CC RESOLUTION 2367RESOLUTION NO. 2367
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF EL SEGUNDO, CALIFORNIA,
DECLARING ITS INTENTION TO GRANT A
FRANCHISE TO SHELL OIL COMPANY, A
CORPORATION, FOR A TERM OF TWENTY -
FIVE (25) YEARS TO LAY, CONSTRUCT,
MAINTAIN AND OPERATE A PIPELINE SYS-
TEM CONSISTING OF A SINGLE LINE OF PIPE
NOT TO EXCEED TWELVE (12) INCHES IN
INTERNAL DIAMETER FOR THE PURPOSE OF
TRANSPORTING AVIATION JET FUEL ALONG
CERTAIN PORTIONS OF CERTAIN PUBLIC
STREETS WITHIN SAID CITY.
WHEREAS, Shell Oil Company, a corporation, has hereto-
fore by written application dated December 21, 1970, petitioned and applied
to the City Council of the City of E1 Segundo, California, to offer for sale and
to sell in the manner provided by law, the franchise hereinafter referred to;
and
WHEREAS, said petition and application was referred to the
Public Works Department by the City Manager for its study and recommenda-
tion to said Council; and
WHEREAS, said Public Works Department has now made its
report to this Council recommending that said franchise be awarded said
applicant in accordance with said application and the terms and conditions
of this resolution; and
WHEREAS, Shell Oil Company, a corporation, shall deposit
with the City Treasurer the sum of $2, 500. 00 to cover the administrative
expenses of the City incurred in connection with this franchise and the additional
sum of $1, 500. 00 to cover the inconvenience to the City for disruption of streets
within private easements, and the further sum of $500. 00 to cover the expenses
of publications incurred in connection with the granting of this franchise. If
said deposit of $500. 00 should not be sufficient to cover the expenses of publi-
cation, grantee agrees to pay the balance of the publication costs within thirty
days after the City furnishes grantee with a written statement of the expenses.
Should the expenses of publication be less than the $500. 00 deposited for publi-
cation expenses, the City agrees to refund to Shell Oil Company the difference
i P-i /i
between the publication costs and $500. 00.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF
EL SEGUNDO, CALIFORNIA, DOES RESOLVE, DECLARE AND DETERMINE
AS FOLLOWS:
FIRST: That the said petition and application of said Shell Oil
Company, dated December 21, 1970, hereinabove referred to, be and the
same is hereby ordered placed on file in the office of the City Clerk of said
City and open to public inspection for the purposes of identification and reference.
SECOND: That it is proposed to grant said franchise, and that the
character of said franchise so proposed to be granted and the terms, provisions,
conditions and restrictions thereof are all as indicated, set forth and described
in the following form of "NOTICE OF SALE OF FRANCHISE TO LAY A SINGLE
LINE OF PIPE FOR THE TRANSPORTATION OF AVIATION JET FUEL ", to wit:
"NOTICE OF SALE OF FRANCHISE TO LAY A SINGLE
LINE OF PIPE FOR THE TRANSPORTATION OF
AVIATION JET FUEL.
"TO WHOM IT MAY CONCERN:
"Notice is hereby given that an application has been made
to the City Council of the City of El Segundo, County of Los Angeles,
State of California, for a franchise granting the right to lay and con-
struct, and for a period of not to exceed twenty -five (25) years to
maintain and operate, a pipeline system consisting of a single line
of pipe, not to exceed twelve inches (12 ") in internal diameter, for
the purpose of transporting aviation jet fuel along those certain por-
tions of the streets of the City of El Segundo hereinafter described;
and that it is proposed by the said City Council of the City of E1
Segundo to sell to Shell Oil Company, a corporation, a franchise
upon the terms and conditions hereinafter contained. The franchise
is described as follows, to wit:
"A franchise to lay, construct, and for a period not to exceed
twenty -five (25) years, and as hereinafter provided, to operate, main-
tain, renew, remove and /or abandon in place a pipeline system con-
-2-
"sisting of a single line of pipe not to exceed twelve inches (12 ") in
internal diameter for the purpose of transporting aviation jet fuel,
together with all manholes, valves, service connections and appur-
tenances necessary and convenient to properly maintain and operate
said pipeline, including facilities necessary for cathodic protection
of said pipeline, in, under, along and across those certain streets
of the City of E1 Segundo hereinafter described on the attached
Exhibit "A ".
