HomeMy WebLinkAboutChevron USA, Inc. - 1990-03-05 ,6 ob, a->
( (�
RE UES FOR CITY COUNCIL �CTI y
Date December 3, 1990 :-:
Submitted to: �' ._
Honorable Mayor and City Council 7
Submitted by: Michael T. Uberuaga, City Administrator �- -- "rn
`
. :mac,
Prepared by: Louis F. Sandoval, Director of Public Works APPROVED
Y CI-By co i •
Subject: BLUFF TOP PARK IMPROVEMENTS, PHASE V; CC-780 ' :�
Consistent with Council Policy? [x] Yes [ ] New Policy or Excepti CT y cx,LV;K.
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments:_
STATEMENT OF ISSUE:
American Landscape Companies, the contractor landscaping the bluffs along the ocean
side of Pacific Coast Highway north of Golden West Street is-requesting from the City a
total of $96,678.00, $39,424.00 of which is for "downtime" and $57,254.00 to repair
damages incurred to their landscaping project during Chevron's oil well abandonment
operations.
RECOMMENDATIONS:
1. Authorize the Deputy City Administrator/Administrative Services to offer to resolve
the dispute with Chevron by deducting $76,966.00 from the balance due Chevron
U.S.A. under the agreement to abandon well sites in order to cover the costs of
downtime and damages incurred by American Landscape Company, and to release
funds due Chevron upon receipt of a signed satisfaction and release from Chevron
U.S.A., approved as to form by the City Attorney and approved by the City
Administrator. The $76,966.00 is the sum of the $57,254.00 of landscape damage
repair plus $19,712.00, one-half of the $39,424.00 of "downtime" damages.
2. Authorize the Director of Public Works to expend an additional $50,000.00 for
landscape project change orders and other contingencies.
3. Authorize the Deputy City Administrator/Administrative Services to reappropriate
$50,000.00 for increased contingencies from funds budgeted for this project in fiscal
year 1990 (see Attachment C).
ANALYSIS:
On February 5, 1990, Council awarded a construction contract (Phase V) to American
Landscape Companies to landscape the bluffs along the ocean side of Pacific Coast
Highway north of Golden West Street. Shortly after construction began, the City and
Chevron U.S.A. entered into an agreement to abandon all Chevron oil wells along the
project site. In accordance with the agreement, Chevron immediately started the
abandonment of their wells. As a result of conflicting work and the priority of the well
abandonment, American Landscape Companies was forced to "pull-off" the job.
Request for Council Action
Bluff Top Park Improvements; Phase V
December 3, 1990
Page 2
Chevron U.S.A. has completed the abandonment of their oil wells and American Landsape
Companies could resume construction of the landscape improvements. However, they are
hesitant to do so until a change order is issued, covering "downtime" and damage costs
incurred to their landscaping project. Damage costs are the result of damage to landscape
improvements in the course of well abandonment.
The Director of Public Works, in two letters (see Attachments A & B) to Chevron U.S.A.,
has suggested that Chevron and the City share equally the cost of American Landscape's
"downtime" because of the priority given to the well abandonment and that Chevron bear
the entire expense for damages caused by their contractor during the abandonment
operations. Chevron has been given detailed and documented information, including
photographs of the damages. City staff has met with Chevron Oil representatives on two
separate occasions to resolve this matter to no avail. Chevron is unwilling to split the
"downtime" costs since they claim those costs are the responsibility of the City. Chevron
will not offer any more than $46,000 for the damages claiming they are responsible for
only those areas immediately adjacent to their wells. We cannot expect American
Landscape to resume operations until this matter is resolved. Furthermore, the City now
runs the risk of losing the grant funds for this project because of continuing delays.
Therefore, the Director of Public Works recommends that Council authorize the Deputy
City Administrator/Administrative Services to deduct $76,966.00 ($57,254 + $19,712)
from the balance due Chevron U.S.A. to cover the cost of repairing all the damages and
"downtime" expenses.
On a separate issue, Council on February 5, 1990, authorized the Director of Public Works
to expend no more than $50,000 for construction contingencies on the project. However,
the cost of Bluff Top Park Improvement Phase V project change orders at the time
American Landscape's "pull—off" totaled $52,000. By the time the landscaping project is
completed, it is anticipated that construction change orders and other contingencies could
exceed $100,000, therefore, it is recommended that the amount be increased an additional
$50,000.
FUNDING SOURCE:
"Downtime" and Repair of Damages
Per an agreement approved by City Council on March 5, 1990, the City is to pay Chevron
U.S.A. a sum not to exceed $650,000 toward the abandonment of twenty—five well sites.
To date, Chevron U.S.A. has received payments totalling $200,000. Deducting Chevron's
share of the "downtime" plus the cost of repairing damages leaves a balance of
$373,034.00 due Chevron.
