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HomeMy WebLinkAbout04/03/2007, PH3 - PUBLIC HEARING AND INTRODUCTION OF ORDINANCES APPROVING TRANSFER OF CONTROL UNDER FRANCHISE ORDINAN o 0 counat Mnta Dirt 1. L j ac ..enaa Report "h3/,l CITY O F SAN L U IS O B I S P O FROM: Jonathan Lowell, City Attorney Prepared By: J. Christine Dietrick, Assistant City Attorney,�� SUBJECT: PUBLIC HEARING AND INTRODUCTION OF ORDINANCES APPROVING TRANSFER OF CONTROL UNDER FRANCHISE ORDINANCES 1390 AND 1391, GRANTING RIGHTS TO TRANSPORT OIL AND HYDROCARBON GASES, TO CONOCOPHILLIPS COMPANY AND CONOCOPHILLIPS PIPELINE COMPANY, RESPECTIVELY CAO RECOMMENDATIONS 1. Introduce an Ordinance approving the transfer of rights and obligations under Franchise Ordinance 1390 from Tosco Corporation to ConocoPhillips Company and amending Ordinance No. 1390 to reflect the transfer. 2. Introduce an Ordinance approving the transfer of rights and obligations under Franchise Ordinance 1391 from-Union Pipeline Company ("Unocap"), a California Corporation and wholly owned subsidiary of ConocoPhillips Company to ConocoPhillips Pipe Line Company and amending Ordinance No. 1391 to reflect the transfer. DISCUSSION On March 6, 2007, pursuant to Section 1002 of the City Charter, Council passed a resolution declaring its intention to approve requests by ConocoPhillips Company and ConocoPhillips Pipeline Company ("CPPLC") to transfer control of the franchises granted by Ordinances 1390 and 1391 and setting a public hearing on the proposed transfers for April 3, 2007. At this hearing, Council is to consider two ordinances modifying existing franchises to recognize the successors in interest to the franchise grantees and to hear public input. The facts underlying the present transfer actions are as follows. The City of San Luis Obispo adopted Ordinances Nos. 1390 and 1391 on July 10, 2001, granting franchise rights to Tosco Corporation and Unocap, respectively, for a term of 10 years each for the transportation and distribution of oil and other specified materials in the City of San Luis Obispo. Tosco . Corporation was later acquired by Phillips Petroleum Company, which subsequently merged with Conoco Inc., became a subsidiary of the parent company and changed its name to ConocoPhillips Company. Then, on January 1, 2003, Tosco Corporation was merged into ConocoPhillips Company and ceased to exist as a legal entity. Similarly, effective February 1, 2005, Unocap merged into CPPLC, a wholly owned subsidiary of ConocoPhillips Company, and is no longer a legal entity. The successor companies are currently operating the franchises and have expressly agreed to assume the rights and obligations of Tosco Corporation and Unocap under Franchise o • Council Agenda Report—Tosco/Unocap Franchise Transfers Page 2 Ordinances Nos. 1390 and 1391. Thus, ConocoPhillips Company and CPPLC have requested that the City modify the existing franchises to reflect the accurate corporate ownership. The attached ordinances approve the transfer requests and amend the existing franchise ordinances to reflect accurately the corporate ownership and responsibility for the franchises. The amendments make no other substantive changes to the terms or conditions of the existing franchise agreements. CONCURRENCES The Public Works Department has reviewed its file and verifies that no further information is required to approve the transfers. The Finance Director has reviewed the financial documents relating to the successor companies and verifies that the companies appear to be financially sound to satisfy the obligations of the franchises. FISCAL IMPACT The annual franchise fee to the City will be paid in accordance with Public Utilities Code Section 6231.5. This fee will generate approximately $7,500 per year in discretionary income to the General Fund. This fee is set by State law, which authorizes a per foot fee based on pipeline diameter. Staff costs in reviewing and processing the transfer requests have been billed to ConocoPhillips. ALTERNATIVES 1. Council may decline to approve the transfers. Staff does not recommend this action because the assets transfers have already been completed among the companies and approved by the CPUC. Failure to approve the transfers would leave the City holding Franchise agreements with entities that no longer exist and create undesirable ambiguities as to responsibility for maintenance and control of the franchises. 2. Council could direct staff to further renegotiate the Franchise agreements if specific changes to the agreement are desired. ATTACHMENTS 1. Ordinance approving the franchise transfer and amending Franchise Ordinance No. 1390 to reflect the transfer of the franchise from Tosco Corporation to ConocoPhillips Company. 