HomeMy WebLinkAboutItem 6g - Reolution of Intention to Approve Franchise Agrement with Phillips 66 Pipeline LLC Item 6g
Department: Public Works
Cost Center: 5001
For Agenda of: 10/6/2026
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Public Works & Utilities Director
Prepared By: Brendan Pringle, Senior Business Analyst
Madeline Kacsinta, Assistant Director of Public Works
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
AND SET A PUBLIC HEARING FOR NOVEMBER 17, 2026
RECOMMENDATION
1. Adopt a Resolution of Intention (Attachment A) entitled, “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 1709 (2022 Series), to allow Phillips
66 Pipeline LLC to operate and maintain pipelines for the transportation of oil and
other specified materials in the City of San Luis Obispo and setting a public hearing
for November 17, 2026”; and
2. Authorize the Public Works and Utilities Director to execute the letter agreement
memorializing the abandonment of the Phillips 66 proprietary pipeline.
REPORT-IN-BRIEF
This agenda item presents a draft Resolution of Intention (Attachment A) declaring the
City’s intent to consider renewal of a franchise agreement with Phillips 66 Pipeline LLC
(Phillips 66) for the continued operation and maintenance of existing common carrier
pipelines within City rights-of-way. The Resolution of Intention does not approve a
renewed franchise agreement. Rather, it initiates the process required by the Public
Utilities Code and provides an opportunity for the Council and community to review and
comment on the proposed agreement before any action on adoption.
Phillips 66 submitted a written request to renew its franchise agreement as required under
the existing agreement. The prior franchise agreement expired on April 14, 2025. Since
that time, Phillips 66 has remained operational and subject to standard City encroachment
permit requirements while staff completed its review of the renewal request. Phillips 66
has held the franchise since 2013, when it succeeded Union Pipeline Company
(UNOCAP), which was initially granted the franchise in 2001.
Page 99 of 274
Item 6g
The proposed franchise agreement applies only to existing common carrier pipelines
located within City rights-of-way. It does not authorize new pipeline corridors, expansion
of existing facilities, or expanded operations without prior City Council approval. The
proposed term of the renewal agreement is five years.
As compensation for use of the public right-of-way, the agreement includes a $30,000
granting fee and annual franchise fees established pursuant to Public Utilities Code
(PUC) § 6231.5). During review of prior franchise fee payments, staff identified historical
underpayments associated with Consumer Price Index (CPI) calculations, and Phillips 66
has agreed to remit approximately $51,201 to reconcile the difference.
This agenda item also includes a separate letter agreement memorializing the
abandonment of proprietary pipelines previously operated by Phillips 66 Comp any under
a separate franchise agreement. These proprietary pipelines are distinct from the
common carrier pipelines that are the subject of the proposed franchise renewal and have
already been abandoned through the City's encroachment permit and inspection process.
The letter agreement documents abandonment and does not grant or renew any
franchise rights for that proprietary pipeline. Upon execution of the agreement, Phillips 66
will also pay the City a one-time administrative fee in the amount of $10,000 to
compensate the City for its time in reviewing the abandonment report and related
materials.
If the Council adopts the Resolution of Intention, a public hearing would be held on
November 17, 2026, to consider introduction of an ordinance approving a re newed
franchise agreement. A second reading and potential adoption would occur on December
1, with the ordinance becoming effective on December 31, 2026.
POLICY CONTEXT
The action before Council on October 6, 2026, is limited to initiating the public hearing
process and scheduling the required public hearing. Adoption of the Resolution of
Intention does not approve a new franchise agreement.
The renewal of the Phillips 66 franchise agreement is subject to the provisions of PUC §§
6231–6234, which establish the process for granting and renewing franchises that
authorize utility operators to occupy public rights-of-way. Under these provisions, the City
Council has discretion to approve or deny a franchise renewal. If the Council wishes to
consider renewing a franchise, state law requires the Council to first adopt a Resolution
of Intention and schedule a public hearing. Following the public hearing, the Council may
consider an ordinance approving the proposed franchise agreement.
The proposed renewal aligns with the authority granted to the City Council under Article
X of the City Charter (Licenses and Franchises), which authorizes the Council to grant
franchises through the adoption of an ordinance. Accordingly, approval of a franchise
renewal requires both compliance with the PUC process and adoption of an ordinance by
the City Council.
DISCUSSION
Page 100 of 274
Item 6g
Phillips 66 operates petroleum pipelines that traverse portions of the City's right -of-way
and are used to transport refined petroleum products through the region. Franchise
agreements provide utility operators with a limited, revocable right to occupy public rights-
of-way for specific purposes, subject to terms and conditions intended to protect public
infrastructure, public safety, and the broader public interest. Franchise agreements also
provide compensation to the City for the use of public property.
The City currently maintains franchise agreements with several utility providers that utilize
public rights-of-way to deliver services or transport products, including Pacific Gas and
Electric, Southern California Gas Company, and Charter Communications.
Phillips 66 has held a franchise agreement with the City since February 2013, when the
franchise originally granted to Union Pipeline Company (UNOCAL) in 2001 was
transferred from ConocoPhillips Pipeline Company to Phillips 66 Pipeline LLC. Most
recently, the City Council renewed the franchise in March 2022 for a three-year term that
expired on April 14, 2025.
On March 17, 2025, Phillips 66 submitted a written request seeking renewal of the
franchise agreement (Attachment C). The existing franchise agreement does not provide
for extensions, and renewal requires adoption of a new ordinance pursuant to the Public
Utilities Code and City Charter. Following expiration of the previous franchise agreement,
Phillips 66 remained subject to the City's encroachment permit requirements while staff
conducted additional review of the renewal request, including review of franchise fee
calculations and clarification of the status of separate proprietary pipelines discussed later
in this report.
Scope of Common Carrier Franchise Agreement
The proposed franchise agreement (Attachment D) grants Phillips 66 a non-exclusive
right to use portions of the City's right-of-way for the continued operation, maintenance,
repair, replacement, and eventual removal of existing common carrier petroleum
pipelines. The agreement does not authorize new pipeline corridors, expansion of existing
facilities, or expanded operations without prior City Council approval.
The common carrier pipeline system is part of a larger regional network extending through
multiple jurisdictions and serving facilities beyond City limits. The proposed franchise
renewal applies only to those portions of the existing pipeline system located within City
rights-of-way. Attachment E includes maps showing both the regional system and the
specific pipeline segments located within the City's jurisdiction.
The franchise agreement grants Phillips 66 the right to occupy City rights -of-way for the
purposes of transmitting and distributing oil/oil products under the terms and conditions
established in the agreement; it does not regulate petroleum production, refining, or end
use, nor does it authorize expanded pipeline operations .
Pipeline Decommissioning and Abandonment Requirements
Page 101 of 274
Item 6g
The proposed agreement includes requirements governing future decommissioning,
abandonment, or removal of pipeline facilities if they are no longer utilized or if the
franchise is not renewed in the future. Upon expiration, revocation, termination, or
permanent discontinuance of use, Phillips 66 would be required to submit an application
to the City describing the facilities proposed for abandonment or removal and
documenting their physical condition.
The agreement requires coordination with the City regarding environmental testing,
facility condition, record documentation, and future maintenance responsibilities. Phillips
66 would also be required to provide decommissioning and removal plans, updated
record drawings, and facility location information to assist with future utility coordination
and capital project planning.
The proposed agreement does not predetermine whether future pipeline facilities would
be removed or abandoned in place. Any such determination would be based on the
specific circumstances at that time and the City's evaluation of public safety,
environmental considerations, infrastructure impacts, operational needs, and long -term
liability considerations. If facilities are abandoned in place, Phillips 66 would remain
responsible for applicable bonding, insurance, indemnification, encroachment, defense,
indemnification, and right of way repair and restoration requirements of this franchise.
