firm or corporation. When such rearrangement is done for the accommodation of any person, firm or corporation, other than one of said utility systems owned or operated by the City, the cost of such rearrangement shall be borne by the accommodated party. Such accommodated party, in advance of such rearrangement, shall deposit with the Grantee or the City Clerk cash or a letter of credit or other cash equivalent in an amount, as in the reasonable discretion of the City Public Works Department, shall be required to pay the costs of such rearrangement, and such accommodated party shall execute an instrument agreeing to indemnify and hold harmless the Grantee from any and all damages or claims caused by such rearrangement. 3) The rearrangement referred to in subsection (1) and (2) of Section B of this Article 10 shall be accomplished in conformity with the written notice of the City Public Works Department. C. Rearrangement of the Facilities of Others. Nothing in this franchise shall be construed to require the City to move, alter or relocate any of its facilities upon said streets, at its own expense, for the convenience, accommodation or necessity of any other public utility, person, firm or corporation now or hereafter owning a public utility system of any type or nature, to move, alter or relocate any part of its system upon said streets for the convenience, accommodation or necessity of the Grantee. D. Notice. The Grantee shall be given not less than sixty (60) days written notice of any rearrangement of facilities which the Grantee is required to make hereunder. Such notice shall specify in reasonable detail the work to be done by the Grantee and shall specify a reasonable time that such work is to be accomplished. In the event that the City shall change the provisions of any such notice given to the Grantee, the Grantee shall be given an additional period of not less than thirty (30) days to initiate such work. ARTICLE 11 GRANTEE'S REMOVAL OR ABANDONMENT OF FACILITIES A. The City reserves the right to require Grantee to remove its facilities from the City streets and City public property in the event of the non - renewal, revocation or termination of this franchise or at any time thereafter with respect to those facilities abandoned in place, or for the facilities affected by the permanent discontinuance of all or a portion of the facilities. Further, so long as any abandoned facilities installed under the authority of this franchise remain in a City street, Grantee shall maintain a performance bond, security fund, or other form of collateral, 13 Page 71 of 466 Ordinance No. 1391 (2001 series) Page 14 of 28 acceptable to the City, sufficient to cover the cost of the removal of all such facilities from the City streets. B. At the expiration, revocation or termination of this franchise or of the permanent discontinuance of the use of all or a portion of its facilities, Grantee shall, within thirty (30) days thereafter, make written application to the City Public Works Department for authority either: 1. To abandon all or a portion of such facilities in place; or 2. To remove all or a portion of such facilities. Such application shall describe the facilities desired to be abandoned, their location with reference to City streets, and shall describe with reasonable accuracy the physical condition of such facilities. As part of the application for removal or abandonment of these facilities, Grantee shall submit a soil test, taken within thirty (30) days of the submittal of the application, for those materials to be tested annually pursuant to federal, state and local laws. A soil test shall be taken along that portion of the pipeline to be removed or abandoned at such intervals as directed in writing by the City Public Works Department and reasonably consistent with established sampling protocols. The City Public Works Department shall determine whether any abandonment or removal which is thereby proposed may be effected without detriment to the public interest and the conditions under which such proposed abandonment or removal may be effected. The City Public Works Department shall then notify Grantee of the City's determinations. Grantee shall also obtain permits to abandon or remove the pipeline from the City Public Works Department for all pipelines prior to the removal, abandonment or discontinuation of use of all or a portion of Grantee's facilities. The City also reserves the right to require removal of Grantee's abandoned facilities in place at any time following the expiration, revocation or termination of this franchise. Grantee shall be required to meet the bonding, insurance, indemnification and annual franchise fee requirements of this franchise, for facilities abandoned in place. C. Within thirty (30) days after receipt of Notification from the City Public Works Department pursuant to Article 11.B.2 above, Grantee shall apply for a permit from the City Public Works Department to abandon or remove the facility. D. Grantee shall, within sixty (60) days after obtaining such permit, commence and diligently prosecute to completion the work authorized by the City's permit. E. In the event Grantee applies to remove its facilities, and the City Public Works Department determines that any or all of the facilities cannot be removed due to a moratorium preventing work in the City streets, the payment of annual franchise fees shall be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty (30) days of notice to pay. Deferred annual franchise fees shall otherwise be waived. F. Failure to Comply with City's Orders Regarding the Removal or Abandonment of Facilities. 14 Page 72 of 466 Ordinance No. 1391 (2001 beries) Page 15 of 28 1. If any orders or prescribed conditions relating to the abandonment of any facilities are not complied with, the City Public Works Department may impose such additional orders and conditions as the City deems appropriate, including an order that the Grantee remove any or all of such facilities. Grantee shall comply with such additional orders. 2. In the event that Grantee fails to comply with the terms and conditions of abandonment or removal as may be required by this franchise Ordinance, and within such time as may be prescribed by the City Public Works Department, then the City may remove or cause to be removed such facilities at Grantee's expense. Grantee shall pay to the City all of the costs of removing and disposing of these facilities, as well as returning the rights -of -way occupied pursuant to this franchise, including, but not limited to: (a) the cost of all environmental testing the City must conduct to determine the environmental condition of any rights -of -way occupied pursuant to this franchise and to ascertain what procedures the City must undertake, if any, to return any such rights -of -way to the environmental condition required by applicable Federal, State or local environmental laws; (b) all cleanup costs, disposal costs, and any other costs associated with returning these rights -of -way to such environmental condition; (c) all costs of removing, storing, and disposing of the Grantee's facilities; (d) all costs of returning all streets to the structural conditions they were in immediately at the beginning of Grantee's use of these streets pursuant to this franchise agreement; (e) plus the current rate of overhead being charged by the City for reimbursable work. 3. If, at the nonrenewal, revocation or termination of this franchise, or of the permanent discontinuance of the use of all or a portion of its facilities, Grantee, within thirty (30) days thereafter, fails or refuses to make written application for the above - mentioned authority to remove or abandon its facilities, the City Public Works Department shall make the determination as to whether the facilities shall be abandoned in place or removed. The City Public Works Department shall then notify Grantee of its determinations. Grantee shall thereafter comply with the applicable provisions of this Article 11. G. For those facilities Grantee abandons in place, Grantee shall be required to maintain an acceptable performance bond, letter of credit or security fund, as determined by the City Public Works Department, to cover the costs for the removal of any such abandoned facilities from the City streets for any and all periods of time, including those periods following the expiration, revocation or termination of this franchise, that Grantee's facilities remain in the City streets. Grantee shall be required to maintain insurance and to indemnify the City pursuant to this Article during any periods the abandoned facilities remain within the City streets. Provided, however, that any pipelines which cannot be removed due to a moratorium preventing work in the City streets, may be deferred from the payment of the annual franchise fee. The payment of annual franchise fees may be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such Facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty (30) days of notice to pay. 15 Page 73 of 466 Ordinance No. 1391 (2001 series) Page 16 of 28 ARTICLE 12 COMPLETION OF WORK In the event that the Grantee fails to commence any work or act and diligently proceed therewith or to complete any such act or work required of the Grantee by the terms of this franchise within the time limits required hereby (and except as is otherwise provided in Articles 10 and 11), the City may cause such act or work to be completed by the City or, at the election of the City, by a private contractor. The Grantee agrees to pay the City, within thirty (30) days after delivery of an itemized bill, the cost of performing such act or work plus an amount equal to fifteen percent (15 %) thereof for overhead. If the Grantee is dissatisfied with any decision made by the City Public Works Department hereunder or the determination of the cost of any work performed by the City pursuant to this Agreement, it may petition the City Council to review the same within ten (10) days after such decision or determination. ARTICLE 13 RECOVERY OF COSTS OF REPAIRS AND UNPAID FEES If the Grantee has not paid the City for such fees and expenses and/or liquidated damages incurred by or payable to the City as hereinabove set forth, the City may institute the following collection procedures (which procedures are in addition to any other rights, in law or equity, which the City has to correct amounts due under this franchise and to enforce the terms of this franchise): A. The City Public Works Department shall keep an itemized account of the expenses incurred by the City pursuant hereto, or the fees unpaid by the Grantee. Sixty (60) days after the presentation of the bill to the Grantee therefore, the City Public Works Department shall prepare and file with the City Clerk a report specifying the work done by the City, or the unpaid fees, the itemized and total cost of the work, a description of the work performed, and the name and address of the Grantee entitled to notice pursuant to this Article. B. Upon receipt of said report, the City Clerk shall present it to the City Council for consideration. The City Council shall fix a time, date and place for hearing said report, and any protest or objections thereto. The City Clerk shall cause notice of said hearing to be posted in a newspaper of general circulation in the City, and served by certified mail, postage prepaid, addressed to the Grantee as set forth herein. Such notice shall be given at least ten (10) days prior to the date set for hearing and shall specify the day, hour, and place when the City Council will hear and pass upon the City Public Works Department's report, together with any objections or protests which may be filed as hereinafter provided. C. The Grantee may file written protests or objections with the City Clerk at any time prior to the time set for the hearing on the report of the City Public Works Department. Any such protest or objection must contain a description of the work or unpaid fee or liquidated damages in which the Grantee is contesting and the grounds of such protest or objection and the date it was received by him. He shall present such protest or objection to the City Council at the 16 Page 74 of 466 Ordinance No. 1391 (2001 series) Page 17 of 28 time set for the hearing, and no other protest or objection shall be considered, except as determined by the City Council for good cause shown. D. Upon the day and hour fixed for the hearing, the City Council shall hear and pass upon the report of the City Public Works Department together with any such objections or protests, make such revision, correction or modification to the charge as it may deem just; and when the City Council is satisfied with the correctness of the charge, the report (as revised, corrected or modified), together with the charge, shall be confirmed or rejected. The decision of the City Council on the report and the charge, and on all protests or objections, shall be the final and conclusive decision of the City. E. The City Council may thereupon order that such charge shall be made a personal obligation of the Grantee or assess such charge against the property of the Grantee. 1) If the City Council orders that the charge shall be a personal obligation of the Grantee, it shall direct the City Attorney to collect the same on behalf of the City by use of all appropriate legal remedies. 2) If the City Council orders that the charge shall be assessed against the property of the Grantee, it shall confirm the assessment, cause the same to be recorded on the assessment roll, and thereafter, said assessment shall constitute a special assessment against a lien upon any property held in the City of San Luis Obispo by the Grantee. F. The validity of any assessment made under the provisions of this franchise shall not be contested in any action or proceeding unless the same is commenced within ninety (90) days after the assessment is placed upon the assessment roll as provided herein. G. The City Council, in its discretion, may determine that assessments in amounts of 500.00 or more shall be payable in not more than five (5) equal annual installments. The City Council's determination to allow payment of such assessments in installments, the number of installments, whether they shall bear interest, and the rate thereof shall be adopted by a resolution prior to the confirmation of the assessment. H. Immediately upon its being placed on the assessment roll, the assessment shall be deemed to be complete, the several amounts assessed shall be payable, and the assessments shall be liens against the property of the grantee in the City of San Luis Obispo. The lien shall be subordinate to all existing special assessment liens previously imposed upon the same property, and shall be paramount to all other liens except for state, county, and municipal taxes with which it shall be upon a parity. The lien shall continue until the assessment and all interest due and payable thereon are paid. 1) All such assessments remaining unpaid after thirty (30) days from the date of recording on the assessment roll shall become delinquent and shall bear interest at the highest rate permitted by law from and after said date. 17 Page 75 of 466 Ordinance No. 1391 (2001 series) Page 18 of 28 I. After confirmation of the report, certified copies of the assessment shall be filed with the County Auditor on or before August 10th. The descriptions of the parcels reported shall be those used for the same parcels on the County Assessors map books for the current year. J. The amount of the assessment shall be collected at the same time and in the same manner as ordinary county taxes are collected and shall be subject to the same penalties and procedure and sale in case of delinquency as provided for ordinary county taxes. All laws applicable to the levy collection and enforcement of taxes shall be applicable to such assessment. If the City Council has determined that the assessment shall be paid in installments, each installment and any interest thereon shall be collected in the same manner as ordinary City taxes is in successive years. If any installment is delinquent, the amount thereof is subject to the same penalties and procedure for sale as provided for ordinary county taxes. K. All money recovered by payment of the charge or assessment or from the sale of the property at foreclosure sale shall be paid to the City Finance Director. ARTICLE 14 BOND A. Grantee shall, concurrently with the filing of and acceptance of award of this franchise, file with the City Clerk, and yearly thereafter, maintain in full force and effect, a bond guaranteeing to the City of San Luis Obispo the penal sum of One Million Dollars ($1,000,000.00), with a surety to be approved by the City Public Works Director and City Risk Manager, conditioned that Grantee shall, well and truly observe, fulfill and perform each and every term and condition of this franchise, and in c, material breach of condition of said franchise, at the discretion of the City Public Works Director, a percentage of the amount of the bond shall be paid to the City according to the following schedule, which cumulative amount for any said breach not cured within the time specified below shall not exceed the full amount of the bond, in addition to any damages recoverable by the City and shall be recoverable from the principal and sureties of the bond: Following receipt of notice by Certified Mail sent by the City, failure to cure said breach of condition, within: 10 business days 30 calendar days 60 calendar days 90 calendar days In Penal sum paid to City: 5% of the amount of the bond 30% cumulative amount of the bond 70% cumulative amount of the bond 100% cumulative amount of the bond Page 76 of 466 Ordinance No. 1391 (2001 series) Page 19 of 28 The amount of time specified above shall be tolled while City and Grantee resolve, or until the City Council rules on, any written appeal, protest or objection to the City Public Works Director's decision as set forth in Articles 12, 13, 19, and 25, and elsewhere in this agreement; however, if Grantee's appeal, protest or objection is found by the City Council to be the result of bad -faith actions or tactics that are frivolous or intended to cause unnecessary delay, such amount of time shall not be tolled. If said bond is not so filed, the award of this franchise and privileges will be set aside and any money paid therefore will be forfeited. Whenever a bond is taken and deemed to be liquidated damages for any breach of a term or condition of this franchise, the Grantee must immediately file another bond of like amount and character, and if the Grantee fails to do so within the time set by the City Public Works Director, the City Council may, by resolution, declare said franchise automatically forfeited. Nothing herein shall insulate Grantee from liability in excess of the amount of said bond or shall be construed as a waiver by the City of any remedy at law against the Grantee for any breach of the terms and conditions of this franchise, or for any damage, loss or injuries suffered by the City of San Luis Obispo in case of any damage, loss or injury suffered by any person, firm, or corporation by reason of any work done or any activity conducted by the Grantee in exercise of this franchise. B. The faithful performance bond shall continue to exist for one (1) year following the City's approval of any sale, transfer, assignment or other change of ownership of this franchise, or of the expiration or termination of this franchise. The City may release said bond prior to the end of the one (1) year period upon satisfaction by Grantee of all the obligations under this franchise. ARTICLE 15 INSURANCE A. The Grantee shall procure and shall keep in force for the term of the franchise, at the sole cost and expense of the Grantee, the following insurance. All insurance coverages are to be placed with insurers which have a Best's rating of not less than B +VIII and are admitted insurance companies in the State of California. Grantee may satisfy the requirements of this Article 15 by showing proof of self - insurance reasonably satisfactory to the City Attorney and Risk Manager. Commercial General Liability Insurance (CGL): Grantee shall maintain in full force and effect Commercial General Liability Insurance with the following coverages: 1. Personal Injury and Bodily Injury, including death resulting therefrom. 2. 'Property Damage. 3. Automobile coverage which shall include owned, non -owned and hired vehicles. The amount of insurance shall not be less than the following: Single limit on the coverage applying to bodily and personal injury, including death resulting therefrom, property damage, and automobile coverage in the total amount of Ten Million Dollars ($10,000,000.00). The following endorsements must be provided in the CGL policy: 1. If the insurance policy covers on an "accident" basis, it must be changed to occurrence." 19 Page 77 of 466 Ordinance No. 1391 (2001 Series) Page 20 of 28 2. The policy must cover personal injury as well as bodily injury. 3. Blanket contractual liability must be afforded and the policy must contain a cross - liability or severability of interest endorsement. 4. Broad Form Property Damage Liability must be afforded. 5. Products and Completed Operations coverage must be provided. 6. The City, its officers, employees and agents shall be named as additional insured under the policy. The policy shall include the appropriate insurance company endorsement, as required under.City regulations. The policy shall provide that the insurance will operate as primary insurance. No other insurance effected by the City, whether commercial or self - insurance will be called upon to contribute to a loss hereunder. The following requirements apply to all insurance to be provided by Grantee: 1. A certificate of insurance shall be furnished to the City. Upon request by the City, Grantee shall provide a certified copy of any insurance policy to the City within forty -five working days of the City's request. 2. Certificates and policies shall state that the policies will not be canceled or reduced in coverage or changed in any other material respect without thirty days prior written notice to the City. B. Failure on the part of Grantee to procure or maintain required insurance and bonding shall constitute a material breach of this franchise upon which the City may immediately terminate or suspend this franchise. ARTICLE 16 INDEMNIFICATION BY GRANTEE The Grantee, by the acceptance or use of the franchise hereby granted, shall defend, indemnify and shall keep and save free and harmless the City, its officers, agents and/or employees against any and all claims, demands or causes of action which may be asserted, prosecuted or established against them, or any of them, for damage to persons, or property, of whatsoever nature, arising out of the use by it of the City streets hereunder or arising out of any of the operations or activities of the Grantee pursuant to this franchise, whether such damage shall be caused by its own sole negligence or negligence concurrent with the City, excepting therefrom, however, any claim or demand based on the sole negligence or willful misconduct of the City and any claim, demand, or cause of action which may be asserted, prosecuted or established against the City under the provision of the Worker's Compensation Act for injury to or the death of any of City's officers, agents or employees while acting within the scope of their employment. Grantee shall not be responsible for any criminal, fraudulent or malicious conduct of the City. ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE A. On and after the Grantee's acceptance of this franchise as provided in Article 23 herein, Grantee, its partners, its shareholders, or any other person or persons holding an interest 20 Page 78 of 466 Ordinance No. 1391 (2001 series) Page 21 of 28 in Grantee shall not transfer any interest in the franchise where such a transfer would lead to another person achieving a twenty -five percent (25 %) or greater interest in this franchise or change control of this franchise, unless the City approves such a transfer or change in control. The City shall approve a request for transfer or change in control only if doing so serves the public interest. As used in this franchise Ordinance, "control" includes actual working control in whatever manner exercised. 1. The City shall deny any such request for transfer or change in control if the transferor or transferee fails to comply with any applicable provision of this Article of this franchise Ordinance, or if the City determines the transferor is in non - compliance with the terms and conditions of this franchise Ordinance, or if a transferee is lacking in experience and/or financial ability to operate the pipelines authorized by this franchise Ordinance, or if the proposed transfer will be detrimental to the public interest. B. Both the Grantee and the proposed transferee shall inform the City Public Works Department of any pending change in control of this franchise or of any pending transfer of an interest in the franchise requiring the City's consent pursuant to this Article, and each shall provide applications containing all documents on which the transfer or change in control is predicated and all documents which the City Public Works Department determines are necessary to evaluate the transfer or change of control. These applications shall be signed by duly authorized representatives of the Grantee and the proposed transferee, with signatures acknowledged by a notary. The appropriate transfer fee described in Article 17(C), infra shall accompany these applications. 1. Grantee's application shall include: a. Identification and ownership of the proposed transferee in the same detail as if the proposed transferee were an applicant for an initial grant; b. Current financial statements showing the financial condition of the Grantee as of the date of the application. In this application, the Grantee shall also agree to submit financial statements showing the condition of the franchise as of the closing. Said financial statements shall have been audited and certified by an independent certified public accountant, and shall be submitted within ninety (90) days of the closing. 