HomeMy WebLinkAboutO-1709 granting a Franchise to Phillips 66 Pipeline to Construct, Operate, and_Maintain PipelinesO 1709
ORDINANCE NO. 1709 (2022 SERIES)
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 PIPELINES
FOR THE TRANSPORTATION OF OIL, AND OTHER SPECIFIED
MATERIALS IN THE CITY OF SAN LUIS OBISPO
WHEREAS, on January 18, 2022, the City of San Luis Obispo passed Resolution
No. 11297 (2022 Series), 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
via teleconference, on February 15, 202 2, 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, Phillips 66 Pipeline LLC is currently operating pipelines for the
transportation of oil and other specified materials within the City of San Luis Obispo; and
WHEREAS, Phillips 66 Pipeline LLC has requested the City of San Luis Obispo
enter into a new franchise agreement .
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:
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TABLE OF CONTENTS
ARTICLE 1 NATURE OF FRANCHISE ........................................................................... 4
A. Grant of Franchise ................................................................................................. 4
B. Limitations Upon Grant ......................................................................................... 5
C. Rights Reserved to the City of San Luis Obispo ................................................... 6
ARTICLE 2 APPURTENANCES ..................................................................................... 6
ARTICLE 3 LOCATION OF PIPELINES ......................................................................... 7
ARTICLE 4 CONSTRUCTION OF PIPELINES ............................................................... 7
A. Terms of Construction ............................................................................................ 7
B. Restoration of Streets ........................................................................................... 7
ARTICLE 5 COMMENCEMENT OF CONSTRUCTION .................................................. 8
ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED ............................................... 8
ARTICLE 7 COMPENSATION TO THE CITY ................................................................. 9
ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS ............................................... 11
ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAIR OF DAMAGE TO
CITY STREETS............................................................................................................. 11
ARTICLE 10 REARRANGEMENT OF FACILITIES ..................................................... 11
A. Expense of Grantee ............................................................................................. 11
B. Expense of Others .............................................................................................. 13
C. Rearrangement of the Facilities of Others .......................................................... 13
D. Notice .................................................................................................................. 13
ARTICLE 11 GRATEES’S REMOVAL OR ABANDONMENT OF FACILITIES ............. 14
ARTICLE 12 COMPLETION OF WORK ....................................................................... 16
ARTICLE 13 RECOVERY OF COSTS OR REPAIRS AND UNPAID FEES ................. 17
ARTICLE 14 BOND ....................................................................................................... 19
ARTICLE 15 INSURANCE ............................................................................................ 19
ARTICLE 16 INDEMNIFICATION BY GRANTEE ......................................................... 21
ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE ............................................ 21
ARTICLE 18 WAIVER OF BREACH ............................................................................. 24
ARTICLE 19 DEFAULT ................................................................................................ 24
ARTICLE 20 SCOPE OF RESERVATION .................................................................... 25
ARTICLE 21 NOTICE ................................................................................................... 25
ARTICLE 22 SUCCESSORS ....................................................................................... 26
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ARTICLE 23 ACCEPTANCE OF FRANCHISE ............................................................ 26
ARTICLE 24 FORCE MAJEURE................................................................................... 26
ARTICLE 25 LIQUIDATED DAMAGES ......................................................................... 27
ARTICLE 26 ATTORNEY’S FEES ................................................................................ 27
ARTICLE 27 CONDEMNATION .................................................................................... 28
ARTICLE 28 SURVIVALOF OBLIGATIONS ................................................................. 28
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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, 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 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 Ordinance shall be for a term
of three (3) years, commencing with the date on which it is Granted by the City.
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 existing rights enjoyed by
Grantee.
(c) Grantee shall not be relieved of its obligation to promptly comply with
any provision of this franchise by failure of the City to enforce prompt compliance.
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(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 or related any
provision or requirement of this franchise or its lawful enforcement by the City.
(f) This franchise does not relieve Grantee of any applicable requirements
of the San Luis Obispo Municipal Code or of any federal, state, or City law, ordinance,
rule, regulation, or specification, including, but not limited to, any requirement relating to
street work, street excavation permits, or the use, removal, or relocation of property in
streets, except as specifically prescribed herein.
(g) This franchise is non-exclusive. Neither the granting of this franchise
nor any of the provisions contained herein shall be construed to prevent the City from
granting any identical or similar franchise to any other person.
(h) The compensation provided for in this franchise is for (i) the rights and
privileges granted by this franchise, and (ii) the right and privilege granted to the Grantee
to construct, erect, maintain, operate, repair, renew, abandon and change the size of
and remove 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
Ordinance must be approved by the City under a separate franchise.
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(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 Public Ut ilities Commission, the City, or any
other federal or state body or agency having jurisdiction over Grantee's franchise
activities, the remainder of this franchise Ordinance, or the application of this franchise to
persons or circumstances other than those to which it is held invalid or not in such
compliance, shall not be affected thereby.
B. Limitations Upon Grant.
1. No privilege or exemption is granted or conferred by this franchise except
those specifically prescribed herein.
2. Any privilege claimed under this franchise by Grantee in any street shall
be subordinate to any prior lawful occupancy of the street, 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 Ordinance. 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, or as otherwise expressly provided herein. The City agrees that such prior
consent shall not be unreasonably withheld or conditioned.
C. Rights Reserved to the City.
1. The rights reserved to the City under this franchise Ordinance are in
addition to all other rights of the City, whether authorized by the San Luis Obispo City
Charter, San Luis Obispo City Municipal Code, or any other federal, state, or City law,
rule, or regulation. No action, proceeding or exercise of a right shall affect any other rights
that may be held by the City. Grantee, by acceptance of this franchise, shall be bound
thereby and shall comply with any action or requirement of the City in its exercise of any
such right or power.
2. The City shall have the power and right at all times during the term of
this franchise to require Grantee to conform to the laws, rules and regulations governing
the operation of pipelines now or hereafter adopted by the City Council to the extent
permitted by law.