The City retains the right to require future removal of abandoned facilities and may
recover costs associated with environmental testing, remediation, disposal, restoration,
and administration if Phillips 66 fails to satisfy its obligations.
Franchise Fees
Franchise fees for petroleum pipeline operators are governed by PUC § 6231.5, which
sets a fee schedule based on pipeline diameter. The proposed agreement specifies that
Phillips 66 operates approximately 18,800 linear feet of 8 -inch pipeline and 5,800 linear
feet of 12-inch pipeline within the City’s right-of-way.
Base rates were originally established in 1989 as follows:
$0.176 per linear foot for 8-inch pipelines
$0.264 per linear foot for 12-inch pipelines
These base rates are subject to adjustments based on the CPI to reflect inflation over
time. PUC § 6231.5 states that the “applicable base rate shall be multiplied by the CPI for
the area, as published by the United States Department of Labor, Office of In formation
for the month of September immediately preceding the month in which payment is due
and payable, and divided by the Consumer Price Index for June 30, 1989, which is
declared to be 100.0.”
The City uses the CPI for All Urban Consumers (CPI -U) for the Los Angeles area, as
published by the U.S. Bureau of Labor Statistics1. Applying the CPI adjustment from June
1 U.S. Bureau of Labor Statistics (CPI-U) Los Angeles-Long Beach-Anaheim
Page 102 of 274
Item 6g
1989 to September 2025 (169%), the adjusted rates for the most recent payment in April
2026 were:
$0.473 per linear foot for 8-inch pipelines
$0.709 per linear foot for 12-inch pipelines
Using the adjusted rates and total pipeline footage, the current annual franchise fee is
approximately $12,603.
In addition to this recurring fee, the City is proposing a one -time granting fee of $30,000
to recover costs associated with administering the franchise, in line with the previous
franchise agreement. This granting fee, which is not currently identified in the User Fee
Schedule, includes the preparation and negotiation of the franchise agreement, pu blic
noticing, and facilitation of the required three public meetings (including one public
hearing for introduction of the Ordinance), and ongoing management and compliance
oversight of the agreement. The granting fee also accounts for staff time required to
coordinate with Phillips 66 on City capital projects that may be affected by the presence
or potential relocation of the pipelines.
Past Years’ Underpayments of Franchise Fees
In a recent audit of franchise fee payments, staff identified a discrepancy in Phillips 66’s
past years’ calculations of franchise fee payments. Payment calculations did not align
with the formula set out by PUC guidelines on CPI -related annual increases. Phillips 66
has offered to remedy this error by tendering payment for underpayments from 2021-
2025, totaling $51,200.70.
Although annual franchise fee payments were made during this period, staff determined
that the amounts paid did not fully reflect the CPI-adjusted rates required under state law.
Phillips 66 has agreed to remit the outstanding balance within thirty (30) days after the
date City Council adopts this franchise agreement by ordinance , should the Council
ultimately choose to move forward with the franchise renewal process. Staff will require
payment of these amounts prior to execution of any renewed franchise agreement.
Proprietary Pipeline Agreement Previously Held by Phillips 66 Company
The proprietary pipelines discussed in this section are separate from the common carrier
pipelines that are the subject of the proposed franchise renewal.
Phillips 66 Pipeline LLC, the applicant for renewal of the common carrier franchise, is a
wholly owned subsidiary of Phillips 66 Company. Phillips 66 Company previously held a
separate franchise agreement for proprietary pipelines used exclusively to transport
company-owned products rather than products belonging to multiple customers.
The proprietary pipeline franchise agreement expired on April 14, 2025. Over time,
portions of the proprietary pipeline system were taken out of service through the City's
Page 103 of 274
Item 6g
encroachment permit and inspection process. City records document those abandonment
activities within the public right-of-way.
As part of the current franchise review process, Phillips 66 informed the City that all
proprietary pipelines previously covered by the separate franchise agreement have been
abandoned and are no longer in service. Staff reviewed available records and verified
that prior abandonment activities were consistent with that representation.
To formally document the abandonment and conclude the associated franchise
obligations, Phillips 66 provided an abandonment report and proposed letter agreement
(Attachment B). The agreement is administrative in nature and memorializes the
abandonment in place of facilities that have been isolated, purged, and rendered inert.
The agreement does not grant, renew, extend, or confer any franchise rights and is
separate from the statutory process applicable to the proposed common carrier franchise
agreement.
Under the proposed letter agreement, Phillips 66 will continue to be subject to applicable
bonding, insurance, indemnification, environmental compliance, and other franchise -
related obligations unless and until the facilities are removed. The agreement does not
waive, release, or discharge any existing obligations associated with the abandoned
facilities.
The City also retains the authority to require future removal or relocation of the abandoned
facilities if they conflict with, interfere with, or must be removed to accommodate a City or
third-party project, or if removal is necessary to protect public health or safety.
Upon execution of the agreement, Phillips 66 will also pay the City a one -time
administrative fee in the amount of $10,000 to compensate the City for its time in
reviewing the abandonment report and related materials.
Based on staff's review, documented abandonment in place of the proprietary facilities
represents the most practical long-term approach. Removal of inactive pipeline facilities
can be environmentally disruptive and may result in greater impacts to surrounding
infrastructure and environmental resources. In this case, staff determined that
documented abandonment in place, coupled with the continuing obligations retained by
Phillips 66 and the City's ability to require future removal if necessary, provides the
greatest long-term public benefit.
Previous Council or Advisory Body Action
July 10, 2001 – City Council adopted Ordinance No. 1391 granting a franchise to
Union Pipeline Company (UNOCAP) for a period of ten (10) years.
April 17, 2007 – City Council adopted Ordinance No. 1504 transferring the
franchise from UNOCAP to ConocoPhillips Pipeline Company.
Page 104 of 274
Item 6g
June 21, 2011 – City Council adopted Ordinance No. 1564 to renew the franchise
agreement with ConocoPhillips Pipeline Company for a period of ten (10) years.
October 18, 2011 – City Council adopted Ordinance No. 1569 granting a
proprietary pipeline franchise agreement to ConocoPhillips Pipeline Company.
February 5, 2013 – City Council adopted Ordinance No. 1587, transferring the
common carrier pipeline franchise from ConocoPhillips Pipeline Company to
Phillips 66 Pipeline LLC.
February 5, 2013 – City Council adopted Ordinance No. 1588, transferring the
proprietary pipeline franchise agreement from ConocoPhillips Pipeline Company
to Phillips 66 Pipeline LLC.
March 15, 2022 – City Council adopted Ordinance No. 1709 to renew the common
carrier franchise agreement with Phillips 66 Pipeline LLC for a period of three (3)
years. This ordinance became effective on April 14, 2022.
Public Engagement
If the Council adopts this resolution, a public hearing will be held on November 17, 2026,
giving community members a formal opportunity to review and comment on the proposed
agreement and proposed ordinance.
Pursuant to PUC § 6234, members of the public may submit written objections to the
franchise renewal prior to the hearing scheduled for November 17, 2026.
At the hearing, the Council must hear and consider any objections received before the
hearing. Protests must be submitted in writing, signed by the protestant, and delivered to
the City Clerk. Any objections received must be considered by the Council.
The Council is not required to make any findings in order to deny the franchise renewal.
However, if written objections are received from community members or organizations
and the Council wishes to grant the renewal, the Council must first determine that the
objections are insufficient or otherwise overrule or deny them. The statute does not define
“insufficient.” However, since it is within the Council’s discretion to grant or deny the
franchise altogether, it is reasonable to conclude that this determination of sufficiency is
likewise within the Council’s discretion, taking into account policy considerations, fiscal
impacts, and other legitimate municipal objectives.