2. The proposed transferee's application shall contain current financial statements of the proposed transferee and other such information and data, including but not limited to sources of capital, as will demonstrate conclusively that the proposed transferee has all the financial resources necessary to acquire the pipeline(s), carry out all of the terms and conditions of the franchise, remedy any and all defaults and violations of the provisions of this franchise in the Grantee's past and present operations, make such other improvements and additions as may be required or proposed to maintain and conduct the services and facilities required under this franchise. The proposed transferee will be required to authorize release of financial information to the City from financial institutions relating to information supplied by the proposed transferee in support of the application. The proposed transferee's application shall also include: 21 Page 79 of 466 Ordinance No. 1391 (2001 aeries) Page 22 of 28 a. A construction schedule, describing type and placement of construction, detail phases of construction, and include map(s) correlated to the phases of construction. Map(s) shall include detail on the location, length, depth, and internal diameter of any planned pipelines. b. Copies of any agreements with utility companies for the use of any facilities including, but not limited to, poles, lines and conduit. c. A description of plans for emergency equipment and personnel enabling the transferee to meet the emergency equipment personnel requirements in Article 8 herein. d. Any information indicating as specifically as possible that any principal, manager, or associate of the proposed transferee or a parent entity of the proposed transferee has previously been or is currently: i. A party to a criminal proceeding (involving felonies or misdemeanors) in which any of the following offenses have been charged: fraud, embezzlement, tax evasion, bribery, extortion, jury tampering, obstruction of justice (or other misconduct affecting public or judicial officers in the performance of their duties), false /misleading advertising, perjury, antitrust violations (state or federal), violation of environmental laws or regulations, or conspiracy to commit any of the foregoing; ii. A party to a civil proceeding concerning liability for any of the following: unfair or anticompetitive business practice, antitrust violations (state or federal) including instances in which consent decrees were entered, violations of security laws (state or federal), false /misleading advertising, racketeer influences and corrupt organizations, violation of environmental laws or regulations, or contraband forfeitures; iii. Subject to any penalty, criminal or civil, involving failure to comply with the requirements of a pipeline franchise; iv. Involved in instituting legal action against its franchising authorities; v. Involved in revocation/non- renewal of any other franchise; e. Any other details, statements, in or references pertinent to the subject matter of such application which shall be required or requested by the City or by any provision of law. f. An express and unconditional written acceptance of the terms and conditions of this Franchise Ordinance, in its most current form, as a condition to the transfer. C. A fee shall be submitted with the applications for the City's consent to transfer or change of control. 1. Where the City's consent to a transfer or a change of control of this franchise does not result in the modification of this franchise by adoption of an amending ordinance, this fee for each application shall be as set forth in the City's fee ordinance. 2. Where the City's consent to a transfer or a change of control of this franchise results in the modification of this franchise by adoption of an amending ordinance this fee shall be as set forth in the City's fee ordinance. 3. In the event the costs to process the applications exceed the fees detailed above, the applicants may be required to pay any additional costs incurred by the City in processing the applicants' requests for the City's consent to the transfer or change of control of this franchise. Such costs may include the cost incurred for hiring consultants to assist in evaluating the applications. Such costs shall be paid by the applicants prior to final consideration of the request by City Public Works Department, or the City Council, as applicable. 22 Page 80 of 466 Ordinance No. 1391 (2001 Neries) Page 23 of 28 D. Within thirty (30) days of the effective date of the City's approval of the transfer or change of control, or within thirty (30) days of the date of the close of the transfer or change of control, the Grantee shall file with the City Public Works Department: (1) a certified copy of each duly executed instrument of such a transfer or change in control; and (2) the submittal of a final accounting and report of all fees due under this franchise. The proposed transferee shall be responsible for any underpayment, and shall be entitled to a credit for any overpayment. Within ninety (90) days of the closing of the transfer or change of control, the Grantee shall submit financial statements, audited and certified by an independent certified public accountant, showing the condition of the franchise as of the closing. If such duly executed instruments are not filed with the City Public Works Department by the deadlines imposed in this Article, or if the final documents are different from the preliminary documents, the City Public Works Department may inform the proposed transferee that the transfer or change in control is not deemed to be in force and effect. The City Public Works Department may then administratively determine that this franchise is forfeited and the City Council may, without notice, by ordinance repeal this franchise. E. As a condition to the granting of consent to such a transfer or change in control, the City Council may impose such additional terms and conditions upon this franchise and upon the proposed transferee as are in the public interest. Such additional terms and conditions shall be imposed by ordinance. Nothing herein contained shall be construed to grant Grantee the right to transfer or change control of this franchise or any part thereof, except in the manner aforesaid. This Article 17 applies to any transfer of this franchise, or of any change in control of this franchise, whether by operation of law, by voluntary act of Grantee, or otherwise. ARTICLE 18 WAIVER OF BREACH 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 succeeding breach of the same or other covenant, 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 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. ARTICLE 19 DEFAULT A. In the event that the Grantee shall default in the performance of any of the terms, covenants and conditions herein, the City may give written notice to the Grantee of such default by certified mail. In the event that the Grantee does not commence the work necessary to cure such default within five (5) business days after such notice is received or prosecute such work diligently to completion, the City may declare this franchise forfeited by giving written notice thereof to the Grantee, whereupon this franchise shall be void and the rights of the Grantee 23 Page 81 of 466 Ordinance No. 1391 (2001 series) Page 24 of 28 hereunder shall terminate and the Grantee shall execute an instrument of surrender and deliver the same to the City. If the City Council declares this franchise forfeited, it may thereupon and thereafter exclude the Grantee from further occupancy or use of all City roads and streets authorized under this franchise. A forfeiture of said franchise shall not of itself operate to release any bond filed for said franchise. Upon declaring a franchise forfeited, the City Council may elect to take and accept any bond as liquidated damages therefore or pursue any other legal remedy for any damage, loss or injury suffered by the City as a result of such breach or both. After forfeiture, any 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 City Public Works Department and is filed with the City Clerk. The release shall state whether all excavations have been back filled, all obstructions removed, and whether the substratum or surface of City streets occupied or used have been placed in good and serviceable condition. A release shall not constitute a waiver of any right or remedy which the City of San Luis Obispo 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. B. No provision herein 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 said terms and conditions, but the remedies and procedure herein provided, in addition to those provided by law shall be deemed to be cumulative. ARTICLE 20 SCOPE OF RESERVATION Nothing herein contained shall ever 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 herein of specific rights reserved shall not be construed as exclusive, or as limiting the general reservation herein made or as limiting such rights as the City may now or hereafter have in law. ARTICLE 21 NOTICE Any notice required to be given under the terms of this franchise, the manner of service of which is not specifically provided for, may be served as follows: Upon the City, by serving the City Clerk, personally or by addressing a written notice to the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, and depositing such notice in the United States mail, postage prepaid. Upon the Grantee, by addressing a written notice to Grantee addressed to Union Pipeline Company, c/o Tosco Refining Company, 9645 Santa Fe Springs Road, P.O. Box 2628, Santa Fe Springs, CA 90670 -0628, Attn: Supervisor, R/W Administration, or such other address as may 24 Page 82 of 466 Ordinance No. 1391 (2001 series) Page 25 of 28 from time to time be furnished in writing by one party to the other and depositing said notice in the United States mail, postage prepaid. When service of any such notice is made by mail, the time of such notice shall begin with and run from the date of the deposit of same in the United States mail. ARTICLE 22 SUCCESSORS The terms herein shall inure to the benefit of and shall bind, as the case may be, the successors and assigns of the parties hereto, subject, however, to the provisions of Article 17. ARTICLE 23 ACCEPTANCE OF FRANCHISE A. This franchise is granted and shall be held and enjoyed only upon the terms and conditions herein contained. By accepting this grant of franchise, Grantee shall agree to be bound by each and all of the requirements of Article X, Sections 1001 through 1007 of the San Luis Obispo City Charter. B. Grantee shall, within ten (10) days after the passage of this franchise Ordinance, file with the City Clerk an express and unconditional written letter of acceptance of, and consent to, the terms and conditions of this franchise Ordinance, in its current version, and as subsequently amended, pursuant to San Luis Obispo City Charter, Article X, Section 1004. C. The parent entity, or entities, if any, of Grantee, shall file a letter with the City, concurrent with Grantee's letter of acceptance, which guarantees the performance of each and every term, covenant and condition imposed on Grantee pursuant to the franchise Ordinance. D. Grantee's letter of acceptance shall be signed by two (2) duly authorized representatives of Grantee, whose signatures shall be acknowledged by a notary, and shall be accompanied by the performance bond and evidence of insurance required by this franchise Ordinance. ARTICLE 24 FORCE MAJEURE The time within which Grantee is obligated hereunder to construct, erect, maintain, operate, repair, renew, change the size of and remove pipelines or other improvements shall be extended for a period of time equal in duration to, and performance in the meantime shall be excused on account of, and for, and during the period of any delay caused by strikes, threats of strikes, lockouts, war, threats of war, insurrection, invasion, acts of God, calamities, violent action of the elements, fire, action or regulation of any governmental agency law or ordinance, impossibility of obtaining materials, or other things beyond the reasonable control of Grantee. P4 Page 83 of 466 Ordinance No. 1391 (2001 series) Page 26 of 28 ARTICLE 25 LIQUIDATED DAMAGES A. By acceptance of this franchise, Grantee understands and acknowledges that failure to timely comply with any performance requirements stipulated in this franchise Ordinance will result in damages to the City, and that it is and will be impractical to determine the actual amount of such damage in the event of delay or nonperformance. Each of the amounts set forth below has been set in recognition of the difficulty of affixing actual damages arising from breach of these time of performance requirements. Each of said amounts constitutes a reasonable estimate of these damages. This section does not limit the rights and remedies available to the City for damages other than the timely compliance with performance requirements as described in this section. The liquidated damages set forth below shall be chargeable to the bond, letter of credit or security fund provided for in Article 14, supra, should Grantee not make payment within thirty (30) days of written notice by certified mail by the City that the following amounts are due for the following concerns: 1. Failure to provide data, documents, or reports within ten (10) business days after receipt of written request by the City, by certified mail, or such longer time as may be specified in said request: Two Hundred Fifty Dollars ($250.00) per day for each day, or part thereof that each violation continues. 2. Failure to provide to the City within ten (10) business days after receipt of written request by the City, by certified mail, current evidence of insurance and bonding: Two Hundred Fifty Dollars ($250.00) per day for each day, or part thereof, that each noncompliance continues. Nothing in this Section shall preclude immediate termination or suspension of this franchise as provided for under Article 15B., supra. 3. Failure by Grantee to timely restore public or private property after performance of work, and following Grantee's receipt of written request by the City to do so within ten (10) business days thereafter by certified mail: Two Hundred Fifty Dollars ($250.00) per day or part thereof, that each non - compliance continues. Any fines paid pursuant to this Subsection 3 shall be paid solely to the Street Fund of the City Public Works Department. B. If the City Public Works Department determines that Grantee is liable for liquidated damages, the City Public Works Department shall issue to Grantee by certified mail written notice of intention to charge liquidated damages. Liquidated damages shall begin to accrue as of the date of the written notice and as set forth in said notice. The notice shall set forth the basis for the liquidated damages and give Grantee a reasonable time in which to remedy the violation. C. Grantee shall have the right to appeal any notice to the City Public Works Department by certified mail, within twenty (20) days after issuance of the notice by the City Public Works Department. The City Public Works Department shall hold an administrative hearing within sixty (60) days after receipt of an appeal. The City Public Works Director's decision shall be the final decision of the City. 26 Page 84 of 466 Ordinance No. 1391 (2001 series) Page 27 of 28 D. If Grantee does not appeal the notice within said twenty (20) day period, Grantee shall pay the amount(s) of liquidated damages as stated in the notice. If payment is not paid as provided for in this Article, the City may withdraw against the bond provided for in Article 14 herein. ARTICLE 26 ATTORNEYS' FEES In the event the City or Grantee brings legal action against the other, or against Grantee's bonding companies or insurance carriers to compel performance of, or to recover for breach of any covenant, agreement or condition contained in this franchise, or for damages, the prevailing party shall be entitled to, in addition to any other relief obtained, such reasonable attorneys' fees as are fixed by the judge of the court in which such action is brought. ARTICLE 27 CONDEMNATION Notwithstanding anything to the contrary contained herein and in accordance with San Luis Obispo City Charter Article X, Section 1005, this Ordinance shall not in any way affect the right of the City to acquire the property of the Grantee thereof either by purchase or through the exercise of the right of eminent domain, and nothing herein contained shall be construed to contract away or to modify or to abridge either for a term or in perpetuity the City's right of eminent domain with respect to any public utility. The City reserves the right to purchase the property of such utility at an agreed price. In fixing the price to be paid by the City for any utility, no allowance shall be made for franchise value (other than the actual amount paid to the City at the time of the franchise acquisition), goodwill, going concern, earning power, increased cost of reproduction, severance damage, or increased value of right -of -way. SECTION 2: If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of San Luis Obispo hereby declares that they would have adopted this ordinance and each sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional. SECTION 3: This ordinance shall take effect and be in full force and effect thirty (30) days after its passage, and before the expiration of fifteen (15) days after passage of this ordinance, it shall be published once with the names of the members of the City Council voting for and against the ordinance in a newspaper of general circulation published in the City of San Luis Obispo, State of California. SECTION 4: A synopsis of this ordinance, approved by the City Attorney, together with the ayes and noes shall be published once in full at least five (5) days prior to its final passage, in a newspaper published and circulated in said City, and at the same time shall go into 27 Page 85 of 466 Ordinance No. 1391 (2001 6eries) Page 28 of 28 effect at the expiration of thirty (30) days after its said final passage. A copy of the full final text of this ordinance shall be on file in the Office of the City Clerk on and after the date following the introduction and passage to print and shall be available to any interested member of the public. INTRODUCED on the 19th day of June 2001 AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the 10"' day of July 2001, on the following roll call vote: AYES: Council Members Marx, Mulholland, Schwartz, Vice Mayor Ewan and Mayor Settle NOES: None ABSENT: Non a Mayor Allen Settle ATTE l:ce Price, City Clerk APPROVED: f y G. J rgen , C&4 Attorney Page 86 of 466 V council M D j agenda Report C I T Y OF SAN LU IS O B I S P O FROM: Jonathan P. Lowell, City Attorney SUBJECT: ADOPTION OF ORDINANCE NO. 1504 APPROVING THE TRANSFER OF RIGHTS AND OBLIGATIONS UNDER FRANCHISE ORDINANCE 1391 FROM UNION PIPELINE COMPANY ("UNOCAP"), A CALIFORNIA CORPORATION AND WHOLLY OWNED SUBSIDIARY OF CONOCOPHILLIPS COMPANY TO CONOCOPHILLIPS PIPELINE COMPANY AND AMENDING ORDINANCE NO. 1391 TO REFLECT THE TRANSFER CAO RECOMMENDATION Adopt Ordinance No. 1504. DISCUSSION On April 3, 2007, the Council voted 5-0 to introduce Ordinance No.1504 which transfers the rights and obligations under Franchise Ordinance 1391 from Union Pipeline Company Unocap") to ConocoPhillips Pipeline Company and amends the existing franchise ordinance to reflect accurately the corporate ownership and responsibility for the franchise. The amendment makes no other substantive change to the terms or conditions of the existing franchise agreement. Ordinance No. 1504 is now ready for adoption and will become effective thirty days after the date of its final passage. ATTACHMENT Ordinance No. 1504 G:\Franchises\ConocoPhillips\2006 Franchise Transfer(from Tosco-Unocal)\CAR.Final Adoption UnionPipeline Ord 1391 now 1504.doc Cq - IPage 87 of 466 ORDINANCE NO. 1504 (2007 Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING THE TRANSFER FROM UNION PIPELINE COMPANY, A CALIFORNIA CORPORATION, TO CONCOCOPHILLIPS PIPELINE COMPANY, A DELAWARE CORPORATION, OF A FRANCHISE TO CONSTRUCT, OPERATE, AND MAINTAIN PIPELINES FOR THE TRANSPORTATION OF OIL, AND OTHER SPECIFIED MATERIALS IN THE CITY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND AMENDING ORDINANCE NO. 1391 TO REFLECT THE TRANSFER WHEREAS, the City of San Luis Obispo adopted Ordinance No. 1391 on July 10, 2001, granting a franchise to Union Pipeline Company ( "Unocap "), a California Corporation for a term of 10 years for the transportation and distribution of oil and other specified materials in the City of San Luis Obispo; and WHEREAS, effective February 1, 2005, Unocap merged into ConocoPhillips Pipe Line Company ( "CPPLC "), a wholly owned subsidiary of ConocoPhillips Company, and is no longer a legal entity; and WHEREAS, CPPLC is currently operating pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo and expressly agrees to assume the rights and obligations of Unocap under Franchise Ordinance 1391; and WHEREAS, ConocoPhillips Pipeline Company has requested that Gouncil approve the transfer of the subject franchise from Unocap to ConcocoPhillips; and WHEREAS, on March 6, 2007, pursuant to Section 1002 of the Charter of the City of San Luis Obispo and Article 17 of Franchise Ordinance 1391, the City Council adopted Resolution No. 9881 (2007 Series), declaring its intention to consent to the transfer of Franchise Ordinance number 1391 from Unocap to ConocoPhillips Pipe Line Company; and and WHEREAS, the City Clerk published said Resolution in the Tribune on March 17; 2007; WHEREAS, a public hearing was held on April 3, 2007; and WHEREAS, the City Council finds that the requested transfer is in the best interest of the City. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo that the transfer from Union Pipeline Company, a California corporation, to ConcocoPhillips Pipeline Company, a Delaware corporation, of the franchise granted by Ordinance No. 1391, to construct, operate, and maintain pipelines for the transportation of oil, 01504 Page 88 of 466 Ordinance No. 1504 (2007) Page 2 and other specified materials in the City of San Luis Obispo is approved and Ordinance No. 1391is amended to reflect the transfer, as follows: SECTION 1: Subsection A of Article I and Article 21 of the franchise set forth in Ordinance No. 1391 (2001 Series) are amended to read as follows: ARTICLE I NATURE OF FRANCHISE A. Grant of Franchise. 1. The City of San Luis Obispo (hereinafter referred to as "City "), hereby grants to ConocoPhillips Pipeline Company, a Delaware Corporation, (hereinafter referred to as Grantee "), pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9(b) of the California Constitution, and Section 39732(b) of the California Government Code, the non - exclusive right, privilege and franchise, subject, however, to all the limitations and restrictions herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change the size of and remove pipelines, not to exceed twelve (12) inches nominal internal diameter, for the transportation of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, movable by pipeline, in, under, along, and across the public streets, ways, alleys and places within the City of San Luis Obispo (hereinafter collectively referred to as "streets "), as described in Exhibit No. 1, attached hereto and made a part hereof. ARTICLE 21 NOTICE Any notice required to be given under the terms of this franchise, the manner of service of which is not specifically provided for, may be served as follows: Upon the City, by serving the City Clerk, personally or by addressing a written notice to the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, and depositing such notice in the United States mail, postage prepaid. Upon the Grantee, by addressing a written notice to Grantee addressed to ConocoPhillips Company, 3900 Kilroy Airport Way, Suite 210, Long Beach, CA 90806, Attn: Supervisor, R/W Administration, or such other address as may from time to time be furnished in writing by one party to the other and depositing said notice in the United States mail, postage prepaid. When service of any such notice is made by mail, the time of such notice shall begin with and run from the date of the deposit of same in the United States mail. Page 89 of 466 Ordinance No. 1504 (2007) Page 3 SECTION 2: The rights and obligations of the parties pursuant to Franchise Ordinance No. 1391 shall continue and remain otherwise unchanged and ConocoPhillips Pipeline Company expressly assumes all rights and obligations conferred upon it by Ordinance No. 1391, as amended. SECTION 3: This ordinance shall take effect and be in full force and effect thirty (30) days after its passage, and before the expiration of fifteen (15) days after passage of this ordinance, it shall be published once with the names of the members of the City Council voting for and against the ordinance in a newspaper of general circulation published in the City of San Luis Obispo, State of California. SECTION 4: A synopsis of this ordinance, approved by the City Attorney, together with the ayes and noes shall be published once in full at least five (5) days prior to its final passage, in a newspaper published and circulated in said City, and at the same time shall go into effect at the expiration of thirty (30) days after its said final passage. A copy of the full final text of this ordinance and Ordinance 1391, as amended, shall be on file in the Office of the City Clerk on and after the date following the introduction and passage to print and shall be available to any interested member of the public. INTRODUCED on the 3rd day of April 2007, AND FINALLY ADOPTED by the Council of -the City of San Luis Obispo on the 17th day of April 2007, on the following roll call vote: AYES: Council Members Brown, Carter and Settle, Vice Mayor Mulholland and Mayor Romero NOES: None ABSENT: None weed Mayor David F. Romero ATTEST: Audrey 14 er 1 hereby certify that this docurnertt is a true City Clerk and accurate original of Ordinance No. 1504 , and that the ordinance was published pursuant APPROVED AS TO FORM: to C or 8ectio Dab ny Clerk VDffath1h"P. Lowell City Attorney Page 90 of 466 couml( w- I j Agenda nepoat CITY . OF SAN LUIS OBISPO FROM: Michael Codron, Assistant City Manager Prepared By: Amy Lopez, Administration Intern SUBJECT: ADOPTION OF ORDINANCE NO. 1564, GRANTING CONOCOPHILLIPS PIPELINE COMPANY A FRANCHISE TO CONSTRUCT, OPERATE AND MAINTAIN PIPELINES FOR THE TRANSPORTATION OF OIL, AND OTHER SPECIFIED MATERIALS IN THE CITY OF SAN LUIS OBISPO RECOMMENDATION Adopt Ordinance No. 1564 to renew an existing franchise agreement with ConocoPhillips, pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9(b) of the California Constitution, and Section 39732(b) of the California Government Code. DISCUSSION Background ConocoPhillips is currently operating pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo. ConocoPhillips has requested the City of San Luis Obispo enter into a new franchise agreement. The proposed agreement covers issues such as purpose, term, fees, insurance, and indemnity. In addition, the franchise agreement covers all other subjects commonly found in such franchise documents such as: the type of maintenance and operation of the pipelines, permitted transfers of the franchise, requirement for moving pipelines to accommodate public works and utilities, encroachment permits, and pipeline abandonment and removal requirements. The term of the franchise granted under this Ordinance shall be for a term of ten (10)years, commencing with the date on which it is accepted by Grantee. ALTERNATIVE Council may reject the application by ConocoPhillips for a new franchise agreement and direct Staff to initiate appropriate procedures by which ConocoPhillips begins removal of the pipelines. This alternative is not recommended because it is in the City's best interest to have a qualified company operate and maintain the existing pipeline infrastructure within the City's right-of-way. ATTACHMENT Ordinance No. 1564 G:\Stan\Codron\CAR\CC 2nd read Conocoftllips.doc C8-1Page 91 of 466 ORDINANCE NO. 1564 (2011 Series) AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO GRANTING TO CONOCOPHILLIPS PIPELINE COMPANY, A DELAWARE CORPORATION CONOCOPHILLIPS), A FRANCHISE TO CONSTRUCT, OPERATE, AND MAINTAIN PIPELINES FOR THE TRANSPORTATION OF OIL, AND OTHER SPECIFIED MATERIALS IN THE CITY OF SAN LUIS OBISPO WHEREAS, on May 3, 2011, the City of San Luis Obispo passed Resolution No. 10261, a resolution of intention to approve a franchise agreement with ConocoPhillips; and WHEREAS, the Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on June 7, 2011, for the purpose of considering approval of the franchise agreement; and WHEREAS, notices of said public hearing were made at the time and in the manner required by law; and WHEREAS, ConocoPhillips is currently operating pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo; and WHEREAS, ConocoPhillips has requested the City of San Luis Obispo enter into a new franchise agreement; and WHEREAS, the proposed agreement covers issues such as purpose, term, fees, insurance, and indemnity. In addition, the franchise agreement covers all other subjects commonly found in such franchise documents such as: the type of maintenance and operation of the pipelines, permitted transfers of the franchise, requirement for moving pipelines to accommodate public works and utilities, encroachment permits, and pipeline abandonment and removal requirements. