HomeMy WebLinkAbout32-Public Works
CITY OF SAN BERNQaDINO
File No 8.081
- REQUEST ~ COUNCIL ACTION
From: ROGER G. HARDGRAVE
Subject:
Assignment of Petro~eum Pipeline
Franchise -- SOUTH8RN PACIFIC
PIPE LINES, INC. l ~
Public Works/Engineering
Dapt:
Date:
10-18-88
Synopsis of Previous Council action:
07-19-82 -- Resolution No. 82-308 adopted granting a franchise to
Southern Pacific Pipelines to construct, maintain and
operate pipelines within the City of San Bernardino.
Recommended motion:
That the requested assignment of the franchise from
Southern Pacific Pipe Lines, Inc. to Southern Pacific
Pipe Lines Partnership, L.P., be approved; and the City
Attorney directed to prepare the appropriate resolution
to assign the franchise.
cc: . Jim Robbins
Jim Richardson
Jim Penman
Ward:
5025
N/A
Supporting data attached:
Roger G. Hardgrave
Staff Report, letter
Phone:
Contact person:
FUNDING REQUIREMENTS:
Amount:
N/A
Source: (Acct. No.)
(Acct. DescriPtion)
Finance:
Council Notes:
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CIT~ OF SAN BERN~DINO - REQUEST ~ COUNCIL ACTION
STAFF REPORT
A franchise was granted to Southern Pacific Pipe Lines,
by Resolution No. 82-308, to construct and maintain pipelines
within street rights-of-way. This franchise.was for a period of
25 years.
Before the franchise was to become effective, a written
acceptance of the terms and conditions was to be filed with the
City Clerk. Also, a surety bond in the amount of $25,000 was to
be kept on file with the City Clerk and maintained in good
standing.
An annual franchise fee, completed on the basis of two
percent of the gross annual receipts, shall be paid to the City.
Section 9 provides that th~ franchise is not to be sold
or assigned without the prior consent of the Mayor and Common
Council.
Southern Pacific Pipe Lines intends to reorganize and
.recapitalize, which would entail assigning their franchise to
Southern Pacific Pipe Lines Partnership, L.P. A request for this
assignment has been made by letter dated 10-13-88, a copy of
which is attached for reference.
The transfer of assets to the new company is scheduled to
occur in November, 1988, but the franchise will not be transferred
until consent is received from the City.
Approval must be secured from several other agencies before
the transfer can occur. For this reason, Southern Pacific Pipe
Lines, Inc. requests that the City grant consent promptly, but
take no action to actually transfer the franchise until further
notice is received.
10-18-88
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Southern Pacific Pipe Lines,lnc.
888 South Figueroa Street
Los Angeles. Califoritia 90017
213/614.1095
October 13, 1988
VIA FEDERAL EXPRESS
Honorable Mayor and Members of
the Common Council of City
City of San Bernardino
300 North "0", 3rd Floor
San Bernardino, California 92418
Attention: Roger Hardgrave
Director of Public Works
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Re: Assignment of Petroleum pipeline Franchise
Granted to Southern Pacific Pipe Lines, Inc.
("SPPL") by City of San Bernardino,
Resolution No. 82-308
Honorable Mayor and Members of
the Common Council of city:
Southern Pacific pipe Lines, Inc. ("SPPL") and
Southern Pacific Pipe Lines Partnership, L.P. (the "SPPL
Partnership") hereby request your consent to the assignment of
the above-referenced franchise and all rights relating thereto
(the "Franchise") by SPPL to the SPPL Partnership pursuant to
the provisions of Resolution No. 82-308 of the city of san
Bernardino (the "City"). A copy of said resolution is
attached hereto as Exhibit A.
I. IDBN'rII'ICATION OF PARTIBS
A. ASSIGNOR: Southern Pacific pipe Lines, Inc.
("SPPL") is a Delaware corporation with its principal
executive office in Los Angeles, California.
B. ASSIGNEE: Southern pacific Pipe Lines Partner-
ship, L.P. (the "SPPL Partnership") is a Delaware limited
partnership with its principal executive office in Los
Angeles, California. SPPL is the general partner of the SPPL
Partnership.
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Honorable Mayor and Members of
the Common Council of city
city of San Bernardino
- October 13, 1988
II. CONTBMPLATBD TRANSACTION
SPPL currently operates a refined petroleum products
pipeline system. A portion of that system uses rights-of-way
granted to SPPL by the Franchise. SPPL intends to reorganize
and recapitalize its pipeline business. This would be
accomplished by, among other things, a transfer by SPPL of its
operating assets, including the Franchise, to the SPPL
Partnership, which would thereafter own the pipeline system.
As noted above, SPPL would be the general partner of the SPPL
Partnership. As such, SPPL would continue to be responsible
for operation and maintenance of the system.
The transfer of the Franchise would be made pursuant
to an Assignment of Franchise in the form attached hereto as
Exhibit B. As assignee, the SPPL Partnership would assume all
obligations of SPPL as owner of the Franchise.
