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HomeMy WebLinkAbout23-Public Works o :) File No. 8.081 ,;:'} - REQUEST FOR COUNCIL ACTION CITY OF SAN BERNARDINO ,- --- From: ROGER G. HARDGRAVE De~: Public Works/Engineering Subject: Assignment of Petroleum Pipeline Franchise -- SOUTHERN PACIFIC PIPE LINES, INC. 'ft 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 Supporting data attached: Ward: , 5025 N/A Contact person: Roger G. Hardgrave Staff Report, letter Phone: FUNDING REOUIREMENTS: Amount: N/A Source: (Acct. No.! (Acct. Description) Finance: B I .S W't 9l 130 BIlGI ',:140 .tmtQY-'Q.~311 c_ "-' Council Notes: Aoe"nda I tern No _s::f.-, 3 CITY OF SAN BERN~DINO - REQUEST FO 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 g provides that the franchise is not to be sold or assigned without the prior consent of the Mayor and Common Counci 1. 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 ....- 75.0264 - - /"....., ~ - ...../ Southern Pacific Pipe Lines, Inc. ,,",,,,, 888 South Figueroa Street Los Angeles, California 90017 213/614-1095 October 13, 1988 - Honorable Mayor and Members of the Common Council of city city of San Bernardino 300 North "0", 3rd Floor San Bernardino, California 92418 VIA FEDERAL EXPRESS Attention: Roger Hardgrave Director of Public Works 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. IDENTIFICATION OF PARTIES 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. - A Santa Fe Southern Pacific Company ,~.".." " --- ,) - ........ Page 2 - Honorable Mayor and Members of - October 13, 1988 the Common Council of City City of San Bernardino II. CONTEMPLATED 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 INSURANCE 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 prov~s~ons 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 -- - j ~... .,r .-- 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 SPPL Partnership) 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 corporation/ / .' / I ' i ( , John M. Abboud Senior Vice President INC. , By: Name: Title: SOUTHERN PACIFIC PIPE LINES PARTNERSHIP, L.P., a Delaware limited partnership By: SOUTHERN PACIFIC PIPE LINES INC., a Delaware corporation, its general partner By: Name: Title: I / I /. > ;' / (- John M. Abboud Senior Vice President / I I -' """"" '"1-, j -, ..~." 1 REC'D. - ADM'N O~r:' RESOLUTION OF THE CITY OF SAN BERNARDINO GRANTING TO SOUtH~ PACIFIC PIPE LINES A FRANCHISE TO CONSTRUCT. MAINTAjI8~~~~5 PIPELINES WITHIN THE CITY OF SAN BERNARDINO. J RESOLUTION NO. 82-308 ,.- 2 '- 3 4 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: S 6 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. - IS 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 conditions 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 2S ordinance. 26 SECTION 3. The Grantee shall. during the life of this .-- 27 franchise. pay to the City. an annual franchise fee computed on 28 the basis of two percent of the gross annual receipts of the I ~ .., 1 Grantee arising from the use, operation or possession of this ,- 2 franchise. Said payment shall be made annually to the City by "-' 3 Grantee. computations for the franchise fee shall be made in the f 4 same manner as computations under Section 6006 of the California S 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 gr08s 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 12 Treasurer of the City the franchise fee coincident with the filing 13 of such statement. Any neglect, omission or refusal of the 14 Grantee to file such verified statement, or to pay such annual - IS 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 II corrected within fifteen days after demand therefor by City. 19 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 2S 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 -2- -- 100..- '-' 100..