Change Orders (i.e. Construction Contingencies)
Sufficient revenues were budgeted in fiscal year 1990; however, the unencumbered project
balance was not carried forward to the current fiscal year. Therefore, the Deputy City
Administrator/Administrative Services must be authorized to reappropriate $50,000.00
from the unappropriated Park Acquisition and Development Fund.
Request for Council Action
Bluff Top Park Improvements; Phase V
December 3, 1990
Page 3
ALTERNATIVE ACTION:
Forego the deduction of $76,966.00 from the balance due Chevron U.S.A. and increase the
reapportionment from the unappropriated Park Acquisition and Development Fund as
needed.
ATTACHMENTS:
FIS
Attachment A - Letter to Chevron dated 9/19/90
B - Letter to Chevron dated 10/5/90
C - Request for Council Action dated 2/5/90
LFS:DRN:lb
2599g/4-6
CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
- HUNTINGTON BEACH
To MICHAEL T. UBERUAGA From ROBERT J. FRANZ
City Administrator Deputy City Administrator
Subject REQUEST FOR APPROPRIATION Date OCTOBER 23, 1990
• TO REALLOCATE FUNDS FOR
BLUFF TOP PARK IMPROVEMENTS
FIS 90-40 •
As requested under the authority of Resolution 4832, a Fiscal Impact Statement has been
prepared and submitted relative to the proposed re-appropriation of funds from last year's
budget to provide for anticipated contractual contingencies on Phase V of the Blufftop Park
Improvement Project. Estimates are that an appropriation of $50,000 would be adequate for
• this purpose.
An affirmative response by the City Council would reduce the unaudited, undesignated
balance of the City's Park Acquisition and Development Fund to $348,669.
JI1AIIIt
ROBERT J. -RANZ
Deputy City Administra or
RJF:sd
•
5494j
_. ,
- -
. 1 II J1
r ` n
• CITY OF HUNTINGTON BEACH1.9 2000 MAIN STREET P. O. BOX 190 CALIFORNIA 92648
Louis F. Sandoval Public Works Department
Director (714) 536-5431
September 19, 1990
Mr. Dave Holtebeck
Chevron U.S.A. Inc.
646 County Square Drive
Ventura, CA 93006
Subject: Removal of Oil Wells along ocean side of Pacific Coast Highway
bear Mr. Holtebeck:
On February 5, 1990, the Huntington Beach City Council awarded a construction contract
to American Landscape Companies to provide and install landscape improvements along
the ocean side of Pacific Coast Highway north of Golden West Street. Subsequent to this
action, Chevron U.S.A. Inc. and the City of Huntington Beach entered into an agreement
to abandon twenty—five Chevron wells along this same stretch of highway.
In accordance with this agreement, Chevron began the removal of wells immediately. This
action resulted in a "pull off" by American Landscape Companies, and in damage to
numerous existing improvements from the heavy equipment utilized by Chevron during the
well abandonment procedures. As a result, American Landscape is requesting $29,968.00
for "downtime" (see attachments A & B) and $57,254.00 to repair said damages (see
attachment C).
After reviewing these requests in light of our agreement, I believe it would be appropriate
for the city and Chevroi to split the cost of the "downtime" charges. However, I could not
in good conscience recommend that the City participate in the cost of repairing the
damages. Please review these costs, at your earliest convenience, and contact me
regarding Chevron's position in this matter.
Very truly you ,
rze. Louis F. S ndoval -
•
cc: Robert Eichblatt, City Engineer
Tom Blackburn, Chief Public Works Inspectbr -r
Don Noble, Contracts Administrator
CC-780 "General Correspondence"
LFS:DN:eh
Attachments
1 r r'_
AelIVj,,r 1'L ,1
*1 CITY OF HUNTINGTON BEACH
2000 MAIN STREET P. O. BOX 190 CALIFORNIA 92648
Louis F. Sandoval Public Works Department
Director (714) 536-5431
October 5, 1990
Mr. Dave Holtebeck
Chevron U.S.A., Incorporated
646 County Square Drive
Ventura, CA 93006
Subject: Removal of Oil Wells Along Ocean Side of Pacific Coast Highway
Dear Mr. Holtebeck
The City and American Landscape Companies are most anxious to resume the construction
of improvements along the ocean side of Pacific Coast Highway, north of Golden West
Street. However, we are unable to do so until the issue of payment for Chevron damages
is resolved.
I have not received a timely response to the letter sent you regarding this matter;
therefore, I am requesting that City Council resolve this matter at their November 5, 1990
Council meeting. As previously suggested, I believe it would be appropriate for the city
and Chevron to split the cost of the "downtime" charges. However, I cannot in good
conscience recommend that the city participate in the cost of repairing the damages.