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo to grant a franchise to construct, operate, and maintain pipelines for the transportation of oil, and other specified materials in the City of San Luis Obispo to ConocoPhillips, as follows: SECTION 1: Terms and Conditions of Franchise (Table of Contents begins on page 2): 01564 Page 92 of 466 City Council Ordinance No. 15o4 (2011 Series) TABLE OF CONTENTS Page ARTICLE I NATURE OF FRANCHISE 4 A. Grant of Franchise 4 B. Limitations Upon Grant 5 C. Rights Reserved to the City of San Luis Obispo 6 ARTICLE 2 APPURTENANCES 6 ARTICLE 3 LOCATION OF PIPELINES 7 ARTICLE 4 CONSTRUCTION OF PIPELINES 7 A. Terms of Construction 7 B. Restoration of Streets 7 ARTICLE 5 COMMENCEMENT OF CONSTRUCTION 7 ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED 8 ARTICLE 7 COMPENSATION TO THE CITY 9 ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS 10 ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAIR OF DAMAGE TO CITY STREETS 11 ARTICLE 10 REARRANGEMENT OF FACILITIES 11 A. Expense of Grantee 11 B. Expense of Others 12 C. Rearrangement of the Facilities of Others 13 D. Notice 13 ARTICLE II GRANTEE'S REMOVAL OR ABANDONMENT OF FACILITIES 13 ARTICLE 12 COMPLETION OF WORK 16 ARTICLE 13 RECOVERY OF COSTS OF REPAIRS AND UNPAID FEES 16 ARTICLE 14 BOND 18 ARTICLE 15 INSURANCE 19 0 Page 93 of 466 City Council Ordinance No. 1504 (2011 Series) ARTICLE 16 INDEMNIFICATION BY GRANTEE ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE ARTICLE 18 WAIVER OF BREACH ARTICLE 19 DEFAULT ARTICLE 20 SCOPE OF RESERVATION ARTICLE 21 NOTICE ARTICLE 22 SUCCESSORS ARTICLE 23 ACCEPTANCE OF FRANCHISE ARTICLE 24 FORCE MAJEURE ARTICLE 25 LIQUIDATED DAMAGES ARTICLE 26 ATTORNEYS' FEES ARTICLE 27 CONDEMNATION 3 20 20 23 23 24 24 25 25 25 26 27 27 Page 94 of 466 City Council Ordinance No. 15o4 (2011 Series) ARTICLE I NATURE OF FRANCHISE A. Grant of Franchise. 1. The City of San Luis Obispo (hereinafter referred to as "City "), hereby grants to ConocoPhillips Pipe Line Company, a Delaware corporation, (hereinafter referred to as Grantee ") pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9(b) of the California Constitution, and Section 39732(b) of the California Government Code, the non - exclusive right, privilege and franchise, subject, however, to all the limitations and restrictions herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change the size of and remove pipelines, not to exceed twelve (12) inches nominal internal diameter, for the transportation of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, movable by pipeline, in, under, along, and across the public streets, ways, alleys and places within the City of San Luis Obispo (hereinafter collectively referred to as "streets "), as described in Exhibit No. 1, attached hereto and made a part hereof. 2. The term of the franchise granted under this Ordinance shall be for a term of ten 10) years, commencing with the date on which it is accepted by Grantee. 3. Unless otherwise specifically stated, the following provisions shall govern the interpretation and construction of the franchise granted herein: a) This franchise shall include the right, for the period and subject to the conditions hereof, to construct, erect, maintain, operate, repair, renew, abandon and change the size and remove the said pipelines, if any, of Grantee, as laid and constructed in said streets. b) The terms and conditions of this franchise shall also apply to any pipe or other facilities of Grantee which are located within the right of way of any existing public road or street at the time such road or street becomes a City street through annexation or otherwise, subject to any other existing rights enjoyed by Grantee. c) Grantee shall not be relieved of its obligation to promptly comply with any provision of this franchise by failure of the City to enforce prompt compliance. d) Any right or power conferred, or duty imposed upon any officer, employee, department, or other City entity, by the terms of this franchise, may be legally transferred to any other City officer, employee, department, or other City entity. e) Grantee shall have no recourse whatsoever against the City for any loss, cost, expense, or damage suffered by Grantee and arising out of any provision or requirement of this franchise or its lawful enforcement by the City. f) This franchise does not relieve Grantee of any applicable requirements of the San Luis Obispo Municipal Code or of any federal, state, or City law, ordinance, rule, regulation, H Page 95 of 466 City Council Ordinance No. 1544 (2011 Series) or specification, including, but not limited to, any requirement relating to street work, street excavation permits, or the use, removal or relocation of property in streets, except as specifically prescribed herein. g) This franchise is non - exclusive. Neither the granting of this franchise nor any of the provisions contained herein shall be construed to prevent the City from granting any identical or similar franchise to any other person. h) The compensation provided for in this franchise is for (i) the rights and privileges granted by this franchise, and (ii) the right and privilege granted to the Grantee to construct, erect, maintain, operate, repair, renew, abandon and change the size of and remove the said pipelines pursuant to this franchise within the City's streets . The City expressly reserves the right to impose and collect from Grantee, on a non - discriminatory basis, its normal duly established processing and inspection fees from street cutting and excavation permits to the extent such fees are imposed generally on all non - governmental applicants for such permits within the City. i) Any activities involving the use of a pipeline system for the transmitting of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, which are not specifically authorized under this franchise are prohibited under this franchise. Except as provided in Article 2, any telecommunication or other uses not authorized in this franchise Ordinance must be approved by the City under a separate franchise. 0) If any provision of this franchise, or the application of this franchise to any person or circumstance is held invalid by a court of competent jurisdiction or is not in compliance with any requirement of the Public Utilities Commission, the City, or any other federal or state body or agency having jurisdiction over Grantee's franchise activities, the remainder of this franchise Ordinance, or the application of this franchise to persons or circumstances other than those to which it is held invalid or not in such compliance, shall not be affected thereby. B. Limitations Upon Grant. 1. No privilege or exemption is granted or conferred by this franchise except those specifically prescribed herein. 2. Any privilege claimed under this franchise by Grantee in any street shall be subordinate to any prior lawful occupancy of the street. 3. The rights and privileges of this franchise are granted solely to Grantee except as provided within this franchise Ordinance. This franchise is not be to sold, transferred, leased assigned, or disposed of as a whole or in part, either by forced sale, merger, consolidation, or otherwise, without the City's prior consent as described in Article 17, infra, or as otherwise expressly provided herein . The City agrees that such prior consent shall not be unreasonably withheld or conditioned. Page 96 of 466 City Council Ordinance No. 1504 (2011 Series) C. Rights Reserved to the City. 1. The rights reserved to the City under this franchise Ordinance are in addition to all other rights of the City, whether authorized by the San Luis Obispo City Charter, San Luis Obispo City Municipal Code, or any other federal, state, or City law, rule, or regulation. No action, proceeding or exercise of a right shall affect any other rights that may be held by the City. Grantee, by acceptance of this franchise, shall be bound thereby and shall comply with any action or requirement of the City in its exercise of any such right or power. 2. The City shall have the power and right at all times during the term of this franchise to require Grantee to conform to the laws, rules and regulations governing the operation of pipelines now or hereafter adopted by the City Council to the extent permitted by law. 3. The City may enforce, to the maximum extent permitted by law, the inspection and testing of pipelines, pursuant to state and federal standards and require appropriate remuneration and fees to cover such enforcement activities. ARTICLE 2 APPURTENANCES The Grantee shall have the right, subject to the prior approval of the City Public Works Department, to construct and maintain such traps, manholes, conduits, valves, appliances, attachments, and appurtenances (hereinafter for convenience collectively referred to as appurtenances "), as may be necessary or convenient for the proper maintenance and operation of the pipelines under said franchise. Said appurtenances shall be so located as to conform to any order of the City Public Works Department in regard thereto and not to interfere with the use of the streets for travel. The Grantee shall have the right, subject to such ordinances, rules, or regulation as are now or may hereafter be in force, to make all necessary excavations in said street for the construction and repair of said pipelines and appurtenances subject to the prior approval of the City Public Works Department. "Appurtenances" shall also include any adjunct communications lines and /or conduits as coaxial cable, optical fiber, wire, or other transmission lines or forms of transmission, and associated equipment and devices located in, upon, along, across, under or over the streets of the City, the sole function of which is to monitor or control the operation or safety of the pipeline system via the distribution of video, audio, voice, or data signals. An adjunct communications line shall not include any facility which distributes, through any means, to subscribers or persons other than Grantee, the signal of one or more broadcast television or radio stations or other sources of video, audio, voice, or data signals. ARTICLE 3 LOCATION OF PIPELINES So far as is practicable and within the requirements of the California State Fire Marshall, any pipeline hereinafter laid shall be located along the edge or shoulder of the streets or in the on Page 97 of 466 City Council Ordinance No. 1504 (2011 Series) parking areas adjacent thereto so as not unreasonably to disturb the flow of traffic and where possible shall be laid in the unpaved portion of the street. ARTICLE 4 CONSTRUCTION OF PIPELINES A. Terms of Construction. The pipelines and appurtenances laid, constructed or maintained under the provisions of this franchise shall be installed, maintained, and inspected by the Grantee in a satisfactory, safe, and workmanlike manner, of good material, and in conformity with all ordinances, rules, or regulations now or hereafter adopted or prescribed by the City Council, State, or Federal authorities . B. Restoration of Streets. The work of laying, constructing, maintaining, operating, renewing, repairing, changing size and moving any of the pipeline system contemplated by this franchise and all other work in exercise of this franchise shall be conducted according to the provisions of the City's encroachment ordinances from time to time prevailing, and otherwise in accordance with federal and state law and applicable City ordinances, and with the least possible hindrance or interference to the use of City roads by the public or by the City of San Luis Obispo, and Grantee shall provide all necessary warning, safety and traffic control devices as are or may be required by City, State or Federal regulations. All excavations shall be back filled and adequately compacted. As part of any work completed under provisions of this franchise agreement, the surface of City streets shall be repaired and replaced to meet current City standards and specifications. Under no circumstances shall the surface of City streets be placed in a manner less than as good and serviceable condition as existed at the beginning of said work, to the satisfaction of the City Public Works Department. ARTICLE 5 COMMENCEMENT OF CONSTRUCTION The Grantee, in good faith, shall commence with work of laying the pipelines and appurtenances within four (4) months from the date of passage of the approval of this franchise, and if any such pipelines be not so commenced within said time, this franchise shall be declared forfeited; provided, however, that if the Grantee is maintaining and operating an existing pipeline system over the route referred to in Article I herein, it shall be deemed to be in compliance with the foregoing. The Grantee shall not commence the construction of any new pipelines under the provision of this franchise or add to such existing pipeline system, if any there be, until it first shall have applied for and obtained a permit therefore from the City Public Works Department. The application of the Grantee shall show the following facts: the length, approximate depth and proposed location of the pipeline proposed to be laid or constructed, the size and description of the pipeline intended to be used, and such other relevant facts as the City Public Works Department may require. The Grantee shall pay any and all encroachment permit fees of the City. Upon the completion of the construction of any pipelines constructed pursuant to said franchise, the Grantee shall render a statement to the City of San Luis Obispo showing in detail the permit or permits issued and the total length of pipeline, the construction of which was authorized under such permit, or permits, and the total length of pipeline actually laid, and the 7 Page 98 of 466 City Council Ordinance No. 1504 (2011 Series) Grantee shall make payment to the City for the pipelines which have actually been constructed under said franchise as provided in Article 7, Section C. ARTICLE .6 MAPS AND REPORTS TO BE FURNISHED A. Within six (6) months of the effective date of this franchise for existing pipelines, and within ninety (90) days following the date in which any additional pipelines have been laid or constructed under this franchise, the Grantee shall file a map in such form as may be required by the City Public Works Department showing the accurate location and size of all its facilities then in place, and shall, upon installation of any additional facilities or upon removal, change or abandonment of all or any portion thereof, file a revised map or maps showing the location and size of all such additional and /or abandoned facilities as of this date. Cathodic protection is to be used for all facilities installed or maintained pursuant to this franchise. For facilities previously in liquid service and where the liquids have been removed and the facilities inerted, or for facilities previously in gas service that are not pressurized, cathodic protection shall be maintained consistent with State Fire Marshall or other agency requirements. A description of all the protective devices shall be furnished to the City Public Works Department which shall show the location and types of anodes, including a description of methods to be used as a protection against corrosion and electrolytic leakage. B. Grantee shall file with the City Finance Director, within thirty (30) days after the expiration of the calendar year, or fractional calendar year, following the date of the granting of this franchise and within thirty (30) days after the expiration of each calendar year thereafter, two copies of a report verified by the oath of Grantee or by the oath of a duly authorized representative of Grantee, showing, for the immediately preceding franchise period, the length of main lines in streets, the nominal internal diameter of such main lines, the rate per foot per year when applicable) and the total amount due to the City. In this report, Grantee shall also show any change in franchise footage since the last franchise report, segregating such footage as to new main lines and adjunct communications lines laid, old main lines and adjunct communications lines removed, old main lines and adjunct communications lines abandoned in place, and the footage of main lines and adjunct communications lines in territory annexed by the City since the last franchise report. C. Grantee shall file with the City Public Works Department within sixty (60) days after the end of the calendar year a report, in duplicate, showing the permit number of each permit obtained for the installation of new main lines during the immediately preceding franchise report period, together with the length and size of said main lines. ARTICLE 7 COMPENSATION TO THE CITY A. During the term of this franchise, Grantee shall pay to the City an annual fee for this franchise, said fee to be those fees prescribed by the California Public Utilities Code section 6231.5, provided that the rate is subject to increase to the maximum rate established in subsequent amendments of the California Public Utilities Code. Annual payments to be made Page 99 of 466 City Council Ordinance No. 1504 (2011 Series) pursuant to this franchise shall be due and payable in arrears April 1 of each year of this franchise. The initial payment hereunder shall be prorated for the remainder of the current calendar year based on a 365 -day year. At the time of payment of fees by Grantee, Grantee shall file a verified statement with the Clerk of the City of San Luis Obispo, with a copy to the City Public Works Department showing in detail the number of lineal feet and the diameter thereof, expressed in inches, of pipelines covered by this franchise during the previous calendar year, or portion thereof. The compensation provided for in this Article shall be subject to an increase after the first year of the franchise and each subsequent year during the term of this franchise, based on the provisions of California Public Utilities Code Section 6231.5, as amended. The fees set forth will be adjusted annually each year by the annual percentage change in the U S. Bureau of Labor Statistics (or successor agency) consumer price index for all urban consumers (CPI -U) all cities average for the prior calendar year. Notwithstanding the provisions as otherwise stated in this Article and franchise, the Grantee shall be liable to pay the City the annual fee for the period to and including the date of either actual removal of the facilities or the effective date of the abandonment "in place," and until the Grantee shall have fully complied with all of the provisions of law or ordinances relative to such abandonment. In the event of partial abandonment of facilities as provided in the Ordinance, or in the event of partial removal of such facilities by the Grantee, the payments otherwise due the City for occupancy of the streets by such facilities shall be reduced by the length and diameter of pipelines abandoned or the actual pipeline removed beginning with the first day of the next succeeding franchise year, and for each franchise year thereafter; provided, however, that the base rate shall be modified to reflect the adjustment (per this Article) applicable to such abandoned or removed pipeline at the beginning of the next succeeding franchise year following abandonment or removal. Grantee shall pay to the City, upon demand, the cost of all repairs made by the City to public property arising out of the operations of the Grantee under this franchise. Any fees charged or expenses charged to Grantee by City pursuant to this Article, or any other provision of this franchise Ordinance, unless disputed in good faith, shall be paid when due or shall be deemed delinquent. Any undisputed delinquent amounts shall be charged a 10% penalty and, in addition, shall accrue interest commencing thirty (30) days after the due date, at a rate of one and one -half percent (1.5 %) per month (based upon a 30 -day calendar month) or any lesser amount if required by law. Any neglect, omission or refusal by said Grantee to pay any undisputed delinquent franchise fee with any late charges, within thirty (30) days of delinquency, at the times or in the manner herein provided, shall be grounds for a declaration of a forfeiture of this franchise and of all rights hereunder. 6 Page 100 of 466 City Council Ordinance No. 15o4 (2011 Series) Payments are to be made to the City Finance Department, 990 Palm Street, San Luis Obispo, California 93401, or at such place as the City shall, from time to time, designate in writing. B. Grantee shall pay the City a granting fee of $10,000.00 within thirty (30) days after the date the City Council adopts this franchise Ordinance. C. Grantee shall pay the City Public Works Department, within sixty (60) days after the end of each calendar year, for each year during the life of this franchise, an initial construction charge calculated at the rate of One Dollar ($1.00) per foot for all new main lines laid pursuant to this franchise Ordinance during the preceding year . D. Right of Inspection. The City shall have the right to inspect Grantee's pipeline accounting and other records relating to its annual report and to audit and recompute any and all accounts payable under this franchise. Costs of audit shall be borne by Grantee when an audit results in an increase of more than five percent of Grantee's annual payments to 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 franchise or for the performance of any other obligation hereunder. ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS At all times during the term of this franchise, the Grantee shall maintain or arrange for, on a 24- hour -a -day basis, adequate emergency equipment and a properly trained emergency crew within a reasonable distance from any pipelines, appurtenances and facilities installed or maintained pursuant hereto for the purpose of monitoring the leak detection system and the communications systems if applicable, and of shutting off the pressure and the flow of contents of such facilities in the event of an emergency resulting from an earthquake, act of war, civil disturbance, fire, flood, or any other cause or nature whatsoever. ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAIR OF DAMAGE TO CITY STREETS If any portion of any street shall be damaged by any reason related to the Grantee's operations pursuant to this franchise including defective facilities laid or constructed under this franchise, Grantee shall, at its own expense, repair any defect of its facilities and put such street in as good condition as it was before such damage was incurred, to the satisfaction of the City Public Works Department. If Grantee, within ten (10) days after receipt of written notice from the City Public Works Department instructing it to repair such damage, fails to commence to comply with such instruction, or, thereafter, fails diligently to prosecute such work to completion, then the City Public Works Director immediately may take any actions which are, in the sole judgment and discretion of the City Public Works Director, necessary to repair said damage. Any and all costs and expenses so incurred shall be the sole responsibility of Grantee including the current rate of overhead being charged by the City for reimbursable work, which 10 Page 101 of 466 City Council Ordinance No. 1 Su4 (2011 Series) cost and expense, by the acceptance of this franchise, Grantee agrees to pay upon demand. If such damage constitutes an immediate danger to public health or safety requiring the immediate repair thereof, the City Public Works Department, without notice, may repair such damage and Grantee agrees to pay the cost thereof upon demand. ARTICLE 10 REARRANGEMENT OF FACILITIES A. dense of Grantee. 1. If any of the Grantee's facilities, in the opinion of the City Public Works Director, shall endanger the public or interfere with the use of any street by the public or, for public purposes, the City shall have the right to require the Grantee, and the Grantee shall repair, replace, move, alter or relocate the same (hereinafter called "rearrangement ") to avoid such danger, interference or obstruction, in conformity with the written notice of the City Public Works Department, at the Grantee's sole expense. 2. The City reserves the right to change the grade, to construct grade separation facilities, to change the width or to alter or change the location, of any street which is located within the service area for which this franchise is granted. If any of the facilities heretofore or hereafter constructed, installed or maintained by Grantee pursuant to this franchise on, along, under, over, in, upon or across any street are located in a manner which prevents or interferes with the change of grade, traffic needs, operation, maintenance, improvement, repair, construction, reconstruction, widening, grade separation, alteration or relocation of the street, or any work or improvement upon the street, Grantee shall relocate permanently or temporarily, as directed at the sole discretion of the City Public Works Director, any such facility at no expense to the City, upon receipt of a written request from the City Public Works Department to do so, and shall commence such work, by beginning engineering, surveying, or other pre - construction activities, on or before the date specified in such written request, which date shall be not less than sixty (60) days from receipt of such written request . Grantee shall thereafter diligently prosecute such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California. 