2. Ordinance approving the franchise transfer and amending Franchise Ordinance No. 1391 to reflect the transfer of the franchise from Union Pipeline Company, a California Corporation, to ConocoPhillips Pipeline Company. G:\Franchises\Tosco-Unocal\2006 Franchise Transfer\CAR.Public Hearing.Franchise Transfer.Tosco- Unocap.07.4.3.doc 0 *ATTACHMENT I ORDINANCE NO. (2007 Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING THE TRANSFER FROM TOSCO CORPORATION, A NEVADA CORPORATION, TO CONOCOPHILLIPS COMPANY, OF A FRANCHISE TO CONSTRUCT, OPERATE, AND MAINTAIN PIPELINES FOR THE TRANSPORTATION OF OIL,AND OTHER SPECIFIED MATERIALS IN THE CITY OF SAN LUIS OBISPO,STATE OF CALIFORNIA AND AMENDING ORDINANCE NO. 1390 TO REFLECT THE TRANSFER WHEREAS, the City of San Luis Obispo adopted Ordinance No. 1390 on July 10, 2001, granting a franchise to TOSCO Corporation, a Nevada 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 January 1, 2003, TOSCO Corporation was merged into ConocoPhillips Company and ceased to exist as a legal entity; and WHEREAS, ConcocoPhillips Company is currently operating pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo and expressly agrees to assume the rights and obligations of TOSCO under Franchise Ordinance 1390, and WHEREAS, ConcocoPhillips Company has requested that Council approve the transfer of the subject franchise from TOSCO to ConcocoPhillips Company; and WHEREAS, on March 6, 2007, pursuant to Section 1002 of the Charter of the City of San Luis Obispo and Article 17 of Franchise Ordinance 1390, the City Council adopted Resolution No. , declaring its intention to consent to the transfer of Franchise Ordinance number 1390 from TOSCO to ConocoPhillips Company; and WHEREAS, the City Clerk published said Resolution in the Tribune on ; and WHEREAS, a public hearing was held on April 3, 2007;and WHEREAS, the City Council finds that the requested transfer is in the best interest of the City NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo that the transfer from TOSCO to ConcocoPhillips Company of the franchise granted by Ordinance No. 1390, to construct, operate, and maintain pipelines for the transportation of oil, and other specified materials in the City of San Luis Obispo is approved and Ordinance No. 1390 is amended to reflect the transfer, as follows: � -3 Ordinance No. _ (2007 Series) ATTACHMENT 1 Page 2 SECTION 1: Subsection A (Grant of Franchise) of Article I (Nature of Franchise) and Article 21 (Notice) of the franchise set forth in Ordinance No. 1390 are amended to read as follows: ARTICLE I NATURE OF FRANCHISE A. Grant of Franchise. 1. The City of San Luis Obispo (hereinafter referred to as "City"), hereby grants to ConocoPhillips Company, (hereinafter referred to as "Grantee"), pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9(b) of the California Constitution, and Section 39732(b) of the California Government Code, the non-exclusive right, privilege and franchise, subject, however, to all the limitations and restrictions herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change the size of and remove pipelines, not to exceed twelve (12) inches nominal internal diameter, for the transportation of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, movable by pipeline, in, under, along, and across the public streets, ways, alleys and places within the City of San Luis Obispo (hereinafter collectively referred to as "streets"), as described in Exhibit No. 1, attached hereto and made a part hereof. ARTICLE 21 NOTICE Any notice required to be given under the terms of this franchise, the manner of service of which is not specifically provided for, may be served as follows: Upon the City, by serving the City Clerk, personally or by addressing a written notice to the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, and depositing such notice in the United States mail, postage prepaid. Upon the Grantee, by addressing a written notice to Grantee addressed to ConocoPhillips Company, 3900 Kilroy Airport Way, Suite 210, Long Beach, CA 90806, Attn: Supervisor, R/W Administration, or such other address as may from time to time be furnished in writing by one party to the other and depositing said notice in the United States mail, postage prepaid. When service of any such notice is made by mail, the time of such notice shall begin with and run from the date of the deposit of same in the United States mail. J-y • JITAGHMENT Ordinance No. _(2007 Series) Page 3 SECTION 2: The rights and obligations of the parties pursuant to Franchise Ordinance No. 1391 shall continue and remain otherwise unchanged and ConocoPhillips Pipeline Company expressly assumes all rights and obligations conferred upon it by Ordinance No. 1391, as amended. SECTION 3: This ordinance shall take effect and be in full force and effect thirty (30) days after its passage, and before the expiration of fifteen (15) days after passage of this .ordinance, it shall be published once with the names of the members of the City Council voting for and against the ordinance in a newspaper of general circulation published in the City of San Luis Obispo, State of California. SECTION 4: A synopsis of this ordinance, approved by the City Attorney, together with the ayes and noes shall be published once in full at least five (5) days prior to its final passage, in a newspaper published and circulated in said City, and at the same time shall go into effect at the expiration of thirty (30) days after its said final passage. A copy of the full final text of this ordinance and Ordinance 1390, as amended, shall be on file in the Office of the City Clerk on and after the date following the introduction and passage to print and shall be available to any interested member of the public. Upon motion of seconded by and on the following roll call vote: Ayes: Noes: Absent: the foregoing ordinance was introduced to print this day of , 2007. Mayor David F. Romero ATTEST: Audrey Hooper, City Clerk APPROVED AS TO FORM: Jona Lowell, City Attorney 3 � 0 OTTACHMENT ORDINANCE NO. (2007 Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING THE TRANSFER FROM UNION PIPELINE COMPANY, A CALIFORNIA CORPORATION, TO CONCOCOPHILLIPS PIPELINE COMPANY, A DELAWARE CORPORATION, OF A FRANCHISE TO CONSTRUCT, OPERATE, AND MAINTAIN PIPELINES FOR THE TRANSPORTATION OF OIL,AND OTHER SPECIFIED MATERIALS IN THE CITY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND AMENDING ORDINANCE NO. 1391 TO REFLECT THE TRANSFER WHEREAS, the City of San Luis Obispo adopted Ordinance No. 1391 on July 10, 2001, granting a franchise to Union Pipeline Company ("Unocap"), a California Corporation for a term of 10 years for the transportation and distribution of oil and other specified materials in the City of San Luis Obispo; and WHEREAS, effective February 1, 2005, Unocap merged into ConocoPhillips Pipe Line Company ("CPPLC"), a wholly owned subsidiary of ConocoPhillips Company, and is no longer a legal entity; and WHEREAS, CPPLC is currently operating pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo and expressly agrees to assume the Tights and obligations of Unocap under Franchise Ordinance 1391; and WHEREAS, ConocoPhillips Pipeline Company has requested that Council approve the transfer of the subject franchise from Unocap to ConcocoPhillips; and WHEREAS, on March 6, 2007, pursuant to Section 1002 of the Charter of the City of San Luis Obispo and Article 17 of Franchise Ordinance 1391, the City Council adopted Resolution No. , declaring its intention to consent to the transfer of Franchise Ordinance number 1391 from Unocap to ConocoPhillips Pipe Line Company; and WHEREAS, the City Clerk published said Resolution in the Tribune on and WHEREAS, a public hearing was held on April 3, 2007; and WHEREAS, the City Council finds that the requested transfer is in the best interest of the City NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo that the transfer from Union Pipeline Company, a California corporation, to ConcocoPhillips Pipeline Company, a Delaware corporation, of the franchise granted by Ordinance No. 1391, to construct, operate, and maintain pipelines for the transportation of oil, • c5TACHMENT Ordinance No. (2007) Page 2 and other specified materials in the City of San Luis Obispo is approved and Ordinance No. 139lis amended to reflect the transfer, as follows: SECTION 1: Subsection A of Article I and Article 21 of the franchise set forth in Ordinance No. 1391 (2001 Series) are amended to read as follows: ARTICLE I NATURE OF FRANCHISE A. Grant of Franchise. 1. The City of San Luis Obispo (hereinafter referred to as "City"), hereby grants to ConocoPhillips Pipeline Company, a Delaware Corporation, (hereinafter referred to as "Grantee"), pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9(b) of the California Constitution, and Section 39732(b) of the California Government Code, the non-exclusive right, privilege and franchise, subject, however, to all the limitations and restrictions herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change the size of and remove pipelines, not to exceed twelve (12) inches nominal internal diameter, for the transportation of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, movable by pipeline, in, under, along, and across the public streets, ways, alleys and places within the City of San Luis Obispo (hereinafter collectively referred to as "streets"), as described in Exhibit No. 1, attached hereto and made a part hereof. ARTICLE 21 NOTICE Any notice required to be given under the terms of this franchise, the manner of service of which is not specifically provided for, may be served as follows: Upon the City, by serving the City Clerk, personally or by addressing a written notice to the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, and depositing such notice in the United States mail, postage prepaid. Upon the Grantee, by addressing a written notice to Grantee addressed to ConocoPhillips Company, 3900 Kilroy Airport Way, Suite 210, Long Beach, CA 90806, Attn: Supervisor, R/W Administration, or such other address as may from time to time be furnished in writing by one party to the other and depositing said notice in the United States mail, postage prepaid. When service of any such notice is made by mail, the time of such notice shall begin with and run from the date of the deposit of same in the United States mail. v gL7ACHMENT �- Ordinance No. (2007) Page 3 SECTION 2: The rights and obligations of the parties pursuant to Franchise Ordinance No. 1391 shall continue and remain otherwise unchanged and ConocoPhillips Pipeline Company expressly assumes all rights and obligations conferred upon it by Ordinance No. 1391, as amended. SECTION 3: This ordinance shall take effect and be in full force and effect thirty (30) days after its passage, and before the expiration of fifteen (15) days after passage of this ordinance, it shall be published once with the names of the members of the City Council voting for and against the ordinance in a newspaper of general circulation published in the City of San Luis Obispo, State of California. SECTION 4: A synopsis of this ordinance, approved by the City Attorney, together with the ayes and noes shall be published once in full at least five (5) days prior to its final passage, in a newspaper published and circulated in said City, and at the same time shall go into effect at the expiration of thirty (30) days after its said final passage. A copy of the full final text of this ordinance and Ordinance 1391, as amended, shall be on file in the Office of the City Clerk on and after the date following the introduction and passage to print and shall be available to any interested member of the public. Upon motion of seconded by and on the following roll call vote: Ayes: Noes: Absent: the foregoing ordinance was introduced to print this day of , 2007. Mayor David F.Romero ATTEST`. Audrey Hooper, City Clerk APPROVED AS TO FORM: Lowell, City Attorney � f