Next Steps
If the Council elects to renew the franchise agreement, state law and the City Charter
require that it be renewed via ordinance. Staff have developed the following schedule of
next steps, if Council wishes to move forward, to ensure compliance with all legal
requirements and to allow for public transparency and Council deliberation:
November 17, 2026: Hold public hearing and introduce ordinance
Page 105 of 274
Item 6g
December 1, 2026: Second reading and final adoption of ordinance
December 31, 2026: Ordinance becomes effective
The November 17, 2026 meeting will serve as the public hearing required under state law
and provide the opportunity for public comment and Council discussion on the merits of
the renewed franchise agreement.
The Resolution of Intention does not grant or renew a franchise. However, it does initiate
the statutory process and schedules the required public hearing. The currently proposed
and any future franchise renewal must be considered by the Council at a public hearing
to introduce the Ordinance, at which time the Council may approve, modify, or reject the
proposed terms of the agreement.
As referenced above, if the Council decides against moving forward in the hearing
process for the common carrier franchise agreement, pipelines would be abandoned or
removed by Phillips 66 at their own expense, and oil would be transported by ground
transportation or be rerouted via pipelines through a neighboring jurisdiction.
CONCURRENCE
The City Attorney’s office approves the draft agreement as to form.
ENVIRONMENTAL REVIEW
The renewal of the franchise agreements is categorically exempt from the provisions of
the California Environmental Quality Act, in accordance with section 15301 (Existing
Facilities) because renewing the franchise agreement involves negligible or no expansion
of existing use of the pipeline infrastructure by Phillips 66. Any expansion in the future
would require advanced consideration and approval of the City Council, which would then
trigger any applicable environmental review at that time.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2026-27
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $0 $0 $0 $0
State
Federal
Fees
Other:
Total $0 $0 $0 $0
Page 106 of 274
Item 6g
The proposed agreement is expected to generate around $13,000 annually in franchise
fee revenue, increasing with CPI as outlined in the PUC § 6231.5. Franchise fees are
collected each April for the prior calendar year to allow time for CPI to be calculated. This
annual fee collection would continue throughout the term of the agreement (5 years).
The agreement also includes a one-time granting fee of $30,000 to recover staff costs
related to agreement preparation, public noticing, required hearings, and ongoing
administration of the franchise. This granting fee is not determined by the User Fee
Schedule but is in line with other fees on the User Fee Schedule based on the amount of
staff time required.2
Pipeline franchise fees are budgeted in aggregate form with the other General Fund
franchise fees based on financial models. Additionally, the FY 2026-27 budget does not
include the $30,000 granting fee.
As part of the new common carrier franchise agreement, Phillips 66 is issuing a check for
$51,200.70 to settle underpayments from 2021-2025 for both the common carrier pipeline
agreement that is being considered for renewal under this process; and for the proprietary
pipeline which has been formally abandoned and confirmed by the City. The amount
represents the actual difference owed, dating back to 2021, based on staff’s calculations,
which were confirmed and verified by Phillips 66. The FY 2026-27 budget does not include
this amount either.
Separately, as part of the proprietary pipeline abandonment agreement, Phillips 66 would
also pay the City a one-time administrative fee in the amount of $10,000 to compensate
the City for its time in reviewing the abandonment report and related materials. The FY
2026-27 budget does not include this administrative fee.
These fees and settlement underpayments will support the City’s General Fund.
ALTERNATIVES
1. The City Council may choose not to move forward with a franchise agreement
with Phillips 66. If the Council elects not to renew the franchise agreement, Phillips
66 would no longer have a franchise authorizing operation of the pipeline within City
right-of-way. Certain provisions of the former franchise agreement, such as
environmental responsibility, indemnification, annual franchise fees, insurance, and
bonding, survive the expiration of that agreement and continue for as long as Phillips
66 facilities remain within the City (except for annual fees, which terminate upon formal
abandonment in place.) The City also retains the right to require removal of the
facilities now or in the future, should Phillips 66 abandon them in place under the terms
of the franchise agreement.
2 The FY 2026-27 Comprehensive Fee Schedule outlines the fee for a Reimbursement Agreement as
$43,584.55 (p.2), and the Development Review of a Moderate Development Project as $26,644.42 (p.3).
Page 107 of 274
Item 6g
2. The City Council may decline to delegate authority to the Director of Public
Works and Utilities to execute the letter agreement memorializing the
abandonment of the Phillips 66 proprietary pipeline. The letter agreement as
drafted ensures that Phillips 66 retains environmental responsibility, indemnification,
insurance, and bond requirements as long as pipelines remain within the City. The
final execution of this letter agreement does not affect and is not related to the
timeline for Council’s consideration of the common carrier franchise agreement , nor
is it governed by that statutory framework. If the Council does not wish to delegate
authority to the Director of Public Works and Utilities to execute the letter agreement
(Attachment B), Council may instead authorize the Mayor or City Manager to execute
the letter agreement, provide direction to staff regarding any necessary revisions to
the letter, or continue consideration of the letter agreement to a future meeting with
direction regarding any additional information needed.
3. The City Council may consider negotiating a franchise agreement with a term
length different than the proposed 5 years, such as a longer 10-year term. A
shorter term, as recommended, allows for more frequent review by Council and
renegotiation, and would result in more frequent one-time administrative fees, while
a longer term can provide stability and reduce administrative burdens. This
alternative enables the City to tailor the agreement’s duration to best balance
oversight, operational certainty, and future planning. Should Council wish to
designate a different term length, that determination must be made now as part of
this agenda item, as PUC § 6233 states that the notice of public hearing shall
designate the term for which the franchise is proposed to be granted.
ATTACHMENTS
A - Draft Resolution of Intention to approve a new franchise agreement with Phillips 66
Pipeline LLC
B - Proprietary Pipeline Abandonment Agreement
C - Phillips 66 Pipeline LLC Franchise Application
D - Draft Common Carrier Pipeline Franchise Agreement
E - Map of Existing Common Carrier Pipeline and Abandoned Proprietary Pipeline
Locations
Page 108 of 274
R ______
RESOLUTION NO. _____ (2026 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
1709 (2022 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 NOVEMBER 17, 2026
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 ten-year 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, the City of San Luis Obispo adopted Ordinance No. 1709 on March
15, 2022 renewing a franchise agreement with Phillips 66 Pipeline LLC for a term of three
years; and
WHEREAS, on March 14, 2025, Phillips 66 Pipeline LLC applied to the City of San
Luis Obispo for a new franchise agreement to replace the franchise agreement which was
set to expire on April 14, 2025; and
WHEREAS, Phillips 66 Pipeline LLC continues to operate pipelines for the
transportation of oil and other specified materials within the City of San Luis Obisp o’s
right-of-way; and
Purpose: To maintain and operate pipelines for the transportation of oil and
hydrocarbons within the City of San Luis Obispo.
Type: Non-exclusive
Term: 5-years
Page 109 of 274
Resolution No. _____ (2026 Series) Page 2
R ______
Fees: One-time granting fee of $30,000 and annual franchise fee to the City
in accordance with Public Utilities Code Section 6231.5, adjusted per
the Consumer Price Index, per lineal foot based on pipeline diameter
Bond: One-million dollars faithful performance bond.
Insurance: Ten million dollars liability insurance, five million dollars automobile
liability insurance, and ten million dollars pollution liability insurance
(each amount is per occurrence)
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. Survives expiration or
termination of the franchise agreement and abandonment of the
pipelines until all pipelines are removed from City property.
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.
SECTION 2: A public hearing will be held on November 17, 2026 at 5:30pm at 990
Palm Street in the City Council Chambers for the purpose of hearing and considering any
objections to the granting of the above-described franchise. The City Council will, on that
date, vote on the introduction of an Ordinance renewing such franchise agreement.
SECTION 3: The City Clerk is directed to publish a notice of the hearing described
in Section 2 at least once within fifteen (15) days after the passage of this Resolution in
a newspaper of general circulation within the City.
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _______________ 20 26.