- '.:- .. ( ( '-" 1 obtaining street cutting permits. SECTION 5. City reserves the right to improve, widen, vacate 2 ) or relocate any highway, stree., alley or other public places, or 4 portion thereof, over and .within which this franchise is granted, S including the widening, change of grade, construction or I 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 IS 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 II ridge or artificial support in, on, over or underlying any 19 ighway, street, alley or other public places in which the 20 Grantee's property is located, and in the event that the cost of 11 such work as may reasonably be required is increased in order to 22 rovide for the installation, maintenance or operation of 23 rantee's property in, on, over or under the area covered by such 24 then Grantee shall pay to City the full amount of such 1S increase of cost, upon completion of such construction, 16 installation or repair. Any damage done directly or indirectly t 17 ny public street, highway, alley or other public places or publi 21 improvement by the Grantee, in exercising directly or indirectly -.,- "", ""',...." ........ - -- 1 any right, power or privilege under this franchise, or in 2 performing any duty under or pursuant to the provisions of this 3 franchise, shall be promptly repaired by Grantee at its sole cost 4 and expense, to the reasonable satisfaction of City. S SECTION 6. Grantee shall hold City, its authorized officers, 6 agents and employees, harmless from and against any and all 7 liability or loss resulting from claims for damages by any person 1 arising out of the acts or omissions of Grantee, its agents or 9 employees in the performance of any work authorized hereunder. 10 SECTION 7. If Grantee shall fail, neglect or refuse to 11 comply with any of the provisions or conditions hereof and shall 12 not, within thirty days after written demand for compliance, begin 13 the work of compliance, or, after such beginning, shall not ,''''.... 14 prosecute the same with due diligence to completion, then the - lS City, by its Mayor and Common Council, may declare this franchise 16 forfeited. 17 SECTION 8. In the event that the use of Grantee's property 11 pursuant to this franchise is discontinued or abandoned for any 19 reason, the Grantee shall promptly, uPon being given ten days 20 notice, either quitclaim such property in place to City or 21 commence and diligently prosecute the timely removal from the 22 streets or public places of all such franchise property and 23 promptly restore the street or area from Which such property has 24 been removed to a condition satisfactory to the City Engineer and 25 the Public Services Superintendent. 26 SECTION 9. The provisions of this franchise and all rights, obligations and duties thereof shall inure to and be binding upon - 21 21 Grantee, its successors and assigns. Grantee shall not sell, 1_"'. .-. ,-. ~ - '-' ..... . - .0 . 0 '~...J' 1 transfer or assign this franchise or any of the rights or 2 privileges herepy granted without the prior consent of the Mayor 3 and Common Council of City, whi~h consent will not pe unreasonaply 4 withheld, and, if consent is given, shall promptly file a copy of S the duly executed sale or transfer instrument in writing with the 6 City Clerk. Nothing in this franchise shall pe construed to grant 7 to Grantee any right to sell, transfer or assign this franchise, 8 or any of the rights or privileges herepy 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 pond in favor of City in form J2 satisfactory to City's City Attorney, guaranteeing full 13 performance of the conditions and undertakings of this franchise, 14 and conditioned that such Grantee shall well and truly opserve, IS fulfill and perform each term and condition of the franchise. 16 Said pond shall be filed Py Grantee with the City Clerk within 17 fifteen days after this franchise is awarded. The penal sum of J8 the Pond shall pe in the amount of twenty-five thousand dollars, 19 or more. at the option of Grantee. 20 SECTION 11. This franchise shall take effect upon the filing 2J ith the City Clerk of an acceptance thereof Py franchisee. 22 I HEREBY CERTIFY that the foregoing resolution was duly 23 adopted Py the Mayor and Common Council of the City of San 24 Bernardino at a reqular meeting thereof, held 2S on the 19th day of Julv , 1982, Py the following 26 vote, to wit: . . . . 27 . . . . . . 21 . . . . . - j ~~ ......: . ~ . ..1." ....... '. ... ,,- ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 - 14 15 16 17 18 19 20 21 :n 23 24 25 26 ""- 27 21 """.'",- ~ ,""Ji ...... , AYES: council Members Castaneda. Reillv. Hernandez. Quiel. Hobbs, strickler NAYS: None , ABSENT: council !1elllber Botts 4FJ1.#/~~ / C ty Clerk The foregoing resolution of Julv , 1982. APpro~ed ,as to fO,rlll~ C /i ;, , V,., ' / ,i/)-?/) j., ,'t'," , ' ~ .,.,/:!Z.... ~r ity A orney _F._