Should you wish to discuss and/or resolve this matter before the November 5, 1990 Council
meeting, please telephone me at (714) 536-5437.
ery truly yours
Louis F. Sa doval
Director o Public Works
LFS:DRN:lb
cc: Robert Eichblatt
Tom Blackburn
Don Noble
CC-780 — Gen. Corresp.
2575g
�7`" REQUESI _ DR CITY COUNCIL DTION i- r 4.6.- -- P i---'4
kft-Pse_1 Mt=1J‹
Date February 5, 1990 -_
Submitted to: Honorable Mayor and City Council , -
Submitted by: Paul E. Cook, City Administrator - ` ;•, ,
J Louis F. Sandoval, Director of Public Works r'
�„
Prepared by: \ k,. ; �,r
Subject: BLUFF TOP PARK IMPROVEMENTS (PHASE V); CC-780 .
------ APPROVED BY CITY COUNC::_ ;;
c R -" ki ,9. `7et;I
Consistent with Council Policy? [ 7XYes [ ] New Policy or Exception A. , 1
cr r4 ).M ,I:.iI
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Ac,tiv��s, Atta.,l,iiients: t,'L," '{
STATEMENT OF ISSUE:
Bids for the landscaping of the bluffs along the ocean side of Pacific Coast Highway,
north of Golden West Street, were received and opened on January 16, 1990.
RECOMMENDATION:
Approve the low bid submitted by American Landscape Companies and authorize the
- Director of Public Works to expend $1,059,446.00 to cover contract costs of $994,446.00,
estimated construction contingencies of $50,000.00 and anticipated "incidental"
expenditures of $15,000.00.
ANALYSIS:
On December 4, 1989, Council approved the plans and specifications for the construction
of landscape improvements along the ocean side of Pacific Coast Highway, north of
' Golden West Street, and authorized the Director of Public Works to solicit bids for
construction. Bids, as summarized below, were received and opened on January 16, 1990.
Contractor Bid Amount
American Laadscape'Companies $ 994,446.00 * -
Terra-Cal Construction, Inc. 1,001,199.45
Gateway Construction, Inc. . 1,121,248.00 **
Valley Crest Landscape, Inc. - 1,131,851.20
Marina Contractors, Inc. 1,151,734.31
Hondo Company, Inc. 1,157,808.20 *
Tracy & Haigh Landscape, Inc. 1,283,994.46-**
Engineer's Estimate 1,200,000.00
* Audit Total (i.e. the actual total of bid after correction for math errors)
** Incomplete bid - (i.e. contractor did not bid all items of work)
l�I
I . f
Bluff Top Park Imp.; Ci
February 5, 1990
Page 2
Staff has reviewed each bid and suggests the selection of American Landscape
Companies. Therefore, the Director of Public Works recommends that a contract in the
amount of $994,446.00 be awarded to American Landscape Companies.
FUNDING SOURCE:
Contract Costs: $ 994,446.00
Construction Contingencies: 50,000.00 *
Incidentals (i.e. soils testing, utility costs, etc.) 15,000.00 **
TOTAL AMOUNT $1,059,446.00
* The Director of Public Works is authorized, by Resolution, to spend up to 10% of the
contract amount, but not more than $50,000.00, on anticiapted Change Orders (i.e.
unforseen work such as the removal of buried oil lines etc.). Staff anticipates
encountering numerous unknown buried oil lines and abandoned structures; therefore,
$50,000.00 is included in the contract costs for construction contin,gencies.
** The project budget includes sufficient revenues to cover construction costs,
contingencies, and project "incidentals"; however, staff is not authorized to encumber
funds for "incidentals" without Council approval. Therefore, it is recommended that
$15,000.00 be encumbered for project "incidentals".
Revenue Sources:
An unemcumbered balance of $1,542,000.00 is available in fiscal account
E-SK-CS-674-6-39-00 (Park Acquisition and Development - Community Services -
Bluff Top Park).
ALTERNATIVE ACTION:
1. Deny award of contract to American Landscape Companies and select on of the other
bidders.
2. Reject all bids and forego the construction of these improvements.
ATTACHMENTS:
None
PEC:LFS:DRN:dw
2303g/5&6
y ,a
• � en.
CITY OF HUNTINGTON REACH
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
Michael Uberuaga Gail Hutton
To City Administrator From City Attorney
Bluff Top Park Improvements November 27, 1990
Subject Date
Item E-5 of the 12/3/90 City Council agenda deals with an
attempt to resolve a dispute between American Landscape, Chevron
U. S .A. , and the city with regard to bluff top park
improvements . Apparently American Landscape contends it has
been damaged to the extent of downtime costs and damage to
landscape improvements in the course of Chevron ' s performance of
its agreement to abandon wells . The city has a contract with
American Landscape to landscape the bluffs .