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3. The City may enforce, to the maximum extent permitted by law, the
inspection and testing of pipelines, pursuant to state and federal standards and require
appropriate remuneration and fees to cover such enforcement activities.
ARTICLE 2
APPURTENANCES
The Grantee shall have the right, subject to the prior approval of the City Public
Works Department, to construct and maintain such traps, manholes, conduits, valves,
appliances, attachments, and appurtenances (hereinafter for convenience collectively
referred to as "appurtenances"), as may be necessary or convenient for the proper
maintenance and operation of the pipelines under said franchise. Said appurtenances
shall be so located as to conform to any order of the City Public Works Department in
regard thereto and not to interfere with the use of the streets for travel. The Grantee
shall have the right, subject to such ordinances, rules, or regulation as are now or may
hereafter be in force, to make all necessary excavations in said street for the
construction and repair of said pipelines and appurtenances subject to the prior approval
of the City Public Works Department. "Appurtenances" shall also include any adjunct
communications lines and/or conduits as coaxial cable, optical fiber, wire, or other
transmission lines or forms of transmission, and associated equipment and devices
located in, upon, along, across, under or over the streets of the City, the sole function of
which is to monitor or control the operation or safety of the pipeline syst em 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 televisio n or radio stations or
other sources of video, audio, voice, or data signals.
ARTICLE 3
LOCATION OF PIPELINES
So far as is practicable and within the requirements of the California State Fire
Marshall, any pipeline hereinafter laid shall be located along the edge or shoulder of the
streets or in the parking areas adjacent thereto so as not unreasonably to disturb the flow
of traffic and where possible shall be laid in the unpaved portion of the street.
ARTICLE 4
CONSTRUCTION OF PIPELINES
A. Terms of Construction. The pipelines and appurtenances laid, constructed
or maintained under the provisions of this franchise shall be installed, maintained, and
inspected by the Grantee in a satisfactory, safe, and workmanlike manner, of good
material, and in conformity with all ordinances, rules, or regulations now or hereafter
adopted or prescribed by the City Council, State, or Federal authorities.
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B. Restoration of Streets. The work of laying, constructing, maintaining,
operating, renewing, repairing, chan ging 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
federal and state law and applicable City ordinances, and with the least possible
hindrance or interference to the use of City roads by the public or by the City of San Luis
Obispo, and Grantee shall provide all necessary warning, safety and traffic control
devices as are or may be required by City, State or Federal regulations. All excavations
shall be back filled and adequately compacted. As part of any work completed under
provisions of this franchise agreement, the surface of City streets shall be repaired and
replaced to meet current City standards and specifications. Under no circumstances shall
the surface of City streets be placed in a manner less than as good and serviceable
condition as existed at the beginning of said work, to the satisfaction of the City Public
Works Department.
ARTICLE 5
COMMENCEMENT OF CONSTRUCTON
. The Grantee shall not commence the construction of any new pipelines under the
provision of this franchise or add to such existing pipeline system, if any there be, until it
first shall have applied for and obtained a permit therefore from the City Public Works
Department.
The application of the Grantee shall show the following facts: the length,
approximate depth and proposed location of the pipeline proposed to be laid or
constructed, the size and description of the pipeline intended to be used, and such other
relevant facts as the City Public Works Department may require. The Grantee shall pay
any and all encroachment permit fees of the City. Upon the completion of the construction
of any pipelines constructed pursuant to said franchise, the Grantee shall render a
statement to the City of San Luis Obispo showing in detail the permit or permits issued
and the total length of pipeline, the construction of which was authorized under such
permit, or permits, and the total length of pipeline actually laid, and the Grantee shall
make payment to the City for the pipelines which have been constructed under said
franchise as provided in Article 7, Section C. Nothing herein shall be construed to obligate
the City to approve or allow any new or expanded pipelines or appurtenances during the
term of the grant herein or otherwise.
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ARTICLE 6
MAPS AND REPORTS TO BE FURNISHED
A. Within six (6) months of the effective date of this franchise for existing
pipelines, and within ninety (90) days following the date in which any additional pipelines
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 Department showing the accurate location and
size of all its facilities then in place, and shall, upon installation of any additional facilities
or upon removal, change or abandonment of all or any portion thereof, file a revised map
or maps showing the location and size of all such additional and/or abandoned facilities
as of this date. Cathodic protection is to be used for all facilities installed or maintained
pursuant to this franchise. For facilities previously in liquid service and where the liquids
have been removed and the facilities inserted, or for facilities previously in gas service
that are not pressurized, cathodic protection shall be maintained consistent with State
Fire Marshall or other agency requir ements. A description of all the protective devices
shall be furnished to the City Public Works Department which shall show the location and
types of anodes, including a description of methods to be used as a protection against
corrosion and electrolytic leakage.
B. Grantee shall file with the City Finance Director, within thirty (30) days after
the expiration of the calendar year, or fractional calendar year, following the date of the
granting of this franchise and within thirty (30) days after the expiration of each calendar
year thereafter, two copies of a report verified by the oath of Grantee or by the oath of a
duly authorized representative of Grantee, showing, for the immediately preceding
franchise period, the length of main lines in streets, the nominal internal diameter of such
main lines, the rate per foot per year (when applicable) and the total amount due to the
City. In this report, Grantee shall also show any change in franchise footage since the last
franchise report, segregating such footage as to new main lines and adjunct
communications lines laid, old main lines and adjunct communications lines removed, old
main lines and adjunct communications lines abandoned in place, and the footage of main
lines and adjunct communications lines in territory annexed by the City since the last
franchise report.
C. Grantee shall file with the City Public Works Department within sixty (60)
days after the end of the calendar year a report, in duplicate, showing the permit number
of each permit obtained for the installation of new main lines during the immediately
preceding franchise report period, together with the length and size of said main lines.