3. The City reserves the right to lay, construct, repair, alter, relocate and maintain subsurface, surface or other improvements of any type of description in a governmental but not proprietary capacity within, over or under the streets over which this franchise is granted. If the City finds that the location or relocation of such subsurface, surface or other improvements conflicts with the facilities laid, constructed or maintained under this franchise, whether such facilities were laid before or after the improvements of the City, Grantee shall relocate permanently or temporarily, as directed at the sole discretion of the City Public Works Director, 11 Page 102 of 466 City Council Ordinance No. 1544 (2011 Series) any such facility at no expense to the City upon receipt of a written request from the City Public Works Department to do so and shall commence such work, by beginning engineering, surveying or other pre- construction activities, on or before the date specified in such written request, which date shall not be less than sixty (60) days from receipt of such written request. The Grantee shall thereafter diligently prosecute such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California. 4. If Grantee, after the notice provided for herein from the City, fails or refuses to relocate permanently or temporarily its facilities located in, on, upon, along, under, over, across, or above any street, or to pave, surface, grade, repave, resurface, or regrade as required pursuant to any provision of this franchise, the City may cause the work to be done, and shall keep an itemized account of the entire costs thereof, and Grantee shall hold harmless the City, its officers and employees from any liability which may arise or be claimed to arise from the moving, cutting or alteration of any of Grantee's facilities, or any necessary relocation of the facilities of other utilities. 5. Grantee agrees to, and shall, reimburse the City for such cost within thirty (30) days after presentation to Grantee of an itemized account arising out of the actions taken in this Article 10A. B. Expense of Others. 1. The City shall have the right to require the Grantee to rearrange any part of the Grantees' facilities for the accommodation of the City when such rearrangement is done for the accommodation of any water, electric, gas or other utility system now or hereafter owned or operated by the City. Except as otherwise provided in Article 10A, such arrangement shall be at the City's expense. 2. The City shall have the right to require the Grantee to rearrange any part of the Grantee's facilities for the accommodation of any person, firm or corporation. When such rearrangement is done for the accommodation of any person, firm or corporation, other than one of said utility systems owned or operated by the City, the cost of such rearrangement shall be borne by the accommodated party. Such accommodated party, in advance of such rearrangement, shall deposit with the Grantee or the City Clerk cash or a letter of credit or other cash equivalent in an amount, as in the reasonable discretion of the City Public Works Department, shall be required to pay the costs of such rearrangement, and such accommodated party shall execute an instrument agreeing to indemnify and hold harmless the Grantee from any and all damages or claims caused by such rearrangement. 12 Page 103 of 466 City Council Ordinance No. 1 5u4 (2011 Series) 3. The rearrangement referred to in subsection (1) and (2) of Section B of this Article 10 shall be accomplished in conformity with the written notice of the City Public Works Department. C. Rearrangement of the Facilities of Others. Nothing in this franchise shall be construed to require the City to move, alter or relocate any of its facilities upon said streets, at its own expense, for the convenience, accommodation or necessity of any other public utility, person, firm or corporation now or hereafter owning a public utility system of any type or nature, to move, alter or relocate any part of its system upon said streets for the convenience, accommodation or necessity of the Grantee. D. Notice. The Grantee shall be given not less than sixty (60) days written notice of any rearrangement of facilities which the Grantee is required to make hereunder. Such notice shall specify in reasonable detail the work to be done by the Grantee and shall specify a reasonable time that such work is to be accomplished. In the event that the City shall change the provision s of any such notice given to the Grantee, the Grantee shall be given an additional period of not less than thirty (30) days to initiate such work. ARTICLE 11 GRANTEE'S REMOVAL OR ABANDONMENT OF FACILITIES A. The City reserves the right to require Grantee to remove its facilities from the City streets and City public property in the event of the non - renewal, revocation or termination of this franchise or at any time thereafter with respect to those facilities abandoned in place, or for the facilities affected by the permanent discontinuance of all or a portion of the facilities. Further, so long as any abandoned facilities installed under the authority of this franchise remain in a City street, Grantee shall maintain a performance bond, security fund, or other form of collateral, acceptable to the City, sufficient to cover the cost of the removal of all such facilities from the City streets. B. At the expiration, revocation or termination of this franchise or of the permanent discontinuance of the use of all or a portion of its facilities, Grantee shall, within thirty (30) days thereafter, make written application to the City Public Works Department for authority either: To abandon all or a portion of such facilities in place; or 2. To remove all or a portion of such facilities. Such application shall describe the facilities desired to be abandoned, their location with reference to City streets, and shall describe with reasonable accuracy the physical condition of such facilities. As part of the application for removal or abandonment of these facilities, Grantee shall submit a soil test, taken within thirty (30) days of the submittal of the application, for those materials to be tested annually pursuant to federal, state and local laws. A soil test shall be taken along that portion of 13 Page 104 of 466 City Council Ordinance No. 15o4 (2011 Series) the pipeline to be removed or abandoned at such intervals as directed in writing by the City Public Works Department and reasonably consistent with established sampling protocols. The City Public Works Department shall determine whether any abandonment or removal which is thereby proposed may be effected without detriment to the public interest and the conditions under which such proposed abandonment or removal may be effected. The City Public Works Department shall then notify Grantee of the City's determinations. Grantee shall also obtain permits to abandon or remove the pipeline from the City Public Works Department for all pipelines prior to the removal, abandonment or discontinuation of use of all or a portion of Grantee's facilities. The City also reserves the right to require removal of Grantee's abandoned facilities in place at any time following the expiration, revocation or termination of this franchise. Grantee shall be required to meet the bonding, insurance, indemnification and annual franchise fee requirements of this franchise, for facilities abandoned in place. C. Within thirty (30) days after receipt of Notification from the City Public Works Department pursuant to Article I I.B.2 above, Grantee shall apply for a permit from the City Public Works Department to abandon or remove the facility. D. Grantee shall, within sixty (60) days after obtaining such permit, commence and diligently prosecute to completion the work authorized by the City's permit. E. In the event Grantee applies to remove its facilities, and the City Public Works Department determines that any or all of the facilities cannot be removed due to a moratorium preventing work in the City streets, the payment of annual franchise fees shall be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty (30) days of notice to pay. Deferred annual franchise fees shall otherwise be waived. F. Failure to Comply with City's Orders Regarding the Removal or Abandonment of Facilities. 1. If any orders or prescribed conditions relating to the abandonment of any facilities are not complied with, the City Public Works Department may impose such additional orders and conditions as the City deems appropriate, including an order that the Grantee remove any or all of such facilities. Grantee shall comply with such additional orders. 2. In the event that Grantee fails to comply with the terms and conditions of abandonment or removal as may be required by this franchise Ordinance, and within such time as may be prescribed by the City Public Works Department, then the City may remove or cause to be removed such facilities at Grantee's expense . Grantee shall pay to the City all of the costs of removing and disposing of these facilities, as well as returning the rights -of -way occupied pursuant to this franchise, including, but not limited to: (a) the cost of all environmental testing the City must conduct to determine the environmental condition of any rights -of -way occupied pursuant to this franchise and to ascertain what procedures the City must undertake, if any, to return any such rights -of -way to the environmental condition required by applicable Federal, 14 Page 105 of 466 City Council Ordinance No. I5u4 (2011 Series) State or local environmental laws; (b) all cleanup costs, disposal costs, and any other costs associated with returning these rights -of -way to such environmental condition; (c) all costs of removing, storing, and disposing of the Grantee's facilities; (d) all costs of returning all streets to the structural conditions they were in immediately at the beginning of Grantee's use of these streets pursuant to this franchise agreement; (e) plus the current rate of overhead being charged by the City for reimbursable work. 3. If, at the nonrenewal, revocation or termination of this franchise, or of the permanent discontinuance of the use of all or a portion of its facilities, Grantee, within thirty (30) days thereafter, fails or refuses to make written application for the above - mentioned authority to remove or abandon its facilities, the City Public Works Department shall make the determination as to whether the facilities shall be abandoned in place or removed. The City Public Works Department shall then notify Grantee of its determinations. Grantee shall thereafter comply with the applicable provisions of this Article 11. G. For those facilities Grantee abandons in place, Grantee shall be required to maintain an acceptable performance bond, letter of credit or security fund, as determined by the City Public Works Department, to cover the costs for the removal of any such abandoned facilities from the City streets for any and all periods of time, including those periods following the expiration, revocation or termination of this franchise, that Grantee's facilities remain in the City streets. Grantee shall be required to maintain insurance and to indemnify the City pursuant to this Article during any periods the abandoned facilities remain within the City streets. Provided, however, that any pipelines which cannot be removed due to a moratorium preventing work in the City streets, may be deferred from the payment of the annual franchise fee. The payment of annual franchise fees may be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such Facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty (30) days of notice to pay. ARTICLE 12 COMPLETION OF WORK In the event that the Grantee fails to commence any work or act and diligently proceed therewith or to complete any such act or work required of the Grantee by the terms of this franchise within the time limits required hereby (and except as is otherwise provided in Articles 10 and 11), the City may cause such act or work to be completed by the City or, at the election of the City, by a private contractor. The Grantee agrees to pay the City, within thirty (30) days after delivery of an itemized bill, the cost of performing such act or work plus an amount equal to fifteen percent (15 %) thereof for overhead. If the Grantee is dissatisfied with any decision made by the City Public Works Department hereunder or the determination of the cost of any work performed by the City pursuant to this Agreement, it may petition the City Council to review the same within ten (10) days after such decision or determination. 15 Page 106 of 466 City Council Ordinance No. 15o4 (2011 Series) ARTICLE 13 RECOVERY OF COSTS OF REPAIRS AND UNPAID FEES If the Grantee has not paid the City for such fees and expenses and /or liquidated damage s incurred by or payable to the City as hereinabove set forth, the City may institute the following collection procedures (which procedures are in addition to any other rights, in law or equity, which the City has to correct amounts due under this franchise and to enforce the terms of this franchise): A. The City Public Works Department shall keep an itemized account of the expenses incurred by the City pursuant hereto, or the fees unpaid by the Grantee. Sixty (60) days after the presentation of the bill to the Grantee therefore, the City Public Works Department shall prepare and file with the City Clerk a report specifying the work done by the City, or the unpaid fees, the itemized and total cost of the work, a description of the work performed, and the name and address of the Grantee entitled to notice pursuant to this Article. B. Upon receipt of said report, the City Clerk shall present it to the City Council for consideration. The City Council shall fix a time, date and place for hearing said report, and any protest or objections thereto. The City Clerk shall cause notice of said hearing to be posted in a newspaper of general circulation in the City, and served by certified mail, postage prepaid, addressed to the Grantee as set forth herein . Such notice shall be given at least ten (10) days prior to the date set for hearing and shall specify the day, hour, and place when the City Council will hear and pass upon the City Public Works Department's report, together with any objections or protests which may be filed as hereinafter provided. C. The Grantee may file written protests or objections with the City Clerk at any time prior to the time set for the hearing on the report of the City Public Works Department. Any such protest or objection must contain a description of the work or unpaid fee or liquidated damages in which the Grantee is contesting and the grounds of such protest or objection and the date it was received by him. He shall present such protest or objection to the City Council at the time set for the hearing, and no other protest or objection shall be considered, except as determined by the City Council for good cause shown. D. Upon the day and hour fixed for the hearing, the City Council shall hear and pass upon the report of the City Public Works Department together with any such objections or protests, make such revision, correction or modification to the charge as it may deem just; and when the City Council is satisfied with the correctness of the charge, the report (as revised, corrected or modified), together with the charge, shall be confirmed or rejected. The decision of the City Council on the report and the charge, and on all protests or objections, shall be the final and conclusive decision of the City. E. The City Council may thereupon order that such charge shall be made a personal obligation of the Grantee or assess such charge against the property of the Grantee. 16 Page 107 of 466 City Council Ordinance No. 1504 (2011 Series) 1. If the City Council orders that the charge shall be a personal obligation of the Grantee, it shall direct the City Attorney to collect the same on behalf of the City by use of all appropriate legal remedies. 2. If the City Council orders that the charge shall be assessed against the property of the Grantee, it shall confirm the assessment, cause the same to be recorded on the assessment roll, and thereafter, said assessment shall constitute a special assessment against a lien upon any property held in the City of San Luis Obispo by the Grantee. F. The validity of any assessment made under the provisions of this franchise shall not be contested in any action or proceeding unless the same is commenced within ninety (90) days after the assessment is placed upon the assessment roll as provided herein . G. The City Council, in its discretion, may determine that assessments in amounts of 500.00 or more shall be payable in not more than five (5) equal annual installments. The City Council's determination to allow payment of such assessments in installments, the number of installments, whether they shall bear interest, and the rate thereof shall be adopted by a resolution prior to the confirmation of the assessment. H. Immediately upon its being placed on the assessment roll, the assessment shall be deemed to be complete, the several amounts assessed shall be payable, and the assessments shall be liens against the property of the grantee in the City of San Luis Obispo. The lien shall be subordinate to all existing special assessment liens previously imposed upon the same property, and shall be paramount to all other liens except for state, county, and municipal taxes with which it shall be upon a parity. The lien shall continue until the assessment and all interest due and payable thereon are paid. 1. All such assessments remaining unpaid after thirty (30) days from the date of recording on the assessment roll shall become delinquent and shall bear interest at the highest rate permitted by law from and after said date. I. After confirmation of the report, certified copies of the assessment shall be filed with the County Auditor on or before August 10th. The descriptions of the parcels reported shall be those used for the same parcels on the County Assessors map books for the current year. J. The amount of the assessment shall be collected at the same time and in the same manner as ordinary county taxes are collected and shall be subject to the same penalties and procedure and sale in case of delinquency as provided for ordinary county taxes. All laws applicable to the levy collection and enforcement of taxes shall be applicable to such assessment. If the City Council has determined that the assessment shall be paid in installments, each installment and any interest thereon shall be collected in the same manner as ordinary City taxes is in successive years . If any installment is delinquent, the amount thereof is subject to the same penalties and procedure for sale as provided for ordinary county taxes. K. All money recovered by payment of the charge or assessment or from the sale of the property at foreclosure sale shall be paid to the City Finance Director. 17 Page 108 of 466 City Council Ordinance No. 15o4 (2011 Series) ARTICLE 14 BOND A. Grantee shall, concurrently with the filing of and acceptance of award of this franchise, file with the City Clerk, and yearly thereafter, maintain in full force and effect, a bond guaranteeing to the City of San Luis Obispo the penal sum of One Million Dollars 1,000,000.00), with a surety to be approved by the City Public Works Director and City Risk Manager, conditioned that Grantee shall, well and truly observe, fulfill and perform each and every term and condition of this franchise, and in a material breach of condition of said franchise, at the discretion of the City Public Works Director, a percentage of the amount of the bond shall be paid to the City according to the following schedule, which cumulative amount for any said breach not cured within the time specified below shall not exceed the full amount of the bond, in addition to any damages recoverable by the City and shall be recoverable from the principal and sureties of the bond: Following receipt of notice by Certified Mail sent by the City, failure to cure said breach of condition, within: 10 business days 30 calendar days 60 calendar days 90 calendar days Penal sum paid to City: 5% of the amount of the bond 30% cumulative amount of the bond 70% cumulative amount of the bond 100% cumulative amount of the bond The amount of time specified above shall be tolled while City and Grantee resolve, or until the City Council rules on, any written appeal, protest or objection to the City Public Works Director's decision as set forth in Articles 12, 13, 19, and 25, and elsewhere in this agreement; however, if Grantee's appeal, protest or objection is found by the City Council to be the result of bad -faith actions or tactics that are frivolous or intended to cause unnecessary delay, such amount of time shall not be tolled. If said bond is not so filed, the award of this franchise and privileges will be set aside and any money paid therefore will be forfeited. Whenever a bond is taken and deemed to be liquidated damages for any breach of a term or condition of this franchise, the Grantee must immediately file another bond of like amount and character, and if the Grantee fails to do so within the time set by the City Public Works Director, the City Council may, by resolution, declare said franchise automatically forfeited. Nothing herein shall insulate Grantee from liability in excess of the amount of said bond or shall be construed as a waiver by the City of any remedy at law against the Grantee for any breach of the terms and conditions of this franchise, or for any damage, loss or injuries suffered by the City of San Luis Obispo in case of any damage, loss or injury suffered by any person, firm, or corporation by reason of any work done or any activity conducted by the Grantee in exercise of this franchise. 18 Page 109 of 466 City Council Ordinance No. I) u4 (2011 Series) B. The faithful performance bond shall continue to exist for one (1) year following the City's approval of any sale, transfer, assignment or other change of ownership of this franchise, or of the expiration or termination of this franchise. The City may release said bond prior to the end of the one (1) year period upon satisfaction by Grantee of all the obligations under this franchise. ARTICLE 15 INSURANCE A. The Grantee shall procure and shall keep in force for the term of the franchise, at the sole cost and expense of the Grantee, the following insurance. All insurance coverages are to be placed with insurers which have a Best's rating of not less than B +VIII and are admitted insurance companies in the State of California. Grantee may satisfy the requirements of this Article 15 by showing proof of self - insurance reasonably satisfactory to the City Attorney and Risk Manager. Commercial General Liability Insurance (CGL): Grantee shall maintain in full force and effect Commercial General Liability Insurance with the following coverages: 1. Personal Injury and Bodily Injury, including death resulting therefrom. 2. Property Damage. 3. Automobile coverage which shall include owned, non -owned and hired vehicles. The amount of insurance shall not be less than the following: Single limit on the coverage applying to bodily and personal injury, including death resulting therefrom, property damage, and automobile coverage in the total amount of Ten Million Dollars ($10,000,000.00). The following endorsements must be provided in the CGL policy: 1. If the insurance policy covers on an "accident" basis, it must be changed to occurrence." 2. The policy must cover personal injury as well as bodily injury. 3. Blanket contractual liability must be afforded and the policy must contain a cross - liability or severability of interest endorsement. 4. Broad Form Property Damage Liability must be afforded. 5. Products and Completed Operations coverage must be provided. 6. The City, its officers, employees and agents shall be named as additional insured under the policy. The policy shall include the appropriate insurance company endorsement, as required under City regulations. The policy shall provide that the insurance will operate as primary insurance. No other insurance effected by the City, whether commercial or self - insurance will be called upon to contribute to a loss hereunder. The following requirements apply to all insurance to be provided by Grantee: 19 Page 110 of 466 City Council Ordinance No. 1504 (2011 Series) 1. A certificate of insurance shall be furnished to the City. Upon request by the City, Grantee shall provide a certified copy of any insurance policy to the City within forty -five working days of the City's request. 2. Certificates and policies shall state that the policies will not be canceled or reduced in coverage or changed in any other material respect without thirty days prior written notice to the City. B. Failure on the part of Grantee to procure or maintain required insurance and bonding shall constitute a material breach of this franchise upon which the City may immediately terminate or suspend this franchise. ARTICLE 16 INDEMNIFICATION BY GRANTEE The Grantee, by the acceptance or use of the franchise hereby granted, shall defend, indemnify and shall keep and save free and harmless the City, its officers, agents and /or employees against any and all claims, demands or causes of action which may be asserted, prosecuted or established against them, or any of them, for damage to persons, or property, of whatsoever nature, arising out of the use by it of the City streets hereunder or arising out of any of the operations or activities of the Grantee pursuant to this franchise, whether such damage shall be caused by its own sole negligence or negligence concurrent with the City, excepting therefrom, however, any claim or demand based on the sole negligence or willful misconduct of the City and any claim, demand, or cause of action which may be asserted, prosecuted or established against the City under the provision of the. Worker's Compensation Act for injury to or the death of any of City's officers, agents or employees while acting within the scope of their employment. Grantee shall not be responsible for any criminal, fraudulent or malicious conduct of the City. ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE A. On and after the Grantee's acceptance of this franchise as provided in Article 23 herein, Grantee, its partners, its shareholders, or any other person or persons holding an interest in Grantee shall not transfer any interest in the franchise where such a transfer would lead to another person achieving a twenty -five percent (25 %) or greater interest in this franchise or change control of this franchise, unless the City approves such a transfer or change in control. The City shall approve a request for transfer or change in control only if doing so serves the public interest. As used in this franchise Ordinance, "control" includes actual working control in whatever manner exercised. 1. The City shall deny any such request for transfer or change in control if the transferor or transferee fails to comply with any applicable provision of this Article of this franchise Ordinance, or if the City determines the transferor is in non - compliance with the terms and conditions of this franchise Ordinance, or if a transferee is lacking in experience and /or financial ability to operate the pipelines authorized by this franchise Ordinance, or if the proposed transfer will be detrimental to the public interest . 