In an effort to negotiate this dispute, apparently the city
takes the position that it is reasonable to pay $57 , 524 . 00 to '
American Landscape in damages , and $39 , 424 . 00 in downtime
costs . The city has asked Chevron to pay all of the damages and
split the downtime costs , in the total sum of $75 , 966 . 00 .
However, Chevron is unwilling to pay any of the downtime costs ,
and will only pay $46 , 000 . 00 of the damages , leaving a
difference between the city and Chevron of $30 , 966 . 00 . The
proposal is to deduct this sum from amounts otherwise due
Chevron under the contract for abandoning the oil wells . At the
same time, it is also proposed that an additional $50 , 000 . 00 be
authorized for change orders and other contingencies .
We have reviewed the law applicable to such disputes and the
right to offset damages and have the following thoughts and
recommendations .
First, the law does not authorize the city to unilaterally
deduct such amounts in dispute from the balance otherwise due
Chevron under the contract . The contract between the city and
Chevron, which is dated March 5 , 1990 , does not contain any
right of offset for third party claims and damages .
Second, as a practical matter, the city can take the position
that it will withhold payment under the contract and raise the
offsets by way of a claim in a court action for declaratory
relief and the other remedies . Obviously, the existence of this
right and the fact that the city is the one paying the cash
rather than receiving it gives the city substantial negotiating
power .
IP
Michael Uberuaga -'
November 27 , 1990
Page 2
Third, there are a number of ways of discharging contractual .
obligations , including a novation, which is a new agreement,' a
compromise, and an accord and satisfaction. The latter is a
device for resolving disputed claims whereby the city tenders a.
certain amount in accord, and if accepted it operates to satisfy
the claim.
Accordingly, it is our recommendation that you change
Recommendation 1 in the RCA- dated December 3 , 1990 , to read as
follows :
1 . Authorize the Director of Administrative Services
to offer to resolve the dispute with Chevron by
deducting $75 , 966 . 00 from the balance due Chevron -
U. S .A. under the agreement to abandon well sites
in order to cover the costs of downtime and
damages incurred by American Landscape Company,
and to release funds due Chevron upon receipt of
a signed satisfaction and release from Chevron
U.S .A. , approved as to form by the City Attorney
and approved by the City ,Administrator .
For the agenda, I suggest you insert the following
paragraph in lieu of the language now contained at Item
3-5 :
Authorize the Director of Administrative Services to
resolve a dispute between the city, American
Landscape Companies , and Chevron U.S .A. , Inc . by
negotiating an offset of $75 , 966 . 00 from the balance
due Chevron "U. S .A. under its agreement to abandon
well sites ; authorize the Director of Public Works to
expend an additional $50 , 000 . 00 for project change.
orders and other contingencies ; and authorize the
Director of Administrative Services to reappropriate
$50 , 000 . 00 for increased contingencies from funds
budgeted for this project in fiscal year 1990 .
In recommendation 3 in the RCA, perhaps "Director of Finance"
should read "Director of Administrative Services . "
Gail Hutton
City ,Attorney
By / ' / ,
Robert Sangster
Deputy City Attorney
cc : Connie Brockway, City Clerk
Pat Dapkus , Management Aide
Robert Franz , Director of Administrative Services
Lou Sandoval , Director of Public Works
• 74, .tni CITY OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
March 15, 1990
Chevron U.S.A.
P. 0. Box 606
La Habra, CA 90631
Attn: David N. Villa
Enclosed is an executed copy of Agreement between the City of Huntington
Beach and Chevron to close well sites and remove equipment on the lease
commonly known as Pacific Electric Lease Site which was approved by the
City Council on March 5, 1990.
Connie Brockway
City Clerk
CB:bt
Enc.