"That the terms and conditions upon which said franchise will
be offered for sale are the following:
"That the term of said franchise shall be for a period of twenty-
five (25) years from and after the date of granting such franchise.
"That franchise is granted and shall be held and enjoyed only
upon the terms and conditions herein contained, and that the grantee
must, within thirty (30) days after the passage of this franchise, file
with the clerk of the City Council a written acceptance of the terms
and conditions herein expressed. The word "Grantee" whenever
used herein shall be held to include the grantee or grantees, his, her,
its, or their, successors or assigns.
"The grantee of said franchise shall in good faith commence
the work of constructing said pipeline system within not more than
one (1) year from the date of granting this franchise, and said work
shall be prosecuted diligently thereafter and in good faith, and if not
so commenced within said time said franchise so granted shall be
declared forfeited.
"That the grantee shall have the right to construct and main-
tain such traps, manholes, valves, appliances and attachments as
may be necessary and convenient to properly maintain and operate
the pipeline laid and constructed under said franchise, including all
facilities necessary to provide cathodic protection for the pipeline,
and said traps, manholes, appliances, and attachments, shall at all
times be kept flush with the surface of the highway and so located as
-3-
"to conform to any order of the City Council in regard thereto,
and not to interfere with the use of the highway for travel. The
grantee shall have the right, subject to such regulations as are
now, or may hereafter be, in force, to make all necessary exca-
vations in said highway for the construction and repair of said
pipeline, traps, manholes, appliances, and attachments.
"If the said pipe shall be laid along any paved highway in
the City of E1 Segundo, it shall be placed as close as reasonably
possible to the edge of the pavement so as not to unreasonably
disturb the paved surface. In the event it is necessary to break
pavement to lay said pipe, grantee shall apply for, and City shall,
upon payment of the required fees, grant a permit, which permit
shall specify the manner in which the pipe or conduit shall be laid;
and the repair of the highway, after the pipe has been laid, shall be
made promptly by the grantee, at the expense of the grantee and
to the satisfaction and approval of the City Engineer, and in the
event of its failure so to do, this franchise shall thereupon be sub-
ject to forfeiture.
"All pipe, pipeline, traps, manholes, attachments, and
appliances constructed or maintained under the provisions of said
franchise shall be constructed and maintained in accordance with,
and in conformity with, all the ordinances, rules, and regulations
now or hereafter adopted or prescribed by the City Council of the
City of E1 Segundo, County of Los Angeles, State of California; pro-
vided, however, that all pipe and pipeline laid under said franchise
shall be of first class material and subject to the approval of said
City Engineer; and provided further, no pipeline laid hereunder
shall exceed twelve inches (12 ") in internal diameter.
"All excavations for laying, moving or repairing, said pipe-
line and appurtenances shall be done in such manner as not to inter-
fere with the free use of the streets by the public, except such tem-
porary interference as may be reasonably necessary or incident to
-4-
"the proper prosecution of said work. That all excavation shall be
made and refilled in strict compliance with the ordinances, resolu-
tions and orders of the City of El Segundo, that may be in force at
the time of the performance of such work. That the grantee of said
franchise shall make such deposits of money with the City Treasurer
or such other officer of said City as may be designated by such ordi-
nances, resolutions, orders, or otherwise by law, and as may be
from time to time required from persons making excavations in the
streets of said City, for the purpose of insuring the restoration of
all streets to a good and perfect condition along such excavations.
