City of Culver City, California
Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council adopt a resolution: (1) declaring the City
Council’s intention to grant a Franchise to Crimson California Pipeline, L.P.
(Proposed Crimson Franchise) for the operation of existing pipelines located in the
public rights-of-way for the transportation of oil or products thereof pursuant to
certain terms and conditions upon which such franchise is proposed to be granted;
and, (2) setting the date, time, and place for the Public Hearing at which any person
may appear before the City Council and be heard to be July 27, 2015 at 7:00 PM in
the Mike Balkman Council Chambers.
BACKGROUND:
Section 1700 of the City Charter provides, in pertinent part, the following:
“The City Council may, by ordinance, grant a franchise to furnish the City
and its inhabitants with any public utility or service and to use the public
streets for that purpose. The exercise by any person, firm or corporation
of any privilege for which a franchise is required without procuring such
franchise from the City is prohibited.”
Meeting Date: 06/08/2015 Item Number: C-8
CITY COUNCIL AGENDA ITEM: Adoption of a Resolution: (1) Declaring the City
C o u n c i l ’ s Intention to Grant a Franchise to Crimson California Pipeline, L.P. for the
Operation of Existing Pipelines Located in the Public Rights-of-Way for the
Transportation of Oil or Products Thereof Pursuant to Certain Terms and
Conditions upon which Such Franchise is Proposed to be Granted; and, (2) Setting
the Date, Time, and Place for the Public Hearing at which any Person May Appear
Before the City Council and be Heard to be July 27, 2015 at 7:00 PM in the Mike
Balkman Council Chambers.
Contact Person/Dept.:
Martin R. Cole, Assistant City
Manager/City Clerk
Phone Number: 310-253-6000
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: Meetings and Agendas – City Council (06/03/15)
Department Approval:
Martin R. Cole (06/03/15)
City Attorney Approval:
Carol Schwab (by R. Miranda) (06/03/15)
Chief Financial Officer Approval:
Jeff Muir (06/03/15)
City Manager Approval:
John M. Nachbar (06/03/15) City of Culver City, California
Agenda Item Report
Additionally, Section 6205.1 of the California Public Utilities Code (PUC) provides, in
pertinent part, the following:
“…facilities which are part of a pipeline system transmitting oil or products
thereof, shall be granted upon the terms and conditions provided in, and in
accordance with...this chapter”
Since its incorporation in 1917, in accordance with the City Charter and the PUC, the
City has issued a number of franchises to various utilities. Some of the City’s
franchises often trace their origins back a number of decades. In the case of the
Proposed Crimson Franchise, the pipelines that are subject to the Proposed
Crimson Franchise have been in their underground location since at least 1968
(under a Franchise granted by the City Council via Ordinance CS-593 on April 11,
1968).
Since 1968, the City Charter was significantly updated in 2006. Also, the PUC has
been substantively amended. In addition to these changes in applicable law,
provisions in the 1968 Franchise have become dated (especially provisions related
to insurance and indemnity). Further, Shell Oil Company, the franchise holder of the
original 1968 Franchise, conveyed its interests to Crimson California Pipeline, L. P.
(Crimson). For all of these reasons, an updated Franchise is needed.
DISCUSSION:
Given the significant changes noted above and the 47 years of time since the
installation of the subject pipelines, staff has been in discussions with Crimson to
update the Proposed Crimson Franchise. The result of over three years of
discussions is a completely re-written and updated document.
Significant Change in Applicable Law
When the PUC was last substantively amended by the State Legislature in 1989, the
amendments included a “pre-emption” provision. That provision (contained in
Section 6205.1) pre-empted the City’s authority to negotiate many substantive
provisions in the franchise and required that franchises be granted “upon the terms
and conditions provided in [the PUC].” One important provision, the amount of the
fee the City can charge oil pipeline systems for the use of the public right-of-way is
set by Section 6231.5 of the PUC (prior to 1989, the franchise fee was a negotiable
item).
City of Culver City, California
Agenda Item Report
Substantive Updates Contained in the Proposed Crimson Franchise
Throughout this entire process, in accordance with negotiating instructions provided
by the City Council, staff has proceeded with negotiations to update the
insurance/bond/indemnity language to provide improved protection to the residents
of the City in case of pipeline damage or oil spills. Also, secondarily to providing for
the public health and safety, the City Council’s negotiating instructions also provided
for an opportunity to standardize and update the remaining language of the franchise
agreements and provide maximum revenues for use of the public lands.
Improved and Updated Insurance Coverage
Because of the pre-emption of the franchise fee by the PUC, negotiations focused
mainly on the City’s main goal to modernize and improve the insurance provided by
Crimson to protect the City, it residents, and property owners. As with the City of
Santa Monica franchise, the Proposed Crimson Franchise includes updated and, in
staff’s opinion more appropriate, insurance coverage (please see Exhibit B of the
Proposed Crimson Franchise for additional details). The updated insurance
requirements now provide for $35,000,000 in Pollution Legal Liability coverage and
$10,000,000 in Excess or Umbrella Liability.
Other Major Terms and Conditions
The Proposed Crimson Franchise includes the following major terms and conditions:
1. Term of 10 Years: Staff had originally proposed an initial term of ten years
and two five-year extensions subject to payment of Extension Fees. To
maintain parity with the Santa Monica (and other) franchises, Crimson
rejected that proposal. The term reverted to a single, 10-year term, which
both parties have agreed upon.
2. Updated Language: The language of the document has been updated and
restructured to improve the ease of administration of the franchise.
3. Renewal and Annual Franchise Fee: The document reflects the payment of a
$10,000 Franchise Renewal and Extension Fee and an annual Franchise Fee
equal to the maximum allowed under the PUC. Under the PUC tariff
schedule, the City is expected to receive $1,654 for the first year of the
franchise, subject to a modest inflation factor each year thereafter.
Should the City Council adopt the proposed resolution this evening, in compliance
with Section 1700 of the City Charter, the proposed resolution contains the City
Council’s direction to the City Clerk to publish the resolution at least once within 15 City of Culver City, California
Agenda Item Report
days of its passage in a newspaper circulated in the City and designated by the City
Council. Such publication will provide notice to the public of the Public Hearing set
for Monday, July 27, 2015 at 7:00 PM in the Mike Balkman Council Chambers at
which time any person may appear before the City Council and be heard and the
City Council will formally consider granting of the franchise.
FISCAL IMPACT:
Adoption of the proposed resolution does not create a material fiscal impact for the
City. Should the City Council adopt the proposed resolution, a Public Hearing will be
scheduled for July 27, 2015. The report prepared for that Public Hearing will include
the fiscal impacts related to granting of the franchise (as those impacts are outlined
above).
ATTACHMENTS:
Proposed Crimson Franchise
MOTION:
That the City Council:
Adopt a resolution: (1) declaring the City Council’s intention to grant a
Franchise to Crimson California Pipeline, L.P. (Proposed Crimson Franchise)
for the operation of existing pipelines located in the public rights-of-way for
the transportation of oil or products thereof pursuant to certain terms and
conditions upon which such franchise is proposed to be granted; and, (2)
setting the date, time, and place for the Public Hearing at which any person
may appear before the City Council and be heard to be July 27, 2015 at 7:00
PM in the Mike Balkman Council Chambers.
MEETING DATE: June 8, 2015
AGENDA ITEM: CITY COUNCIL AGENDA ITEM: Adoption of a
Resolution: (1) Declaring the City Council’s Intention
to Grant a Franchise to Crimson California Pipeline,
L.P. for the Operation of Existing Pipelines Located in
the Public Rights-of-Way for the Transportation of Oil
or Products Thereof Pursuant to Certain Terms and
Conditions upon which Such Franchise is Proposed to
be Granted; and, (2) Setting the Date, Time, and Place
for the Public Hearing at which any Person May
Appear Before the City Council and be Heard to be
July 27, 2015 at 7:00 PM in the Mike Balkman Council
Chambers.