(Telephone:714-536-5227)
S Ie
AN AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND
CHEVRON TO CLOSE WELL SITES AND REMOVE EQUIPMENT ON THE
LEASE COMMONLY KNOWN AS PACIFIC ELECTRIC LEASE SITE
TABLE OF CONTENTS
TITLE PAGE(S)
1. WELLS TO ABANDON 1
2. CITY' S FINANCIAL PARTICIPATION 2 & 3
3 . CONTINGENCIES 3
4 . NON-CONFORMANCE STATUS 3
5 . COMMENCEMENT OF WORK 3
6 . TIME OF THE ESSENCE 3
7 . INDEPENDENT CONTRACTOR 4
8 . TIMING OF PAYMENT 4
9 . WITHHELD CONTRACT FUNDS, SUBSTITUTION OF SECURITIES 4 & 5
10 . AFFIDAVITS OF SATISFACTION OF CLAIMS 5
11. WAIVER OF CLAIMS 5
12 . INDEMNIFICATION, DEFENSE, HOLD HARMLESS 5 & 6
13 . WORKERS ' COMPENSATION INSURANCE 6
14 . INSURANCE 6 & 7
15 . FORCE MAJEURE 7
16 . DEFAULT AND TERMINATION 8
17. NON-ASSIGNABILITY 8
18 . CITY EMPLOYEES AND OFFICIALS 8
19 . STOP NOTICES 8 & 9
20 . IMMIGRATION 9
21. NOTICES 9
22 . CAPTIONS 9
23 . ENTIRETY 10
AN AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND
CHEVRON TO CLOSE WELL SITES AND REMOVE EQUIPMENT ON THE
LEASE COMMONLY KNOWN AS PACIFIC ELECTRIC LEASE SITE
THIS AGREEMENTis made and entered into on this 5+4i day
of T a5^ C Il , 19 ?a by and between the CITY OF HUNTINGTON BEACH, a
municipal corporation of the State of California, hereinafter
referred to as "CITY, " and CHEVRON U.S.A. , a Pennsylvania
corporation, hereinafter referred to as "CHEVRON. "
WHEREAS, the CITY is desirous of having the well site
commonly referred to as the Pacific Electric Lease closed and all
equipment removed. This site located on the beach area at
approximately Goldenwest Street and Pacific Coast Highway (more
specifically defined in Exhibit "A") contains twenty-five well sites
operated by CHEVRON. CITY is the lessee of a lease with the State
of California of the surface rights on the subject property where
the wells are located. CHEVRON is agreeable to terminate its
surface rights in order to enable CITY' S unencumbered use of the
property under the following terms and conditions .
NOW, THEREFORE, in consideration of the promises and
agreements hereinafter made and exchanged, the parties covenant and
agree as follows :
1. WELLS TO ABANDON
The twenty-five (25) wells to be abandoned are identified in
Exhibit "B" attached herewith and made a part hereto. Exhibit "B"
shall also designate which of the 25 well sites are the five (5)
well sites which shall remain for a period of one year or less from
the execution of this agreement.
-1-
2 . CITY' S FINANCIAL PARTICIPATION
The CITY' S participation in the abandonment and removal of
the well sites shall be limited to a financial contribution only and
assumes no responsibility or liability for any work to be performed
under this agreement.
a . CITY shall pay to CHEVRON, as their financial
contribution to the project, a sum not to exceed Four Hundred
Thousand Dollars ($400, 000 .00) toward the abandonment of the initial
twenty (20) well sites . Included in this abandonment is the removal
of all oil and gas well related appurtenant facilities as mutually
agreed upon by the CITY and CHEVRON.
b. For the remaining five (5) well sites the CITY
shall make an additional contribution which will be calculated using
the following formula:
The highest and lowest per unit cost of abandoning the
initial twenty (20) well sites will be disregarded. The total cost
of abandoning the remaining eighteen will be divided by eighteen to
determine the average cost per well site and that sum shall be
multiplied by five (5) to determine the amount to be paid by the
CITY to CHEVRON for abandoning these wells .
Example, if one of the sites abandoned cost is $80, 000 . 00,
one is $20, 000 . 00 and the remaining eighteen (18) have an average
cost of $35, 000 . 00 the CITY would be responsible for a payment of
$175, 000 . 00 ($35, 000 . 00 x 5) . Regardless of the cost incurred to
abandon the original eighteen (18) well sites the CITY' S
responsibility for payment to abandon the additional five shall not
exceed the sum of Two Hundred and Fifty Thousand Dollars
($250, 000 . 00) .
-2-
CHEVRON will contract with independent contractors to perform
the abandonment of the well sites . The cost of an abandonment shall
be the amount charged by the contractor plus an amount equal to
fifteen percent (15%) of such amount charged by the contractor . The
fifteen percent (15%) will be the total amount the CITY will be
responsible to CHEVRON to administer the abandonments .
3 . CONTINGENCIES
This agreement is contingent upon the written approval of the
State of California which will be obtained by CITY and all parties
having a beneficial interest in the Pacific Electric Lease Site
which will be obtained by CHEVRON.
4 . NON-CONFORMANCE STATUS
The equipment on the five well sites which are to remain for
a period of one (1) year as identified on Exhibit "B" are not in
conformance with Huntington Beach ordinance concerning non-public
health requirements but may remain in a non-conformance status until
they are abandoned.
5 . COMMENCEMENT OF WORK
CHEVRON shall, within thirty (30) days from the execution of
this agreement, provide CITY with a written notice of the date that
abandonment operations are to commence ("Start Date") . Such Start
Date shall be within three (3) months from the date of receipt of
said notice, unless such commencement is delayed due to securement
of necessary permits beyond CHEVRON' S control .