The transfer of SPPL's assets to the SPPL Partner-
ship is scheduled to occur in November 1988, after California
Public utilities Commisssion approvals have been obtained and
other conditions to the transfer have been satisfied. Because
transfer of the Franchise requires your consent, however, the
Franchise will not be transferred to the SPPL Partnership
until your consent has been obtained. Your prompt
consideration of this request would thus be greatly
appreciated.
III. BOND AND INSURANCB
The SPPL Partnership is prepared to post a bond with
and for the benefit of the City prior to or concurrently with
the proposed transfer, in accordance with the provisions of
applicable law.
Pursuant to the prov1s1ons of the Franchise
Resolution, SPPL has posted a $25,000.00 Bond with the City.
We assume that this existing bond will be released to SPPL
upon the consummation of the transfer of the Franchise and the
posting by the SPPL Partnership of a replacement bond. If
this is not correct, please inform us promptly.
Please note that numerous approvals and consents, in
addition to that requested of you, must be obtained before the
proposed transfer of assets can be implemente~, and that the
decision as to whether or not the transaction can and will be
consummated is contingent upon a number of factors which are
beyond our control. As a result, we respectfully request that
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Page 3 - Honorable Mayor and Members of - October 13, 1988
the Common Council of City
city of San Bernardino
you promptly grant your consent to the proposed transfer of
the Franchise but that you take no action which would have the
effect of actually transferring the Franchise to the SPPL
partnership (or of terminating the existing Franchise if a new
Franchise is to be issued to the SPPLPartnership) until we or
our counsel in this matter inform you that the transfer has
been or is ready to be made.
Should the City Councilor any of its staff have any
questions regarding the proposed assignment or any matters
relating thereto, or if further information is required,
please contact either of the applicants at the address shown
above or our counsel, O'Melveny & Myers, 400 South Hope
street, Los Angeles, California 90071, Attention: Peter
Benudiz, Gregory B. Thorpe or Edward W. Hieronymus (Telephone:
213-669-6000).
Respectfully submitted,
,SOUTHERN PACIFIC PIPE LINES,
a Delaware corporatipn/ /
/ // /1: /
John M. Abboud
i Senior vice President
INC. ,
By:
Name:
Title:
SOUTHERN PACIFIC PIPE LINES
PARTNERSHIP, L.P., a Delaware
partnership
limited
By: SOUTHERN PACIFIC PIPE LINES
INC., a Delaware corporation,
its general, part~e>// / /
By: . ,/ /// I [' (-- /
Name: John M. Abboud -
Title: Senior Vice President
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RESOLUTION NO. 82-308
REC'D. - AOMUt ftJ:'1='
RESOLUTION OF THE CITY OF SAN BERNARDINO GRANTU!9 TO sout'BlM
PACIFIC PIPE LINES A FRANCHISE TO CONSTRUCT, MAINTA__ ,qI'W"S
PIPELINES WITHIN THE CITY OF SAN BERNARDINO.
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BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS I
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SECTION 1. The right, privilege and franchise are hereby
7 granted by the City of San Bernardino, hereinafter referred to as
8 "City", to Southern Pacific Pipe Lines, hereinafter referred to as
9 "Grantee", for a period of twenty-five years from and after the
10 granting of this franchise to construct, maintain, inspect,
11 operate, protect, repair, replace, and retain in place a pipeline
12 or pipelines, control facilities and other appurtenances,'
13 including any facilities necessary for cathodic protection
14 thereof, for the transportation of refined petroleum products in,
l' under, along and across public streets, highways and alleys of the
16 City of San Bernardino. This franchise shall be effective for
17 those pipeline routes presently in use, and for any additions
18 thereto which may hereafter be approved by the Mayor and Common
. 19 Council.
20
SECTION 2. This franchise and privilege are granted and
21 shall be held and enjoyed only upon the provisions and condition.
22 prescribed by law and those contained in this ordinance, and shall
23 not be effective until Grantee has filed with the City Clerk of
24 City a written acceptance of the terms and conditions of this
23 ordinance.
26
SECTION 3. The Grantee shall, during the life of this
27 franchi.e, pay to the City, an annual franchise fee computed on
21 the basi. of two percent of the gross annual receipts of the
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Grantee arising from the use, operation or possession of this
2 frandhise. Said payment shall be made annually to the City by
3 Grantee. Computations for th~ franchise fee shall be made in the
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4 same manner as computations under Section 6006 of the California
, Public Utilities Code, commonly known as The Broughton Act. The
6 Grantee shall file with the City Clerk of the City within three
7 months after the expiration of the calendar year for which payment
I is due, a verified statement specifying in detail the total gross
9 receipts of said Grantee during the preceding calendar year,
10 arising from the use, operation or possession of this franchise
11 within the City of San Bernardino, and shall pay to the City
J2 Treasurer of the City the franchise fee coincident with the filing
J3 of such statement. Any neglect, omission or refusal of the
14 Grantee to file such verified statement, or to pay such annual
J' franchise fee, at the time or in the manner hereinbefore provided,
16 shall be grounds for the declaration of a forfeiture of this
17 franchise and of all rights of the Grantee hereunder, if not
JI corrected within fifteen days after demand therefor by City.