20 Page 111 of 466 City Council Ordinance No. 1504 (2011 Series) B. Both the Grantee and the proposed transferee shall inform the City Public Works Department of any pending change in control of this franchise or of any pending transfer of an interest in the franchise requiring the City's consent pursuant to this Article, and each shall provide applications containing all documents on which the transfer or change in control is predicated and all documents which the City Public Works Department determines are necessary to evaluate the transfer or change of control. These applications shall be signed by duly authorized representatives of the Grantee and the proposed transferee, with signatures acknowledged by a notary. The appropriate transfer fee described in Article 17(C), infra shall accompany these applications. Grantee's application shall include: a. Identification and ownership of the proposed transferee in the same detail as if the proposed transferee were an applicant for an initial grant; b. Current financial statements showing the financial condition of the Grantee as of the date of the application. In this application, the Grantee shall also agree to submit financial statements showing the condition of the franchise as of the closing. Said financial statements shall have been audited and certified by an independent certified public accountant, and shall be submitted within ninety (90) days of the closing. 2. The proposed transferee's application shall contain current financial statements of the proposed transferee and other such information and data, including but not limited to sources of capital, as will demonstrate conclusively that the proposed transferee has al 1 the financial resources necessary to acquire the pipeline(s), carry out all of the terms an d conditions of the franchise, remedy any and all defaults and violations of the provisions of this franchise in the Grantee's past and present operations, make such other improvements an additions as may be required or proposed to maintain and conduct the services and facilities required under this franchise . The proposed transferee will be required to authorize release o f financial information to the City from financial institutions relating to information supplied b y the proposed transferee in support of the application. The proposed transferee's application shall also include: a. A construction schedule, describing type and placement of construction, detail phases of construction, and include map(s) correlated to the phases of construction. Map(s) shall include detail on the location, length, depth, and internal diameter of any planned pipelines. b. Copies of any agreements with utility companies for the use of any facilities including, but not limited to, poles, lines and conduit. C. A description of plans for emergency equipment and personnel enabling the transferee to meet the emergency equipment personnel requirements in Article 8 herein. d. Any information indicating as specifically as possible that any principal, manager, or associate of the proposed transferee or a parent entity of the proposed transferee has previously been or is currently: i. A party to a criminal proceeding (involving felonies or misdemeanors) in which any of the following offenses have been charged: fraud, embezzlement, tax evasion, bribery, extortion, jury tampering, obstruction of justice (or other misconduct affecting public or judicial officers in the performance of their duties), false /misleading 21 Page 112 of 466 City Council Ordinance No. 1504 (2011 Series) advertising, perjury, antitrust violations (state or federal), violation of environmental laws or regulations, or conspiracy to commit any of the foregoing; ii. A party to a civil proceeding concerning liability for any of the following: unfair or anticompetitive business practice, antitrust violations (state or federal) including instances in which consent decrees were entered, violations of security laws (state or federal), false /misleading advertising, racketeer influences and corrupt organizations, violation of environmental laws or regulations, or contraband forfeitures; iii. Subject to any penalty, criminal or civil, involving failure to comply with the requirements of a pipeline franchise; iv. Involved in instituting legal action against its franchising authorities; V. Involved in revocation/non- renewal of any other franchise; e. Any other details, statements, information or references pertinent to the subject matter of such application which shall be required or requested by the City or by any provision of law. f. An express and unconditional written acceptance of the terms and conditions of this Franchise Ordinance, in its most current form, as a condition to the transfer. C. A fee shall be submitted with the applications for the City's consent to transfer or change of control. 1. Where the City's consent to a transfer or a change of control of this franchise does not result in the modification of this franchise by adoption of an amending ordinance, this fee for each application shall be as set forth in the City's fee ordinance. 2. Where the City's consent to a transfer or a change of control of this franchise results in the modification of this franchise by adoption of an amending ordinance this fee shall be as set forth in the City's fee ordinance. 3. In the event the costs to process the applications exceed the fees detailed above, the applicants may be required to pay any additional costs incurred by the City in processing the applicants' requests for the City's consent to the transfer or change of control o f this franchise. Such costs may include the cost incurred for hiring consultants to assist in evaluating the applications. Such costs shall be paid by the applicants prior to final consideration of the request by City Public Works Department, or the City Council, as applicable. D. Within thirty (30) days of the effective date of the City's approval of the transfer or change of control, or within thirty (30) days of the date of the close of the transfer or change of control, the Grantee shall file with the City Public Works Department: (1) a certified copy of each duly executed instrument of such a transfer or change in control; and (2) the submittal of a final accounting and report of all fees due under this franchise. The proposed transferee shall be responsible for any underpayment, and shall be entitled to a credit for any overpayment. Within ninety (90) days of the closing of the transfer or change of control, the Grantee shall submit financial statements, audited and certified by an independent certified public accountant, showing the condition of the franchise as of the closing. If such duly executed instruments are not filed with the City Public Works Department by the deadlines imposed in this Article, or if 22 Page 113 of 466 City Council Ordinance No. 1504 (2011 Series) the final documents are different from the preliminary documents, the City Public Works Department may inform the proposed transferee that the transfer or change in control is not deemed to be in force and effect. The City Public Works Department may then administratively determine that this franchise is forfeited and the City Council may, without notice, by ordinance repeal this franchise. E. As a condition to the granting of consent to such a transfer or change in control, the City Council may impose such additional terms and conditions upon this franchise and upon the proposed transferee as are in the public interest. Such additional terms and conditions shall be imposed by ordinance. Nothing herein contained shall be construed to grant Grantee the right to transfer or change control of this franchise or any part thereof, except in the manner aforesaid. This Article 17 applies to any transfer of this franchise, or of any change in control of this franchise, whether by operation of law, by voluntary act of Grantee, or otherwise. ARTICLE 18 WAIVER OF BREACH 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 succeeding breach of the same or other covenant, 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 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. ARTICLE 19 DEFAULT A. In the event that the Grantee shall default in the performance of any of the terms, covenants and conditions herein, the City may give written notice to the Grantee of such default by certified mail. In the event that the Grantee does not commence the work necessary to cur e such default within five (5) business days after such notice is received or prosecute such work diligently to completion, the City may declare this franchise forfeited by giving written notice thereof to the Grantee, whereupon this franchise shall be void and the rights of the Grantee hereunder shall terminate and the Grantee shall execute an instrument of surrender and deliver the same to the City. If the City Council declares this franchise forfeited, it may thereupon and thereafter exclude the Grantee from further occupancy or use of all City roads and streets authorized under this franchise. A forfeiture of said franchise shall not of itself operate to release any bond filed for said franchise. Upon declaring a franchise forfeited, the City Council may elect to take and accept any bond as liquidated damages therefore or pursue any other legal remedy for any damage, loss or injury suffered by the City as a result of such breach or both. After forfeiture, any 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 City Public Works Department and is filed with the City Clerk. The release shall state whether all excavations have been back filled, all obstructions removed, and whether the substratum or surface of City streets occupied or used have been placed in good and serviceable 23 Page 114 of 466 City Council Ordinance No. 1504 (2011 Series) condition. A release shall not constitute a waiver of any right or remedy which the City of San Luis Obispo 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. B. No provision herein made for the purpose of securing the enforcement of the term s and conditions of this franchise shall be deemed an exclusive remedy, or to afford the exclusive procedure, for the enforcement of said terms and conditions, but the remedies and procedure herein provided, in addition to those provided by law shall be deemed to be cumulative. ARTICLE 20 SCOPE OF RESERVATION Nothing herein contained shall ever 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 herein of specific rights reserved shall not be construed as exclusive, or as limiting the general reservation herein made or as limiting such rights as the City may now or hereafter have in law. ARTICLE 21 NOTICE Any notice required to be given under the terms of this franchise, the manner of service of which is not specifically provided for, may be served as follows: Upon the City, by serving the City Clerk, personally or by addressing a written notice to the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, and depositing such notice in the United States mail, postage prepaid. Upon the Grantee, by addressing a written notice to Grantee addressed to ConocoPhillips, Property Tax, Real Estate, Right of Way and Claims, 3900 Kilroy Airport Way, Suite 210, Long Beach, CA, 90806, or such other address as may from time to time be furnished in writing by one party to the other and depositing said notice in the United States mail, postage prepaid. When service of any such notice is made by mail, the time of such notice shall begin with and run from the date of the deposit of same in the United States mail. ARTICLE 22 SUCCESSORS The terms herein shall inure to the benefit of and shall bind, as the case may be, the successors and assigns of the parties hereto, subject, however, to the provisions of Article 17. 24 Page 115 of 466 City Council Ordinance No. 1504 (2011 Series) ARTICLE 23 ACCEPTANCE OF FRANCHISE A. This franchise is granted and shall be held and enjoyed only upon the terms and conditions herein contained. By accepting this grant of franchise, Grantee shall agree to be bound by each and all of the requirements of Article X, Sections 1001 through 1007 of the San Luis Obispo City Charter. B. Grantee shall, within ten (10) days after the passage of this franchise Ordinance, file with the City Clerk an express and unconditional written letter of acceptance of, and consent to, the terms and conditions of this franchise Ordinance, in its current version, and as subsequently amended, pursuant to San Luis Obispo City Charter, Article X, Section 1004. C. The parent entity, or entities, if any, of Grantee, shall file a letter with the City, concurrent with Grantee's letter of acceptance, which guarantees the performance of each and every term, covenant and condition imposed on Grantee pursuant to the franchise Ordinance. D. Grantee's letter'of acceptance shall be signed by two (2) duly authorized representatives of Grantee, whose signatures shall be acknowledged by a notary, and shall be accompanied by the performance bond and evidence of insurance required by this franchise Ordinance. ARTICLE 24 FORCE MAJEURE The time within which Grantee is obligated hereunder to construct, erect, maintain, operate, repair, renew, change the size of and remove pipelines or other improvements shall be extended for a period of time equal in duration to, and performance in the meantime shall be excused on account of, and for, and during the period of any delay caused by strikes, threats of strikes, lockouts, war, threats of war, insurrection, invasion, acts of God, calamities, violent action of the elements, fire, action or regulation of any governmental agency law or ordinance, impossibility of obtaining materials, or other things beyond the reasonable control of Grantee. ARTICLE 25 LIQUIDATED DAMAGES A. By acceptance of this franchise, Grantee understands and acknowledges that failure to timely comply with any performance requirements stipulated in this franchise Ordinance will result in damages to the City, and that it is and will be impractical to determine the actual amount of such damage in the event of delay or nonperformance. Each of the amounts set forth below has been set in recognition of the difficulty of affixing actual damages arising from breach of these time of performance requirements. Each of said amounts constitutes a reasonable estimate of these damages. This section does not limit the rights and remedies available to the City for damages other than the timely compliance with performance requirements as describe d in this section. The liquidated damages set forth below shall be chargeable to the bond, letter o f credit or security fund provided for in Article 14, supra, should 25 Page 116 of 466 City Council Ordinance No. 1504 (2011 Series) Grantee not make payment within thirty (30) days of written notice by certified mail by the City that the following amount s are due for the following concerns: 1. Failure to provide data, documents, or reports within ten (10) business days after receipt of written request by the City, by certified mail, or such longer time as may be specified in said request: Two Hundred Fifty Dollars ($250.00) per day for each day, or part thereof that each violation continues. 2. Failure to provide to the City within ten (10) business days after receipt of written request by the City, by certified mail, current evidence of insurance and bonding: Two Hundred Fifty Dollars ($250 .00) per day for each day, or part thereof, that each noncompliance continues. Nothing in this Section shall preclude immediate termination or suspension of this franchise as provided for under Article 1513, supra. 3. Failure by Grantee to timely restore public or private property after performance of work, and following Grantee's receipt of written request by the City to do so within ten (10) business days thereafter by certified mail: Two Hundred Fifty Dollars ($250.00) per day or part thereof, that each non - compliance continues. Any fines paid pursuant to this Subsection 3 shall be paid solely to the Street Fund of the City Public Works Department. B. If the City Public Works Department determines that Grantee is liable for liquidated damages, the City Public Works Department shall issue to Grantee by certified mail written notice of intention to charge liquidated damages. Liquidated damages shall begin to accrue as of the date of the written notice and as set forth in said notice. The notice shall set forth the basis for the liquidated damages and give Grantee a reasonable time in which to remedy the violation. C. Grantee shall have the right to appeal any notice to the City Public Works Department by certified mail, within twenty (20) days after issuance of the notice by the City Public Works Department. The City Public Works Department shall hold an administrative hearing within sixty (60) days after receipt of an appeal. The City Public Works Director's decision shall be the final decision of the City. D. If Grantee does not appeal the notice within said twenty (20) day period, Grantee shall pay the amount(s) of liquidated damages as stated in the notice. If payment is not paid as provided for in this Article, the City may withdraw against the bond provided for in Article 14 herein. ARTICLE 26 ATTORNEYS' FEES In the event the City or Grantee brings legal action against the other, or against Grantee's bonding companies or insurance carriers to compel performance of, or to recover for breach of any covenant, agreement or condition contained in this franchise, or for damages, the prevailing party shall be entitled to, in addition to any other relief obtained, such reasonable attorneys' fees Mol Page 117 of 466 City Council Ordinance No. 1504 (2011 Series) ARTICLE 27 CONDEMNATION Notwithstanding anything to the contrary contained herein and in accordance with San Luis Obispo City Charter Article X, Section 1005, this Ordinance shall not in any way affect the right of the City to acquire the property of the Grantee thereof either by purchase or through the exercise of the right of eminent domain, and nothing herein contained shall be construed to contract away or to modify or to abridge either for a term or in perpetuity the City's right of eminent domain with respect to any public utility. The City reserves the right to purchase the property of such utility at an agreed price. In fixing the price to be paid by the City for any utility, no allowance shall be made for franchise value (other than the actual amount paid to the City at the time of the franchise acquisition), goodwill, going concern, earning power, increased cost of reproduction, severance damage, or increased value of right -of -way. SECTION 2. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of San Luis Obispo hereby declares that they would have adopted this ordinance and each sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional. SECTION 3. This ordinance shall take effect and be in full force and effect thirty (30) days after its passage, and before the expiration of fifteen (15) days after passage of this ordinance, it shall be published once with the names of the members of the City Council voting for and against the ordinance in a newspaper of general circulation published in the City of San Luis Obispo, State of California. SECTION 4. A synopsis of this ordinance, approved by the City Attorney, together with the ayes and noes shall be published once in full at least five (5) days prior to its final passage, in a newspaper published and circulated in said City, and at the same time shall go into effect at the expiration of thirty (30) days after its said final passage. A copy of the full final text of this ordinance shall be on file in the Office of the City Clerk on and after the date following the introduction and passage to print and shall be available to any interested member of the public. 27 Page 118 of 466 City Council Ordinance No. 1504 (2011 Series) INTRODUCED on the 7th day of June 2011 AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the 21" day of June 2011, on the following vote: AYES: Council Member Carpenter, Carter and Smith, Vice Mayor Ashbaugh and Mayor Marx NOES: None ABSENT: None ATTEST: XL Elaina Cano 1 he GWWy that; this "aanant N.a VW City Clerk *W amwats 0110 d0kWW oe No. ane4, Vo the ae N w-ce wapOWed puwadnt to Charter See bw 007. APPROVED AS TO FORM: 2 za istine Dietrick City Attorney 28 Page 119 of 466 FRANCHISE MILEAGE 8 —INCH PIPELINE 18,812 FEET 3.56 MILES 12 —INCH PIPELINE 5,848 FEET 1.10 MILES INDEX TO SAN LUIS OBISPO FRANCHISE MAPS OJA , ConocoPhillips ORDINANCE No. P P i CONOCOPHILLIPS PIPE LINE COMPANY r Pipe Line Company RIGHT —OF —WAY No. 086243 Page 120 of 466 Page 121 of 466 y. SEE SHEET 3 HIGH ST. MAT LINE 1 I x 2 r BRANCH ST. SOUTH 1 g st SOUTH ST. N i> I m r I I Q BRIDGE ST. i 3245'— 8" LINE #400 COAST VALLEY TRUNK No.2 IrI rr ' T 3 3245'— 8" LINE #400 COAST VALLEY TRUNK No. 1 NA174, D2A340 REV DATE CITY OF SAN LUIS OBISPO FRANCHISE MAP DRAWN FGIII 1 04 27 11 APP'D. O SCALE I°= 4/08 ORDINANCE NO. GATE 5/20/98 ConocoPhillips RW086243 s Pipe Line Company 4 SHEETS SHEET z Page 122 of 466 BROAD " ST. (HWY. 227) 2717'— 8° LINE #400 COAST VALLEY TRUNK No. NIPOMO ST. BEACH CARMEL V) U N a a ARCHER 7 N 0V) j No. WALKER I S y11 L Gi /cGF I S H 1 O 1 2702' 8" LINE #400 COAST VALLEY TRUNK No. 2 ST. ST. ST, V/ry D2A340, NAM REV DATE CITY OF SAN LUIS OBISPO FRANCHISE MAP DRAWN r 1 04/27/11 SCALE 1°s 400' ORDINANCE NO. SCALE DATE 5/20/98 ConocoPhillips RWO86243 PPL Pipe Line Company 4 SHEETS SHEET 3 Page 123 of 466 REV I DATE 1 1 04/27 mHNSON I ST. ST. TORO 3450'— 8" LINE #400 COAST VALLEY TRUNK No. 2 li SANTA ROSA ST. OSOS ST. 3453'— 8" LINE #400 COAST VALLEY TRUNK a No. 1 D m MORRO ST. W CHORRO ST. 0 a GARDEN ST. BROAD ST. (HWY. 227) CITY OF SAN LUIS OBISPO FRANCHISE MAP ORDINANCE NO. ConocoPhillips Pipe Line Company NAM, D2A339 DRAWN r5ii APP'D. SCALE 1 "= 400' DATE 5/20/98 R W086243 4 SHEETS I SHEET 4 Page 124 of 466 counciljagenOaRepoRt Fleetin g Date tern Numberr 2• C I T Y O F S A N L U I S O B I S P O FROM:J. Christine Dietrick, City Attorney Prepared By :Claudia Prows, Paralega l SUBJECT :ADOPTION OF ORDINANCE NO . 1587 APPROVING THE TRANSFER O F FRANCHISE ORDINANCE NO . 1564 FROM CONOCOPHILLIPS PIPELIN E LLC TO PHILLIPS 66 PIPELINE LL C RECOMMENDATIO N Adopt Ordinance No . 1587 (2013 Series). DISCUSSION On January 22, 2013 the Council voted 5-0 to introduce Ordinance No . 1587 that approves th e transfer of the rights and obligations under Franchise Ordinance No . 1564 from ConocoPhillips Pipeline LLC to Phillips 66 Company . The ordinance is now ready for final adoption . ATTACHMEN T Ordinance No . 1587 (2013 Series ) T:\Council Agenda Reports\20I3\20I3-02- 05\ConocoPhillips Franchise Ord 1587 - Adoption (Dietrick-Visveshwara)\Counci l Agenda Report.docx C2-1 Page 125 of 466 ORDINANCE NO . 1587 (2013 Series ) AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO APPROVING TRANSFER O F FRANCHISE ORDINANCE NO . 1564 TO PHILLIPS 66 PIPELINE, LLC,A DELAWARE COMPANY, TO CONSTRUCT, OPERATE AND MAINTAIN COMMO N CARRIER PIPELINES FOR THE TRANSPORTATION OF OIL, AND OTHE R SPECIFIED MATERIALS IN THE CITY OF SAN LUIS OBISPO, STATE O F CALIFORNIA WHEREAS,the City of San Luis Obispo adopted Ordinance No . 1564 on June 21, 201 1 granting a franchise to ConocoPhillips Pipeline Company("Conoco') for a term of 10 years t o maintain common carrier pipelines for the transportation and distribution of oil and othe r specified materials in the City of San Luis Obispo ; and WHEREAS,as a result of a company reorganization, Phillips 66 Pipeline, LL C Phillips 66 PLLC") has requested the City of San Luis Obispo consent to its assumption of th e existing franchise agreement for common carrier oil transportation and distribution pipelines ; and WHEREAS,on December 4, 2012, the City of San Luis Obispo passed Resolution No . 10411, a resolution of intention to approve the transfer of Franchise Ordinance No . 1564 to Phillips 66 ; an d WHEREAS,the Council of the City of San Luis Obispo conducted a public hearing i n the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on January 22 , 2012, for the purpose of considering approval of the franchise agreement ; and WHEREAS,notices of said public hearing were made at the time and in the manne r required by law : an d WHEREAS,the proposed transfer of the franchise ordinance agreement serves th e public interest, because the pipelines have already been transferred to Phillips 66 PLLC and th e California Public Utilities Commission found that there would be no change in day to da y operations or management as a result of the transfer . NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Lui s Obispo to approve the transfer of franchise Ordinance 1564, to Phillips 66 PLLC, a Delawar e company, effective retroactively to April 12, 2012, to construct, operate, and maintain commo n carrier pipelines for the transportation of oil, and other specified materials in the City of San Lui s Obispo, for term expiring June 20, 2021, subject to all the other terms and conditions of th e franchise, as follows : SECTION 1 :Terms and Conditions of Franchise (Table of Contents begins on page 2): 0 1587 Page 126 of 466 Ordinance No . 1587 (2013 Series) Page 2 TABLE OF CONTENTS Page ARTICLE I NATURE OF FRANCHISE 4 A . Grant of Franchise 4 B . Limitations Upon Grant 5 C . Rights Reserved to the City of San Luis Obispo 6 ARTICLE 2 APPURTENANCES 6 ARTICLE 3 LOCATION OF PIPELINES 6 ARTICLE 4 CONSTRUCTION OF PIPELINES 7 A. Terms of Construction 7 B . Restoration of Streets 7 ARTICLE 5 COMMENCEMENT OF CONSTRUCTION 7 ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED 8 ARTICLE 7 COMPENSATION TO THE CITY 8 ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS 1 0 ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAI R OF DAMAGE TO CITY STREETS 1 0 ARTICLE 10 REARRANGEMENT OF FACILITIES 1 1 A . Expense of Grantee 1 1 B . Expense of Others 1 2 C . Rearrangement of the Facilities of Others 1 3 D . Notice 1 3 ARTICLE II GRANTEE'S REMOVAL OR ABANDONMEN T OF FACILITIES 1 3 ARTICLE 12 COMPLETION OF WORK 1 5 ARTICLE 13 RECOVERY OF COSTS OF REPAIR S AND UNPAID FEES 1 6 ARTICLE 14 BOND 1 8 ARTICLE 15 INSURANCE 19 Page 127 of 466 Ordinance No . 1587 (2013 Series ) Page 3 ARTICLE 16 INDEMNIFICATION BY GRANTEE 20 ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE 20 ARTICLE 18 WAIVER OF BREACH 23 ARTICLE 19 DEFAULT 24 ARTICLE 20 SCOPE OF RESERVATION 24 ARTICLE 21 NOTICE 24 ARTICLE 22 SUCCESSORS 2 5 ARTICLE 23 ACCEPTANCE OF FRANCHISE 2 5 ARTICLE 24 FORCE MAJEURE 2 5 ARTICLE 25 LIQUIDATED DAMAGES 26 ARTICLE 26 ATTORNEYS' FEES 27 ARTICLE 27 CONDEMNATION 27 Page 128 of 466 Ordinance No . 1587 ( 2013 Series) Page 4 ARTICLEI NATURE OF FRANCHISE A .Grant of Franchise . 