6 . TIME OF THE ESSENCE
The parties hereto recognize and agree that time is of the
essence in the performance of this Agreement and each and every
provision of the contract documents .
-3-
7. INDEPENDENT CONTRACTOR
It is understood and agreed that CHEVRON is, and shall be,
acting at all times hereunder as an independent contractor and not
as an employee of CITY. CHEVRON shall secure, at its expense, and
be responsible for any and all payments of income tax, social
security, state disability insurance compensation, unemployment
compensation and other payroll deductions for CHEVRON and its
officers, agents and employees, and all business licenses, if any,
in connection with the PROJECT.
8 . TIMING OF PAYMENT
CITY will pay to CHEVRON for the abandonment of the twenty
(20) wells the sum of Two Hundred Thousand Dollars ($200, 000 . 00)
pursuant to Paragraph 2 within ten (10) days from the execution of
this contract . The balance of the amount due from the CITY under
Paragraph 2 will be paid to CHEVRON within thirty (30) days from the
completion of the last well abandonment as mutually agreed by
CHEVRON an amount equal to ten (10%) percent of the total amount due
pursuant to Paragraph 2 will be withheld and paid upon the approval
of the abandonment by the California Division of Oil and Gas .
CITY shall pay to CHEVRON for the abandonment of the five (5)
well sites the sum due as calculated by the formula in Paragraph 2b
after the completion of abandonment of these wells and the removal
of the mutually agreed upon appurtenant facilities from the Pacific
Electric Lease Well Sites .
9 . WITHHELD CONTRACT FUNDS, SUBSTITUTION OF SECURITIES
At the request and expense of CHEVRON, who shall retain
beneficial ownership and receive interest, if any thereon, CITY
shall permit the substitution and deposit therewith of securities
-4-
equivalent to the amount of any monies withheld by CITY to ensure
performance under Paragraph 2 of this Agreement.
10 . AFFIDAVITS OF SATISFACTION OF CLAIMS
After the completion of the work contemplated by this
Agreement, CHEVRON shall file with the DPW its affidavit stating
that all workers and persons employed, all firms supplying materials
and all subcontractors upon PROJECT have been paid in full and that
there are no claims outstanding against PROJECT for either labor or
material, except certain items, if any, to be set forth in an
affidavit covering disputed claims, or items in connection with
Notices to Withhold which have been filed under the provisions of
the statutes of the State of California.
11. WAIVER OF CLAIMS
The acceptance by CHEVRON of the payment of the final
certificate shall constitute a waiver of all claims against CITY
under or arising out of this Agreement. ,
12 . INDEMNIFICATION, DEFENSE, HOLD HARMLESS
CHEVRON hereby agrees to protect, defend, indemnify and hold
and save harmless CITY, its officers, and employees against any and
all liability, claims, judgments, costs and demands, however caused,
including those resulting from death or injury to CHEVRON' S
employees and damage to CHEVRON'S property, arising directly or
indirectly out of the obligations or operations herein undertaken by
CHEVRON, including those arising from the passive concurrent
negligence of CITY, but save and except those which arise out of the
active concurrent negligence, sole negligence, or the sole willful
misconduct of CITY. CHEVRON will conduct all defense at its sole
cost and expense. CITY shall be reimbursed by CHEVRON for all costs
-5-
or attorney' s fees incurred by CITY in enforcing this obligation.
13 . WORKERS' COMPENSATION INSURANCE
Pursuant to California Labor Code §1861, CHEVRON acknowledges
awareness of §3700 et seq. of said code, which requires every
employer to be insured against liability for workers ' compensation;
CHEVRON covenants that it will comply with such provisions prior to
commencing performance of the work hereunder.
CHEVRON shall maintain such Workers ' Compensation Insurance
in an amount of not less than One Hundred Thousand Dollars
($100, 000) bodily injury by accident, each occurrence, One Hundred
Thousand Dollars ($100, 000) bodily injury by disease, each employee,
and Two Hundred Fifty Thousand Dollars ($250, 000) bodily injury by
disease, policy limit, at all times incident hereto, in forms and
underwritten by insurance companies satisfactory to CITY.
CHEVRON shall require all subcontractors to provide such
Workers ' Compensation Insurance for all of the subcontractors '
employees . CHEVRON shall furnish to CITY a certificate of waiver of
subrogation under the terms of the Workers ' Compensation Insurance
and CHEVRON shall similarly require all subcontractors to waive
subrogation. CHEVRON has on file with the CITY an insurance
certificate within the provisions of this Paragraph.