ATTACHMENTS
Pages
Proposed Crimson Franchise 1-38
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ORDINANCE NO. 2015-____
AN ORDINANCE OF THE CITY OF CULVER CITY, CALIFORNIA,
CONSOLIDATING, RESTATING AND AMENDING A NON EXCLUSIVE
FRANCHISE IN FAVOR OF CRIMSON CALIFORNIA PIPELINE, L.P. TO
OPERATE AND MAINTAIN CERTAIN PIPELINES AND
APPURTENANCES FOR THE TRANSPORTATION OF OIL OR
PRODUCTS THEREOF IN THE CITY OF CULVER CITY
WHEREAS, the City of Culver City (“City”), pursuant to its Charter and Ordinance No.
94-031 (“Ord. 94-031”), previously granted a non-exclusive Franchise (the “Shell Franchise”) to
Shell California Pipeline Company (“Shell”) to operate, maintain, replace and repair 1,186 lineal
feet of one ten inch (10”) diameter pipeline (the “Shell 10” Line”) for the transportation of oil or
products thereof; and,
WHEREAS, pursuant to Ordinance No. 2003-001 (“Ord. 2003-001”), 1,100 lineal feet of
one eight inch (8”) diameter pipeline (the “Shell 8” Line”) were consolidated and made a part of
the Shell Franchise and the Shell Franchise was extended to April 11, 2008, subject to all of the
terms and conditions of Ord. 94-031; and,
WHEREAS, on May 1, 2005, Shell sold and assigned certain components of its common-
carrier crude oil pipeline system located in Southern California, including the Shell 10” Line, to
Crimson California Pipeline, L.P., a California limited partnership (CRIMSON) and CRIMSON
agreed to assume all of Shell’s obligations relating to the Shell 10” Line. The Shell 8” Line was
not transferred by Shell to CRIMSON. On April 7, 2005, Shell and CRIMSON received
approval (of Shell’s sale to CRIMSON) of the Shell 10” Line from the California Public Utilities
Commission (“CPUC”); and, 057915\5883655v9
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WHEREAS, although the Shell Franchise has expired, CRIMSON has continued to
operate the Shell 10” Line in compliance with all of the terms and conditions of the Shell
Franchise; and,
WHEREAS, the City, pursuant to a License (“License No. 57658”) dated October 20,
1989 (the “Union Oil License”), granted Union Oil Company of California (“Union Oil”) a non-
exclusive license to install, operate and maintain 1,588 lineal feet of twelve inch (12”) pipeline
(the “Union Oil 12” Line”) to transport petroleum; and,
WHEREAS, subsequent to the issuance of the Union Oil License, through mesne
conveyances, the Union Oil License was acquired as of February 1, 2005 by ConocoPhillips
Pipeline Company (“CPPLC”); and,
WHEREAS, effective July 1, 2008, CPPLC sold and assigned its common-carrier crude
oil pipeline system located in Southern California to CRIMSON and CRIMSON agreed to
assume all of CPPLC’s obligations relating to the Union Oil 12” Line; and,
WHEREAS, on December 20, 2007, CPPLC and CRIMSON received approval of
CPPLC’s sale to CRIMSON from the CPUC; and,
WHEREAS, since July 1, 2008, CRIMSON has operated the Union Oil 12” Line in
compliance with all of the terms and conditions of the Union Oil License; and,
WHEREAS, the Shell 10” Line and the Union Oil 12” Line are operated by CRIMSON
as a public utility common carrier to transport oil or products thereof for the public under tariffs
governed by the CPUC; and,
WHEREAS, CRIMSON has requested the Culver City City Council to approve the
assignment of the Shell Franchise (as it relates to the Shell 10” Line) from Shell to CRIMSON
and the assignment of the Union Oil License from CPPLC to CRIMSON; and, 057915\5883655v9
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WHEREAS, CRIMSON has further requested that the Union Oil 12” Line be
consolidated into and made a part of a renewed and extended CRIMSON FRANCHISE; and
WHEREAS, CRIMSON has requested the City Council to renew and extend the Shell
Franchise (as it relates to the Shell 10” Line) and the Union Oil License into a single CRIMSON
FRANCHISE; and,
WHEREAS, the Shell 10” Line and the Union Oil 12” Line have been in continuous
operation for over 25 years, with such operation being without incident; and,
WHEREAS, the City Council, to ensure the continued protection of the public health,
safety, and welfare, has provided direction to CITY MANAGER to enter into negotiations with
CRIMSON for the purposes of updating the decades-old Shell Franchise and Union Oil License,
especially in the areas of safety precautions, including obtaining adequate levels and appropriate
types of insurance to protect the interests of CITY and its residents; and,
WHEREAS, pursuant to Resolution No. __________, adopted on _____________, 2015,
the CITY COUNCIL declared its intention to approve the renewed and extended Shell Franchise
and Union Oil License as consolidated into this CRIMSON FRANCHISE; and,
WHEREAS, on _____________, 2015, the CITY COUNCIL held a public hearing on the
application submitted by CRIMSON and, following public testimony and thorough discussion of
CRIMSON’s application, determined to approve the application on the terms and conditions
provided herein.
NOW THEREFORE, the CITY COUNCIL of the City of Culver City, California, DOES
HEREBY ORDAIN as follows: 057915\5883655v9
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SECTION 1. CLARIFICATION, ASSIGNMENT, AND GRANT OF FRANCHISE
1. The Shell Franchise (as it relates to the Shell 10” Line) and the
Union Oil License are hereby renewed and extended as consolidated into this CRIMSON
FRANCHISE, subject to each of the terms and conditions of this Ordinance No. 2015-____;
2. The CRIMSON FRANCHISE reads as follows:
SECTION 1A. DEFINITIONS
The following CAPITALIZED TERMS shall have the meaning as set forth in this
Section:
ABANDONMENT: The permanent discontinuance of the use of the PIPELINES under this
CRIMSON FRANCHISE or the PIPELINES have been idle for a period of not less than six
months.
APPURTENANCES: Items such as, but not limited to, scraper traps, manholes, flanges,
conduits, culverts, valves, appliances, cathodic protection systems, vaults, attachments and other
accessories necessary for the proper operation of the PIPELINES, including safety monitoring
devices.
ANNIVERSARY DATE: January 1 of each year this CRIMSON FRANCHISE is in full force
and effect.
ANNUAL FRANCHISE FEE: The fee payable to CITY by CRIMSON in return for the rights
and privileges enjoyed by CRIMSON pursuant to this CRIMSON FRANCHISE.
CITY: The City of Culver City, California – a Charter City.
CITY ATTORNEY: The duly acting and appointed City Attorney of CITY.
CITY CLERK: The duly appointed and acting City Clerk of CITY.
CITY COUNCIL: The duly elected City Council of CITY. 057915\5883655v9
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CITY MANAGER: The duly appointed and acting City Manager of CITY or his/her duly
authorized representative.
CRIMSON FRANCHISE: This franchise.
DIRECTOR: The duly appointed and acting Director of Public Works/City Engineer of CITY
or his/her duly authorized representative.
EFFECTIVE DATE: The 31st calendar day after the adoption of this ORDINANCE by the
CITY COUNCIL.
EMERGENCY: Situations in which persons are endangered or property or environmental
damage may result, or other requirements of law, rule, regulation, or government order may be
violated, if work is delayed pending issuance of a permit.
EXTENSION OPTION #1: The first opportunity for GRANTEE to extend the term of this
CRIMSON FRANCHISE to December 31, 2030, subject to the terms and conditions contained
herein.
EXTENSION OPTION #2: The second opportunity for GRANTEE to extend the term of this
CRIMSON FRANCHISE to December 31, 2035, subject to the terms and conditions contained
herein.
FRANCHISE RENEWAL AND EXTENSION FEE: The sum of $10,000 payable in lawful
money of the United States of America.
FRANCHISE TERM: The period of time this CRIMSON FRANCHISE shall be in full force
and effect, commencing with the INITIAL TERM and as may be extended through the exercise
of EXTENSION OPTION #1 and EXTENSION OPTION #2.
GRANTEE OR CRIMSON: Crimson California Pipeline, L.P., a California limited
partnership. 057915\5883655v9
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INITIAL TERM: The period of time commencing on the EFFECTIVE DATE and concluding
on December 31, 2025.