1.The City of San Luis Obispo (hereinafter referred to as "City"), hereby grants t o Phillips 66 Pipeline, LLC, a Delaware company, (hereinafter referred to as "Grantee") pursuan t to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9(b) of th e California Constitution, and Section 39732(b) of the California Government Code, the non - exclusive right, privilege and franchise, subject, however, to all the limitations and restriction s herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change th e size of and remove pipelines, not to exceed twelve (12) inches nominal internal diameter, for th e transportation of oil, products thereof, hydrocarbon gases and other gas necessary for th e operation and maintenance of the pipelines, water and mixtures thereof, movable by pipeline, in , under, along, and across the public streets, ways, alleys and places within the City of San Lui s Obispo (hereinafter collectively referred to as "streets"), as described in Exhibit No . 1, attache d hereto and made a part hereof. 2.The term of the franchise granted under this Ordinance shall be for a term of te n 10) years, commencing with the date on which it is accepted by Grantee . 3.Unless otherwise specifically stated, the following provisions shall govern th e interpretation and construction of the franchise granted herein : a)This franchise shall include the right, for the period and subject to th e conditions hereof, to construct, erect, maintain, operate, repair, renew, abandon and change th e size and remove the said pipelines, if any, of Grantee, as laid and constructed in said streets . b)The terms and conditions of this franchise shall also apply to any pipe or othe r facilities of Grantee which are located within the right of way of any existing public road o r street at the time such road or street becomes a City street through annexation or otherwise , subject to any other existing rights enjoyed by Grantee . c)Grantee shall not be relieved of its obligation to promptly comply with an y provision of this franchise by failure of the City to enforce prompt compliance . d)Any right or power conferred, or duty imposed upon any officer, employee , department, or other City entity, by the terms of this franchise, may be legally transferred to an y other City officer, employee, department, or other City entity. e)Grantee shall have no recourse whatsoever against the City for any loss, cost, expense, or damage suffered by Grantee and arising out of any provision or requirement of thi s franchise or its lawful enforcement by the City . f)This franchise does not relieve Grantee of any applicable requirements of th e San Luis Obispo Municipal Code or of any federal, state, or City law, ordinance, rule, regulation, Page 129 of 466 Ordinance No . 1587 (2013 Series ) Page 5 or specification, including, but not limited to, any requirement relating to street work, stree t excavation permits, or the use, removal or relocation of property in streets, except as specificall y prescribed herein. g)This franchise is non-exclusive . Neither the granting of this franchise nor any of the provisions contained herein shall be construed to prevent the City from granting an y identical or similar franchise to any other person . h)The compensation provided for in this franchise is for (i) the rights an d privileges granted by this franchise, and (ii) the right and privilege granted to the Grantee t o construct, erect, maintain, operate, repair, renew, abandon and change the size of and remove th e said pipelines pursuant to this franchise within the City's streets . The City expressly reserves the right to impose and collect from Grantee, on a non-discriminatory basis, its normal dul y established processing and inspection fees from street cutting and excavation permits to th e extent such fees are imposed generally on all non-governmental applicants for such permit s within the City . i)Any activities involving the use of a pipeline system for the transmitting of oil , products thereof, hydrocarbon gases and other gas necessary for the operation and maintenanc e of the pipelines, water and mixtures thereof, which are not specifically authorized under thi s franchise are prohibited under this franchise . Except as provided in Article 2, an y telecommunication or other uses not authorized in this franchise Ordinance must be approved b y the City under a separate franchise . W If any provision of this franchise, or the application of this franchise to an y person or circumstance is held invalid by a court of competent jurisdiction or is not i n compliance with any requirement of the Public Utilities Commission, the City, or any othe r federal or state body or agency having jurisdiction over Grantee's franchise activities, th e remainder of this franchise Ordinance, or the application of this franchise to persons o r circumstances other than those to which it is held invalid or not in such compliance, shall not b e affected thereby . B .Limitations Upon Grant . 1.No privilege or exemption is granted or conferred by this franchise except thos e specifically prescribed herein . 2.Any privilege claimed under this franchise by Grantee in any street shall b e subordinate to any prior lawful occupancy of the street . 3.The rights and privileges of this franchise are granted solely to Grantee except a s provided within this franchise Ordinance . This franchise is not be to sold, transferred, lease d assigned, or disposed of as a whole or in part, either by forced sale, merger, consolidation, o r otherwise, without the City's prior consent as described in Article 17, infra, or as otherwis e expressly provided herein . The City agrees that such prior consent shall not be unreasonabl y withheld or conditioned . Page 130 of 466 Ordinance No . 1587 ( 2013 Series ) Page 6 C .Rights Reserved to the City . 1.The rights reserved to the City under this franchise Ordinance are in addition to all other rights of the City, whether authorized by the San Luis Obispo City Charter, San Lui s Obispo City Municipal Code, or any other federal, state, or City law, rule, or regulation . N o action, proceeding or exercise of a right shall affect any other rights that may be held by the City . Grantee, by acceptance of this franchise, shall be bound thereby and shall comply with an y action or requirement of the City in its exercise of any such right or power . 2.The City shall have the power and right at all times during the term of thi s franchise to require Grantee to conform to the laws, rules and regulations governing th e operation of pipelines now or hereafter adopted by the City Council to the extent permitted b y law . 3.The City may enforce, to the maximum extent permitted by law, the inspectio n and testing of pipelines, pursuant to state and federal standards and require appropriat e remuneration and fees to cover such enforcement activities . ARTICLE2 APPURTENANCE S The Grantee shall have the right, subject to the prior approval of the City Public Work s Department, to construct and maintain such traps, manholes, conduits, valves, appliances , attachments, and appurtenances (hereinafter for convenience collectively referred to a s appurtenances"), as may be necessary or convenient for the proper maintenance and operatio n of the pipelines under said franchise . Said appurtenances shall be so located as to conform to an y order of the City Public Works Department in regard thereto and not to interfere with the use o f the streets for travel . The Grantee shall have the right, subject to such ordinances, rules, o r regulation as are now or may hereafter be in force, to make all necessary excavations in sai d street for the construction and repair of said pipelines and appurtenances subject to the prior approval of the City Public Works Department . "Appurtenances" shall also include any adjunc t communications lines and/or conduits as coaxial cable, optical fiber, wire, or other transmissio n lines or forms of transmission, and associated equipment and devices located in, upon, along , across, under or over the streets of the City, the sole function of which is to monitor or contro l the operation or safety of the pipeline system via the distribution of video, audio, voice, or dat a signals . An adjunct communications line shall not include any facility which distributes, throug h any means, to subscribers or persons other than Grantee, the signal of one or more broadcas t television or radio stations or other sources of video, audio, voice, or data signals . ARTICLE3 LOCATION OF PIPELINE S So far as is practicable and within the requirements of the California State Fire Marshall , any pipeline hereinafter laid shall be located along the edge or shoulder of the streets or in the Page 131 of 466 Ordinance No . 1587 (2013 Series) Page 7 parking areas adjacent thereto so as not unreasonably to disturb the flow of traffic an d wher e possible shall be laid in the unpaved portion of the street . ARTICLE4 CONSTRUCTION OF PIPELINE S A.Terms of Construction .The pipelines and appurtenances laid, constructed o r maintained under the provisions of this franchise shall be installed, maintained, and inspected b y the Grantee in a satisfactory, safe, and workmanlike manner, of good material, and in conformit y with all ordinances, rules, or regulations now or hereafter adopted or prescribed by the Cit y Council, State, or Federal authorities . B.Restoration of Streets .The work of laying, constructing, maintaining, operating , renewing, repairing, changing size and moving any of the pipeline system contemplated by thi s franchise and all other work in exercise of this franchise shall be conducted according to th e provisions of the City's encroachment ordinances from time to time prevailing, and otherwise i n accordance with federal and state law and applicable City ordinances, and with the least possibl e hindrance or interference to the use of City roads by the public or by the City of San Lui s Obispo, and Grantee shall provide all necessary warning, safety and traffic control devices as ar e or may be required by City, State or Federal regulations . All excavations shall be back filled and adequately compacted . As part of any work completed under provisions of this franchis e agreement, the surface of City streets shall be repaired and replaced to meet current Cit y standards and specifications . Under no circumstances shall the surface of City streets be place d in a manner less than as good and serviceable condition as existed at the beginning of said work , to the satisfaction of the City Public Works Department . ARTICLE5 COMMENCEMENT OF CONSTRUCTIO N The Grantee, in good faith, shall commence with work of laying the pipelines an d appurtenances within four (4) months from the date of passage of the approval of this franchise , and if any such pipelines be not so commenced within said time, this franchise shall be declare d forfeited ; provided, however, that if the Grantee is maintaining and operating an existing pipelin e system over the route referred to in Article I herein, it shall be deemed to be in compliance wit h the foregoing . The Grantee shall not commence the construction of any new pipelines under th e provision of this franchise or add to such existing pipeline system, if any there be, until it firs t shall have applied for and obtained a permit therefore from the City Public Works Department . The application of the Grantee shall show the following facts : the length, approximat e depth and proposed location of the pipeline proposed to be laid or constructed, the size an d description of the pipeline intended to be used, and such other relevant facts as the City Publi c Works Department may require . The Grantee shall pay any and all encroachment permit fees o f the City. Upon the completion of the construction of any pipelines constructed pursuant to sai d franchise, the Grantee shall render a statement to the City of San Luis Obispo showing in detai l the permit or permits issued and the total length of pipeline, the construction of which wa s authorized under such permit, or permits, and the total length of pipeline actually laid, and the Page 132 of 466 Ordinance No .1587 (2013 Series ) Page 8 Grantee shall make payment to the City for the pipelines which have actually been constructe d under said franchise as provided in Article 7,Section C . ARTICLE6 MAPS AND REPORTS TO BE FURNISHE D A.Within six (6) months of the effective date of this franchise for existing pipelines , and within ninety (90) days following the date in which any additional pipelines have been lai d or constructed under this franchise, the Grantee shall file a map in such form as may be require d by the City Public Works Department showing the accurate location and size of all its facilitie s then in place, and shall, upon installation of any additional facilities or upon removal, change o r abandonment of all or any portion thereof, file a revised map or maps showing the location an d size of all such additional and/or abandoned facilities as of this date . Cathodic protection is to b e used for all facilities installed or maintained pursuant to this franchise . For facilities previousl y in liquid service and where the liquids have been removed and the facilities inerted, or fo r facilities previously in gas service that are not pressurized, cathodic protection shall b e maintained consistent with State Fire Marshall or other agency requirements . A description of al l the protective devices shall be furnished to the City Public Works Department which shall sho w the location and types of anodes, including a description of methods to be used as a protectio n against corrosion and electrolytic leakage . B.Grantee shall file with the City Finance Director, within thirty (30)days after the expiration of the calendar year, or fractional calendar year, following the date of the granting o f this franchise and within thirty (30)days after the expiration of each calendar year thereafter, tw o copies of a report verified by the oath of Grantee or by the oath of a duly authorize d representative of Grantee, showing, for the immediately preceding franchise period, the length o f main lines in streets, the nominal internal diameter of such main lines, the rate per foot per yea r when applicable) and the total amount due to the City . In this report, Grantee shall also sho w any change in franchise footage since the last franchise report, segregating such footage as t o new main lines and adjunct communications lines laid, old main lines and adjunc t communications lines removed, old main lines and adjunct communications lines abandoned i n place, and the footage of main lines and adjunct communications lines in territory annexed by th e City since the last franchise report . C.Grantee shall file with the City Public Works Department within sixty (60)days after the end of the calendar year a report, in duplicate, showing the permit number of eac h permit obtained for the installation of new main lines during the immediately preceding franchis e report period, together with the length and size of said main lines . ARTICLE7 COMPENSATION TO THE CIT Y A . During the term of this franchise, Grantee shall pay to the City an annual fee fo r this franchise, said fee to be those fees prescribed by the California Public Utilities Code sectio n 6231 .5,provided that the rate is subject to increase to the maximum rate established i n subsequent amendments of the California Public Utilities Code . Annual payments to be made Page 133 of 466 Ordinance No . 1587 (2013 Series ) Page 9 pursuant to this franchise shall be due and payable in arrears April 1 of each year of thi s franchise . The initial payment hereunder shall be prorated for the remainder of the curren t calendar year based on a 365-day year . At the time of payment of fees by Grantee, Grantee shall file a verified statement with th e Clerk of the City of San Luis Obispo, with a copy to the City Public Works Department showin g in detail the number of lineal feet and the diameter thereof, expressed in inches, of pipeline s covered by this franchise during the previous calendar year, or portion thereof . The compensation provided for in this Article shall be subject to an increase after the firs t year of the franchise and each subsequent year during the term of this franchise, based on th e provisions of California Public Utilities Code Section 6231 .5, as amended . The fees set forth will be adjusted annually each year by the annual percentage change i n the U .S . Bureau of Labor Statistics (or successor agency) consumer price index for all urba n consumers (CPI-U) all cities average for the prior calendar year . Notwithstanding the provisions as otherwise stated in this Article and franchise, th e Grantee shall be liable to pay the City the annual fee for the period to and including the date o f either actual removal of the facilities or the effective date of the abandonment "in place," an d until the Grantee shall have fully complied with all of the provisions of law or ordinance s relative to such abandonments . In the event of partial abandonment of facilities as provided in the Ordinance, or in the event of partial removal of such facilities by the Grantee, the payments otherwise due the Cit y for occupancy of the streets by such facilities shall be reduced by the length and diameter o f pipelines abandoned or the actual pipeline removed beginning with the first day of the nex t succeeding franchise year, and for each franchise year thereafter ; provided, however, that th e base rate shall be modified to reflect the adjustment (per this Article) applicable to suc h abandoned or removed pipeline at the beginning of the next succeeding franchise year followin g abandonment or removal . Grantee shall pay to the City, upon demand, the cost of all repairs made by the City t o public property arising out of the operations of the Grantee under this franchise . Any fees charged or expenses charged to Grantee by City pursuant to this Article, or any other provisio n of this franchise Ordinance, unless disputed in good faith, shall be paid when due or shall b e deemed delinquent . Any undisputed delinquent amounts shall be charged a 10% penalty and, i n addition, shall accrue interest commencing thirty (30) days after the due date, at a rate of one an d one-half percent (1 .5%) per month (based upon a 30-day calendar month) or any lesser amount i f required by law . Any neglect, omission or refusal by said Grantee to pay any undispute d delinquent franchise fee with any late charges, within thirty (30) days of delinquency, at th e times or in the manner herein provided, shall be grounds for a declaration of a forfeiture of thi s franchise and of all rights hereunder . Page 134 of 466 Ordinance No . 1587 (2013 Series) Page 10 Payments are to be made to the City Finance Department, 990 Palm Street, San Lui s Obispo, California 93401, or at such place as the City shall, from time to time, designate i n writing . B.Grantee shall pay the City a granting fee of $5,000 .00 within thirty (30) day s after the date the City Council adopts this franchise Ordinance . C.Grantee shall pay the City Public Works Department, within sixty (60) days afte r the end of each calendar year, for each year during the life of this franchise, an initia l construction charge calculated at the rate of One Dollar ($1 .00) per foot for all new main line s laid pursuant to this franchise Ordinance during the preceding year . D.Right of Inspection . The City shall have the right to inspect Grantee's pipelin e accounting and other records relating to its annual report and to audit and re-compute any and al l accounts payable under this franchise . Costs of audit shall be borne by Grantee when an audit results in an increase of more than five percent of Grantee's annual payments to the City . Acceptance of any payment shall not be construed as a release, waiver, acquiescence, or accor d and satisfaction of any claim the City may have for further or additional sums payable under thi s franchise or for the performance of any other obligation hereunder . ARTICLE8 EMERGENCY EQUIPMENT AND CREW S At all times during the term of this franchise, the Grantee shall maintain or arrange for , on a 24-hour-a-day basis, adequate emergency equipment and a properly trained emergency cre w within a reasonable distance from any pipelines, appurtenances and facilities installed o r maintained pursuant hereto for the purpose of monitoring the leak detection system and th e communications systems if applicable, and of shutting off the pressure and the flow of content s of such facilities in the event of an emergency resulting from an earthquake, act of war, civi l disturbance, fire, flood, or any other cause or nature whatsoever . ARTICLE9 REPAIR OF DEFECTIVE FACILITIES AN D REPAIR OF DAMAGE TO CITY STREET S If any portion of any street shall be damaged by any reason related to the Grantee's operations pursuant to this franchise including defective facilities laid or constructed under thi s franchise, Grantee shall, at its own expense, repair any defect of its facilities and put such street in as good condition as it was before such damage was incurred, to the satisfaction of the Cit y Public Works Department . If Grantee, within ten (10) days after receipt of written notice fro m the City Public Works Department instructing it to repair such damage, fails to commence t o comply with such instruction, or, thereafter, fails diligently to prosecute such work t o completion, then the City Public Works Director immediately may take any actions which are, i n the sole judgment and discretion of the City Public Works Director, necessary to repair sai d damage . Any and all costs and expenses so incurred shall be the sole responsibility of Grante e including the current rate of overhead being charged by the City for reimbursable work, which Page 135 of 466 Ordinance No .1587 (2013 Series ) Page 1 1 cost and expense, by the acceptance of this franchise, Grantee agrees to pay upon demand . I f such damage constitutes an immediate danger to public health or safety requiring the immediat e repair thereof, the City Public Works Department, without notice, may repair such damage an d Grantee agrees to pay the cost thereof upon demand . ARTICLE 1 0 REARRANGEMENT OF FACILITIE S A .Expense of Grantee . 1.If any of the Grantee's facilities, in the opinion of the City Public Works Director, shall endanger the public or interfere with the use of any street by the public or, for publi c purposes, the City shall have the right to require the Grantee, and the Grantee shall repair , replace, move, alter or relocate the same (hereinafter called "rearrangement") to avoid such danger, interference or obstruction, in conformity with the written notice of the City Publi c Works Department, at the Grantee's sole expense . 2.The City reserves the right to change the grade, to construct grade separatio n facilities, to change the width or to alter or change the location, of any street which is locate d within the service area for which this franchise is granted . If any of the facilities heretofore o r hereafter constructed, installed or maintained by Grantee pursuant to this franchise on, along , under, over, in, upon or across any street are located in a manner which prevents or interfere s with the change of grade, traffic needs, operation, maintenance, improvement, repair , construction, reconstruction, widening, grade separation, alteration or relocation of the street, o r any work or improvement upon the street, Grantee shall relocate permanently or temporarily, a s directed at the sole discretion of the City Public Works Director, any such facility at no expens e to the City, upon receipt of a written request from the City Public Works Department to do so , and shall commence such work, by beginning engineering, surveying, or other pre-constructio n activities, on or before the date specified in such written request, which date shall be not les s than sixty (60)days from receipt of such written request . Grantee shall thereafter diligently prosecute such work to completion . Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set fort h in Article 25,Grantee shall be responsible for and shall reimburse the City for any and al l additional costs or expenses incurred by City due to or resulting from such delay in the relocatio n of the facilities plus, where applicable, the current rate of overhead being charged by the City fo r reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California . 3.The City reserves the right to lay, construct, repair, alter, relocate and maintai n subsurface, surface or other improvements of any type of description in a governmental but no t proprietary capacity within, over or under the streets over which this franchise is granted . If the City finds that the location or relocation of such subsurface, surface or other improvement s conflicts with the facilities laid, constructed or maintained under this franchise, whether suc h facilities were laid before or after the improvements of the City, Grantee shall relocat e permanently or temporarily, as directed at the sole discretion of the City Public Works Director, Page 136 of 466 Ordinance No . 1587 (2013 Series ) Page 1 2 any such facility at no expense to the City upon receipt of a written request from the City Publi c Works Department to do so and shall commence such work, by beginning engineering , surveying or other pre-construction activities, on or before the date specified in such writte n request, which date shall not be less than sixty (60) days from receipt of such written request . The Grantee shall thereafter diligently prosecute such work to completion . Should Grante e neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, i n addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for an d shall reimburse the City for any and all additional costs or expenses incurred by City due to o r resulting from such delay in the relocation of the facilities plus, where applicable, the current rat e of overhead being charged by the City for reimbursable work . If such street be subsequentl y constituted a state highway, while it remains a state highway the rights of the State of Californi a shall be as provided in Section 680 of the Streets and Highways Code of the State of California . 4.If Grantee, after the notice provided for herein from the City, fails or refuses t o relocate permanently or temporarily its facilities located in, on, upon, along, under, over, across , or above any street, or to pave, surface, grade, repave, resurface, or regrade as required pursuan t to any provision of this franchise, the City may cause the work to be done, and shall keep a n itemized account of the entire costs thereof, and Grantee shall hold harmless the City, its officer s and employees from any liability which may arise or be claimed to arise from the moving , cutting or alteration of any of Grantee's facilities, or any necessary relocation of the facilities o f other utilities . 5.Grantee agrees to, and shall, reimburse the City for such cost within thirty (30 ) days after presentation to Grantee of an itemized account arising out of the actions taken in thi s Article 10A . B .Expense of Others . 1.The City shall have the right to require the Grantee to rearrange any part of th e Grantees' facilities for the accommodation of the City when such rearrangement is done for th e accommodation of any water, electric, gas or other utility system now or hereafter owned o r operated by the City . Except as otherwise provided in Article 10A, such arrangement shall be at the City's expense . 