That before the work of laying said pipe is commenced, the grantee
of said franchise or assigns, shall file with the City Engineer of said
City complete plans showing the location of said pipeline in the streets
and the location of all manholes, traps, and other appliances, and
attachments, as may be necessary for the purpose of safely and effi-
ciently operating and maintaining said pipeline. That the granting of
such franchise shall not be construed to relieve said grantee from the
provisions of any order, ordinance, or law, that may be in force at
the time requiring applications to be made and obtained for excava-
tions in streets before such work can be done. That the location of
said pipeline in streets or portions of streets shall be subject to the
approval of the City Engineer of said City, who shall have the power
to give such directions for the location of said pipes as may be neces-
sary to avoid sewers, water pipes, and other conduits, or structures,
in or under said streets, or portions of streets, within the boundary
of the City of E1 Segundo, hereinabove described, where said pipe-
line is to be laid.
"That the work of laying down and constructing said pipeline
shall be done to the satisfaction of the City Engineer of the City of
E1 Segundo, and subject to his inspection and shall be equipped with
gate valves and other protective devices as may be required from
time to time.
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"That as soon as the laying or repairing of any pipe or appli-
ance is completed, all portions of the streets which have been exca-
vated or otherwise injured thereby shall be placed in as good condi-
tion as the same was before the laying of such pipe, and to the satis-
faction of the said City Engineer. That any damage or injury suffered
by any person or property by reason of any negligence on the part of
grantee, its agents, servants and employees, or which results from
any excavation being improperly guarded during such work shall be
borne by the grantee of said franchise, and grantee shall indemnify
and save the City, its officers, servants, agents and employees, harm-
less therefrom.
"That the City of E1 Segundo reserves the right to change the
grade of any highway over that portion of the City of El Segundo over
which said franchise is granted, or to locate or relocate municipal
water pipes, sewer lines or other municipal subsurface installations,
and that grantee shall, within 30 days after demand by City, start to
change the location of all pipes, conduits, traps, manholes, appli-
ances and attachments laid, constructed or erected hereunder, so as
to conform to such change of grade, or such location or relocation of
subsurface installations, and proceed diligently to complete such re-
location, all at the grantee's own expense, and in case the grantee
shall fail to comply with the instructions given therefor, the City of
El Segundo may cause the work required to be done and shall keep
an itemized account of the cost thereof, which the said grantee by
the acceptance of said franchise shall agree to pay immediately upon
its being presented to said grantee.
"That if any street or portion thereof along, across, or under
which said pipeline or appurtenances shall be laid shall be damaged
by reason of any leak or leaks, or by reason of any other cause arising
from the operation or extension of such pipeline under such street or
portion thereof, then grantee shall at his or its own cost and expense
immediately repair any and all such damage and restore said street
Q:3
"or portion thereof to as good condition as before such leak or
cause of damage occurred, such work to be done under the direc-
tion of said City Engineer, and to his satisfaction.
"The grantee shall not commence the construction of any
pipelines or appurtenances under the provisions of this franchise
until it shall first have obtained permit from the City Engineer so
to do. Such permit shall be granted upon application of the grantee,
which application shall show the highway upon which it is proposed
to construct or lay the pipe, the length of the pipe proposed to be
constructed or laid on the highway, the size and description of the
pipe intended to be used, and such other facts as said City Engineer
may require. Each application for a permit filed hereunder shall be
accompanied by a fee for the laying of such pipeline which fee shall
be at the rate of One Thousand Five Hundred Dollars ($1, 500. 00) per
mile, or major fraction thereof, and Seven Hundred Fifty Dollars
($750. 00) for each one -half mile or less, for all pipe proposed to be
laid under such application and permit, and within ninety (90) days
after the completion of the construction authorized by said permit the
grantee shall render a report to the City of E1 Segundo showing in
detail the total length of pipe actually laid under said permit, and
the grantee shall accompany said report with the balance, if any,
which may be payable to said City for all lines of pipe so actually
laid, at the rates above stated.
"The grantee of this franchise shall have the right during the
period for which this franchise is granted to transport aviation jet
fuel through said pipeline.
"The provisions of said franchise and all rights, obligations
and duties thereunder shall inure to and be binding upon the grantee,
his, its, or their successors, or assigns.