PIPELINES: The system of pipelines built and/or operated by CRIMSON under this
CRIMSON FRANCHISE as set forth in Exhibit A hereof.
REPAIR: Work undertaken to maintain the PIPELINES in compliance with the latest revision
of the Standard Plans for Public Works Construction and the Standard Specifications for Public
Works and standard plans for street repair as approved by the DIRECTOR. Such work may
include, but is not necessarily limited to, excavation of STREETS.
STREETS: Those public roads, highways and alleys, and other public rights-of-way under the
control of CITY under which PIPELINES are located.
SECTION 2. GENERAL TERMS AND CONDITIONS OF FRANCHISE
A. Grant of Franchise
This CRIMSON FRANCHISE is hereby granted to GRANTEE for the INITIAL
TERM effective on the EFFECTIVE DATE, subject to all of the limitations and restrictions
herein contained. Pursuant to Section 6265 of the California Public Utilities Code, as such code
existed on the EFFECTIVE DATE, this CRIMSON FRANCHISE grants to GRANTEE the right
to use the PIPELINES and the APPURTENANCES for the purpose of transmitting and
distributing oil or products thereof and shall include the right and privilege to operate, maintain,
replace, and REPAIR the PIPELINES for such purposes, under, along and across STREETS in
CITY, as such PIPELINES are shown on the maps attached hereto as Exhibit “A.”
So long as GRANTEE is in compliance with the terms and conditions of this
CRIMSON FRANCHISE and not in default hereunder, prior to the expiration of the INITIAL
TERM, GRANTEE shall have the right to request the City in writing, at least 60 but no more 057915\5883655v9
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than 120 calendar days prior to the expiration of the INTIAL TERM, to extend the term of this
CRIMSON FRANCHISE to December 31, 2030. GRANTEE’s request shall be subject to the
City’s approval, which approval shall not be unreasonably withheld or delayed. Further, so long
as GRANTEE is in compliance with the terms and conditions of this CRIMSON FRANCHISE
and not in default hereunder, prior to the expiration of the first five year extension, GRANTEE
shall have the right to request the City in writing, at least 60 but no more than 120 calendar days
prior to the expiration of the first five year extension, to further extend the term of this
CRIMSON FRANCHISE to December 31, 2035. GRANTEE’s request shall be subject to the
City’s approval, which approval shall not be unreasonably withheld or delayed. This
CRIMSON FRANCHISE may be terminated by voluntary surrender or ABANDONMENT by
GRANTEE or by forfeiture for non-compliance with the terms and provisions of this CRIMSON
FRANCHISE.
B. Appurtenances
Subject to GRANTEE’s compliance with the provisions of Section 10 below,
GRANTEE shall have the right to operate, maintain, REPAIR or replace such
APPURTENANCES as may be necessary or convenient for the proper maintenance and
operation of the PIPELINES under this CRIMSON FRANCHISE.
SECTION 3. COMPENSATION TO CITY
A. FRANCHISE RENEWAL AND EXTENSION FEE: Upon submission of
an application to CITY for the renewal and extension of this CRIMSON FRANCHISE,
GRANTEE shall pay to the CITY the FRANCHISE RENEWAL AND EXTENSION FEE which
shall be an administrative fee for appraisal, engineering, legal, publication and other services
incurred by the CITY in processing the application for the CRIMSON FRANCHISE. 057915\5883655v9
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B. ANNUAL FRANCHISE FEE: During the FRANCHISE TERM,
GRANTEE shall pay to the City an annual fee calculated as set forth in Exhibit C of this
CRIMSON FRANCHISE. The first ANNUAL FRANCHISE FEE, which fee shall be prorated
for the period from the EFFECTIVE DATE to December 31 following the EFFECTIVE DATE,
shall be paid on or before February 29, 2016 and each ANNUAL FRANCHISE FEE thereafter
shall be paid annually to the CITY within sixty (60) days after the end of each calendar year.
C. The ANNUAL FRANCHISE FEE shall be subject to increase after
January 1, 2016, and each subsequent year thereafter during the FRANCHISE TERM, based on
the provisions of Section 6231.5 of the Public Utilities Code, as amended, and Exhibit C hereof,
as the case may be.
D. The ANNUAL FRANCHISE FEE set forth in this Section shall in no way
limit Grantee’s obligation to compensate CITY or any private citizen for any damage, claim,
expense, or loss whatsoever as set forth in this CRIMSON FRANCHISE.
E. Compensation Adjustments and Compensation in the Event of Removal or
Abandonment. Notwithstanding the provisions of Section 7 hereof, the GRANTEE shall be
liable to pay CITY the ANNUAL FRANCHISE FEE for the period to and including the date of
either (1) the last day of the month in which actual removal of the PIPELINES was completed;
or (2) the last day of the month in which falls the effective date of any properly approved
abandonment “in place” as may be authorized by CITY, or until the GRANTEE shall have fully
complied with all the provisions of law or ordinances relative to such abandonments, whichever
is later.
In the event of partial abandonment of the PIPELINES with the approval of CITY
as elsewhere in this CRIMSON FRANCHISE provided, or in the event of partial removal of 057915\5883655v9
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such PIPELINES by GRANTEE, the payments otherwise due CITY for occupancy of the
STREETS by such PIPELINES shall be reduced by the length of PIPELINES abandoned or the
actual PIPELINES removed beginning with the first day of the next succeeding calendar year,
and for each calendar year thereafter; provided, however, that the said base rate shall be modified
to reflect the adjustment per Section 7 hereof applicable to such abandoned or removed
PIPELINES at the beginning of the next succeeding calendar year following abandonment or
removal.
F. GRANTEE shall pay to CITY, on demand, the cost of all REPAIRS made
at the cost of CITY to public property made necessary by any operation of the GRANTEE under
this CRIMSON FRANCHISE. In addition, if any private property is damaged by an accident,
spill, discharge, release, escape, accident, leaks or breaks in the PIPELINES or
APPURTENANCES or from any cause arising in whole or in part from the operation or
existence of the PIPELINES or APPURTENANCES or from any act or omission of GRANTEE,
GRANTEE shall pay all damages or compensation to which the owners are entitled and
GRANTEE shall REPAIR its facilities to protect the damaged private property from further
damage to the extent permitted and in conformity with Federal, State and local law, rule,
regulation or order.
G. Any payment due from GRANTEE to CITY under any provision of this
CRIMSON FRANCHISE which is not paid when due shall bear interest at the highest amount
allowed by law, but the payment of such interest shall not excuse nor cure any other default by
GRANTEE under this CRIMSON FRANCHISE. All payments shall be paid without deduction
or offset except as herein provided, in lawful money of the United States to CITY at the
following address: City of Culver City Attn: Chief Financial Officer, 9770 Culver Boulevard, 057915\5883655v9
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Culver City, California 90232, or at such place as CITY may from time to time designate in
writing.
In addition to the interest payable pursuant to the Section above, in the event any
payment required under this Section is late, the following schedule of late charges shall be
applicable to that portion which is overdue as follows: late 10 days but fewer than 30 days -- 2%
of the amount due; for each additional 30 days or fraction thereof over 30 days -- an additional
2% of the amount, including interest due under this Section.
AUDIT: The City shall have the right to inspect GRANTEE’S records relating to
its annual report and to audit and recompute any and all amounts payable to CITY under this
CRIMSON FRANCHISE. Costs of audit shall be borne by GRANTEE when audits result in an
increase of more than five percent of GRANTEE’S annual payments due CITY. Acceptance of
any payment shall not be construed as a release, waiver, acquiescence, or accord and satisfaction
of any claim CITY may have for further or additional sums payable under this CRIMSON
FRANCHISE or for the performance of any other obligation hereunder.
SECTION 4. ROUTINE MAINTENANCE AND REPAIR
A. GRANTEE, at GRANTEE’S sole cost, shall maintain PIPELINES in good
working order in conformity with all applicable federal, state and local rules and regulations and
shall perform any necessary REPAIRS. CITY agrees to process permit applications for such
REPAIRS in a timely manner, subject to the payment of the fee therefor as set by CITY
COUNCIL.