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ARTICLE 7
COMPENSATION TO THE CITY
A. During the term of this franchise, Grantee shall pay to the City an annual
fee for this franchise, said fee to be those fees prescribed by the California Public Utilities
Code section 6231.5, provided that the rate is subject to increase to the maximum rate
established in subsequent amendments of the Califor nia 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 ma ximum 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
Department showing in detail the number of lineal feet and the diameter thereof,
expressed in inches, of pipelines covered by this franchise during the previous calendar
year, or portion thereof.
The compensation provided for in this Article shall be subject to an increase after
the first year of the franchise and each subsequent year du ring the term of this franchise,
including any period of expiration prior to this renewed agreement, based on the
provisions of California Public Utilities Code Section 6231.5, as amended.
The fees set forth will be adjusted annually each year by the annua l percentage
change in the U.S. Bureau of Labor Statistics (or successor agency) consumer price index
for all urban consumers (CPI-U) all cities average for the prior calendar year.
Notwithstanding the provisions as otherwise stated in this Article and fr anchise, the
Grantee shall be liable to pay the City the annual fee for the period to and including the
date of either actual removal of the facilities or the effective date of 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 Ordinance, or in
the event of partial removal of such facilities by the Grantee, the payments other wise 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.
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Grantee shall pay to the City, upon demand, the cost of all repairs made by the
City to public property arising out of the operations of the Grantee under this franchise.
Any fees charged or expenses charged to Grantee by City pursuant to this Article, or
any other provision of this franchise Ordinance, unless disputed in good faith, shall be
paid when due or shall be deemed delinquent. Any undisputed delinquent amounts
shall be charged a 10% penalty and, in addition, shall accrue interest commencing thirty
(30) days after the due date, at a rate of one and one-half percent (1.5%) per month
(based upon a 30-day calendar month) or any lesser amount if required by law. Any
neglect, omission, or refusal by said Grantee to pay any undisputed delinquent franchise
fee with any late charges, within thirty (30) days of delinquency, at the times or in the
manner herein provided, shall be grounds for a declaration of a forfeiture of this
franchise and of all rights hereunder.
Payments are to be made to the City Finance Department, 990 Palm Street, San
Luis Obispo, California 93401, or at such place as the City shall, from time to time,
designate in writing.
B. Grantee shall pay the City a granting fee of $10,000.00 within thirty (30)
days after the date the City Council adopts this franchise Ordinance.
C. Grantee shall pay the City Public Works Department, within sixty (60) days
after the end of each calendar year, for each year during the life of this franchise, an
initial construction charge calculated at the rate of One Dollar ($1.00) per foot for all
new, replaced, or relocated main lines laid pursuant to this franchise Ordinance during
the preceding year.
D. Right of Inspection. The City shall have the right to inspect Grantee's
pipeline accounting and other records relating to its annual report and to audit and
recompute any and all accounts payable under this franchise. Costs of audit shall be
borne by Grantee when an audit results in an increase of more than five percent of
Grantee's annual payments to the City. Acceptance of any payment shall not be
construed as a release, waiver, acquiescence, or accord and satisfaction of any claim
the City may have for further or additional sums payable under this franchise or for the
performance of any other obligation hereunder.
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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 th e leak
detection system and the communications systems if applicable, and of shutting off the
pressure and the flow of contents of such facilities in the event of an emergency
resulting from an earthquake, act of war, civil disturbance, fire, flood, or any other
cause or nature whatsoever.
ARTICLE 9
REPAIR OF DEFECTIVE FACILITIES AND REPAIR OF DAMAGE TO CITY
STREETS
If any portion of any street shall be damaged by any reason related to the
Grantee's operations pursuant to this franchise including defective facilities laid or
constructed under this franchise, Grantee shall, at its own expense, repair any defect
of its facilities and put such street in as good 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 Department. If Grantee, within ten (10) days after receipt of written notice from
the City Public Works Department instructing it to repair such damage, fails to
commence to comply with such instruction, or, thereafter, fails diligently to prosecute
such work to completion, then the City Public Works Director immediately may take any
actions which are, in the sole judgment and discretion of the City Public Works Director,
necessary to repair said damage. Any and all costs and expenses so incurred shall be
the sole responsibility of Grantee including the current rate of overhead , 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 Department, without notice,
may repair such damage and Grantee agrees to pay the cost thereof upon demand.
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ARTICLE 10
REARRANGEMENT OF FACILITIES
A. Expense of Grantee.
1. If any of the Grantee's facilities, in the opinion of the City Public Works
Director, shall endanger the public or interfere with the use of any street by the public or,
for public purposes, the City shall have the right to require the Grantee, and the Grantee
shall repair, replace, move, alter or relocate the same (hereinafter called
"rearrangement") to avoid such danger, interference or obstruction, in conformity with the
written notice of the City Public Works Department, at the Grantee's sole expense.
2. The City reserves the right to change the grade, to construct grade
separation facilities, to change the width or to alter or change the location, of any street
which is located within the service area for which this franchise is granted. If any of the
facilities heretofore or hereafter constructed, installed or maintained by Grantee pursuant
to this franchise on, along, under, over, in, upon or across any street are locat ed in a
manner which prevents or interferes with the change of grade, traffic needs, operation,
maintenance, improvement, repair, construction, reconstruction, widening, grade
separation, alteration or relocation of the street, or any work or improvement upon the
street, Grantee shall relocate permanently or temporarily, as directed at the sole
discretion of the City Public Works Director, any such facility at no expense to the City,
upon receipt of a written request from the City Public Works Department t o 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 reques t . 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, Gran tee 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 charg ed 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.