"That said grantee shallduring the life of said franchise, pay
to the City of El Segundo, in lawful money of the United States, an
annual franchise fee in an amount agreed upon by the applicant and
-7-
"the City computed as follows: one cent (1�) per inch of internal
diameter for each lineal foot of pipeline installed, but not less
than eight cents (8�) per lineal foot, provided, however, that the
amount of each annual payment shall be revised at the time of pay-
ment in accordance with the following formula:
a) The 'Average Wholesale (Primary Market) Price Index,
All Commodities', prepared by the United States Bureau of Labor
Statistics, Department of Labor, for the calendar year 1968 shall
be taken as the base upon which the above franchise fee is com-
puted.
b) If the said index for the last calendar month ending
more than ninety (90) days prior to the date upon which payments
to the City shall be due, shall stand at other than said average
1968 rate, then the rate of payment to the City shall vary from
said hereinabove rates in direct proportion as said index has in-
creased or decreased from the 1968 average.
c) If said Bureau shall revise the said index, the parties
hereto shall accept the method of revision or conversion recom-
mended by the said Bureau.
d) If said Bureau shall discontinue the preparation of a
wholesale price index using prices prevailing in the years 1957-
59, inclusive, as a base of 100, and if no transposition table pre-
pared by said Bureau is available which is applicable to said years
of 1957 -59, inclusive, then the amount of each annual payment shall
be at the amount last computed by the above formula.
"Such franchise shall be forfeited upon any failure, refusal or
neglect of said grantee to make any such payments. Said annual pay-
ment shall be accompanied by a statement, verified by the oath of a
duly authorized representative of the grantee showing (so long as re-
quired by Section 6299 of the Public Utilities Code of the State of
California) the gross receipts of the grantee for the preceding calen-
dar year arising from the use, operation or possession of said fran-
"chise.
"Any neglect, failure, or refusal, by said grantee to file
said verified statement, or to pay the said percentage of the gross annual
receipts or to pay the franchise fee herein reserved shall there-
upon immediately ipso facto effect a forfeiture thereof, and the
said City, by its City Council, may thereupon declare said fran-
chise forfeited, and may exclude the grantee from any further use
of the public highways, streets or alleys, included in said fran-
chise, and said grantee shall thereupon and immediately surrender
all rights in and to the same, and this franchise shall be deemed
and shall remain null, void, and of no effect; provided, however,
the neglect, failure, or refusal of the grantee to file a verified
statement of the percentage of gross annual receipts shall not
effect a forfeiture of this franchise if the City Council determines
that such condition may be waived and Section 6300 of the Public
Utilities Code of the State of California is amended to permit the
omission of such report.
"The grantee shall not sell, transfer or assign this fran-
chise or the rights or privileges granted thereby without the con-
sent of the City Council, nor shall the franchise or the rights or
privileges be sold, transferred or assigned, except by a duly exe-
cuted instrument in writing filed in the office of the City Council
of the City of E1 Segundo, and nothing in the franchise contained
shall be construed to grant to said grantee any right to sell, trans-
fer or assign the franchise or any of the rights or privileges granted
except in the manner aforesaid.
"The grantee shall, by acceptance of any franchise, agree to
complete the initial installation of a pipeline within the time speci-
fied in the Permit to Excavate and shall pay liquidated damages in
the sum of Two Hundred Dollars ($200. 00) per day for each day
construction extends beyond the time specified in the Permit to Exca-
vate.
"The grantee shall be privileged to open the street for
line testing, without penalty, on two days each year.
"The grantee shall be permitted to open the street to re-
pair his lines, provided he first obtains a permit from the City
Engineer and pays the customary charges and sets forth an agreed
upon reasonable number of days within which said work is to be
completed. In the event said work is not completed within the
agreed upon number of days, the grantee shall pay Two Hundred
Dollars ($200. 00) per day as liquidated damages for each day that
the street is open beyond the period of time expressed in the permit.
"NOTICE IS HEREBY GIVEN that a public hearing will be
held by the City Council of the City of El Segundo, California, con-
cerning the granting of said franchise and all persons having any
objections to the granting thereof may appear before the City Council
and be heard thereon. Said public hearing will be held by the City
Council of the City of El Segundo, California, at the hour of 7 :00 P.M.
on Monday the 8th day of March, 1971, in the Council Chamber of
the City Hall of said City, located at 350 Main Street, in the City of
El Segundo, County of Los Angeles, State of California.