B. Subject to GRANTEE’s compliance with the provisions of Section 10
below, GRANTEE, at GRANTEE’S sole cost, shall conduct REPAIRS of PIPELINES and
APPURTENANCES with the least possible hindrance to the use of STREETS, and as soon as 057915\5883655v9
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such work is completed, all portions of STREETS which have been excavated or otherwise
damaged thereby shall be REPAIRED.
C. REPAIR Plans - Should GRANTEE plan any routine REPAIRS to
PIPELINES during any calendar year, the plans for such REPAIRS, showing location and
approximate date and length of time of work, must be submitted to the DIRECTOR six months
prior to the time in which the REPAIRS are to take place. Any REPAIRS not scheduled in
accordance herewith may be denied unless the work is an EMERGENCY, or the need is
unforeseen.
D. GRANTEE, upon completing REPAIRS under this Section, shall REPAIR
all STREETS and private property to the satisfaction of DIRECTOR, and does by this
CRIMSON FRANCHISE, guarantee that the work of restoration shall be good against all faulty
work and materials and shall, for a period of one (1) year thereafter, maintain all such restored
STREET surfaces in as good condition as other portions of said STREET not disturbed by said
REPAIRS and according to current ordinances of CITY and all other applicable law, rules, and
regulations.
E. In the event City elects to perform work on STREETS that requires
relocation or alteration of GRANTEE’S facilities which are the subject matter of this CRIMSON
FRANCHISE, GRANTEE hereby agrees to move and alter its PIPELINES and
APPURTENANCES, either permanently or temporarily, as required by the DIRECTOR, at
GRANTEE’S sole cost.
F. GRANTEE shall coordinate REPAIRS undertaken under this Section with
CITY in order to minimize disruption of the STREETS especially the disturbance of roadways
that have been repaved within five years of the date of the proposed REPAIRS. In the case 057915\5883655v9
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GRANTEE shall be permitted by CITY to perform REPAIRS on such roadways, subject to
GRANTEE’s compliance with the provisions of Section 10 below, GRANTEE shall, at its sole
cost, provide for the REPAIRS and re-pavement of the roadway.
SECTION 5. UNPLANNED MAINTENANCE AND REPAIRS
A. GRANTEE shall report as soon as reasonably practicable any unplanned
REPAIRS, including but not limited to those undertaken in response to spills or leaks, to CITY.
If any portion of any STREET is damaged by reason of operation of PIPELINES and/or
APPURTENANCES, or if any STREET, sidewalk, sewer, storm drain, other facility or private
property is contaminated with any products transported in PIPELINES, GRANTEE shall, at its
sole expense, immediately REPAIR or clean up or cause to be REPAIRED or cleaned up any
such damage or contamination and REPAIR such STREET or other facility to the satisfaction of
DIRECTOR. Such cleanups shall be accomplished in a timely manner, with as little public
disruption as possible.
B. GRANTEE shall reimburse CITY for all costs associated with CITY
services provided for such unplanned maintenance and REPAIRS. Such reimbursement shall
include, but not be limited to, the current rate of overhead being charged by CITY for
reimbursable work. Reimbursable work shall include, but not be limited to, inspection, traffic
control, police, fire, STREET, environmental, and any other CITY response forces or services.
SECTION 6. EMERGENCY MAINTENANCE AND REPAIRS
A. In the case of EMERGENCY, as that term is defined in this CRIMSON
FRANCHISE, GRANTEE shall coordinate its response with all Federal, State, Regional, and
CITY forces to respond to and rectify such emergency. Such coordination shall include, but not 057915\5883655v9
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be limited to, providing notice to CITY as soon as reasonably practicable of such emergency
condition.
B. EMERGENCY CREWS - At all times during the term of this CRIMSON
FRANCHISE, GRANTEE shall maintain, on a twenty-four (24) hour basis, personnel to operate
PIPELINE and APPURTENANCES, including but not limited to the leak detection and other
safety or operations systems used in the operation of the PIPELINES. In addition, during the
term of this CRIMSON FRANCHISE, GRANTEE shall maintain, on a twenty-four (24) hour
basis, adequate standby equipment and properly trained emergency standby crews for the
purpose of implementing emergency response such as REPAIRS, oil spill cleanup, preventing or
minimizing damage or the threat of damage to people, property and the environment in the event
of an emergency resulting from an earthquake, act of war, civil disturbance, flood, leakage, or
other cause. As soon as practicable following discovery of an EMERGENCY, GRANTEE shall
report the emergency to the National Response Center and other applicable Federal, State,
Regional, and agencies and departments and call out the emergency standby crews and
equipment.
SECTION 7. REMOVAL OR ABANDONMENT OF FACILITIES
A. Application to DIRECTOR
At the expiration, revocation or termination of this CRIMSON FRANCHISE or
upon the permanent discontinuance of the use of its PIPELINES or any portion thereof,
GRANTEE shall, within thirty (30) days thereafter, make a written application to DIRECTOR
for authority to abandon all or a portion of such PIPELINES. Such application shall describe the
PIPELINES desired to be abandoned or removed and shall also describe with reasonable
accuracy the relative physical condition of such PIPELINES. Upon abandonment, as-built plans 057915\5883655v9
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of the PIPELINES as they exist at the time of abandonment shall be provided to CITY.
Abandonment of the PIPELINES shall be accomplished as required by the Pipeline Safety Act,
State or Federal regulations, or any successor legislation.
B. Determination of DIRECTOR
DIRECTOR shall review the application submitted pursuant to this Section and,
within 30 days of such application being deemed complete by DIRECTOR, determine whether
such proposed abandonment or removal may be effected without detriment to the public interest
or under what conditions such proposed abandonment or removal may be safely effected.
DIRECTOR shall notify GRANTEE of the DIRECTOR’S determination to approve,
conditionally approve, or deny such application, and, in the case such application is approved or
conditionally approved, in accordance with such requirements and conditions as shall be
specified by DIRECTOR in any permit issued as a result of the application submitted pursuant to
this Section, including but not limited to applicable state and federal regulations, GRANTEE
shall, within ninety (90) days of such determination, either:
1. Remove all or a portion of such PIPELINES, or
2. Abandon in place all or a portion of such PIPELINES, as set forth
in the approved Permit.
C. Failure to Properly Abandon
If any PIPELINES to be abandoned in place subject to prescribed conditions shall
not be abandoned in accordance with all such conditions, then DIRECTOR may make additional
appropriate orders, including, if deemed desirable, an order that GRANTEE shall remove all
such PIPELINES in accordance with applicable requirements of the Pipeline Safety Act or other
governing law or statute. In the event GRANTEE shall fail to remove any facilities which it is 057915\5883655v9
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obligated to remove in accordance with such applicable requirements within such time as may be
prescribed by DIRECTOR, then CITY may remove or cause to be removed such PIPELINES at
GRANTEE’S expense, and GRANTEE shall pay CITY the actual cost thereof plus the current
rate of overhead being charged by CITY for reimbursable work, as such overhead rate may have
been set by action of CITY COUNCIL or as may reasonably be calculated by CITY MANAGER
SECTION 8. REARRANGEMENT/RELOCATION OF FACILITIES
A. Expense of GRANTEE
Whenever, during the FRANCHISE TERM, CITY shall change the grade, width,
or location of any STREET or improve any STREET in any manner including the laying of any
sewer, storm drain, conduits, gas, water, or other pipes owned or operated by CITY or any other
public agency or utility, or construct any pedestrian tunnels or other work of CITY (the right to
do all of which is specifically reserved to CITY without any admission on its part that it would
not otherwise have such rights) and such work shall, in the opinion of DIRECTOR, render
necessary any change in the position or location of any PIPELINES in the STREET, GRANTEE
shall, at its sole cost and expense, do any and all things to effect such change in position or
location in conformity with the written notice of DIRECTOR as provided in this Section;
provided, however, that CITY shall not require GRANTEE to remove PIPELINES in their
entirety.