___________________________
Mayor Erica A. Stewart
Page 110 of 274
Resolution No. _____ (2026 Series) Page 3
R ______
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 111 of 274
Page 112 of 274
City of San Luis Obispo
Public Works & Utilities Department
919 Palm Street
San Luis Obispo, CA 93401
[Date]
[VIA EMAIL AND U.S. MAIL]
Phillips 66 Company
420 S. Keeler Ave.
Bartlesville, OK 74003
Re: Letter Agreement – City of San Luis Obispo Acceptance of Abandonment in Place of
Pipeline Facilities and Continuing Obligations under Franchise
This letter agreement (the “Agreement”) confirms the City of San Luis Obispo’s (the “City”)
acceptance of the abandonment in place of certain pipeline facilities owned by Phillips 66
Company (“Grantee”) within City public streets, ways, alleys and places (hereinafter collectively
referred to as “streets”) and memorializes Grantee’s surviving and continuing obligations under
that certain franchise granted by the City to Grantee, being Ordinance No. 1588 and adopted on
February 5th, 2013 (the “Franchise”), the terms of which are incorporated by reference herein.
1. Identification of Facilities; Effective Date of Abandonment: Grantee represents and warrants
that as of [Effective Date of Abandonment] (the “Abandonment Effective Date”) it has
permanently discontinued the use of, and has abandoned in place, the pipeline facilities
described in Exhibit A (the “Abandoned Facilities”), which facilities were installed within
streets under the City’s jurisdiction, pursuant to the Franchise. Grantee has delivered to the
City reports detailing its work to abandon and inert the Abandoned Facilities. The parties agree
that, as of the Abandonment Effective Date, the Abandoned Facilities may remain in place
within City streets subject to the terms of this Agreement and the Franchise.
2. City’s Acceptance; No Waiver or Release: Subject to the terms and conditions of this
Agreement and the Franchise, the City hereby accepts Grantee’s abandonment in place of the
Abandoned Facilities as of the Abandonment Effective Date. This acceptance is administrative
in nature, acknowledges Grantee’s discontinuation of use, and permits the Abandoned
Facilities to remain in place on the conditions set forth herein. This acceptance does not
constitute a waiver, release, or discharge of any obligations of Grantee arising under the
Franchise, including obligations relating to bonding and insurance, indemnity, environmental
compliance, or future removal. The City reserves all rights and remedies with respect to the
Abandoned Facilities.
3. Grantee Representations: Grantee represents, warrants, and covenants that, prior to the
Abandonment Effective Date, it has isolated, purged, and rendered inert the Abandoned
Facilities in compliance with applicable laws, rules, and regulations.
4. One-Time Administrative Review Fee; No Ongoing Annual Fee: Upon execution of this
Agreement, Grantee shall pay the City a one-time administrative fee in the amount of Ten
Thousand Dollars ($10,000.00) (the “Review Fee”) to compensate the City for its time
Page 113 of 274
reviewing Grantee’s abandonment report and related materials. The parties agree that, with
respect to the Abandoned Facilities, no annual franchise fee or other recurring occupancy-
based charge shall accrue after the Abandonment Effective Date so long as the facilities remain
abandoned in place in accordance with this Agreement and the Franchise. This provision does
not waive or alter standard permit, encroachment, or inspection fees of general applicability
for any future work.
5. Bonding and Insurance: For so long as the Abandoned Facilities remain in the City streets,
Grantee shall maintain the performance security required by the Franchise (which may include
surety bonds, letters of credit, or other security acceptable to the City) and shall maintain
insurance meeting the coverage, limits, and endorsement requirements of the Franchise.
6. Indemnity; Defense; Cost Reimbursement: Grantee’s defense, indemnification, and hold-
harmless obligations under the Franchise survive and continue in full force and effect with
respect to the Abandoned Facilities and all closure-related activities.
7. Relocation; Conflicts with City Projects: If the City determines that any portion of the
Abandoned Facilities conflicts with, interferes with, or must be removed or relocated to
accommodate a City or third-party public project or to protect public health or safety, the City
may direct Grantee to remove or relocate the Abandoned Facilities (or portions thereof) , in
accordance with the Franchise. If Grantee fails to timely act, the City may perform or cause
the work to be performed and recover its costs from Grantee, including through application of
performance security.
8. Future Removal: Any removal by Grantee of all or a portion of the Abandoned Facilities shall
be done in accordance with the Franchise, including written application to the City.
9. Environmental Responsibilities: Grantee remains responsible for any release, contamination,
or environmental condition attributable to the Abandoned Facilities or to Grantee’s activities,
whether discovered before or after the Abandonment Effective Date. Grantee shall timely
investigate, report, and remediate such conditions in compliance with applicable laws, rules,
and regulations and shall coordinate with the City and any regulatory agencies having
jurisdiction.
10. Term; Satisfaction; Endpoints: This Agreement remains in effect for so long as any Abandoned
Facilities remain within City streets or until all obligations related to the Abandoned Facilities
have been fully satisfied and the City has provided written confirmation of completion and, if
applicable, has released performance security. The parties acknowledge that, with respect to
the Abandoned Facilities, no annual franchise fee or other recurring occupancy-based charge
shall accrue after the Abandonment Effective Date as provided in Section 4, and that the
Review Fee constitutes the City’s agreed administrative charge for review of the abandonment
report and related materials. Indemnity, environmental, and warranty/defect correction
obligations survive in accordance with the Franchise.
11. No Renewal or Extension of Franchise Rights: This Agreement does not renew, extend, or
confer any franchise rights to construct, operate, or maintain facilities within City streets
beyond those rights, if any, otherwise in effect under the Franchise. It solely memorializes the
City’s acceptance of abandonment in place and Grantee’s continuing obligations associated
with the Abandoned Facilities.
12. Defaults; Remedies: A failure by Grantee to perform any obligation under this Agreement or
the Franchise constitutes a default. Upon written notice and expiration of any applicable cure
period, the City may exercise any rights and remedies available at law, in equity, under the
Franchise, including drawing on performance security, imposing administrative penalties
Page 114 of 274
where authorized, and seeking injunctive relief or specific performance. In an emergency or
where delay would risk public safety or substantial harm, the City may act immediately and
seek reimbursement from Grantee.
13. Notices: All notices under this Agreement shall be in writing and delivered by personal
delivery, nationally recognized overnight courier, or email with confirmation of receipt, to the
addresses set forth above or such other addresses as a party may designate by notice. Notices
are effective upon receipt or, for email, upon confirmation of receipt if sent during normal
business hours, otherwise the next business day.
14. Authority; No Assignment: Each signatory represents and warrants that they are duly
authorized to execute this Agreement on behalf of their respective party. Grantee shall not
assign or transfer obligations relating to the Abandoned Facilities without the City’s prior
written consent except as permitted under the Franchise; any permitted assignee shall assume
in writing all obligations hereunder.
15. Integration; Amendment: This Agreement, together with the Franchise, comprises the entire
understanding with respect to the subject matter and may be amended only by a written
instrument executed by both parties. In the event of a conflict, the more specific requirements
of the Franchise govern.
16. Counterparts; Electronic Signatures: This Agreement may be executed in counterparts, each of
which is deemed an original, and all of which together constitute one instrument. Signatures
delivered electronically or by PDF are deemed originals.
Please confirm Grantee’s agreement to the foregoing by executing and returning a countersigned
copy of this Agreement.