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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 whi ch 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 Pu blic Works Department to do so and
shall commence such work, by beginning engineering, surveying, or other pre -
construction activities, on or before the date specified in such written request, which date
shall not be less than sixty (60) days from receipt of such written request. The Grantee
shall thereafter diligently prosecute such work to completion. Should Grantee neglect or
fail to relocate its facilities in a timely manner after receipt of any such notice, in addition
to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and
shall reimburse the City for any and all additional costs or expenses incurred by City due
to or resulting from such delay in the relocation of the facilities plus, where applicable, the
current rate of overhead being charged by the City for reimbursable work. If such street
be subsequently constituted a state highway, while it remains a state highway the rights
of the State of California shall be as provided in Section 680 of the Streets and Highways
Code of the State of California.
4. If Grantee, after the notice provided for herein from the City, fails or refuses
to relocate permanently or temporarily its facilities located in, on, upon, along, under,
over, across, or above any street, or to pave, surface, grade, repave, resurface, or
regrade as required pursuant to any provision of this franchise, the City may cause the
work to be done, and shall keep an itemized account of the entire costs thereof, and
Grantee shall hold harmless the City, its officers and employees from any liability which
may arise or be claimed to arise from the moving, cutting or alteration of any of
Grantee's facilities, or any necessary relocation of the facilities of other utilities.
5. Grantee agrees to, and shall, reimburse the City for such cost within thirty
(30) days after presentation to Grantee of an itemized account arising out of the actions
taken in this Article 10A.
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B. Expense of Others.
1. The City shall have the right to require the Grantee to rearrange any part
of the Grantees' facilities for the accommodation of the City when such rearrangement
is done for the accommodation of any water, electric, gas or other utility system now or
hereafter owned or operated by the City.
Except as otherwise provided in Article 10A, such arrangement shall be at the
City's expense.
2. The City shall have the right to require the Grantee to rearrange any part
of the Grantee's facilities for the accommodation of any person, firm or corporation. When
such rearrangement is done for the accommodation of any person, firm, or corporation,
other than one of said utility systems owned or operated by the City, the cost of such
rearrangement shall be borne by the accommodated party. Such accommodated party,
in advance of such rearrangement, shall deposit with the Grantee or the City Clerk cash
or a letter of credit or other cash equivalent in an amount, as in the reasonable discretion
of the City Public Works Department, shall be required to pay the costs of such
rearrangement, and such accommodated party shall execute an instrument agreeing to
indemnify and hold harmless the Grantee from any and all damages or claims caused
by such rearrangement.
3. The rearrangement referred to in subsection (1) and (2) of Section B of
this Article 10 shall be accomplished in conformity with the written notice of the City Public
Works Department.
C. Rearrangement of the Facilities of Others. Nothing in this franchise shall
be construed to require the City to move, alter or relocate any of its facilities upon said
streets, at its own expense, for the convenience, accommodation or necessity of any
other public utility, person, firm or corporation now or hereafter owning a public utility
system of any type or nature, to move, alter or relocate any part of its system upon said
streets for the convenience, accommodation or necessity of the Gran tee.
D. Notice. The Grantee shall be given not less than sixty (60) days written
notice of any rearrangement of facilities which the Grantee is required to make hereunder.
Such notice shall specify in reasonable detail the work to be done by the Grantee and
shall specify a reasonable time that such work is to be accomplished. In the event that
the City shall change the provision s of any such notice given to the Grantee, the Grantee
shall be given an additional period of not less than thirty (30) days to init iate such work.
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ARTICLE 11
GRANTEES’S REMOVAL OR ABANDONMENT OF FACILITIES
A. The City reserves the right to require Grantee to remove its facilities
from the City streets and City public property in the event of the non-renewal,
revocation or termination of this franchise or at any time thereafter with respect to
those facilities abandoned in place, or for the facilities affected by the permanent
discontinuance of all or a portion of the facilities. Further, so long as any abandoned
facilities installed under the authority of this franchise remain in a City Street, Grantee
shall maintain a performance bond, security fund, or other form of collateral,
acceptable to the City, sufficient to cover the cost of the removal of all such facilities
from the City streets.
B. At the expiration, revocation, or termination of this franchise or of the
permanent discontinuance of the use of all or a portion of its facilities, Grantee shall,
within thirty (30) days thereafter, make written application to the City Public Works
Department for authority either:
1. To abandon all or a portion of such facilities in place; or
2. To remove all or a portion of such facilities. Such application shall
describe the facilities desired to be abandoned, their location with reference to City
streets, and shall describe with reasonable accuracy the physical condition of such
facilities. As part of the application for removal or abandonment of these facilities,
Grantee shall submit a soil test, taken within thirty (30) days of the submittal of the
application, for those materials to be tested annually pursuant to federal, state and local
laws. A soil test shall be taken along that portion of the pipeline to be removed or
abandoned at such intervals as directed in writing by the City Public Works Department
and reasonably consistent with established sampling protocols. The City Public Works
Department shall determine whether any abandonment or removal which is thereby
proposed may be affected without detriment to the public interest and the conditions
under which such proposed abandonment or removal may be affected. The City Public
Works Department shall then notify Grantee of the City's determinations. Grantee shall
also obtain permits to abandon or remove the pipeline from the City Public Works
Department for all pipelines prior to the removal, abandonment or discontinuation of use
of all or a portion of Grantee's facilities. The City also reserves the right to require
removal of Grantee's abandoned facilities in place at any time following the expiration,
revocation or termination of this franchise. Grantee shall be required to meet the
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.
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C. Within thirty (30) days after receipt of Notification from the City Public
Works Department pursuant to Article 11.B.2 above, Grantee shall apply for a permit from
the City Public Works Department to abandon or remove the facility.
D. Grantee shall, within sixty (60) days after obtaining such permit,
commence and diligently prosecute to completion the work authorized by the City's
permit.
E. In the event Grantee applies to remove its facilities, and the City Public
Works Department determines that any or all of the facilities cannot be removed due to
a moratorium preventing work in the City streets, the payment of annual franchise fees
shall be deferred during any such moratorium period, provided that Grantee promptly
removes its facilities after notice by the City Public Works Department of the cessation
of the moratorium and direction to remove such facilities. In the event Grantee does not
promptly remove such facilities as directed, any deferred annual franchise fees shall be
due and payable within thirty (30) days of notice to pay. Deferred annual franchise fees
shall otherwise be waived.