B. Expense of Others
Except as provided in Paragraph A of this Section, when such
rearrangement/relocation is done for the accommodation of any person, firm, or corporation, the
cost of such rearrangement shall be borne by the accommodated party. Such accommodated
party, in advance of such rearrangement, shall (a) deposit with GRANTEE either cash or a 057915\5883655v9
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corporate surety bond in an amount, as in the reasonable discretion of GRANTEE shall be
required to pay the costs of such rearrangement, and (b) shall execute an instrument agreeing to
indemnify and hold harmless GRANTEE from any and all damages or claims caused by such
rearrangement.
C. Rearrangement/Relocation of the Facilities of Others
Nothing in this CRIMSON FRANCHISE shall be construed to require
GRANTEE to move, alter, or relocate any of the facilities upon said STREETS for the
convenience, accommodation, or necessity of any other public or private utility, person, firm, or
corporation, or to require CITY or any 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 GRANTEE.
D. Notice Related to Rearrangement/Relocation of Facilities
Prior to commencement of any rearrangement of facilities which GRANTEE is
required to make hereunder, GRANTEE shall be given not less than thirty (30) days’ written
notice, which notice shall specify the time that such work is to be accomplished. In the event
that CITY shall change the planned rearrangement/relocation of facilities, or the notice given to
GRANTEE, GRANTEE may require an additional period no fewer than sixty (60) days to
accomplish such work, unless GRANTEE shall waive such additional period in whole or in part.
SECTION 9. SUSPENSION OF OPERATIONS
If, for any reason, GRANTEE suspends operations on PIPELINES, during any
period of suspended operations and while maintenance and REPAIRS are effectuated,
GRANTEE shall maintain its normal pipeline surveillance and safety monitoring processes,
including all cathodic protection systems, to ensure ongoing pipeline integrity. This shall 057915\5883655v9
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continue until such a time as the line is returned to service or abandoned in accordance with this
CRIMSON FRANCHISE. Subject to the foregoing, this will confirm that performing
maintenance or REPAIR of the PIPELINES shall not be construed as suspending operations.
SECTION 10. SAFETY REQUIREMENTS AND REPORTING
A. Conformance with Pressure Piping Code
The PIPELINES and APPURTANCES shall be operated, maintained, replaced or
REPAIRED in accordance with the latest revision of the “American National Standard Code for
Pressure Piping ANSI/ASME B31 4-1979,” American Petroleum Institute Standard 1104, Code
of Federal Regulations, Part 195, Title 49 USC and other applicable standards and codes,
whichever is the most stringent.
B. Conformance with Federal and State Law
The PIPELINES and APPUTENANCES shall be operated, maintained, replaced
or REPAIRED in accordance with all applicable Federal and/or State standards for the
constructing and operation of interstate pipelines as set forth in State or Federal laws, rules or
regulations. Whenever there is a conflict with the Federal or State standards, the more stringent
standard will prevail.
C. Conformance with City Ordinances, Regulations, and Permits
The PIPELINES and APPURTENANCES shall be operated, maintained,
replaced, or REPAIRED in conformity with all applicable CITY ordinances, rules or regulations
(including, without limitation, City’s Standard Plans for Public Works Construction and the
Standard Specifications for Public Works and standard plans for street REPAIR), not in conflict
with Federal or State standards, or as otherwise prescribed by CITY COUNCIL, not in conflict 057915\5883655v9
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with Federal or State standards, and in accordance with the terms and conditions of any permit
issued by the DIRECTOR.
D. Reporting
GRANTEE shall maintain and make reasonably available to CITY upon request
by CITY to inspect all records as may be required by any regulatory authority, including the
California Public Utilities Commission, the California State Fire Marshal, and any other Federal
or State body or official.
Prior to the EFFECTIVE DATE, GRANTEE shall provide, at sole cost of
GRANTEE, to the DIRECTOR, a report verified under oath or penalty of perjury by a duly
authorized officer of GRANTEE, which describes in full the following information:
(i) The length of PIPELINES prescribed in this CRIMSON FRANCHISE;
(ii) The nominal internal diameter of PIPELINES;
(iii) The method used to calculate the ANNUAL FRANCHISE FEE,
including the total amount due to the CITY; and
(iv) Maps or suitable diagrams indicating the accurate “as-built” location and
size of the PIPELINES and contingency plans for any pipeline emergencies.
Should any of the information set forth in the report change at any time during the
FRANCHISE TERM, GRANTEE shall, within sixty (60) days, provide to the DIRECTOR a
report reflecting the changes verified under oath or penalty of perjury by a duly authorized
officer of GRANTEE. CITY reserves the right to revise and to amend the safety and reporting
requirements prescribed in this CRIMSON FRANCHISE in conformity with all rules and
regulations now or hereafter adopted or prescribed by any State or Federal law. 057915\5883655v9
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SECTION 11. INDEMNIFICATION, INSURANCE, AND BONDS
A. Indemnification: Grantee shall indemnify, defend, and hold CITY, CITY
COUNCIL as well as CITY’s boards, commissions, officers, agents, servants, volunteers and
employees harmless from and 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 whatever nature, arising out of GRANTEE’s use of STREETS hereunder or
arising out of any of the operations or activities of GRANTEE pursuant to this CRIMSON
FRANCHISE, whether such damage shall be caused by GRANTEE’s negligence or otherwise,
including reasonable attorneys’ fees regardless of the merit or outcome of any such claim or suit.
B. GRANTEE shall indemnify, defend, and hold harmless CITY, CITY
COUNCIL as well as CITY’s boards, commissions, officers, agents, servants, volunteers and
employees, from and against any and all claims and losses whatsoever, including reasonable
attorney’s fees, accruing or resulting to any and all persons, firms or corporations furnishing or
supplying work, services, materials, equipment, or supplies to GRANTEE or to its contractors in
connection with activities or work conducted or performed pursuant to this CRIMSON
FRANCHISE and arising out of such activities or work, and from any and all claims or losses
whatsoever, including reasonable attorneys’ fees, accruing or resulting to any person, firm or
corporation for damage, injury, or death arising out of GRANTEE’s operations.
C. GRANTEE shall indemnify, defend and hold harmless CITY, CITY
COUNCIL, as well as CITY’s boards, commissions, officers, agents, servants, volunteers, and
employees from and against any and all claims and losses whatsoever, including reasonable
attorney’s fees, for any act in connection with approving this CRIMSON FRANCHISE. 057915\5883655v9
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D. Insurance: GRANTEE at all times during the FRANCHISE TERM shall
maintain insurance for all operations of GRANTEE relating to the operation of PIPELINES
within CITY in the amounts and coverages specified and described in Exhibit “B” attached
hereto and incorporated herein by this reference.
E. Upon request of DIRECTOR, GRANTEE shall file with CITY a bond in
the amount of Seventy-Five Thousand Dollars ($75,000.00) in favor of CITY, in a form
approved by CITY ATTORNEY, to ensure satisfactory REPAIRS of PIPELINES,
APPURTENANCES, STREETS and public and private property. For each additional renewal
period thereafter, the amount of the required bond shall be reviewed and shall be increased based
on the then current pipeline franchise standard. In no event shall the amount of the bond be
reduced below Seventy-Five Thousand Dollars ($75,000.00); provided, however, to the extent all
or any segment of the PIPELINES located in the CITY is, from time to time, removed or
abandoned in accordance with the provisions of this CRIMSON FRANCHISE, the amount of the
bond shall be reviewed by CITY and GRANTEE and shall be reduced in accordance with the
then current pipeline franchise standard.