Sincerely,
City of San Luis Obispo
By: ______________________________ Name: ____________________________ Title:
_____________________________ Date: _____________________________
Acknowledged and Agreed:
Phillips 66 Company
By: ______________________________ Name: ____________________________ Title:
_____________________________ Date: _____________________________
Exhibit A – Description and Location of Abandoned Facilities
Page 115 of 274
Page 116 of 274
PHil.UPS Angie Hindman
RES - Operafions Support Analyst
420 S Keeler Ave
508-02 Phillips Building
Bartlesville OK 74003
O: 918-977-6795 C: 918-273-8097
An g ie.D.H i nd m a n@P66.co m
March 14,2025
CITY OF SAN SAN LUIS OBISPO
PUBLIC WORKS
990 PALM ST
SAN LUIS OBISPO CA 93401
RE: Phillips 66 Pipeline Ordinance No. 1709 - Application Request for Extension
Public Works Department:
Phillips 66 Pipeline LLC (Phillips 66) currently operates pipelines within the city limits of San Luis
Obispo, CA under the subject pipeline ordinance. Phillips 66 is requesting an extension to this
existing Ordinance.
The existing pipelines are listed on the attachment describing the current locations of the existing
pipelines.
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. oh i I li ps66pipel i ne. com.
We look fonr'rard to working with you on this renewal process
Regards,
Angie Hindman
@
€
Page 117 of 274
-". - _/. j
LUIS OBISPO
' : .--r-
SHEET 4
o-a*r*oa-UI
(bo
SHEET 3
"t**:
SHEET 2
:fl -dl r/.,1
EET 1
-l
1
&i
FRANCHISE MILEAGE
-*1
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. L709
PHILLIPS 66 PIPELINE LLC
RIGHT-OF-WAY No. 086232
PHtu.tPs
Phillips 66
Pipeline LLC
Page 118 of 274
CHUPEROSA DR.
LOS VERDES DR,
URBAN ROAD
5,848'- 12" PRODUCTS
I
*.
z
5 12,' PRODUCTS LINt
JrO
10
OF SAN LUIS OBISPO
COUNTY OF SAN BUCKLEY ROAD
5 UD2A335
REV DATE
1 o4 1
3o3
FCilt
,1"= 4OO' _-
5 /20 /9A
DRAWN
APP'D,
SCALE
DAIE
CITY OF SAN LUIS OBISPO FRANCHISE MAP
ORDINANCE NO. I7()9
RW086232
SFEET 14 SHEETS
Phillips 66
Pipeline LLC
Page 119 of 274
\
\
\
\
HI ST
MA LINE
q
I
I
I
&BRANCH ST
o
@
SI SOUT}] ST
Io
a
F
@
@
o
=I9x 3245'
COAS
No. 1
- 8" L|NE #400T VALLEY IRUNK
F
3245'- 8" LINE
COAST VALLEY
No. 2
#40O
TRUNK
D2A174, D2A340
REV DATE
1
32
FGIII
1"= 400'
5 /20 /e6
DRAWN
APP'0,
SCALE
DA TE
CITY OF SAN LUIS OBISPO FRANCHISE MAP
ORDINANCE NO. I7O9
RW086 232
SHEET 24 SHEETS@FH',f;"'f."
Page 120 of 274
I
EROAD SI ?21')
,i
2717'- 8" L|NE #400
COAST VALLEY TRUNK
No. 1
-):NIPOMO ST
t-
2702' - 8" LINE #400
COAST VALLEY TRUNK
No. 2
BEACH
)ST
Far
E
O
Lo
I
ARCHER
Fa
z
I
t,i
Fa
o
aL
WALKER
r,)'..\
D2A340, D2A270
DATEREV
3
FCIIIDRAWN
_1": 4O0'--
5 /20 /e8
APP'D.
SCALE
DA TE
CITY OF SAN LUIS OBISPO FRANCHISE MAP
ORDINANCE NO. I7O9
R WOB6 232
SFEET J4 SHEETS
(pnrups)
@Fl}['ffi"'f.'
Page 121 of 274
P RAIL Y
SOU
ST
JOHNSON
51
10R0 I
3450'- E" LINE #400
COAST VALLEY TRUNK
No. 2
ROSA ST
''
ln'
OSOS ST
3453'- 8" LINE #400
COAST VALLEY TRUNK zoIofm
No. 1
MORRO ST
CHORRO ST
GARDEN ST
EROAD sr. (HwY 227)
F
o
a
L
D2A270, D2A339
REV DATE
1 1
3205
DRAWN
-1"= 4OO'
5 /20 /98
APP'D
SCALE
DA TE
CITY OF SAN LUIS OBISPO FRANCHISE MAP
ORDINANCE NO. I7()9
RW086232
4 SHEETS SHEET 4@Fil[',?;"'f,-"
Page 122 of 274
ORDINANCE NO. ___________
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO,
CALIFORNIA, GRANTING TO PHILLIPS 66 PIPELINE LLC, A FRANCHISE TO
CONSTRUCT, OPERATE, AND MAINTAIN COMMON CARRIER PIPELINES
FOR THE TRANSPORTATION OF OIL, AND OTHER SPECIFIED MATERIALS,
IN THE PUBLIC STREETS OF THE CITY OF SAN LUIS OBISPO, STATE OF
CALIFORNIA
RECITALS
WHEREAS, Phillips 66 Pipeline LLC (“Phillips 66”) is currently maintaining and/or operating
pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo,
pursuant to a franchise agreement executed on or about March 18, 2022; and
WHEREAS, Phillips 66 has requested the City of San Luis Obispo (“City”) enter into a new
franchise agreement; and
WHEREAS, on [INSERT DATE], the City of San Luis Obispo passed Resolution No.
[INSERT No.], a resolution of intention to approve a franchise agreement with Phillips 66 Pipeline
LLC; and;
WHEREAS, the Council of the City of San Luis Obispo conducted a public hearing on
[DATE], 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, [no protests in writing were filed with the City Clerk by the time of the public
hearing] OR [all protests filed in writing with the City Clerk were heard by the City Council and
determined to be insufficient].
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as
follows:
SECTION 1. The City Council of the City of San Luis Obispo hereby grants to Phillips 66
Pipeline LLC the non-exclusive right, privilege and franchise to continuation of its existing use of the
public streets for its defined operational purposes on the terms and conditions and subject to the
restrictions and obligations set forth herein.
SECTION 2. Summary and Terms and Conditions of Franchise:
Page 123 of 274
TABLE OF CONTENTS
ARTICLE 1 NATURE OF FRANCHISE ........................................................................................ 3
ARTICLE 2 APPURTENANCES ................................................................................................... 5
ARTICLE 3 LOCATION OF PIPELINES ....................................................................................... 6
ARTICLE 4 CONSTRUCTION OF NEW PIPELINES ................................................................... 6
ARTICLE 5 COMMENCEMENT OF CONSTRUCTION ................................................................ 7
ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED ............................................................ 7
ARTICLE 7 COMPENSATION TO THE CITY .............................................................................. 8
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
ARTICLE 11 GRANTEE’S REMOVAL OR ABANDONMENT OF FACILITIES............................ 14
ARTICLE 12 COMPLETION OF WORK ..................................................................................... 16
ARTICLE 13 RECOVERY OF COSTS OF REPAIRS AND UNPAID FEES ................................ 16
ARTICLE 14 BOND .................................................................................................................... 19
ARTICLE 15 INSURANCE ......................................................................................................... 19
ARTICLE 16 INDEMNIFICATION BY GRANTEE ....................................................................... 21
ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE ........................................................... 22
ARTICLE 18 WAIVER OF BREACH .......................................................................................... 25
ARTICLE 19 DEFAULT .............................................................................................................. 25
ARTICLE 20 SCOPE OF RESERVATION .................................................................................. 26
ARTICLE 21 NOTICE ................................................................................................................. 26
ARTICLE 22 SUCCESSORS ..................................................................................................... 26
ARTICLE 23 ACCEPTANCE OF FRANCHISE ........................................................................... 27
ARTICLE 24 FORCE MAJEURE ................................................................................................ 27
ARTICLE 25 LIQUIDATED DAMAGES ...................................................................................... 27
ARTICLE 26 ATTORNEY’S FEES………………………………………………………………….29
ARTICLE 27 CONDEMNATION………………………………………………………………29
ARTICLE 28 SURVIVAL OF OBLIGATIONS……………….……………………………….30
Page 124 of 274
ARTICLE 1
NATURE OF FRANCHISE
A. Grant of Franchise.
1. The City of San Luis Obispo (hereinafter referred to as “City”), hereby grants
to Phillips 66 Pipeline LLC (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, Section
39732(b) of the California Government Code, and Chapter 2 of Division 3 of the California Public
Utilities 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 existing pipelines within the City of San Luis Obispo, 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. There shall be no expansion of
existing infrastructure or operations within the City without the express prior written consent of the City
Council.