F. Failure to Comply with City's Orders Regarding the Removal or
Abandonment of Facilities.
1. If any orders or prescribed conditions relating to the abandonment of any
facilities are not complied with, the City Public Works Department may impose such
additional orders 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 Ordinance, and within
such time as may be prescribed by the City Public Works Department, then the City
may remove or cause to be removed such facilities at Grantee's expense. Grantee shall
pay to the City all of the costs of removing and disposing of these facilities, as well as
returning the rights-of-way occupied pursuant to this franchise, including, but not limited
to: (a) the cost of all environmental testing the City must conduct to determine the
environmental condition of any rights-of way occupied pursuant to this franchise and to
ascertain what procedures the City must undertake, if any, to return any such rights-of-
way to the environmental condition required by applicable Federal, State or local
environmental laws; (b) all cleanup costs, disposal costs, and any other costs associated
with returning these rights-of-way to such environmental condition; (c) all costs of
removing, storing, and disposing of the Grantee's facilities; (d) all costs of returning all
streets to the structural conditions they were in immediately at the beginning of Grantee's
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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
Department shall make the determination as to whether the facilities shall be abandoned
in place or removed. The City Public Works Department shall then notify Grantee of its
determinations. Grantee shall thereafter comply with the applicable provisions of this
Article 11.
G. For those facilities Grantee abandons in place, Grantee shall be required
to maintain an acceptable performance bond, letter of credit or security fund, as
determined by the City Public Works Department, to cover the costs for the removal of
any such abandoned facilities from the City streets for any and all periods of time,
including those periods following the expiration, revocation or termination of this
franchise, that Grantee's facilities remain in the City streets. Grantee shall be required to
maintain insurance and to indemnify the City pursuant to this Article during any periods
the abandoned facilities remain within the City streets. Provided, however, that any
pipelines which cannot be removed due to a moratorium preventing work in the City
streets, may be deferred from the payment of the annual franchise fee. The payment of
annual franchise fees may be deferred during any such moratorium period, provided
that Grantee promptly removes its facilities after notice by the City Public Works
Department of the cessation of the moratorium and direction to remove such Facilities. In
the event Grantee does not promptly remove such facilities as directed, any deferred
annual franchise fees shall be due and payable within thirty (30) days of notice to pay.
ARTICLE 12
COMPLETION OF WORK
In the event that the Grantee fails to commence any work or act and diligently
proceed therewith or to complete any such act or work required of the Grantee by the
terms of this franchise within the time limits required hereby (and except as is otherwise
provided in Articles 10 and 11), the City may cause such act or work to be completed by
the City or, at the election of the City, by a private contractor. The Grantee agrees to pay
the City, within thirty (30) days after delivery of an itemized bill, the c ost of performing
such act or work plus an amount equal to fifteen percent (15%) thereof for overhead. If
the Grantee is dissatisfied with any decision made by the City Public Works Department
hereunder or the determination of the cost of any work perform ed by the City pursuant to
this Agreement, it may petition the City Council to review the same within ten (10) days
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after such decision or determination.
ARTICLE 13
RECOVERY OF COSTS OR 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 herein above set forth, the City may
institute the following collection procedures (which procedures are in addition to any other
rights, in law or equity, which the City has to correct amounts due under this franchise
and to enforce the terms of this franchise):
A. The City Public Works Department shall keep an itemized account of
the expenses incurred by the City pursuant hereto, or the fees unpaid by the Grantee.
Sixty (60) days after the presentation of the bill to the Grantee therefore, the City Public
Works Department shall prepare and file with the City Clerk a report specifying the work
done by the City, or the unpaid fees, the itemized and total cost of the work, a description
of the work performed, and the name and address of the Grantee entitled to notice
pursuant to this Article.
B. Upon receipt of said report, the City Clerk shall present it to the City
Council for consideration. The City Council shall fix a time, date and place for hearing
said report, and any protest or objections thereto. The City Clerk shall cause notice
of said hearing to be posted in a newspaper of general circulation in the City, and
served by certified mail, postage prepaid, addressed to the Grantee as set forth
herein. Such notice shall be given at least ten (10) days prior to the date set for
hearing and shall specify the day, hour, and place when the City Council will hear and
pass upon the City Public Works Department's report, together with any objections or
protests which may be filed as hereinafter provided.
C. The Grantee may file written protests or objections with the City Clerk
at any time prior to the time set for the hearing on the report of the City Public Works
Department. Any such protest or objection must contain a description of the work or
unpaid fee or liquidated damages in which the Grantee is contesting and the grounds
of such protest or objection and the date it was received by 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
Council for good cause shown.
D. Upon the day and hour fixed for the hearing, the City Council shall hear
and pass upon the report of the City Public Works Department together with any such
objections or protests, make such revision, correction or modification to the charge
as it may deem just; and when the City Council is satisfied with the correctness of the
charge, the report (as revised, corr ected or modified), together with the charge, shall
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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
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be filed with the County Auditor on or before August 10th. The descriptions of the parcels
reported shall be those used for the same parcels on the County Assessors map books
for the current year.
J. The amount of the assessment shall be collected at the same time and in
the same manner as ordinary county taxes are collected and shall be subject to the
same penalties and procedure and sale in case of delinquency as provided for ordinary
county taxes. All laws applicable to the levy collection and enforcement of taxes shall
be applicable to such assessment. If the City Council has determined that the
assessment shall be paid in installments, each installment and any interest thereon
shall be collected in the same manner as ordinary City taxes is in successive years. If
any installment is delinquent, the amount thereof is subject to the same penalties and
procedure for sale as provided for ordinary county taxes.
K. All money recovered by payment of the charge or assessment or from the
sale of the property at foreclosure sale shall be paid to the City Finance Director.