2.The City shall have the right to require the Grantee to rearrange any part of th e Grantee's facilities for the accommodation of any person, firm or corporation . When such rearrangement is done for the accommodation of any person, firm or corporation, other than on e of said utility systems owned or operated by the City, the cost of such rearrangement shall b e borne by the accommodated party . Such accommodated party, in advance of such rearrangement , shall deposit with the Grantee or the City Clerk cash or a letter of credit or other cash equivalen t in an amount, as in the reasonable discretion of the City Public Works Department, shall b e required to pay the costs of such rearrangement, and such accommodated party shall execute a n instrument agreeing to indemnify and hold harmless the Grantee from any and all damages o r claims caused by such rearrangement . Page 137 of 466 Ordinance No . 1587 (2013 Series ) Page 13 3.The rearrangement referred to in subsection (1) and (2) of Section B of thi s Article 10 shall be accomplished in conformity with the written notice of the City Public Work s Department . C.Rearrangement of the Facilities of Others . Nothing in this franchise shall be construed to require the City to move, alter or relocat e any of its facilities upon said streets, at its own expense, for the convenience, accommodation o r necessity of any other public utility, person, firm or corporation now or hereafter owning a public utility system of any type or nature, to move, alter or relocate any part of its system upon said streets for the convenience, accommodation or necessity of the Grantee . D.Notice. The Grantee shall be given not less than sixty (60) days written notice of an y rearrangement of facilities which the Grantee is required to make hereunder . Such notice shal l specify in reasonable detail the work to be done by the Grantee and shall specify a reasonabl e time that such work is to be accomplished . In the event that the City shall change the provision s of any such notice given to the Grantee, the Grantee shall be given an additional period of no t less than thirty (30) days to initiate such work . ARTICLE 1 1 GRANTEE'S REMOVAL OR ABANDONMENT OF FACILITIE S A.The City reserves the right to require Grantee to remove its facilities from the Cit y streets and City public property in the event of the non-renewal, revocation or termination of thi s franchise or at any time thereafter with respect to those facilities abandoned in place, or for th e facilities affected by the permanent discontinuance of all or a portion of the facilities . Further, so long as any abandoned facilities installed under the authority of this franchise remain in a Cit y street, Grantee shall maintain a performance bond, security fund, or other form of collateral , acceptable to the City, sufficient to cover the cost of the removal of all such facilities from th e City streets . B.At the expiration, revocation or termination of this franchise or of the permanen t discontinuance of the use of all or a portion of its facilities, Grantee shall, within thirty (30) day s thereafter, make written application to the City Public Works Department for authority either : 1.To abandon all or a portion of such facilities in place ; or 2.To remove all or a portion of such facilities . Such application shal l describe the facilities desired to be abandoned, their location with reference to City streets, an d shall describe with reasonable accuracy the physical condition of such facilities . As part of the application for removal or abandonment of these facilities, Grantee shall submit a soil test, take n within thirty (30) days of the submittal of the application, for those materials to be teste d annually pursuant to federal, state and local laws . A soil test shall be taken along that portion o f the pipeline to be removed or abandoned at such intervals as directed in writing by the City Page 138 of 466 Ordinance No . 1587 (2013 Series) Page 1 4 Public Works Department and reasonably consistent with established sampling protocols . The City Public Works Department shall determine whether any abandonment or removal which i s thereby proposed may be effected without detriment to the public interest and the condition s under which such proposed abandonment or removal may be effected . The City Public Work s Department shall then notify Grantee of the City's determinations . Grantee shall also obtain permits to abandon or remove the pipeline from the City Public Works Department for al l pipelines prior to the removal, abandonment or discontinuation of use of all or a portion o f Grantee's facilities . The City also reserves the right to require removal of Grantee's abandone d facilities in place at any time following the expiration, revocation or termination of thi s franchise . Grantee shall be required to meet the bonding, insurance, indemnification and annua l franchise fee requirements of this franchise, for facilities abandoned in place . C.Within thirty (30) days after receipt of Notification from the City Public Work s Department pursuant to Article 11 .B .2 above, Grantee shall apply for a permit from the Cit y Public Works Department to abandon or remove the facility . D.Grantee shall, within sixty (60) days after obtaining such permit, commence an d diligently prosecute to completion the work authorized by the City's permit . E.In the event Grantee applies to remove its facilities, and the City Public Work s Department determines that any or all of the facilities cannot be removed due to a moratoriu m preventing work in the City streets, the payment of annual franchise fees shall be deferred durin g any such moratorium period, provided that Grantee promptly removes its facilities after notice b y the City Public Works Department of the cessation of the moratorium and direction to remov e such facilities . In the event Grantee does not promptly remove such facilities as directed, an y deferred annual franchise fees shall be due and payable within thirty (30) days of notice to pay . Deferred annual franchise fees shall otherwise be waived . F.Failure to Comply with City's Orders Regarding the Removal or Abandonment o f Facilities . 1.If any orders or prescribed conditions relating to the abandonment of an y facilities are not complied with, the City Public Works Department may impose such additiona l orders and conditions as the City deems appropriate, including an order that the Grantee remov e any or all of such facilities . Grantee shall comply with such additional orders . 2.In the event that Grantee fails to comply with the terms and conditions o f abandonment or removal as may be required by this franchise Ordinance, and within such tim e as may be prescribed by the City Public Works Department, then the City may remove or caus e to be removed such facilities at Grantee's expense . Grantee shall pay to the City all of the cost s of removing and disposing of these facilities, as well as returning the rights-of-way occupie d pursuant to this franchise, including, but not limited to : (a) the cost of all environmental testin g the City must conduct to determine the environmental condition of any rights-of-way occupie d pursuant to this franchise and to ascertain what procedures the City must undertake, if any, t o return any such rights-of-way to the environmental condition required by applicable Federal , State or local environmental laws ; (b) all cleanup costs, disposal costs, and any other costs Page 139 of 466 i Ordinance No . 1587 (2013 Series) Page 1 5 associated with returning these rights-of-way to such environmental condition ; (c) all costs o f removing, storing, and disposing of the Grantee's facilities ; (d) all costs of returning all streets t o the structural conditions they were in immediately at the beginning of Grantee's use of thes e streets pursuant to this franchise agreement ; (e) plus the current rate of overhead being charge d by the City for reimbursable work . 3 . If, at the nonrenewal, revocation or termination of this franchise, or of th e permanent discontinuance of the use of all or a portion of its facilities, Grantee, within thirty (30 ) days thereafter, fails or refuses to make written application for the above-mentioned authority t o remove or abandon its facilities, the City Public Works Department shall make the determinatio n as to whether the facilities shall be abandoned in place or removed . The City Public Work s Department shall then notify Grantee of its determinations . Grantee shall thereafter comply wit h the applicable provisions of this Article 11 . G . For those facilities Grantee abandons in place, Grantee shall be required to maintain an acceptable performance bond, letter of credit or security fund, as determined by th e City Public Works Department, to cover the costs for the removal of any such abandone d facilities from the City streets for any and all periods of time, including those periods followin g the expiration, revocation or termination of this franchise, that Grantee's facilities remain in th e City streets . Grantee shall be required to maintain insurance and to indemnify the City pursuan t to this Article during any periods the abandoned facilities remain within the City streets . Provided, however, that any pipelines which cannot be removed due to a moratorium preventin g work in the City streets, may be deferred from the payment of the annual franchise fee . The payment of annual franchise fees may be deferred during any such moratorium period, provide d that Grantee promptly removes its facilities after notice by the City Public Works Department o f the cessation of the moratorium and direction to remove such Facilities . In the event Grante e does not promptly remove such facilities as directed, any deferred annual franchise fees shall b e due and payable within thirty (30) days of notice to pay . ARTICLE 1 2 COMPLETION OF WOR K In the event that the Grantee fails to commence any work or act and diligently proceed therewith or to complete any such act or work required of the Grantee by the terms of thi s franchise within the time limits required hereby (and except as is otherwise provided in Article s 10 and 11), the City may cause such act or work to be completed by the City or, at the election o f the City, by a private contractor . The Grantee agrees to pay the City, within thirty (30) days afte r delivery of an itemized bill, the cost of performing such act or work plus an amount equal t o fifteen percent (15%) thereof for overhead . If the Grantee is dissatisfied with any decision mad e by the City Public Works Department hereunder or the determination of the cost of any wor k performed by the City pursuant to this Agreement, it may petition the City Council to review th e same within ten (10) days after such decision or determination . Page 140 of 466 Ordinance No . 1587 (2013 Series) Page 16 ARTICLE 13 RECOVERY OF COSTS OF REPAIRS AND UNPAID FEE S If the Grantee has not paid the City for such fees and expenses and/or liquidated damag e s incurred by or payable to the City as hereinabove set forth, the City may institute the followin g collection procedures (which procedures are in addition to any other rights, in law or equity , which the City has to correct amounts due under this franchise and to enforce the terms of thi s franchise): A.The City Public Works Department shall keep an itemized account of th e expenses incurred by the City pursuant hereto, or the fees unpaid by the Grantee . Sixty (60) day s after the presentation of the bill to the Grantee therefore, the City Public Works Department shal l prepare and file with the City Clerk a report specifying the work done by the City, or the unpai d fees, the itemized and total cost of the work, a description of the work performed, and the nam e and address of the Grantee entitled to notice pursuant to this Article . B.Upon receipt of said report, the City Clerk shall present it to the City Council fo r consideration . The City Council shall fix a time, date and place for hearing said report, and an y protest or objections thereto . The City Clerk shall cause notice of said hearing to be posted in a newspaper of general circulation in the City, and served by certified mail, postage prepaid , addressed to the Grantee as set forth herein . Such notice shall be given at least ten (10) day s prior to the date set for hearing and shall specify the day, hour, and place when the City Counci l will hear and pass upon the City Public Works Department's report, together with any objection s or protests which may be filed as hereinafter provided . C.The Grantee may file written protests or objections with the City Clerk at any time prior to the time set for the hearing on the report of the City Public Works Department . Any such protest or objection must contain a description of the work or unpaid fee or liquidate d damages in which the Grantee is contesting and the grounds of such protest or objection and th e date it was received by him . He shall present such protest or objection to the City Council at th e time set for the hearing, and no other protest or objection shall be considered, except a s determined by the City Council for good cause shown . D.Upon the day and hour fixed for the hearing, the City Council shall hear and pas s upon the report of the City Public Works Department together with any such objections o r protests, make such revision, correction or modification to the charge as it may deem just ; an d when the City Council is satisfied with the correctness of the charge, the report (as revised , corrected or modified), together with the charge, shall be confirmed or rejected . The decision o f the City Council on the report and the charge, and on all protests or objections, shall be the fina l and conclusive decision of the City . E.The City Council may thereupon order that such charge shall be made a persona l obligation of the Grantee or assess such charge against the property of the Grantee . Page 141 of 466 Ordinance No . 1587 (2013 Series ) Page 17 1.If the City Council orders that the charge shall be a personal obligation o f the Grantee, it shall direct the City Attorney to collect the same on behalf of the City by use o f all appropriate legal remedies . 2.If the City Council orders that the charge shall be assessed against th e property of the Grantee, it shall confirm the assessment, cause the same to be recorded on th e assessment roll, and thereafter, said assessment shall constitute a special assessment against a lien upon any property held in the City of San Luis Obispo by the Grantee . F.The validity of any assessment made under the provisions of this franchise shal l not be contested in any action or proceeding unless the same is commenced within ninety (90 ) days after the assessment is placed upon the assessment roll as provided herein . G.The City Council, in its discretion, may determine that assessments in amounts o f 500 .00 or more shall be payable in not more than five (5) equal annual installments . The City Council's determination to allow payment of such assessments in installments, the number of installments, whether they shall bear interest, and the rate thereof shall be adopted by a resolution prior to the confirmation of the assessment . H.Immediately upon its being placed on the assessment roll, the assessment shall b e deemed to be complete, the several amounts assessed shall be payable, and the assessments shal l be liens against the property of the grantee in the City of San Luis Obispo . The lien shall b e subordinate to all existing special assessment liens previously imposed upon the same property , and shall be paramount to all other liens except for state, county, and municipal taxes with whic h it shall be upon a parity . The lien shall continue until the assessment and all interest due an d payable thereon are paid . 1 . All such assessments remaining unpaid after thirty (30) days from the dat e of recording on the assessment roll shall become delinquent and shall bear interest at the highes t rate permitted by law from and after said date . I.After confirmation of the report, certified copies of the assessment shall be file d with the County Auditor on or before August 10th . The descriptions of the parcels reported shal l be those used for the same parcels on the County Assessors map books for the current year . J.The amount of the assessment shall be collected at the same time and in the sam e manner as ordinary county taxes are collected and shall be subject to the same penalties an d procedure and sale in case of delinquency as provided for ordinary county taxes . All laws applicable to the levy collection and enforcement of taxes shall be applicable to such assessment . If the City Council has determined that the assessment shall be paid in installments, eac h installment and any interest thereon shall be collected in the same manner as ordinary City taxe s is in successive years . If any installment is delinquent, the amount thereof is subject to the same penalties and procedure for sale as provided for ordinary county taxes . K.All money recovered by payment of the charge or assessment or from the sale o f the property at foreclosure sale shall be paid to the City Finance Director . Page 142 of 466 Ordinance No . 1587 (2013 Series) Page 18 ARTICLE 1 4 BON D A . Grantee shall, concurrently with the filing of and acceptance of award of thi s franchise, file with the City Clerk, and yearly thereafter, maintain in full force and effect, a bon d guaranteeing to the City of San Luis Obispo the penal sum of Five Million Dollar s 5,000,000 .00), with a surety to be approved by the City Public Works Director and City Risk Manager, conditioned that Grantee shall, well and truly observe, fulfill and perform each an d every term and condition of this franchise, and in a material breach of condition of sai d franchise, at the discretion of the City Public Works Director, a percentage of the amount of th e bond shall be paid to the City according to the following schedule, which cumulative amount fo r any said breach not cured within the time specified below shall not exceed the full amount of the bond, in addition to any damages recoverable by the City and shall be recoverable from the principal and sureties of the bond : Following receipt of notice by Certified Mail sent by the City, failure to cur e said breach of condition, within :Penal sum paid to City : 10 business days 5% of the amount of the bon d 30 calendar days 30% cumulative amount of the bon d 60 calendar days 70% cumulative amount of the bon d 90 calendar days 100% cumulative amount of the bon d The amount of time specified above shall be tolled while City and Grantee resolve, o r until the City Council rules on, any written appeal, protest or objection to the City Public Work s Director's decision as set forth in Articles 12, 13, 19, and 25, and elsewhere in this agreement ; however, if Grantee's appeal, protest or objection is found by the City Council to be the result o f bad-faith actions or tactics that are frivolous or intended to cause unnecessary delay, suc h amount of time shall not be tolled . If said bond is not so filed, the award of this franchise and privileges will be set aside an d any money paid therefore will be forfeited . Whenever a bond is taken and deemed to b e liquidated damages for any breach of a term or condition of this franchise, the Grantee mus t immediately file another bond of like amount and character, and if the Grantee fails to do s o within the time set by the City Public Works Director, the City Council may, by resolution , declare said franchise automatically forfeited . Nothing herein shall insulate Grantee from liability in excess of the amount of said bond or shall be construed as a waiver by the City of an y remedy at law against the Grantee for any breach of the terms and conditions of this franchise, o r for any damage, loss or injuries suffered by the City of San Luis Obispo in case of any damage , loss or injury suffered by any person, firm, or corporation by reason of any work done or an y activity conducted by the Grantee in exercise of this franchise . Page 143 of 466 Ordinance No . 1587 (2013 Series ) Page 19 B . The faithful performance bond shall continue to exist for one (1) year followin g the City's approval of any sale, transfer, assignment or other change of ownership of thi s franchise, or of the expiration or termination of this franchise . The City may release said bond prior to the end of the one (1) year period upon satisfaction by Grantee of all the obligation s under this franchise . ARTICLE 1 5 INSURANC E A . The Grantee shall procure and shall keep in force for the term of the franchise, at the sole cost and expense of the Grantee, the following insurance . All insurance coverages are t o be placed with insurers which have a Best's rating of not less than B+VIII and are admitte d insurance companies in the State of California . Grantee may satisfy the requirements of thi s Article 15 by showing proof of self-insurance reasonably satisfactory to the City Attorney an d Risk Manager . Commercial General Liability Insurance (CGL):Grantee shall maintain in full force an d effect Commercial General Liability Insurance with the following coverages : 1.Personal Injury and Bodily Injury, including death resulting therefrom . 2.Property Damage . 3.Automobile coverage which shall include owned, non-owned and hired vehicles . The amount of insurance shall not be less than the following : Single limit on the coverag e applying to bodily and personal injury, including death resulting therefrom, property damage , and automobile coverage in the total amount of Ten Million Dollars ($10,000,000 .00). The following endorsements must be provided in the CGL policy : 1.If the insurance policy covers on an "accident" basis, it must be changed t o occurrence ." 2.The policy must cover personal injury as well as bodily injury . 3.Blanket contractual liability must be afforded and the policy must contain a cross - liability or severability of interest endorsement . 4.Broad Form Property Damage Liability must be afforded . 5.Products and Completed Operations coverage must be provided . 6.The City, its officers, employees and agents shall be named as additional insure d under the policy . The policy shall include the appropriate insurance company endorsement, a s required under City regulations . The policy shall provide that the insurance will operate as Page 144 of 466 Ordinance No . 1587 (2013 Series ) Page 2 0 primary insurance . No other insurance effected by the City, whether commercial or self - insurance will be called upon to contribute to a loss hereunder . The following requirements apply to all insurance to be provided by Grantee : 1.A certificate of insurance shall be furnished to the City . Upon request by the City , Grantee shall provide a certified copy of any insurance policy to the City within forty-fiv e working days of the City's request . 2.Certificates and policies shall state that the policies will not be canceled o r reduced in coverage or changed in any other material respect without thirty days prior writte n notice to the City . B . Failure on the part of Grantee to procure or maintain required insurance an d bonding shall constitute a material breach of this franchise upon which the City may immediatel y terminate or suspend this franchise . ARTICLE 1 6 INDEMNIFICATION BY GRANTE E The Grantee, by the acceptance or use of the franchise hereby granted, shall defend , indemnify and shall keep and save free and harmless the City, its officers, agents and/o r employees against any and all claims, demands or causes of action which may be asserted , prosecuted or established against them, or any of them, for damage to persons, or property, o f whatsoever nature, arising out of the use by it of the City streets hereunder or arising out of an y of the operations or activities of the Grantee pursuant to this franchise, whether such damage shall be caused by its own sole negligence or negligence concurrent with the City, exceptin g therefrom, however, any claim or demand based on the sole negligence or willful misconduct o f the City and any claim, demand, or cause of action which may be asserted, prosecuted o r established against the City under the provision of the Worker's Compensation Act for injury t o or the death of any of City's officers, agents or employees while acting within the scope of thei r employment . Grantee shall not be responsible for any criminal, fraudulent or malicious conduct of the City . ARTICLE 1 7 CHANGES IN CONTROL OF FRANCHIS E A . On and after the Grantee's acceptance of this franchise as provided in Article 2 3 herein, Grantee, its partners, its shareholders, or any other person or persons holding an interes t in Grantee shall not transfer any interest in the franchise where such a transfer would lead t o another person achieving a twenty-five percent (25%) or greater interest in this franchise o r change control of this franchise, unless the City approves such a transfer or change in control . The City shall approve a request for transfer or change in control only if doing so serves th e public interest. As used in this franchise Ordinance, "control" includes actual working control i n whatever manner exercised . Page 145 of 466 Ordinance No . 1587 (2013 Series) Page 21 1 .. The City shall deny any such . request for transfer or change in control i f the transferor or transferee fails to comply with any applicable provision of this Article of thi s franchise Ordinance, or if the City determines the transferor is in non-compliance with the term s and conditions of this franchise Ordinance, or if a transferee is lacking in experience and/o r financial ability to operate the pipelines authorized by this franchise Ordinance, or if th e proposed transfer will be detrimental to the public interest . B . Both the Grantee and the proposed transferee shall inform the City Public Work s Department of any pending change in control of this franchise or of any pending transfer of a n interest in the franchise requiring the City's consent pursuant to this Article, and each shal l provide applications containing all documents on which the transfer or change in control i s predicated and all documents which the City Public Works Department determines are necessar y to evaluate the transfer or change of control . These applications shall be signed by dul y authorized representatives of the Grantee and the proposed transferee, with signature s acknowledged by a notary . The appropriate transfer fee described in Article 17(C), infra shal l accompany these applications . 1 .Grantee's application shall include : a.Identification and ownership of the proposed transferee in the same detail as i f the proposed transferee were an applicant for an initial grant ; b.Current financial statements showing the financial condition of the Grantee a s of the date of the application . In this application, the Grantee shall also agree to submit financia l statements showing the condition of the franchise as of the closing . Said financial statement s shall have been audited and certified by an independent certified public accountant, and shall b e submitted within ninety (90) days of the closing . 