2. The Term of the franchise granted under this Agreement shall be for a term of
five (5) years, commencing with the date on which it is Granted by the City (the “Term.”) Should
Grantee intend to pursue continuation of their franchise rights after expiration of the Term, Grantee
shall submit to the City an application for a franchise in compliance with Public Utilities Code §
6231.5 et seq no later than twelve (12) months prior to expiration of the Term.
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 existing pipelines, if any, of Grantee, as laid and constructed in said streets as of
the date of this Agreement.
(b) The terms and conditions of this franchise shall also apply to any
existing 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 superior 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.
Page 125 of 274
(f) This franchise does not relieve Grantee of any applicable
requirements of the San Luis Obispo Municipal Code or of any applicable 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, or the
payment of applicable permit fees, 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
existing 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 must be approved by the City under
a separate franchise.
(j) 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 California 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, 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, including the City’s express right to demand
relocation of any pipelines or appurtenances as may be necessary for the City to undertake its
municipal functions and otherwise utilize its right of way for any valid municipal purpose.
3. The rights and privileges of this franchise are granted solely to Grantee,
except as provided within this franchise. This franchise is not to be 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, which consent may be
granted or withheld in City’s reasonable discretion, or as otherwise expressly provided herein
C. Rights Reserved to the City.
Page 126 of 274
1. The rights reserved to the City under this franchise 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 &
Utilities 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 & Utilities 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
regulations as are now or may hereafter be in force, to make all necessary excavations in said streets
for the construction and repair of said pipelines and appurtenances subject to the prior approval of
the City Public Works & Utilities 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 Marshal, 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 to unreasonably disturb the flow of traffic and where possible shall
be laid in the unpaved portion of the street.
Page 127 of 274
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 applicable ordinances, rules, or regulations now or hereafter adopted or prescribed by the
City Council, state, or federal authorities. Grantee may be required, at the discretion of the City, to
correct nonconforming pipelines and appurtenances upon any change in ordinance, rule, or
regulation, provided that this requirement shall not apply to pipelines that have been abandoned in
accordance with law and this Agreement.
B. Restoration of Streets. The work of laying, constructing, maintaining, operating,
renewing, repairing, changing size, decommissioning, abandoning, removing 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 applicable federal and state law and applicable City
ordinances, and with the least possible hindrance or interf erence to the use of City streets 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 City standards and specifications in effect at the time of work. 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 & Utilities
Department.
ARTICLE 5
COMMENCEMENT OF CONSTRUCTION
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 & Utilities Department.
The application of the Grantee for the construction of new pipelines 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 & Utilities 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 been constructed under
said franchise as provided in Article 7, Section C.
ARTICLE 6
MAPS AND REPORTS TO BE FURNISHED
Page 128 of 274
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 that may be permitted
under this franchise, the Grantee shall file a map in such form as may be required by the City Public
Works & Utilities 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 said 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. Grantee shall obtain and maintain all necessary permits for
any such work. A description of all the protective devices shall be furnished to the City Public Works &
Utilities 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 sixty (60) 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 as established in Article
7, infra, (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 & Utilities 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 annual fees for this
franchise, said fees to be those fees prescribed by the California Public Utilities Code section 6231.5,
provided that the rates are subject to increase to the maximum rates 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 include compensation to the City at the otherwise applicable maximum rate for any
periods of expiration of this agreement and may be prorated as appropriate 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
City Clerk of the City of San Luis Obispo, with a copy to the City Public Works & Utilities 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.
Page 129 of 274
1) The compensation provided for in this Article for each lineal foot of pipeline shall be
computed and revised each calendar year as follows, per California Public Utilities Code
section 6231.5: (1) The applicable base rate shall be multiplied by the Consumer Price
Index for the area, as published by the United States Department of Labor, Office of
Information for the month of September immediately preceding the month in which payment
is due and payable, and divided by the Consumer Price Index for June 30, 1989, which is
declared to be 100.0. Under no circumstances shall the multiplying factor be less than one.
This fee will be adjusted annually each year by the calculation set forth in Public Utilities
Code 6231.5, as hereafter amended, using the U.S. Bureau of Labor Statistics (or
successor agency) consumer price index for all urban consumers (CPI -U) Los Angeles-
Long Beach-Anaheim for the prior calendar year.
B. Notwithstanding the provisions as otherwise stated in this Article and franchise, the Grantee shall
be liable to pay the City the annual fees for the period to and including the date of either actual
removal of the facilities or the effective date of any agreed upon 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 Agreement, 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.
C. 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
Agreement, unless disputed in good faith, shall be paid when due or shall be deemed delinquent.
Any undisputed delinquent amounts shall be charged a ten percent (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.
D. Grantee shall pay the City a granting fee of $30,000.00, as well as $51,200.70 in
past years’ underpayments within thirty (30) days after the date the City Council adopts this franchise
Agreement by ordinance.
E. Grantee shall pay the City Public Works & Utilities 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, replaced, or
relocated main lines laid pursuant to this franchise Agreement during the preceding year.
Page 130 of 274
F. 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 re-compute 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
system 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 or better
condition as it was before such damage was incurred, provided that any work done shall, at a
minimum, conform to City standards otherwise applicable to the construction of the work performed,
at the time of commencement of the work performed, to the satisfaction of the City Public Works &
Utilities Department. If Grantee, within ten (10) days after receipt of written notice from the City
Public Works & Utilities 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, including administration and legal support, 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 & Utilities 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,
Page 131 of 274
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 & Utilities
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 & Utilities 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, any such facility at
no expense to the City upon receipt of a written request from the City Public Works & Utilities
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 is 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
Page 132 of 274
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 Grantee’s 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 & Utilities 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 & Utilities
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 ninety (90) 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
Page 133 of 274
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 & Utilities 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 & Utilities Department and reasonably consistent with established sampling
protocols. The City Public Works & Utilities Department shall determine whether any abandonment
or removal which is thereby proposed may be affected without detriment to the public interest and
the conditions under which such proposed abandonment or removal may be effected. The City
Public Works & Utilities 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 & Utilities
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
facilities abandoned in place at any time following the expiration, revocation or termination of this
franchise.
C. Grantee shall be required to meet the obligations of all provisions of this Agreement
relating to bonding, insurance, indemnification, encroachment, defense, indemnification, right of
way repair and restoration, and annual franchise fee requirements of this franchise, for facilities
abandoned in place.
D. Within thirty (30) days after receipt of Notification from the City Public Works &
Utilities Department pursuant to Article 11.B above, Grantee shall apply for a permit from the City Public
Works & Utilities Department to abandon or remove the facility.
E. Grantee shall, within sixty (60) days after obtaining such permit, commence and diligently
prosecute to completion the work authorized by the City’s permit, and provide a clear, formal
record of the work completed in the form of as-built plans detailing the final scope of abandonment
or removal, reviewed and approved by the City. Grantee shall coordinate with City staff to verify
the conditions in the field and maintain its own record drawings and field log so that there is a
record for future projects or future questions. The requirements of this Section E shall apply only
Page 134 of 274
to facilities abandoned or removed after the effective date of this Agreement.
F. In the event Grantee applies to remove its facilities, and the City Public Works &
Utilities 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 & Utilities 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.