SECTION 12. DEFAULT
A. Effect of Default
In the event that GRANTEE shall default in the performance of any of the terms,
covenants, and conditions herein and such default is curable, CITY may give written notice to
GRANTEE of such default. In the event that GRANTEE does not commence the work
necessary to cure such default within thirty (30) days after such notice is sent or prosecute such
work diligently to completion, CITY may declare this CRIMSON FRANCHISE forfeited. Upon
giving written notice thereof to GRANTEE, this CRIMSON FRANCHISE shall be void and the 057915\5883655v9
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rights of GRANTEE hereunder shall terminate, and GRANTEE shall execute an instrument of
surrender and deliver the same to CITY. Upon giving notice of such forfeiture to GRANTEE
and the State Fire Marshal, CITY may require GRANTEE to immediately shut off the access
valves to the PIPELINES. Further, CITY may require GRANTEE to effect the removal of
PIPELINES at the sole cost of GRANTEE. In the event GRANTEE does not commence
removal of the facilities within 60 days of receipt of notice from CITY that removal is required,
then CITY may commence removal of such facilities and pursue remedies against GRANTEES,
including but not limited to, the exercise of its rights under any bonds provided under this
CRIMSON FRANCHISE.
B. Force Majeure
In the event GRANTEE is unable to perform any of the terms of this CRIMSON
FRANCHISE by reason of strikes, riots, acts of God, acts of public enemies, or other such cause
beyond its control, it shall not be deemed to be in default or have forfeited its rights hereunder if
it shall commence and prosecute such performance with all deliberate speed.
C. Cumulative Remedies
No provision herein made for the purpose of securing the enforcement of terms
and conditions of this CRIMSON 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 procedures herein provided, in addition to those provided by law, shall be deemed
to be cumulative.
SECTION 13. SCOPE OF RESERVATION
The enumeration herein of specific rights reserved shall not be construed as
exclusive or as limiting such rights as CITY may now or hereafter have in law. 057915\5883655v9
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SECTION 14. NOTICE
Any notice required to be given under the terms of this CRIMSON FRANCHISE,
the manner of services of which is not specifically provided for elsewhere herein, may be served
as follows:
(1) Upon CITY, by serving the City Clerk personally, or by addressing
a written notice to the City Clerk of the City of Culver City, City Hall, 9770
Culver Boulevard, P. O. Box 507, Culver City, California 90232-0507, or at such
address as may be subsequently provided to GRANTEE, and depositing such
notice in the United States mail, postage prepaid or,
(2) Upon GRANTEE, by personal delivery to the Chief Operating
Officer or by addressing a written notice to GRANTEE addressed as follows:
Crimson California Pipeline, L.P.
3780 Kilroy Airport Way, Suite 400
Long Beach, California 90806
Attn: Land Department
and depositing such notice in the United States mail, postage prepaid, or such
other address as may from time to time be furnished in writing by one party to the
other, and depositing said notice in the United States mail.
When the 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.
SECTION 15. SUCCESSORS
The terms herein shall inure to the benefit of or shall bind, as the case may be, the
successors and assigns of the parties hereto. Assignment of this CRIMSON FRANCHISE shall
require the written approval of CITY, which approval shall not unreasonably be withheld. In the 057915\5883655v9
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event GRANTEE wishes to request CITY approval of assignment of this CRIMSON
FRANCHISE, such request shall be made in writing by GRANTEE and shall be accompanied by
the FRANCHISE ASSIGNMENT FEE contained herein. Approval of assignment may be
executed by CITY MANAGER or, in the case CITY MANAGER so determines, referred to
CITY COUNCIL for consideration. This CRIMSON FRANCHISE is granted exclusively to
GRANTEE. CITY may demand proof of financial responsibility of any proposed assignee of
GRANTEE. The provisions of this Section shall not apply to GRANTEE’s assignment of rights,
duties and obligations under this CRIMSON FRANCHISE to any affiliate or subsidiary of
GRANTEE. As used in this CRIMSON FRANCHISE, the term “affiliate” or “subsidiary” shall
mean an entity controlling, controlled by or under common control with the entity to which the
term applies, whether by ownership, contract or voting control. GRANTEE and the entity to
whom the rights are to be assigned shall sign an assignment and assumption agreement whereby
the transferee agrees to be bound by and comply with the terms of this CRIMSON FRANCHISE.
SECTION 16. ACCEPTANCE OF FRANCHISE
This CRIMSON FRANCHISE is granted and shall be held and enjoyed only upon
the terms and conditions herein contained, and GRANTEE must, within thirty (30) days after the
ordinance granting said CRIMSON FRANCHISE becomes effective, file with CITY CLERK a
written acceptance of such terms and conditions. Failure of GRANTEE to file said written
acceptance subjects this CRIMSON FRANCHISE to revocation by CITY upon CITY providing
written notice thereof to GRANTEE.
SECTION 17. COSTS OF LITIGATION
If any legal action is necessary to enforce any provision hereof or for damages by
reason of an alleged breach of any provisions of this CRIMSON FRANCHISE, the prevailing 057915\5883655v9
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party shall be entitled to receive from the losing party reasonable costs and expenses in such
amount as the court or arbitrator may adjudge to be reasonable attorney’s fees and costs incurred
by the prevailing party in such action or proceeding.
SECTION 18. CAPTIONS FOR CONVENIENCE
The captions herein are for convenience and references only and are not a part of
this CRIMSON FRANCHISE and do not in any way limit, define or amplify the terms and
provisions hereof.
SECTION 19. FRANCHISE TO BE STRICTLY CONSTRUED AGAINST
GRANTEE
A. This CRIMSON FRANCHISE is granted upon each and every condition
herein contained and shall ever be strictly construed against GRANTEE.
B. If any section, subsection, sentence or clause or phrase of this ordinance is
for any reason held to be invalid or unconstitutional by the decision of any court of competent
jurisdiction, such decision shall not affect the validity of the remaining portions of this
ordinance. CITY COUNCIL hereby declares that it would have passed this ordinance and each
section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases are declared invalid or unconstitutional.
SECTION 20. GOVERNING LAW
This CRIMSON FRANCHISE has been made and shall be constructed and
interpreted in accordance with the laws of the State of California.
SECTION 21. MEDIATION/REFERENCE
A. If a dispute arises between the parties relating to this CRIMSON
FRANCHISE, the parties agree to use the following procedure prior to using the reference
procedure described in Section 21.B below. A meeting shall be held promptly between the 057915\5883655v9
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parties, attended by individuals with decision-making authority regarding the dispute, to attempt
in good faith to negotiate a resolution of the dispute. If, within thirty (30) days after such
meeting, the parties have not succeeded in negotiating a resolution of the dispute, they agree to
submit the dispute to mediation in accordance with the commercial Mediation Rules of the
American Arbitration Association. GRANTEE shall advance the costs of mediation. The parties
shall jointly appoint a mutually acceptable mediator, seeking assistance in such regard from the
American Arbitration Association if they have been unable to agree upon such appointment
within twenty (20) days from the conclusion of the negotiation period. The parties agree to
participate in good faith in the mediation and negotiations related thereto for a period of thirty
(30) days. Any decision of the mediator shall be supported by written findings of facts and
conclusions of law. The mediator shall apportion the costs of mediation.
B. If the parties are not successful in resolving the dispute through mediation,
the matter shall be heard by a referee pursuant to the provisions of California Code of Civil
Procedure Sections 638 to 645.2, inclusive. The parties hereto shall agree upon a single referee
who shall try all issues of fact, whether at law or in equity (including, but not limited to, specific
enforcement of any provision of this agreement, declaratory relief or injunctive relief), and report
a finding and judgment thereon. If the parties are unable to agree upon a referee, either party
may seek to have one appointed, pursuant to California Code of Civil Procedure Sections 638
and 640. The cost of such proceeding shall initially be borne equally by the parties. However,
the prevailing party shall be entitled, in addition to all other costs, to the costs of the reference as
an item of recoverable costs.
C. Notwithstanding the provisions of this Section 21, either party shall be
entitled to seek declaratory and injunctive relief in any court of competent jurisdiction to enforce 057915\5883655v9
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the terms of this CRIMSON FRANCHISE or to enjoin the other party from an asserted breach
thereof, pending the selection of a referee, on a showing that the moving party would otherwise
suffer irreparable harm.