2 . The proposed transferee's application shall contain current financial statements of the proposed transferee and other such information and data, including but not limited to source s of capital, as will demonstrate conclusively that the proposed transferee has all the financia l resources necessary to acquire the pipeline(s), carry out all of the terms an d conditions of th e franchise, remedy any and all defaults and violations of the provisions of this franchise in th e Grantee's past and present operations, make such other improvements an additions as may b e required or proposed to maintain and conduct the services and facilities required under thi s franchise . The proposed transferee will be required to authorize release of financial informatio n to the City from financial institutions relating to information supplied b y the proposed transfere e in support of the application. The proposed transferee's application shall also include : a.A construction schedule, describing type and placement of construction, detail phases of construction, and include map(s) correlated to the phases of construction . Map(s) shall include detail on the location, length, depth, and internal diameter of any planned pipelines . b.Copies of any agreements with utility companies for the use of an y facilities including, but not limited to, poles, lines and conduit . Page 146 of 466 Ordinance No . 1587 ( 2013 Series) Page 22 c .A description of plans for emergency equipment and personnel enabling the transferee to meet the emergency equipment personnel requirements in Article 8 herein . d . Any information indicating as specifically as possible that any principal , manager, or associate of the proposed transferee or a parent entity of the proposed transferee ha s previously been or is currently : i.A party to a criminal proceeding (involving felonies o r misdemeanors) in which any of the following offenses have been charged : fraud, embezzlement , tax evasion, bribery, extortion, jury tampering, obstruction of justice (or other misconduc t affecting public or judicial officers in the performance of their duties), false/misleadin g advertising, perjury, antitrust violations (state or federal), violation of environmental laws o r regulations, or conspiracy to commit any of the foregoing ; ii.A party to a civil proceeding concerning liability for any of th e following : unfair or anticompetitive business practice, antitrust violations (state or federal ) including instances in which consent decrees were entered, violations of security laws (state or federal), false/misleading advertising, racketeer influences and corrupt organizations, violation of environmental laws or regulations, or contraband forfeitures ; iii.Subject to any penalty, criminal or civil, involving failure t o comply with the requirements of a pipeline franchise ; iv.Involved in instituting legal action against its franchising authorities ; v.Involved in revocation/non-renewal of any other franchise ; e . Any other details, statements, information or references pertinent to the subject matter of such application which shall be required or requested by the City or by an y provision of law . f.An express and unconditional written acceptance of the terms and conditions of this Franchise Ordinance, in its most current form, as a condition to the transfer . C .A fee shall be submitted with the applications for the City's consent to transfer o r change of control . 1.Where the City's consent to a transfer or a change of control of this franchis e does not result in the modification of this franchise by adoption of an amending ordinance, thi s fee for each application shall be as set forth in the City's fee ordinance . 2.Where the City's consent to a transfer or a change of control of this franchis e results in the modification of this franchise by adoption of an amending ordinance this fee shal l be as set forth in the City's fee ordinance . Page 147 of 466 Ordinance No . 1587 (2013 Series) Page 23 3 . In the event the costs to process the applications exceed the fees detailed above, the applicants may be required to pay any additional costs incurred by the City in processing th e applicants' requests for the City's consent to the transfer or change of control of this franchise . Such costs may include the cost incurred for hiring consultants to assist in evaluating th e applications . Such costs shall be paid by the applicants prior to final consideration of the reques t by City Public Works Department, or the City Council, as applicable . D.Within thirty (30) days of the effective date of the City's approval of the transfe r or change of control, or within thirty (30) days of the date of the close of the transfer or chang e of control, the Grantee shall file with the City Public Works Department : (1) a certified copy of each duly executed instrument of such a transfer or change in control ; and (2) the submittal of a final accounting and report of all fees due under this franchise . The proposed transferee shall b e responsible for any underpayment, and shall be entitled to a credit for any overpayment . Within ninety (90) days of the closing of the transfer or change of control, the Grantee shall submi t financial statements, audited and certified by an independent certified public accountant , showing the condition of the franchise as of the closing . If such duly executed instruments ar e not filed with the City Public Works Department by the deadlines imposed in this Article, or i f the final documents are different from the preliminary documents, the City Public Work s Department may inform the proposed transferee that the transfer or change in control is no t deemed to be in force and effect . The City Public Works Department may then administrativel y determine that this franchise is forfeited and the City Council may, without notice, by ordinanc e repeal this franchise . E.As a condition to the granting of consent to such a transfer or change in control , the City Council may impose such additional terms and conditions upon this franchise and upo n the proposed transferee as are in the public interest . Such additional terms and conditions shall b e imposed by ordinance . Nothing herein contained shall be construed to grant Grantee the right t o transfer or change control of this franchise or any part thereof, except in the manner aforesaid . This Article 17 applies to any transfer of this franchise, or of any change in control of thi s franchise, whether by operation of law, by voluntary act of Grantee, or otherwise . ARTICLE 1 8 WAIVER OF BREAC H No waiver of the breach of any of the covenants, agreements, restrictions, or condition s of this franchise by the City shall be construed to be a waiver of any succeeding breach of th e same or other covenant, 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 o f default shall be construed as a waiver thereof, or acquiescence therein, nor shall the acceptanc e 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 . Page 148 of 466 Ordinance No . 1587 ( 2013 Series ) Page 24 ARTICLE 1 9 DEFAUL T A.In the event that the Grantee shall default in the performance of any of the terms , covenants and conditions herein, the City may give written notice to the Grantee of such defaul t by certified mail . In the event that the Grantee does not commence the work necessary to cur e such default within five (5) business days after such notice is received or prosecute such wor k diligently to completion, the City may declare this franchise forfeited by giving written notic e thereof to the Grantee, whereupon this franchise shall be void and the rights of the Grante e hereunder shall terminate and the Grantee shall execute an instrument of surrender and delive r the same to the City . If the City Council declares this franchise forfeited, it may thereupon an d thereafter exclude the Grantee from further occupancy or use of all City roads and street s authorized under this franchise . A forfeiture of said franchise shall not of itself operate to releas e any bond filed for said franchise . Upon declaring a franchise forfeited, the City Council ma y elect to take and accept any bond as liquidated damages therefore or pursue any other lega l remedy for any damage, loss or injury suffered by the City as a result of such breach or both . After forfeiture, any bond shall remain in full force and effect for a period of one (1) year unles s exonerated by the City Council . No bond shall be exonerated unless a release is obtained fro m the City Public Works Department and is filed with the City Clerk . The release shall stat e whether all excavations have been back filled, all obstructions removed, and whether the substratum or surface of City streets occupied or used have been placed in good and serviceabl e condition . A release shall not constitute a waiver of any right or remedy which the City of Sa n Luis Obispo 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 i n the exercise of this franchise . B.No provision herein made for the purpose of securing the enforcement of the ter m s and conditions of this franchise shall be deemed an exclusive remedy, or to afford the exclusiv e procedure, for the enforcement of said terms and conditions, but the remedies and procedur e herein provided, in addition to those provided by law shall be deemed to be cumulative . ARTICLE 20 SCOPE OF RESERVATIO N Nothing herein contained shall ever be construed so as to exempt the Grantee fro m compliance with all ordinances of the City now in effect or which may be hereafter adopte d which are not inconsistent with the terms of this franchise . The enumeration herein of specific rights reserved shall not be construed as exclusive, or as limiting the general reservation herei n made or as limiting such rights as the City may now or hereafter have in law . ARTICLE 2 1 NOTIC E Any notice required to be given under the terms of this franchise, the manner of servic e of which is not specifically provided for, may be served as follows : Page 149 of 466 Ordinance No . 1587 (2013 Series) Page 25 Upon the City, by serving the City Clerk, personally or by addressing a written notice t o the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, an d depositing such notice in the United States mail, postage prepaid . Upon the Grantee, by addressing a written notice to Grantee addressed to Union Pipelin e Company, c/o Tosco Refining Company, 9645 Santa Fe Springs Road, P .0 . Box 2628, Santa F e Springs, CA 90670-0628, Attn : Supervisor, MW Administration, or such other address as ma y from time to time be furnished in writing by one party to the other and depositing said notice i n the United States mail, postage prepaid . When service of any such notice is made by mail, th e time of such notice shall begin with and run from the date of the deposit of same in the Unite d States mail . ARTICLE 2 2 SUCCESSORS The terms herein shall inure to the benefit of and shall bind, as the case may be, the successors and assigns of the parties hereto, subject, however, to the provisions of Article 17 . ARTICLE 2 3 ACCEPTANCE OF FRANCHIS E A.This franchise is granted and shall be held and enjoyed only upon the terms an d conditions herein contained . By accepting this grant of franchise, Grantee shall agree to be boun d by each and all of the requirements of Article X, Sections 1001 through 1007 of the San Lui s Obispo City Charter . B.Grantee shall, within ten (10) days after the passage of this franchise Ordinance , file with the City Clerk an express and unconditional written letter of acceptance of, and consen t to, the terms and conditions of this franchise Ordinance, in its current version, and a s subsequently amended, pursuant to San Luis Obispo City Charter, Article X, Section 1004 . C.The parent entity, or entities, if any, of Grantee, shall file a letter with the City , concurrent with Grantee's letter of acceptance, which guarantees the performance of each an d every term, covenant and condition imposed on Grantee pursuant to the franchise Ordinance . D.Grantee's letter of acceptance shall be signed by two (2) duly authorize d representatives of Grantee, whose signatures shall be acknowledged by a notary, and shall b e accompanied by the performance bond and evidence of insurance required by this franchis e Ordinance . ARTICLE 24 FORCE MAJEUR E The time within which Grantee is obligated hereunder to construct, erect, maintain , operate, repair, renew, change the size of and remove pipelines or other improvements shall be extended for a period of time equal in duration to, and performance in the meantime shall be Page 150 of 466 Ordinance No . 1587 ( 2013 Series) Page 26 excused on account of, and for, and during the period of any delay caused by strikes, threats o f strikes, lockouts, war, threats of war, insurrection, invasion, acts of God, calamities, violen t action of the elements, fire, action or regulation of any governmental agency law or ordinance , impossibility of obtaining materials, or other things beyond the reasonable control of Grantee . ARTICLE 2 5 LIQUIDATED DAMAGE S A. By acceptance of this franchise, Grantee understands and acknowledges tha t failure to timely comply with any performance requirements stipulated in this franchis e Ordinance will result in damages to the City, and that it is and will be impractical to determin e the actual amount of such damage in the event of delay or nonperformance . Each of the amount s set forth below has been set in recognition of the difficulty of affixing actual damages arisin g from breach of these time of performance requirements . Each of said amounts constitutes a reasonable estimate of these damages . This section does not limit the rights and remedie s available to the City for damages other than the timely compliance with performanc e requirements as describe d in this section . The liquidated damages set forth below shall b e chargeable to the bond, letter of credit or security fund provided for in Article 14, supra, shoul d Grantee not make payment within thirty (30) days of written notice by certified mail by the Cit y that the following amount s are due for the following concerns : 1.Failure to provide data, documents, or reports within ten (10) busines s days after receipt of written request by the City, by certified mail, or such longer time as may b e specified in said request : Two Hundred Fifty Dollars ($250 .00) per day for each day, or par t thereof that each violation continues . 2.Failure to provide to the City within ten (10) business days after receipt o f written request by the City, by certified mail, current evidence of insurance and bonding : Two Hundred Fifty Dollars ($250 .00) per day for each day, or part thereof, that each noncomplianc e continues . Nothing in this Section shall preclude immediate termination or suspension of thi s franchise as provided for under Article 15B, supra . 3.Failure by Grantee to timely restore public or private property afte r performance of work, and following Grantee's receipt of written request by the City to do s o within ten (10) business days thereafter by certified mail : Two Hundred Fifty Dollars ($250 .00 ) per day or part thereof, that each non-compliance continues . Any fines paid pursuant to thi s Subsection 3 shall be paid solely to the Street Fund of the City Public Works Department . B . If the City Public Works Department determines that Grantee is liable fo r liquidated damages, the City Public Works Department shall issue to Grantee by certified mai l written notice of intention to charge liquidated damages . Liquidated damages shall begin t o accrue as of the date of the written notice and as set forth in said notice . The notice shall set forth the basis for the liquidated damages and give Grantee a reasonable time in which to remedy th e violation . Page 151 of 466 Ordinance No .1587 (2013 Series) Page 27 C.Grantee shall have the right to appeal any notice to the City Public Work s Department by certified mail, within twenty (20)days after issuance of the notice by the City Public Works Department . The City Public Works Department shall hold an administrative hearing within sixty (60) days after receipt of an appeal . The City Public Works Director's decision shall be the final decision of the City . D.If Grantee does not appeal the notice within said twenty (20)day period, Grante e shall pay the amount(s) of liquidated damages as stated in the notice . If payment is not paid as provided for in this Article, the City may withdraw against the bond provided for in Article 1 4 herein . ARTICLE 2 6 ATTORNEYS' FEE S In the event the City or Grantee brings legal action against the other, or against Grantee's bonding companies or insurance carriers to compel performance of, or to recover for breach o f any covenant, agreement or condition contained in this franchise, or for damages, the prevailin g party shall be entitled to, in addition to any other relief obtained, such reasonable attorneys' fees ARTICLE2 7 CONDEMNATIO N Notwithstanding anything to the contrary contained herein and in accordance with Sa n Luis Obispo City Charter Article X, Section 1005,this Ordinance shall not in any way affect th e right of the City to acquire the property of the Grantee thereof either by purchase or through th e exercise of the right of eminent domain, and nothing herein contained shall be construed t o contract away or to modify or to abridge either for a term or in perpetuity the City's right o f eminent domain with respect to any public utility . The City reserves the right to purchase th e property of such utility at an agreed price . In fixing the price to be paid by the City for any utility, no allowance shall be made for franchise value (other than the actual amount paid to th e City at the time of the franchise acquisition), goodwill, going concern, earning power, increase d cost of reproduction, severance damage, or increased value of right-of-way . SECTION 2 .If any section, subsection, sentence, clause, phrase or portion of thi s ordinance is for any reason held to be invalid or unconstitutional by the decision of any court o f competent jurisdiction, such decision shall not affect the validity of the remaining portions o f this Ordinance . The City Council of the City of San Luis Obispo hereby declares that they woul d have adopted this ordinance and each sentence, clause, phrase or portion thereof irrespective o f the fact that any one or more sections, subsections, sentences, clauses, phrases or portions b e declared invalid or unconstitutional . SECTION 3 .This ordinance shall take effect and be in full force and effect thirty (30) days after its passage, and before the expiration of fifteen (15)days after passage of thi s ordinance, it shall be published once with the names of the members of the City Council votin g for and against the ordinance in a newspaper of general circulation published in the City of Sa n Luis Obispo, State of California . Page 152 of 466 Ordinance No . 1587 (2013 Series ) Page 28 SECTION 4 . A synopsis of this ordinance, approved by the City Attorney, together wit h the ayes and noes shall be published once in full at least five (5) days prior to its final passage, i n a newspaper published and circulated in said City, and at the same time shall go into effect at th e expiration of thirty (30) days after its said final passage . A copy of the full final text of thi s ordinance shall be on file in the Office of the City Clerk on and after the date following th e introduction and passage to print and shall be available to any interested member of the public . INTRODUCED on the 22nd day of January 2013 AND FINALLY ADOPTED by th e Council of the City of San Luis Obispo on the 5 `h day of February 2013 on the following roll cal l vote : AYES :Council Members Ashbaugh, Carpenter and Carter, Vice Mayor Smith and Mayor Marx NOES :None ABSENT : None ATTEST : City Clerk APPROVED AS TO FORM : City Attorney Page 153 of 466 Page 154 of 466 Terri James-Barksdale RES Agent, Western Region Real Estate Transactions PHILLIPS 66 3900 Kilroy Airport Way, Ste 210 Long Beach CA 90806 O: 562-290-1529 Terri.L.James-Barksdale@p66.com November 5, 2021 City of San Luis Obispo Public Works 919 Palm Street San Luis Obispo, CA 93401-3218 RE: Phillips 66 Pipeline Ordinance 1587 – Application Request for Extension Public Works Director: Phillips66 Pipeline LLC currently operates pipelines within the city limits of San Luis Obispo, CA under the subject pipeline ordinance. Phillips 66 is planning to divest from operations within this San Luis Obispo region, therefore we are seeking only to extend the Ordinance for a term of 3 additional years, with an option to renew for an additional term. The existing pipelines are located as shown on the attached maps. We have also provided a copy of our existing pipeline franchise with the neighboring City of Arroyo Grande as requested for reference. The California Constitution, under Division 3 within the Public Utilities Code (PUC), Chapter 2, Sections 6201- 6302, allows for local governments to grant gas, oil, electric, and water franchises. Complete legislative language can be found on the following website: https://leginfo.legislature.ca.gov/faces/codes_displayexpandedbranch.xhtml?tocCode=PUC&division=3.&title= &part=&chapter=2.&article= As in the past, Phillips 66 intends to continue with all safety measures and regulatory practices for the continued safe operations of all our pipelines within the City of San Luis Obispo. For more information about Phillips 66 Pipeline LLC, and its pipeline safety practices, please visit www.phillips66pipeline.com. We look forward to working with you on this renewal process. Sincerely, Terri J. Barksdale cc: Tracey Brown Page 155 of 466 -- FRANCHISE MILEAGE 8-INCH PIPELINE 18,812 FEET 3.56 MILES 12-INCH PIPELINE 5,848 FEET 1.10 MILES INDEX TO SAN LUIS OBISPO FRANCHISE MAPS ORDINANCE No. 1587-2013 PHILLIPS 66 PIPELINE LLC RIGHT-OF-WAY No. 086232Page 156 of 466 CHUPEROSA DR. LOS VERDES DR. 9::· <:) w z SUBURBAN ROAD 5,848' - 12" PRODUCTS ::5 - 12" PRODUCTS LINE w I 0 ---------- I REV DATE 1 04/27 /11 2 03/09/13 CITY OF SAN LUIS OBISPO ---COUNTY OF SAN LUIS OBISPO BUCKLEY ROAD CITY OF SAN LUIS OBISPO FRANCHISE MAP ORDINANCE NO. 1587-2013 PHILLIPS 'r;:r;:J. Phillips 66 �. Pipeline LLC 1 0 ----z Ul 15 w Ul w D2A335 DRAWN�F=Gll�I ----� APP'D. ______ _ SCALE 1 "= 400' DATE 5/20/98 RW086232 4 SHEETS I SHEET 1 Page 157 of 466 REV DATE 04/27 /11 2 03/09/13 V�-o"' 3245' -8" LINE #400 COAST VALLEY TRUNK No. 1 SOUTH ST. >-' (/) w w CD w w CD HIGH ST. BRANCH ST. BRIDGE ST. 3245' -8" LINE #400 COAST VALLEY TRUNK No. 2 I CITY OF SAN LUIS OBISPO FRANCHISE MAP ORDINANCE NO. 1587-2013 D2A174, D2A340 DRAWN �F=Gl�II _____ _ APP'D. _______ _ SCALE 1 "= 400' DATE 5/20/98 RW086232 4 SHEETS SHEET 2 Page 158 of 466 REV DATE 04/27 /11 2 03/09/13 _JLJLJL BROAD 1 1 ST. (HWY. 227) 2717'-8" LINE #400 COAST VALLEY TRUNK No. 1 NIPOMO BEACH ST. I 2702' -8" LINE #400 COAST VALLEY TRUNK No. 2 ST. CITY OF SAN LUIS OBISPO FRANCHISE MAP ORDINANCE NO. 1587-2013 D2A340, D2A270 DRAWN�FG�III�� APP'D. ______ _ SCALE 1 "= 400' DATE 5/20/98 RW086232 4 SHEETS SHEET 3 Page 159 of 466 SOUTHERN PACIFIC R AILWA_Y_� ------ REV DATE 04/27 /11 2 03/09/13 •----+.-3450'-8" LINE #400 COAST VALLEY TRUNK No. 2 SANTA ROSA ST. OSOS ST. L 3453'-8" LINEEJ400 DCCOAST VALLEY TRUNK 5 No. 1 I � MORRO ST. 1.-----� CHORRO ST. �DOC GARDEN ST. =1D C BROAD 11 ST. (HWY. 227) �,------- CITY OF SAN LUIS OBISPO FRANCHISE MAP ORDINANCE NO. 1587-2013 D2A270, D2A339 DRAWN �FG�lll�---- APP'D. ______ _ SCALE 1 "= 400' DATE 5/20/98 RW086232 4 SHEETS SHEET 4 Page 160 of 466 R ______ RESOLUTION NO. _____ (2022 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, DECLARING THE CITY’S INTENT TO APPROVE A FRANCHISE ORDINANCE, SUPERSEDING ORDINANCE 1564 (2011 SERIES), TO OPERATE AND MAINTAIN PIPELINES FOR THE TRANSPORTATION OF OIL AND OTHER SPECIFIED MATERIALS IN THE CITY OF SAN LUIS OBISPO BY PHILLIPS 66 PIPELINE LLC AND SETTING A PUBLIC HEARING FOR FEBRUARY 15, 2022 WHEREAS, the City of San Luis Obispo adopted Ordinance No. 1391 on July 10, 2001 granting a franchise to Union Pipeline Company, a California Corporation for a term of 10 years for the transportation and distribution of oil and other specified materials in the City of San Luis Obispo; and WHEREAS, on April 17, 2007 the City Council adopted Ordinance No. 1504 transferring the franchise agreement from Union Pipeline Company to Conoco -Phillips; and WHEREAS, on June 21, 2011, the City of San Luis Obispo adopted Ordinance No. 1564 for a new franchise agreement to replace the existing franchise agreement approved by Ordinance No. 1391 and set to expire on July 9, 2011; and WHEREAS, On February 5, 2013 the City Council adopted Ordinance No. 1587 transferring the franchise from ConocoPhillips to Phillips 66 Pipeline LLC; and WHEREAS, On June 24, 2021 Phillips 66 Pipeline LLC applied to the City of San Luis Obispo for a new franchise agreement to replace the existing franchise agreement approved by Ordinance No. 1564; and WHEREAS, Phillips 66 Pipeline LLC is currently operating pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo ; and WHEREAS, the new franchise agreement will include the following key provisions; Purpose: To maintain and operate pipelines for the transportatio n of oil and hydrocarbons within the City of San Luis Obispo. Type: Non-exclusive Term: 3-years Fees: Annual franchise fee to the City in accordance with Public Utilities Code Section 6231.5 (a fee ranging from $0.088 to $0.660, adjusted per the Consumer Price Index, per lineal foot based on pipeline diameter) Page 161 of 466 Resolution No. _____ (2022 Series) Page 2 R ______ Bond: One-million dollars faithful performance bond. Insurance: Ten million dollars liability insurance Indemnity: Phillips 66 Pipeline LLC to indemnify the City of any and all damages to personas or property arising out of operations under the franchise. Includes indemnity for joint acts with the City. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Pursuant to Section 1002 of the City Charter of the City of San Luis Obispo, the City Council hereby declares its intention to consent to the granting of a franchise to maintain and operate pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo to Phillips 66 Pipeline LLC. Page 162 of 466 Resolution No. _____ (2022 Series) Page 3 R ______ SECTION 2. A public hearing will be held on February 15, 2022 at 6:00 p.m. The City Clerk shall publish this resolution within fifteen (15) days of its passage in a newspaper in the City of San Luis Obispo. Any persons having an interest in the franchise approval or any objection to the approval of the franchise may appear before the Council to be heard thereon. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this ____ day of ______________ 2022. ___________________________ Mayor Erica A. Stewart ATTEST: __________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: ___________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington City Clerk Page 163 of 466 Page 164 of 466