G. 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 & Utilities Department may impose such
additional orders and conditions as the City deems appropriate, including an order that the Grantee
remove any or all 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 Agreement, and within such time as
may be prescribed by the City Public Works & Utilities 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, including administrative and legal support, 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 & Utilities Department shall make the determination
as to whether the facilities shall be abandoned in place or removed. The City Public Works & Utilities
Department shall then notify Grantee of its determinations. Grantee shall thereafter comply with the
applicable provisions of this Article 11.
H. 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 & Utilities 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
Page 135 of 274
from the payment of 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 & Utilities 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 an 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 & Utilities 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 collect amounts due under this franchise and to enforce the terms of this franchise):
A. The City Public Works & Utilities 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 & Utilities 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 & Utilities 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 & Utilities 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 them. They 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
Page 136 of 274
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 & Utilities 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.
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
Page 137 of 274
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 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:
Penal sum paid to City:
10 business days → 5% of the amount of the bond
30 business days → 30% of the amount of the bond
60 business days → 70% of the amount of the bond
90 business days → 100% of the amount of the bond
Page 138 of 274
P66_6000_cpConoco.mxt
ARTICLE 15
INSURANCE
Without limiting Grantee’s indemnification of City Indemnitees and prior to commencement of the
operations within the City under this agreement, Grantee shall obtain, provide, and maintain at its
sole expense during the term of this Agreement, policies of insurance of the type and amounts
described below and in a form satisfactory to City. All insurance coverages are to be issued by
insurers which have a rating of not less than A- VIII in the latest edition of Best’s Key Rating Guide
and are admitted insurance companies in the State of California.
Proof of insurance. Grantee shall provide certificates of insurance and required endorsements to
City as evidence of the insurance coverage required herein. Insurance certificates and
endorsements must be approved by City’s Risk Manager prior to commencement of performance.
City reserves the right to require complete copies of all Certificates of Insurance and relevant
endorsements at any time and Grantee agrees to provide the same. Grantee may satisfy the
requirements of this Article 15 by providing a letter of self-insurance and may self-insure the
requirements of Article 15.
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.
The amount of insurance shall be the following: Single limit on the coverage applying
to bodily and personal injury, including death resulting therefrom, and property damage, in the total
amount of Ten Million Dollars ($10,000,000.00) any one occurrence.
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.
Auto Liability Insurance: Automobile Liability Insurance with a combined bodily injury and property
damage limit of US $5,000,000 per accident, or per statutory requirements, whichever amount is
greater, covering all owned, non-owned, and/or leased vehicles, and including pollution liability
coverage. If hazardous materials are hauled, then the Policy shall contain a MCS-90 Endorsement
with a Policy Limit of $5,000,000 per accident.
Page 139 of 274
P66_6000_cpConoco.mxt
Worker’s Compensation Insurance. Grantee shall maintain Workers’ Compensation Insurance
(Statutory Limits) and Employer’s Liability Insurance for Grantee’s employees in accordance with
the laws of the State of California, Section 3700 of the Labor Code. A Waiver of Subrogation
endorsement in favor of City Indemnitees must be included in the policy and a copy provided to the
City.
Pollution Liability Insurance. Grantee shall maintain sudden and accidental pollution liability
insurance of $10,000,000 per occurrence through either Grantee’s general liability insurance policy
or a standalone pollution policy. Coverage for any further pollution liability, including gradual pollution
and remediation, will be self-insured by Phillips 66.
The following requirements apply to all insurance to be provided by Grantee:
1. A certificate of insurance or letter of self -insurance .
2. Certificate shall state that the policies will not be canceled or reduced in coverage
or changed in any other material respect without prior written notice as soon as practicable to the City.
Primary / Non-Contributing. To the extent of the risks, liabilities, and indemnification obligations
assumed by Grantee under this agreement all policies required herein not including Workers
Compensation, and Employers Liability shall include the City, its officers, employees and agents
as additional insured under the policy. The policy shall provide that the insurance will operate as
primary insurance to the extent of the risks and liabilities assumed by Grantee under this
agreement. No other insurance procured or maintained by the City, whether commercial or self-
insurance will be called upon to contribute to a loss hereunder.
Duration of coverage. Subject to the survival obligations of Article 28, Contractor shall procure and
maintain for the contract period, insurance against claims for injuries to persons or damages to
property, or financial loss which may arise from or in connection with the performance of the work
hereunder by Contractor, its agents, representatives, employees, subcontractors or
subconsultants. Contractor must maintain general liability and umbrella or excess liability
insurance for as long as there is a statutory exposure to completed operations claims. City and its
officers, officials, employees, and agents shall continue as additional insureds under such policies.
Separation of insureds. A severability of interests provision must apply for all additional insureds
ensuring that Grantee’s insurance shall apply separately to each insured against whom claim is
made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall
not contain any cross-liability exclusions.
Requirements not limiting. Requirements of specific coverage features or limits contained in this
Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of
any coverage normally provided by any insurance. Specific reference to a given coverage feature
is for purposes of clarification only as it pertains to a given issue and is not intended by any party
or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. Self -
Insurance may be used.
Waiver of subrogation. All insurance coverage maintained or procured pursuant to this agreement
shall be endorsed to waive subrogation against City Indemnitees or shall specifically allow Grantee
or others providing insurance evidence in compliance with these specifications to waive their right
Page 140 of 274
P66_6000_cpConoco.mxt
of recovery prior to a loss. Grantee hereby waives its own right of recovery against City.
Enforcement of contract provisions (non estoppel). Grantee acknowledges and agrees that any
actual or alleged failure on the part of the City to inform Grantee of non-compliance with any
requirement imposes no additional obligations on the City nor does it waive any rights hereunder.
Notice of cancellation. Grantee agrees to provide the City with a thirty (30) day notice prior to
cancellation or nonrenewal of coverage for each required coverage.
Timely notice of claims. Grantee shall give the City prompt and timely notice of claims made or
suits instituted that arise out of or result from Grantee’s performance under this Agreement ,
City’s right to revise requirements. The City reserves the right at any time during the term of the
contract to change the amounts and types of insurance required by giving the Grantee a ninety
(90)-day advance written notice of such change Grantee will only be required to make
commercially reasonable efforts to meet such changes and any such change will not eliminate
Grantee’s ability to self-insure the limits required herein
Breach of Franchise. Failure on the part of Grantee to procure or maintain required insurance and
bonding shall constitute a material breach of this franchise; provided, however, that the City shall
provide Grantee with written notice of such breach and Grantee shall have ten (30) days from
receipt of such notice to cure the breach before the City may terminate or suspend this franchise.
ARTICLE 16
INDEMNIFICATION BY GRANTEE
To the fullest extent permitted by law (including, but not limited to California Civil Code
Sections 2782 and 2782.8), Grantee shall indemnify, defend, and hold harmless the City, and its
elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against
any and all causes of action, claims, liabilities, obligations, judgments, or damages, including
reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Grantee’s
performance or Grantee’s failure to perform its obligations under this Agreement or out of the
operations conducted by Grantee or its subcontractors. In the event the City Indemnitees are made
a party to any action, lawsuit, or other adversarial proceeding arising from Grantee’s performance
of this Agreement, the Grantee shall provide a defense to the City Indemnitees or, in the event
Grantee fails to assume such defense, reimburse the City Indemnitees their costs of defense,
including reasonable legal fees, incurred in defense of such claims. Without limiting the foregoing,
Grantee shall further indemnify, defend, and hold harmless the City Indemnitees from and against
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 as such
activities relate directly to this Agreement, including liability arising out of injuries to City employees
incurred as the result of necessary oversight or inspection of Grantee activities pursuant to this
Agreement. For the avoidance of doubt, in no event shall Grantee be responsible for any loss or
damage arising from the sole or active negligence or willful misconduct of the City Indemnitees.