"NOTICE IS HEREBY FURTHER GIVEN, that the grantee of
said franchise must, within thirty (30) days after the award of said
franchise, file with the City Clerk of said City of El Segundo a bond
running to the said City of El Segundo and at all times thereafter
maintain in full force and effect, an acceptable corporate surety
bond, in the amount of Fifty Thousand Dollars ($50, 000. 00), effec-
tive for the entire term of the franchise, and conditioned that in the
event the grantee shall fail to comply with any one or more of the
provisions of the franchise, then there shall be recoverable jointly
and severally from the principal and surety of such bond, any dam-
ages suffered by the City as a result thereof, including the full
amount of any compensation, indemnification, or cost of removal
or abandonment of property, up to the full amount of the bond;
-10-
"said condition to be a continuing obligation for the duration of
the franchise and thereafter until the grantee has liquidated all
of its obligations with the City that may have arisen from the
acceptance of this franchise by the grantee or from its exercise
of any privilege herein granted.
"Neither the provisions of this paragraph, any bond accepted
by the City pursuant thereto, nor any damages recovered by the
City thereunder shall be construed to excuse faithful performance
by the grantee or to limit the liability of the grantee under the fran-
chise or for damages, either to the full amount of the bond or other-
wise.
"By the order of the City Council of the City of El Segundo,
County of Los Angeles, State of California, dated this 8th day of
February, 1971.
/ S / Jane D. Hough
City Clerk of the City of El Segun o,
California. "
THIRD: That the City Clerk of said City is hereby authorized
and instructed to advertise the fact of said application, together with a state-
ment that it is proposed to grant the same. Said advertisement or notice
shall be in the form of "NOTICE OF SALE OF FRANCHISE TO LAY A SINGLE
LINE OF PIPE FOR THE TRANSPORTATION OF AVIATION JET FUEL"
hereinabove set forth in section "SECOND" of this resolution. Said City Clerk
shall cause said notice of advertisement to be published once, not later than
fifteen (15) days after the adoption of this resolution, in the El Segundo Herald,
a weekly newspaper of general circulation published and circulated within said
City of E1 Segundo and which said newspaper is hereby designated for that pur-
pose.
FOURTH: That the City Clerk shall certify to the passage and
adoption of this resolution; shall cause the same to be entered in the book of origi-
nal resolutions of said City, and shall make a minute of the passage and adoption
thereof in the records of the proceedings of the City Council of said City of the
meeting at which the same is passed and adopted.
-11-
s 050
FIFTH: That this resolution shall remain inoperative unless
Shell Oil Company makes the deposits of $2, 500. 00, $1, 500. 00 and $500. 00
on or before February 9, 1971, at 5:00 P. M. The deposit of $1, 500. 00 shall
be refundable if the franchise is not granted.
1971.
ATTEST:
(SEAL)
i
SIXTH: That this resolution shall take effect immediately.
PASSED, APPROVED and ADOPTED this 8th day of February,
City Clerk
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STATE OF CALIFORNIA,
1
COUNTY OF LOS ANGELES, ) SS
CITY OF EL SEGUNDO. )
I, JANE D. HOUGH, City Clerk of the
City of E1 Segundo, California, DO HEREBY CERTIFY that the
whole number of members of the City Council of the said City
is five; that the foregoing Resolution, being Resolution No. 2367
was duly passed and adopted by the said City Council, approved
and signed by the Mayor of said City, and attested by the City
Clerk of said City, all at a regular meeting of the said Council
held on the 8th day of February , 1971
and that the same was so passed and adopted by the following vote:
AYES: Councilmen Balmer, Frederick, Naafi a„r, Mayo-r
Stephens;
NOES: Councilmen McGill:
ABSENT: Councilmen None.
WITNESS my hand and the official seal of said City
this 18th day of February , 197 1
O•
qty Clerk oTTFe city oVE1 Segundo
California
(SEAL)