SECTION 22. EXECUTION
The Mayor of the City shall sign and CITY CLERK shall attest to the passage of
this ordinance. This ordinance shall take effect thirty (30) days from the date of its adoption and
prior to the expiration of fifteen (15) days from the adoption hereof CITY CLERK, pursuant to
Section 616 of the City Charter, shall cause a summary of this ordinance to be published and
shall post in the Office of the City Clerk a copy of the full text of this ordinance along with the
record of the vote thereon.
APPROVED and ADOPTED this _____ day of _____________, 2015.
, Mayor
City of Culver City, California
ATTEST
MARTIN R. COLE,
City Clerk
APPROVED AS TO FORM
CAROL A. SCHWAB
City Attorney 057915\5883655v9
Exhibit A
Page 1
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EXHIBIT “A”
MAPS REFLECTING LOCATION OF PIPELINES
057915\5883655v9
Exhibit B
Page 1
6/4/2015
EXHIBIT “B”
INSURANCE REQUIREMENTS
Without limiting Grantee’s duty to indemnify City, Grantee shall procure and maintain, for the
duration of the Franchise, insurance against claims for injuries to persons or damages to property
that may arise from or in connection with the operation, use, maintenance or any other privilege
exercised under the Franchise:
Minimum Scope/Limits of Insurance
Coverage may be arranged through any combination of primary and excess or umbrella policies
to reach the required minimum limits. Required coverage shall be as follows:
1. Commercial General Liability (CGL): Providing coverage at least as broad as Insurance
Services Office Form CG 00 01 and covering bodily injury, property damage, personal
injury and advertising injury. The CGL policy shall be scheduled under the Excess or
Umbrella policy identified in Paragraph 3, below. This policy shall contain no exclusions
for:
a. Hazards commonly referred to as “XCU,” including explosion, collapse and
underground property damage; or
b. Work performed within 50 feet of a railroad.
2. Business Auto Liability: Providing coverage at least as broad as Insurance Services
Office Form CA 00 01. This policy shall cover “any auto” (symbol “1”). This policy
shall be scheduled under the Excess or Umbrella policy identified in Paragraph 3, below.
3. Excess or Umbrella Liability: Providing coverage at least as broad as specified above for
the CGL and Business Auto coverage, with total limits of not less than $10,000,000 per
occurrence and in the aggregate. Such policy or policies shall include the following
terms and conditions:
a. A drop down feature requiring the policy to respond in the event that any primary
insurance that would otherwise have applied proves to be uncollectable, in whole
or in part, for any reason;
b. Pay on behalf of wording, as opposed to reimbursement;
c. Concurrency of effective dates with primary policies;
d. Policies shall “follow form” to the underlying primary policies; 057915\5883655v9
Exhibit B
Page 2
6/4/2015
e. Insureds under primary policies shall also be insureds under the umbrella or
excess policies.
4. Pollution Legal Liability and/or Asbestos Pollution Legal Liability: Insurance appropriate
to the work being performed, with limits of no less than $35,000,000 per claim or
occurrence. All activities contemplated in this Franchise shall be specifically scheduled
on the policy as “covered operations.” This policy shall specifically provide for a duty to
defend on the part of the insurer. Coverage shall be included on behalf of the insured for
covered claims arising out of the actions of independent contractors. If the insured is
using subcontractors, the policy must include work performed “by or on behalf” of the
insured.
If the Grantee maintains higher limits than the minimums shown above, the City requires and
shall be entitled to coverage for the higher limits maintained by the Grantee.
Other Insurance Provisions
The policies are to contain, or be endorsed to contain, the following provisions:
a. Additional Insured Status (all policies): The City, its officers, officials, employees
and volunteers are to be covered as additional insureds on the CGL, Umbrella and
Pollution policies.
b. Primary Coverage (all policies): For any claims related to this Franchise, the
Grantee’s insurance shall be primary as respects the City, its officers, officials,
employees and volunteers. Any insurance or self-insurance maintained by the
City, its officers, officials, employees or volunteers shall be in excess of the
Grantee’s insurance and shall not contribute with it.
c. Notice of Cancellation (all policies): Each insurance policy required herein shall
state that coverage shall not be cancelled, except after 30 days prior written notice
of reasons for cancellation (other than non-payment of premium) has been given
to the City.
d. Waiver of Subrogation (all policies): Grantee hereby grants to the City a waiver
of any right of subrogation which any insurer of said Grantee may acquire against
the City by virtue of payment of any loss. Grantee agrees to obtain any
endorsement that may be necessary to effect this waiver of subrogation, but this
provision applies regardless of whether or not the City has received a waiver of
subrogation endorsement from the insurer.
Requirements Not Limiting
Requirements of specific coverage features or limits contained in this Exhibit B are not intended
as a limitation on coverage, limits or other requirements, nor as a waiver of any coverage
normally provided by any insurance. Specific reference to a given coverage feature is for 057915\5883655v9
Exhibit B
Page 3
6/4/2015
purposes of clarification only as it pertains to a given issue and is not intended by any party or
insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type.
Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City. The
City may require the Grantee to reduce or eliminate the deductible or retention applicable to this
Franchise or provide satisfactory proof of ability to pay losses and related investigations, claim
administration, and defense expenses within the retention.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best rating of no less than A-:VII,
unless otherwise acceptable to the City.
Timely Notice of Claims
Grantee shall give City prompt and timely notice of claims made or suits instituted that arise out
of or result from Grantee’s performance under this Franchise, and that involve or may involve
coverage under any of the required liability policies.
Claims Made Policies
If the Pollution Legal Liability and/or Asbestos Legal Liability and/or Errors & Omissions policy
provides “claims made” coverage:
a. The Retroactive Date must be shown, and must be before the effective date of this
Franchise.
b. The insurance must be maintained and evidence of insurance must be provided for
at least 5 years after termination of the Franchise.
c. If the policy is cancelled or not renewed, and not replaced with another “claims
made” policy form with a Retroactive Date prior to the effective date of the
Franchise, the Grantee must purchase “extended reporting” coverage for a
minimum of 5 years after termination of the Franchise.
d. A copy of the claims reporting requirements must be submitted to the City for
review.
Verification of Coverage
Grantee shall furnish the City with original certificates and amendatory endorsements or copies
of the applicable policy language providing the insurance coverage required herein. All
certificates and endorsements are to be received and approved by the City before work
commences. However, failure to obtain required documents prior to the work beginning shall
not waive the Grantee’s obligation to provide them. Grantee acknowledges and agrees that any 057915\5883655v9
Exhibit B
Page 4
6/4/2015
actual or alleged failure on the part of the City to inform Grantee of non-compliance with any
insurance requirement imposes no additional obligations on the City nor does it waive any rights
hereunder. The City reserves the right to require complete, certified copies of all required
insurance policies, including the endorsements required herein, at any time.