14 . INSURANCE
CHEVRON shall carry at all times incident hereto, on all
operations to be performed hereunder, general liability insurance,
including coverage for bodily injury, property damage,
products/completed operations, and blanket contractual liability.
Said insurance shall also include automotive bodily injury and
property damage liability insurance. All insurance shall
-6-
be underwritten by insurance companies in forms satisfactory to CITY
for all operations, subcontract work, contractual obligations,
product or completed operations and all owned vehicles and non-owned
vehicles . Said insurance shall name the CITY, its officers, agents
and employees and all public agencies as determined by the CITY as
Additional Insureds . CHEVRON shall subscribe for and maintain said
insurance policies in full force and effect during the life of this
Agreement, in an amount of not less than One Million Dollars
($1, 000, 000) combined single limit coverage. If coverage is
provided under a form which includes a designated general aggregate
limit, such limit shall be no less than One Million Dollars
($1, 000, 000) . In the event of aggregate coverage, CHEVRON shall
immediately notify CITY of any known depletion of limits . CHEVRON
shall require its insurer to waive its subrogation rights against
CITY and agrees to provide certificates evidencing the same.
CHEVRON has on file with the CITY an insurance certificate within
the provisions of this Paragraph.
15 . FORCE MAJEURE
If CHEVRON is prevented or hindered from abandoning the wells
or facilities because of fire, flood, storm, act of God, or any
cause beyond CHEVRON' S control (including but not limited to
governmental law, order or regulation, labor dispute, war, inability
to secure personnel, materials or transportation or the securement
of necessary permits) then the performance of the abandonment
operations shall be suspended during the period of such prevention
or hindrance.
-7-
16 . DEFAULT AND TERMINATION
If CHEVRON fails or refuses to prosecute the work hereunder
with diligence, or fails to complete the work within the time
specified, or is adjudged a bankrupt or makes an assignment for the
benefit of creditors or becomes insolvent, or violates any provision
of this Agreement or the Contract Documents, CITY may give notice in
writing of its intention to terminate this Agreement. Unless the
violation is cured within ten (10) days after such Notice of
Intention has been served on CHEVRON, CITY may, without prejudice to
any other remedy it may have, terminate this Agreement upon the
expiration of that time. Upon such default by CHEVRON, CITY may
elect not to terminate this Agreement; in such event CITY may make
good the deficiency in which the default consists and deduct the
resulting costs from the progress payments then or to become due to
CHEVRON.
17. NON-ASSIGNABILITY
CHEVRON shall not sell, assign, transfer, convey or encumber
this Agreement, or any part hereof, or any right or duty created
herein, without the prior written consent of CITY.
18 . CITY EMPLOYEES AND OFFICIALS
CHEVRON shall employ no CITY official nor any regular CITY
employee in the work performed pursuant to this Agreement. No
officer or employee of CITY shall have any financial interest in
this Agreement in violation of California Government Code §1090 et
seq.
19 . STOP NOTICES
CITY shall be entitled to reasonable administrative and
attorney' s fees, costs and necessary disbursements arising out of
-8-
the processing of said Stop Notices, Notices to Withhold, or any
similar legal document necessary to the prosecution of such action.
Said obligation shall be provided for in the labor and materials
payment bond required of CHEVRON. CITY may charge an administrative
fee of One-Hundred Dollars ($100 . 00) for every Stop Notice filed in
excess of two, regardless of whether or not CITY is named in an
action. CITY may set off any unreimbursed cost or expense so
incurred against any sum or sums owed by CITY to CHEVRON under this
Agreement.
20 . IMMIGRATION
CHEVRON shall be responsible for full compliance with the
immigration and naturalization laws of the United States and shall,
in particular, comply with the provisions of 8 U. S.C. §1324a
regarding employment verification.
21. NOTICES
All notices required or permitted hereunder shall be
delivered in person or by registered or certified mail to an
authorized representative of the party to whom delivery is to be
made, at the place of business of such party, or to any other place
designated in writing by such party.
22 . CAPTIONS
Captions of the Sections of this Agreement are for
convenience and reference only, and the words contained therein
shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction or meaning of the provisions of this
Agreement.
-9-
23 . ENTIRETY
The foregoing represents the entire Agreement between the
parties .
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by and through their authorized officers
the day, month and year first above written.
CHEVRON U. S.A. • CITY OF HUNTINGTON BEACH
a municipal corporation of
the ate of California
` 1. . . �*�•
By:
Mayor
I t s : Assistant Secretary
By:
I t s :
ATTEST: APPROVED AS TO FORM:
City Clerk City Attor y ` "Z-0
AC/, a-I. 50
REVIEWED AND APPROVED: INITIATED AND APPROVED:
M
City Administrator Directo of Public Works
-10-
•
'• .