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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 calendar days 30% cumulative amount of the bond
60 calendar days 70% cumulative amount of the bond
90 calendar days 100% cumulative amount of the bond
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ARTICLE 15
INSURANCE
A. The Grantee shall procure and shall keep in force for the term of the
franchise, at the sole cost and expense of the Grantee, the following insurance. All
insurance coverages are to be placed with insurers which have a Best's rating of not less
than A- VIII and are admitted insurance companies in the State of California. Grantee
may satisfy the requirements of this Article 15 by showing proof of self-insurance and may
self-insure the requirements of Article 15 to the greatest extent allowed by law.
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 not be less than the following: Single limit on the
coverage applying to bodily and personal injury, including death resulting therefrom,
property damage, in the total amount of Ten Million Dollars ($10,000,000.00) any one
occurrence and $10,000,000 in the aggregate.
The following endorsements must be provided in the CGL policy:
1. If the insurance policy covers on an "accident" basis, it must be changed
to "occurrence."
2. The policy must cover personal injury as well as bodily injury.
3. Blanket contractual liability must be afforded, and the policy must contain
a cross- liability or severability of interest endorsement.
4. Broad Form Property Damage Liability must be afforded.
5. Products and Completed Operations coverage must be provided.
6. 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 shall be named as additional insured under the policy. The policy
shall include the appropriate insurance company endorsement, as required under City
regulations. The policy shall provide that the insurance will operate as primary insurance
to the extent of the risks and liabilities assumed by Grantee under this agreement . No
other insurance effected by the City, whether commercial or self - insurance will be called
upon to contribute to a loss hereunder.
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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.
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, Section3700 of the labor Code. In
addition, Grantee shall require each subcontractor to similarly maintain Workers’
Compensation Insurance and Employee’s Liability Insurance in accordance with the laws
of the State of California, Section 3700 for all of the subcontractor’s employees.
The following requirements apply to all insurance to be provided by Grantee:
1. A certificate of insurance or evidence of self-insurance shall be furnished
to the City.
2. Certificates 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.
B. Failure on the part of Grantee to procure or maintain required insurance
and bonding shall constitute a material breach of this franchise upon which the City
may immediately terminate or suspend this franchise.
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ARTICLE 16
INDEMNIFICATION BY GRANTEE
The Grantee, by the acceptance or use of the franchise hereby granted, shall
defend, indemnify and shall keep and save free and harmless the City, its officers,
agents and/or employees against any and all claims, demands or causes of action which
may be asserted, prosecuted or established against them, or any of them, for damage
to persons, or property, of whatsoever nature, arising out of the use by it of the City
streets hereunder or arising out of any of the operations or activities of the Grantee
pursuant to this franchise, whether such damage shall be caused by its own sole
negligence or negligence concurrent with the City, excepting therefrom, however, any
claim or demand based on the sole negligence or willful misconduct of the City and any
claim, demand, or cause of action which may be asserted, prosecuted or established
against the City under the provision of the Worker's Compensation Act for injury to or
the death of any of City's officers, agents or employees while acting within the scope
of their employment, except that Grantee shall indemnify the City for any Worker’s
Compensation liability arising out of injuries to City employees incurred as the result of
necessary oversight or inspection of Grantee activities pursuant to this Agreement .
Grantee shall not be responsible for the sole negligence, criminal, fraudulent or
malicious conduct of the City.
ARTICLE 17
CHANGES IN CONTROL OF FRANCHISE
A. On and after the Grantee's acceptance of this franchise as provided in
Article 23 herein, Grantee, its partners, its shareholders, or any other person or persons
holding an interest in Grantee shall not transfer any interest in the franchise where such
a transfer would lead to another person achieving a twenty-five percent. (25%) or greater
interest in this franchise or change control of this franchise unless the City approves
such a transfer or change in control. The City shall approve a request for transfer or
change in control only if doing so serves the public interest. As used in this franchise
Ordinance, "control" includes actual working control in whatever manner exercised.
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a) ' 1. The City shall deny any such request for transfer or change in control
if the transferor or transferee fails to comply with any applicable provision of this Article
of this franchise Ordinance, or if the City determines the transferor is in non-compliance
with the terms and conditions of this franchise Ordinance, or if a transferee is lacking in
experience and/or financial ability to operate the pipelines authorized by this franchise
Ordinance, or if the proposed transfer will be detrimental to the public interest. Both the
Grantee and the proposed transferee shall inform the City Public Works Department of
any pending change in control of this franchise or of any pending transfer of an interest
in the franchise requiring the City's consent pursuant to this Article, and each shall provide
applications containing all documents on which the transfer or change in control is
predicated and all documents which the City Public Works Department determines are
necessary to evaluate the transfer or change of control. These applications shall be
signed by duly authorized representatives of the Grantee and the proposed transferee,
with signatures acknowledged by a notary. The appropriate transfer fee described in
Article 17(C), infra shall accompany these applications.
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 an additions as may be required or proposed to maintain and
conduct the services and facilities required under this franchise . The proposed transferee
will be required to authorize release 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:
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a. A construction schedule, describing type and placement of
construction, detail phases of construction, and include map(s) correlated to the phases
of construction. Map(s) shall include detail on the location, length, depth, and internal
diameter of any planned pipelines.
b. Copies of any agreements with utility companies for the use
of any facilities including, but not limited to, poles, lines, and conduit.
c. A description of plans for emergency equipment and
personnel enabling the transferee to meet the emergency equipment personnel
requirements in Article 8 herein.
d. Any information indicating as specifically as possible that any
principal, manager, or associate of the proposed transferee or a parent entity of the
proposed transferee has previously been or is currently:
i. A party to a criminal proceeding (involving felonies or
misdemeanors) in which any of the following offenses have been charged: fraud,
embezzlement, tax evasion, bribery, extortion, jury tampering, obstruction of justice (or
other misconduct affecting public or judicial officers in the performance of their duties),
false/misleading advertising, perjury, antitrust violations (state or federal), violation of
environmental laws or regulations, or conspiracy to commit any of the foregoing.