057915\5883655v9
Exhibit C
Page 1
6/4/2015
EXHIBIT “C”
FRANCHISE FEE CALCULATION
The length of pipe expressed in feet located within the City, rounded to the nearest foot, shall be
multiplied by the applicable CPUC (California Public Utilities Code) base rate (see Table 2
below). The applicable base rate shall be multiplied by the Consumer Price Index (CPI-U), All
Items for the Los Angeles-Riverside-Orange County areas, as published by the United States
Department of Labor, Bureau of Labor Statistics for the month of September immediately
preceding the month in which payment is due and payable, and divided by the Consumer Price
Index for June 30, 1989, which is declared to be 100.0. Under no circumstances shall the
multiplying factor be less than one. Under the CPUC the base rate is adjusted based on CPI
(Consumer Price Index) series ID CUURA421SA0 (see Table 1 below):
Table 1
Consumer Price Index – All Urban Consumers
Original Data Value
Series ID: CUURA421SAO
Not Seasonally Adjusted
Area: Los Angeles-Riverside-Orange County, CA
Item: All items
Base Period: 1982-84=100
Years: 1989 to 2014
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual HALF1 HALF2
1989 124.6 125.5 126.2 127.2 128.3 128.7 129.0 128.9 130.1 130.0 130.0 130.6 128.3 126.8 129.8
1990 132.1 133.6 134.5 134.2 134.6 135.0 135.6 136.3 137.7 138.7 138.9 139.2 135.9 134.0 137.7
1991 140.0 139.9 139.7 140.7 140.8 140.8 141.5 141.7 142.6 142.9 143.5 143.1 141.4 140.3 142.6
1992 144.3 144.9 145.5 145.8 146.0 146.2 146.7 146.9 147.4 148.4 148.2 148.2 146.5 145.5 147.6
1993 149.2 150.0 149.8 149.9 150.1 149.7 149.8 149.9 150.2 150.9 151.6 151.9 150.3 149.8 150.7
1994 152.2 152.2 152.5 152.0 151.4 151.3 151.7 152.0 152.7 153.4 152.9 153.4 152.3 151.9 152.7
1995 154.3 154.5 154.6 154.7 155.1 154.8 154.5 154.4 154.6 155.2 154.4 154.6 154.6 154.7 154.6
1996 155.7 156.2 157.3 157.7 157.5 156.7 157.6 157.3 158.2 158.8 158.4 158.3 157.5 158.9 158.1
1997 159.1 159.2 159.8 159.9 159.5 159.4 159.5 159.7 160.5 161.1 160.7 161.2 160.0 159.5 160.5
1998 161.0 161.1 161.4 161.8 162.3 162.2 162.1 162.6 162.6 163.2 163.4 163.5 162.3 161.6 162.9
1999 164.2 164.6 165.0 166.6 166.2 165.4 165.8 166.3 167.2 167.2 167.1 167.3 166.1 165.3 166.8
2000 167.9 169.3 170.7 170.6 171.1 171.0 171.7 172.2 173.3 173.8 173.5 173.5 171.6 170.1 173.0
2001 174.2 175.4 176.2 176.6 177.5 178.9 178.3 178.4 178.8 178.3 178.1 177.1 177.3 176.5 178.2
2002 178.9 180.1 181.1 182.2 182.6 181.9 182.2 183.0 183.4 183.7 184.0 183.7 182.2 181.1 183.3
2003 185.2 188.5 188.2 187.6 186.4 186.3 186.3 186.9 188.2 187.8 187.1 187.0 187.0 186.7 187.2
2004 188.5 190.1 191.5 191.9 193.3 193.7 193.4 193.1 194.5 196.3 196.9 195.2 193.2 191.5 194.9
2005 195.4 197.4 199.2 201.1 201.5 200.7 201.4 203.1 205.8 206.9 205.6 203.9 201.8 199.2 204.5
2006 206.0 207.5 208.5 210.5 212.4 211.1 211.4 211.9 212.9 211.4 211.1 210.6 210.4 209.3 211.6
2007 212.584 214.760 216.500 217.845 218.596 217.273 217.454 217.330 217.697 218.696 219.943 219.373 217.338 216.260 218.416
2008 220.918 221.431 223.606 224.625 226.651 229.033 229.886 228.484 227.449 226.159 222.229 219.620 225.008 224.377 225.638
2009 220.719 221.439 221.376 221.693 222.522 223.906 224.010 224.507 225.226 225.264 224.317 223.643 223.219 221.943 224.495
2010 224.610 224.620 225.483 225.916 226.438 225.877 225.991 226.373 226.048 226.794 225.941 226.639 225.894 225.491 226.298
2011 228.652 229.729 232.241 233.319 233.367 232.328 231.303 231.833 233.022 233.049 232.731 231.567 231.928 231.606 232.251
2012 233.441 234.537 236.941 236.866 237.032 236.025 235.776 237.222 238.104 240.111 237.675 236.042 236.648 235.807 237.488
2013 238.015 239.753 239.995 239.043 239.346 239.223 238.920 239.219 239.611 239.940 238.677 238.742 239.207 239.229 239.185
2014 239.857 241.059 242.491 242.437 243.362 243.528 243.727 243.556 243.623 242.122
057915\5883655v9
Exhibit C
Page 2
6/4/2015
Table 2
CPUC 1989 Table
Pipe Size (internal diameter in inches)
Base rate per lineal foot
0 – 4 $0.088
6 0.132
8 0.176
10 0.220
12 0.264
14 0.308
16 0.352
18 0.396
20 0.440
22 0.484
24 0.528
26 0.572
28 0.616
30 0.660
Formula for Franchise Fee Calculations:
• CPI Adjustment = Current Year CPI / Original Year (June 30, 1989) CPI (from
Table 1).
• Payment Amount = Linear Feet of Pipe x CPUC Base Rate (from Table 2) x CPI
Adjustment:
1. 1,186 feet of 10” pipe:
CPI Adjustment = 243.623 / 128.7 = 1.893
Payment Amount = 1,186 x $0.220 x 1.893 = $493.92
2. 1,588 feet of 12” pipe:
CPI Adjustment = 243.623 / 128.7 = 1.893
Payment Amount = 1,588 x $0.264 x 1.893 = $793.60
Franchise Fee for 2015: $1,287.52 057915\5883655v9
Table of Contents
Page i
6/4/2015
T A BLE OF CONTENTS
Page
SECTION 1. CLARIFICATION, ASSIGNMENT, AND GRANT OF FRANCHISE........... 4
SECTION 2. GENERAL TERMS AND CONDITIONS OF FRANCHISE ........................... 6
A. Grant of Franchise ...................................................................................................... 6
B. Appurtenances ............................................................................................................ 7
SECTION 3. COMPENSATION TO CITY ............................................................................... 7
SECTION 4. ROUTINE MAINTENANCE AND REPAIR ................................................... 10
SECTION 5. UNPLANNED MAINTENANCE AND REPAIRS........................................... 12
SECTION 6. EMERGENCY MAINTENANCE AND REPAIRS ......................................... 12
SECTION 7. REMOVAL OR ABANDONMENT OF FACILITIES .................................. 13
A. Application to DIRECTOR ...................................................................................... 13
B. Determination of DIRECTOR .................................................................................. 14
C. Failure to Properly Abandon .................................................................................... 14
SECTION 8. REARRANGEMENT/RELOCATION OF FACILITIES ............................... 15
A. Expense of GRANTEE ............................................................................................... 15
B. Expense of Others ....................................................................................................... 15
C. Rearrangement/Relocation of the Facilities of Others ............................................... 16
D. Notice Related to Rearrangement/Relocation of Facilities ...................................... 16
SECTION 9. SUSPENSION OF OPERATIONS .................................................................. 16
SECTION 10. SAFETY REQUIREMENTS AND REPORTING ......................................... 17
A. Conformance with Pressure Piping Code ................................................................... 17
B. Conformance with Federal and State Law ................................................................. 17
C. Conformance with City Ordinances, Regulations, and Permits ................................. 17 057915\5883655v9
Table of Contents
Page ii
6/4/2015
D. Reporting .................................................................................................................. 18
SECTION 11. INDEMNIFICATION, INSURANCE, AND BONDS .................................. 19
SECTION 12. DEFAULT ........................................................................................................ 20
A. Effect of Default ......................................................................................................... 20
B. Force Majeure ............................................................................................................. 21
C. Cumulative Remedies ................................................................................................. 21
SECTION 13. SCOPE OF RESERVATION ........................................................................... 21
SECTION 14. NOTICE ............................................................................................................ 22
SECTION 15. SUCCESSORS ................................................................................................... 22
SECTION 16. ACCEPTANCE OF FRANCHISE ................................................................... 23
SECTION 17. COSTS OF LITIGATION .............................................................................. 23
SECTION 18. CAPTIONS FOR CONVENIENCE .............................................................. 24
SECTION 19. FRANCHISE TO BE STRICTLY CONSTRUED AGAINST GRANTEE . 24
SECTION 20. GOVERNING LAW ........................................................................................ 24
SECTION 21. MEDIATION/REFERENCE .......................................................................... 24
SECTION 22. EXECUTION ..................................................................................................... 26
Culver City Franchise
0 200 100
Feet
Legend
Shell 10" Pipeline
City Limits BoundaryCulver City Franchise
0 200 100
Feet
Legend
Union 12" Pipeline
City Limits BoundaryCulver City Franchise
0 600 300
Feet
Legend
Union 12" Pipeline
City Limits Boundary