J9
SECTION 4. Any pipeline laid, located or maintained pursuant
20 to this franchise shall be so placed and maintained as not to
21 interfere with the use of any public streets, highways, alleys or
22 bridges by the traveling public to any greater extent than is
23 reasonably necessary, and in laying said pipeline or pipelines the
24 Grantee shall fill the trench and leave the surface of said
25 street, highway or alley in as good condition as it was prior to
26 excavating for said pipeline, and shall comply with federal law
27 and regulation applicable thereto and any valid regulation of the
21 State and City pertinent thereto, including the requirement for
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1 obtaining street cutting permits.
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SECTION 5. City reserves the right to improve, widen, vacate
) or relocate any highway, stree., alley or other public places, or
4 portion thereof, over and .within which this franchise is granted,
5 including the widening, change of grade, construction or
6 reconstruction of such highway, street, alley or other public
7 places or portion thereof, for the purpose of any public
8 improvements. If notice is given by City to Grantee that work is
9 to be done pursuant to the rights reserved herein, Which notice
10 shall specify the general nature of the work and the area in which
11 the same is to be performed, Grantee shall at its expense do all
12 things reasonably necessary to protect, disconnect, relocate or
13 remove its property during the progress of such work at the
14 required time in order to accommodate such works. All such things
15 to be done and work to be performed by Grantee shall be at the
16 sole cost and expense of the Grantee. In the event that City
17 shall hereafter construct, install, reconstruct or repair any
18 ridge or artificial support in, on, over or underlying any
19 ighway, street, alley or other public places in which the
20 rantee's property is located, and in the event that the cost of
11 as may reasonably be required is increased in order to
12 rovide for the installation, maintenance or operation of
13 rantee's property in, on, over or under the are. covered by such
24 roject, then Grantee shall pay to City the full amount of such
15 increase of cost, upon completion of such construction,
26 installation or repair. Any damage done directly or indirectly t
27 ny public street, highway, alley or other public places or publi
21 provement by the Grantee, in exercising directly or indirectly
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any right, power or privilege under this franchise, or in
performing any duty under or pursuant to the provisions of this
franchise, shall be promptly"rePaired by Grantee at its sole cost
and expense, to the reasonable satisfaction of City.
SECTION 6. Grantee shall hold City, its authorized officers.
agents and employees, harmless frOm and against any and all
liability or loss resulting from claims for damages by any person
arising out of the acts or omissions of Grantee, its agents or
employees in the performance of any work authorized hereunder.
SECTION 7. If Grantee shall fail, neglect or refuse to
comply with any of the provisions or conditions hereof and shall
not, within thirty days after written demand for compliance, begin
the work of compliance. or, after such beginning, shall not
prosecute the sarne with due diligence to completion, then the
City, by its Mayor and Common Council, may declare this franchise
forfeited.
SECTION 8. In the event that the use of Grantee's property
pursuant to this franchise is discontinued or abandoned for any
reason, the Grantee shall promptly, upon being given ten days
notice, either quitclaim such property. in place to City or
commence and diligently prosecute the timely removal from the
streeta or public placea of all such franchise property and
promptly restore the atreet or area from Which auch property haa
been removed to a condition satisfactory to the City Engineer and
the Public Services Superintendent.
SECTION 9. The provisions of thia franchise and all rights.
obligations and duties thereof ahall inure to and be binding upon
Grant.., ita aucceaaora and aasigna. Grantee ahall not sell,
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I transfer or assign this franchise or any of the rights or
2 privileges herebr granted without the prior consent of the Mayor
3 and Common Council of City, whi~h consent will not be unreasonably
4 withheld, and, if consent is given, shall promptly file a copy of
5 the duly executed sale or transfer instrument in writing with the
6 City Clerk. Nothing in this franchise shall be construed to grant
7 to Grantee any right to sell, transfer or assign this franchise,
I or any of the rights or privileges hereby granted.
9
SECTION 10. The Grantee throughout the duration of the
10 franchise shall keep on file with the City Clerk and maintain in
II good standing a corporate surety bond in favor of City in. form
12 satisfactory to City's City Attorney, guaranteeing full
J3 performance of the conditions and undertakings of this franchise,
14 and conditioned that such Grantee shall well and truly observe,
J5 fulfill and perform each term and condition of the franchise.
16 Said bond shall be filed by Grantee with the City Clerk within
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fifteen days after this franchise is awarded. The penal sum of
JI the bond shall be in the amount of twenty-five thousand dollars,
J9 or more, at the option of Grantee.
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SECTION 11. This franchise shall take effect upon the filing
21 ith the City Clerk of an acceptance thereof by franchisee.
22 I HEREBY CERTIFY that the foregoing resolution was duly
23 adopted by the Mayor and Common Council of the City of San
24 Bernardino at a
requla'r
meeting thereof, held
25 on the 19th day of
Julv
, 1982, by the following
26 vote, to witc
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AYES a
council Members Castaneda. ReillV. Hernandez.
Quiel. Hobbs, strickler
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NAYS:
None
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ABSENT:
council Member Botts
~ffi~M6
/ c ty Clerk .
The foregoing re.olution is hereby approved thi ~ _/ ,day
Julv
, 1982.
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