ii. A party to a civil proceeding concerning liability for any
of the following: unfair or anticompetitive business practice, antitrust violations (state or
federal) including instances in which consent decrees were entered, violations of security
laws (state or federal), false/misleading advertising, racketeer influences and corrupt
organizations, violation of environmental laws or regulations, or contraband forfeitures.
iii. Subject to any penalty, criminal or civil, involving failure
to comply with the requirements of a pipeline franchise.
iv. Involved in instituting legal action against its
franchising authorities.
v. Involved in revocation/non-renewal of any other
franchise.
e. Any other details, statements, information or references
pertinent to the subject matter of such application which shall be required or requested
by the City or by any provision of law.
f. An express and unconditional written acceptance of the terms
and conditions of this Franchise Ordinance, in its most current form, as a condition to the
transfer.
B. A fee shall be submitted with the applications for the City's consent to
transfer or change of control.
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1. Where the City's consent to a transfer or a change of control of
this franchise does not result in the modification of this franchise by adoption of an
amending ordinance, this fee for each application shall be as set forth in the City's
fee ordinance.
2. Where the City's consent to a transfer or a change of control of this
franchise results in the modification of this franchise by adoption of an amending
ordinance this fee shall be as set forth in the City's fee ordinance.
3. In the event the costs to process the applications exceed the fees
detailed above , the applicants may be required to pay any additional costs incurred by
the City in processing the applicants' requests for the City's consent to the transfer or
change of control of this franchise. Such costs may include the cost incurred for hiring
consultants to assist in evaluating the applications. Such costs shall be paid by the
applicants prior to final consideration of the request by City Public Works Department,
or the City Council, as applicable.
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
Department: ( 1 ) a certified copy of each duly executed instrument of such a transfer or
change in control; and (2) the submittal of a final accounting and report of all fees due
under this franchise. The proposed transferee shall be responsible for any
underpayment and shall be entitled to a credit for any overpayment. Within ninety (90)
days of the closing of the transfer or change of control, the Grantee shall submit financial
statements, audited and certified by an independent certified public accountant, showing
the condition of the franchise as of the closing. If such duly executed instruments are not
filed with the City Public Works Department by the deadlines imp osed in this Article, or if
the final documents are different from the preliminary documents, the City Public Works
Department may inform the proposed transferee that the transfer or change in control
is not deemed to be in force and effect. The City Public Works Department may then
administratively determine that this franchise is forfeited, and the City Council may,
without notice, by ordinance repeal this franchise.
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 Grantee the right to transfer or change control
of this franchise or any part thereof, except for 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.
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ARTICLE 18
WAIVER OF BREACH
No waiver of the breach of any of the covenants, agreements, restrictions, or
conditions of this franchise by the City shall be construed to be a waiver of any
succeeding breach of the same or other covenant, agreements, restrictions, or
conditions of this franchise. No delay or omission of the City in exercising the right,
power or remedy herein provided in the event of default shall be construed as a waiver
thereof, or acquiescence therein, nor shall the acceptance of any payments made in
a manner or at a time other than is herein provided be construed as a waiver of or
variation in any of the terms of this franchise.
ARTICLE 19
DEFAULT
A. In the event that the Grantee shall default in the performance of any of
the terms, covenants and conditions herein, the City may give written notice to the
Grantee of such default by certified mail. In the event that the Grantee does not
commence the work necessary to cur e such default within five (5) business days after
such notice is received or prosecute such work diligently to completion, the City may
declare this franchise forfeited by giving written notice thereof to the Grantee,
whereupon this franchise shall be void and the rights of the Grantee hereunder shall
terminate and the Grantee shall execute an instrument of surrender and deliver the same
to the City. If the City Council declares this franchise forfeited, it may thereupon and
thereafter exclude the Grantee from further occupancy or use of all City roads and streets
authorized under this franchise. A forfeiture of said franchise shall not of itself operate to
release any bond filed for said franchise. Upon declaring a franchise forfeited, the City
Council may elect to take and accept any bond as liquidated damages therefore or pursue
any other legal remedy for any damage, loss or injury suffered by the City as a result of
such breach or both. After forfeiture, any bond shall remain in full force and effect for a
period of one (1) year unless exonerated by the City Council. No bond shall be exonerated
unless a release is obtained from the City Public Works Department and is filed with the
City Clerk. The release shall state whether all excavations have been back filled, all
obstructions removed, and whether the substratum or surface of City streets occupied or
used have been placed in good and serviceable 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.
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B. No provision herein made for the purpose of securing the enforcement of the
terms and conditions of this franchise shall be deemed an exclusive remedy, or to afford the
exclusive procedure, for the enforcement of said terms and conditions, but the remedies
and procedure herein provided, in addition to those provided by law shall be deemed to be
cumulative.
ARTICLE 20
SCOPE OF RESERVATION
Nothing herein contained shall ever be construed so as to exempt the Grantee from
compliance with all ordinances of the City now in effect or which may be hereafter adopted
which are not inconsistent with the terms of this franchise. The enumeration herein of
specific rights reserved shall not be construed as exclusive, or as limiting the general
reservation herein made or as limiting such rights as the City may now or hereafter have in
law.
ARTICLE 21
NOTICE
Any notice required to be given under the terms of this franchise, the manner of
service of which is not specifically provided for, may be served as follows:
Upon the City, by serving the City Clerk, personally or by addressing a written
notice to the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo,
CA 93401, and depositing such notice in the United States mail, postage prepaid.
Upon the Grantee, by addressing a written notice to Grantee addressed to Phillips
66 Pipeline LLC, Real Estate Services, 3900 Kilroy Airport Way, Suite 210, Long Beach,
CA, 90806, or such other address as may from time to time be furnished in writing by one
party to the other and depositing sa id notice in the United States mail, postage prepaid.