ARTICLE 17
CHANGES IN CONTROL OF FRANCHISE
Page 141 of 274
P66_6000_cpConoco.mxt
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 Agreement, “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
Agreement or if the City determines the transferor is in non-compliance with the terms and conditions
of this franchise Agreement, or if a transferee is lacking in experience and/or financial ability to
operate the pipelines authorized by this franchise Agreement, or if the proposed transfer will, as
determined in the reasonable discretion of the City, be detrimental to the public interest. Both the
Grantee and the proposed transferee shall inform the City Public Works & Utilities 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 & Utilities 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.
2. 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.
3. 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 the 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 constructio n. 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
Page 142 of 274
P66_6000_cpConoco.mxt
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:
e. 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;
f. 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;
g. Subject to any penalty, criminal or civil, involving failure to comply with the
requirements of a pipeline franchise;
h. Involved in instituting legal action against its franchising authorities;
i. Involved in revocation/non-renewal of any other franchise;
j. 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.
k. An express and unconditional written acceptance of the terms and conditions
of this Franchise Agreement, in its most current form, as a condition to the transfer.
B. A fee shall be submitted with the application(s) 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
Page 143 of 274
P66_6000_cpConoco.mxt
applications. Such costs shall be paid by the applicants prior to final consideration of the request by
the City Public Works & Utilities Department, or the City Council, as applicable.
C. 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 & Utilities 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 & Utilities Department by the deadlines imposed in this Article, or if the final
documents are different from the preliminary documents, the City Public Works & Utilities
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 & Utilities Department may then administratively
determine that this franchise is forfeited and the City Council may, without notice, repeal this
franchise.
D. 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 the 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 any 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. No delay or omission of the City in exercising any right, power or remedy
herein provided upon expiration of the Agreement shall be construed as an automatic extension or
renewal thereof.
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 ten (10) business days after such notice is received or prosecute such work diligently
Page 144 of 274
P66_6000_cpConoco.mxt
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 & Utilities 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 applicable 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 Phillips 66 Pipeline
LLC, 2331 CityWest Blvd., Houston, TX 77042, Attn: Real Estate Manager, Real Estate Services, 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 145 of 274
P66_6000_cpConoco.mxt
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.
Page 146 of 274
P66_6000_cpConoco.mxt
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 execution of this franchise Agreement,
file with the City Clerk an express and unconditional written letter of acceptance of, and consent to,
the terms and conditions of this franchise Agreement, 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 Agreement.
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
Agreement.
ARTICLE 24
FORCE MAJEURE
The time within which Grantee must perform its obligations under this agreement 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 Agreement
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 times
of performance requirements. Each of said amounts constitute 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
Page 147 of 274
P66_6000_cpConoco.mxt
after Grantee’s receipt of written request by the City, by certified mail, or such longer time as may
be specified in said request: Five Hundred Dollars ($500.00) 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 Grantee’s
receipt of written request by the City, by certified mail, current evidence of insurance and bonding:
Five Hundred Dollars ($500.00) 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: Five Hundred Dollars ($500.00) per day or part
thereof, that each noncompliance continues. Any fines paid pursuant to this Subsection 3 shall be
paid solely to the Street Fund of the City Public Works & Utilities Department.
B. If the City Public Works & Utilities Department determines that Grantee is liable for
liquidated damages, the City Public Works & Utilities 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 & Utilities
Department by certified mail, within twenty (20) days after Grantee’s receipt of the written notice by
the City Public Works & Utilities Department. The City Public Works & Utilities 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
ATTORNEY’S 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 attorney’s 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 Agreement 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
Page 148 of 274
P66_6000_cpConoco.mxt
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.
ARTICLE 28
SURVIVAL OF OBLIGATIONS
Grantee’s obligations of all provisions of this Agreement relating to bonding, insurance,
defense, indemnification, encroachment, right of way repair and restoration, and annual franchise
fee requirements of this franchise shall survive the termination or expiration of this Agreement and
obligations to save, defend and indemnify the City from harm related to Grantee’s facilities and
operations specifically shall apply to all facilities or appurtenances remaining in City right of way and
any and all claims or allegations against the City relating to or arising from Grantee’s use or
occupation of public property.
SECTION 3. A summary of this ordinance, together with the names of Council members
voting for and against, shall be published at least five (5) days prior to its final passage, in The New
Times, a newspaper published and circulated in this City. This ordinance shall go into effect at the
expiration of thirty (30) days after its final passage.
INTRODUCED on the day of 2026, AND FINALLY ADOPTED by
the Council of the City of San Luis Obispo on the day of 2026, on the following
vote:
Page 149 of 274
Page 150 of 274
Page 151 of 274
--
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. 086232
COMMON CARRIER - ORDINANCE NO. 1587
Page 152 of 274
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 153 of 274
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 154 of 274
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 155 of 274
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 156 of 274
2610'— 6" GAS FUEL
Jm
J
JI
CALIFORNIA
P.R. R. BLVD
REV DATE
2620'— 6" GAS FUEL
OF, P`
r0ti
s
D2A339
DRAWN rani
CITY OF SAN LUIS OBISPO FRANCHISE MAP APP'D.
SCALE 1 "= 400'
ORDINANCE NO. DATE 5/20/98
Philli 5
RW086242ConocoPhillips
6 SHEETS I SHEET i
n
PROPRIETARY - ORDINANCE NO. 1588
Page 157 of 274
o.
REV
1
2310'— 6" GAS FUEL
MORRO
sF ti
F
AFT
1005'— 6" GAS FUEL
SrgTf
Nwy
m
e
BL VD
D2A283
DATE DRAWN FGIII
27/11
CITY OF SAN LUIS OBISPO FRANCHISE MAP APP'D.
SCALE
5/
400'
ORDINANCE NO. DATE 5/20/98
ConocoPhilli p S RWO86242
6 SHEETS I SHEET 2
Page 158 of 274
REV
3265'- 6" GAS FUEL
Cy
Ftir
x"90
H q
COUNTY OF SAN LUIS OBISPO
i
I
I'
i
S
qTC/
DATE CITY OF SAN LUIS OBISPO FRANCHISE MAP
27/11
ORDINANCE NO.
conocoPhilli sp
D2A280, D2A283
DRAWN FGIII
APP'D.
SCALE 1 "= 400'
DATE 5/20/98
RW086242
6 SHEETS SHEET 3
Page 159 of 274
J\"
iO,OJ`y pF
os,
7i
3550' — 6" GAS FUEL
0
s0s
G9
t
O
5p
PaG
rQ
s
9
D
C.
V
O
P G
n,A
r ,1
REV DATE
CITY OF SAN LUIS OBISPO FRANCHISE MAP
1 04/27/11
ORDINANCE NO.
Conocohilli sp
D2A249
DRAWN F6Ill
APP'D.
SCALE 1 "= 400'
DATE 5/20/98
RWO86242
6 SHEETS I SHEET 4
Page 160 of 274
REV
1
P
P
J
P
3,860'— 6" GAS FUEL
1 OS
OJ
Ool
90
C
O
AF
9
op
6
G
o
GP
D2A335
DRAWN FGIII
DATE CITY OF SAN LUIS OBISPO FRANCHISE MAP APP'D.
27/11 SCALE 1 "= 400'
ORDINANCE NO. DATE 5/20/98
conocoPhillips RW086242
6 SHEETS SHEET 5
Page 161 of 274
1 1
GP
P c
6
5
1,050'— 6" GAS FUEL
C1v OF SOF IS OBISP
OUN1Y
O
O
REV DATE CITY OF SAN LUIS OBISPO FRANCHISE MAP
1 04/27/11
ORDINANCE NO.
ConocoPhilli sp
y
Q P
V
O
P
D2A335
DRAWN
APP'D.
SCALE 1'= 400'
DATE 5/20/98
R W086242
6 SHEETS I SHEET 6
Page 162 of 274