When service of any such notice is made by mail, the time of such notice shall begin with
and run from the date of the deposit of same in the United States mail.
ARTICLE 22
SUCCESSORS
The terms herein shall inure to the benefit of and shall bind, as the case may be,
the successors and assigns of the parties hereto, subject, however, to the provisions of
Article 17.
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ARTICLE 23
ACCEPTANCE OF FRANCHISE
A. This franchise is granted and shall be held and enjoyed only upon the
terms and conditions herein contained. By accepting this grant of franchise, Grantee
shall agree to be bound by each and all of the requirements of Article X, Sections
1001 through 1007 of the San Luis Obispo City Charter.
B. Grantee shall, within ten (10) days after the passage of this franchise
Ordinance , file with the City Clerk an express and unconditional written letter of
acceptance of, and consent to, the terms and conditions of this franchise Ordinance, in
its current version, and as subsequently amended, pursuant to San Luis Obispo City
Charter, Article X, Section 1004.
C. The parent entity, or entities, if any, of Grantee, shall file a letter with the
City, concurrent with Grantee's letter of acceptance, which guarantees the performance
of each and every term, covenant and condition imposed on Grantee pursuant to the
franchise Ordinance.
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D. Grantee's letter of acceptance shall be signed by two (2) duly authorized
representatives of Grantee, whose signatures shall be acknowledged by a notary, and
shall be accompanied by the performance bond and evidence of insurance required by
this franchise Ordinance.
ARTICLE 24
FORCE MAJEURE
The time within which Grantee is obligated hereunder to construct, erect, maintain,
operate, repair, renew, change the size of and remove pipelines or other improvements
shall be extended for a period of time equal in duration to, and performance in the
meantime shall be excused on account of, and for, and during the period of any delay
caused by strikes, threats of strikes, lockouts, war, threats of war, insurrection, invasion,
acts of God, calamities, violent action of the elements, fire, action or regulation of any
governmental agency law or ordinance, impossibility of obtaining materials, or other
things beyond the reasonable control of Grantee.
ARTICLE 25
LIQUIDATED DAMAGES
A. By acceptance of this franchise, Grantee understands and
acknowledges that failure to timely comply with any performance requirements
stipulated in this franchise Ordinance will result in damages to the City, and that it is
and will be impractical to determine the actual amount of such damage in the event of
delay or nonperformance. Each of the amounts set forth below has been set in
recognition of the difficulty of affixing actual damages arising from breach of these
time of performance requirements. Each of said amounts constitutes a reasonable
estimate of these damages. This section does not limit the rights and remedies
available to the City for damages other than the timely compliance with performance
requirements as describe d in this section. The liquidated damages set forth below
shall be chargeable to the bond, letter 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 amount s are due for the following
concerns:
1. Failure to provide data, documents, or reports within ten (10)
business days after receipt of written request by the City, by certified mail, or such
longer time as may be specified in said request: Two Hundred Fifty Dollars ($250.00)
per day for each day, or part thereof that each violation continues.
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2. Failure to provide to the City within ten (10) business days after
receipt of written request by the City, by certified mail, current evidence of insurance
and bonding: Two Hundred Fifty Dollars ($250 .00) per day for each day, or part
thereof, that each noncompliance continues. Nothing in this Section shall preclude
immediate termination or suspension of this franchise as provided for under Article
15B, supra.
3. Failure by Grantee to timely restore public or private property
after performance of work and following Grantee's receipt of written request by the
City to do so within ten (10) business days thereafter by certified mail: Two Hundred
Fifty Dollars ($250.00) per day or part thereof, that each non-compliance continues.
Any fines paid pursuant to this Subsection 3 shall be paid solely to the Street Fund
of the City Public Works Department.
B. If the City Public Works Department determines that Grantee is liable
for liquidated damages, the City Public Works Department shall issue to Grantee by
certified mail written notice of intention to charge liquidated damages. Liquidated
damages shall begin to accrue as of the date of the written notice and as set forth in
said notice. The notice shall set forth the basis for the liquidated damages and give
Grantee a reasonable time in which to remedy the violation.
C. Grantee shall have the right to appeal any notice to the City Public
Works Department by certified mail, within twenty (20) days after issuance of the
notice by the City Public Works Department. The City Public Works Department
shall hold an administrative hearing within sixty (60) days after receipt of an appeal.
The City Public Works Director's decision shall be the final decision of the City.
D. If Grantee does not appeal the notice within said twenty (20) day period,
Grantee shall pay the amount(s) of liquidated damages as stated in the notice. If
payment is not paid as provided for in this Article, the City may withdraw against the
bond provided for in Article 14 herein.
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 attorneys' fees
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ARTICLE 27
CONDEMNATION
Notwithstanding anything to the contrary contained herein and in accordance
with San Luis Obispo City Charter Article X, Section 1005, this Ordinance shall not in
any way affect the right of the City to acquire the property of the Grantee thereof either
by purchase or through the exercise of the right of eminent domain, and nothing herein
contained shall be construed to contract away or to modify or to abridge either for a
term or in perpetuity the City's right of eminent domain with respect to any public utility.
The City reserves the right to purchase the property of such utility at an agreed price.
In fixing the price to be paid by the City for any utility, no allowance shall be made for
franchise value (other than the actual amount paid to the City at the time of the
franchise acquisition), goodwill, going concern, earning power, increased cost of
reproduction, severance damage, or increased value of right-of-way.
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.
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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 15th day of February 2022, AND FINALLY ADOPTED by
the Council of the City of San Luis Obispo on the 15th day of March 2022, on the following
vote:
AYES: Council Member Marx, Pease, Shoresman, Vice Mayor
Christianson, and Mayor Stewart
NOES: None
ABSENT: None
___________________________
Mayor Erica A. Stewart
ATTEST:
_______________________
Teresa Purrington,
City Clerk
APPROVED AS TO FORM:
_______________________
J. Christine Dietrick,
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington,
City Clerk
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