-..
. •
' .
. ,
' .
.. .
. .. . .
T.
. \ •••• , , ! .
,. .
, ••• . 0.4 . ..
7
.. . ..• 100. . ....
. .
. .
. . •
II.i S A 6:-..C.4.4 OIL CO "0- .. .. . .
.„, a4•`,...
•.. '
• . ,
..,, 2,;,Ii.k‘6* *..... •„.Az ^:, 4: ,
• . * ''•. a:iv' ". _
•.\ ••.'.•.. ••
. ' ,aryiP\ - '211NY‘ . .. - .• .:. - .:.
w .. ,.,...,..,.: ,.. ..1..-4, .. . :•-.! .,-, .57 \ • •
. to-.•,-..,:cs . 4e, • t,,,,. •ior" .,,,...1, .
''')‘ .'.t' . . — • 1;• --‘6..' ' '' ' ..;/7 " i .
"? \ ''a' \ ;.,.•.* •;•:, ,.. •• i ; &„!. 'Nt,, 1.,
. •••••
" il,
...1'6. •• :7,4. ,.5,....• $.010., ,,,.. „ is,,e.,•,...,,, ,, ,L. ,,,
. .\•• •e\Y.'f/ - -. ., */ ;1'1 , •••1/4-1'..t... I ••
'• :.•,. ,V.•'••,, .•-...., 41 ro'tel
..t.. IlitiwNts FL. 4..., •• ,•'' ),4.•,,,,,•:,Fsr.:6...r.:0'' , btoiC itlie :
. '5*>'' k•*•:P."Viin*G.:`" tw . '',„ 7 „ I . v
. . .... .••• ••••,.i •' -•si.
"(, . -, , ,•,,,.e, IC.0 * 2,4• . ....„ ota„
..* ••••a • •
_....--7...... _ a 4• •
' 1' . . ,41 • • r ' V.'Saf X 4
• .'- . \ <4,s' Ifsi....4 ? N\ NiK.11111°. s ip \'''s4 Z DIST .„<:14 '• '
...../7;/ ' .' . ^ g.*:•' —.)• •.44 . 8.: r ...., 'OFF' . ;•;:\''.1y
4.?4'...
s'INt.--'--..... ...!\s4'1,` .1!\r.4 ...714 •/. 113.:rt:'t,a,.. Ill. .t,
•.S\ ,9„ N ' '..4, \ .71 ','-.,> .i •••• •if.T., "•' •7 N., ...,!*. ? c ' •
• 1..,1 a. . 1.1..*'; / \ ''. 'O. .1
V.), NIVF/P . •/ Er
r''. .. ' •0`4 0 7.12t> . • k
C, .. •.......,,,,A,.. . ‘, c.,..er',,,,...? ,.....,, 4,• / /.....s
'"L- '4.47' cs.'skyt .',,. ,,,,$ .-. .••• -' /.. 'vf,i/ 4... •71, ,
', , '1/4. ' ' 'N• S*.\... „ 7 , „•,./•••• / \ , '0, 1 , .... / -.i••
, kg..., ., ,.,, / 0,--,, :„. /f• • ,./
1. 'N•',1• '". . „,,*/• 1.%,,...so.; ''\ *q •/`-z•••• ./..' 1
•I '4. :•••• •. ` •
. ,,.. , , se N 40 -\y/ H.'
• ..\ •
-3,3'• - s.• . , , ,,. -7.....\./,/ -72' rs,..,. - •," -
4* . ---,\----- , _ .„.........„..‹....... ,....• -• • ,
. • •••0
. .41., ••-,..> .. . ,s •, •.;44....:., ....„„,„„... „,,. • .„. > <.: '- ./.•
.).4 ".
..,„....„ .„ ,,, ,--..././ , -. ,„ A. -• , /"\-:\-/ - .. .4,
•„>• 4„, ''',„, ..,„‘.\\,,\‘.;,-... fe/,,x,". r.,••••. ,,, K,„, ,,-,‹ '/-:':,•••• ,
. •• .
...., .... . ,... ,_ ) .
•,. .„..... ,., , ' ...\\\....\\'is.:-:-‘• ',,,,s."./ •,.\,.....„ ,;......,,,, ..
. , / ,411 ..•'•-.'‘ \
. •k"'N . '\.\ 0 L*4)
hi..%\'' / f?Athlk. '''' 4 ..• ,
. .%.• "4/
, . „1.•;• ,•' 4..„'N. ' .. . '..\..
..., - •..t•x*.ilts.' iii!..1:.*Ns. ,..‘`, . ..
. , sf..., • ,, .
•
4;• • • 1kt t'i :0 44 N>.....;:c:. 4 .•-\\N •.• ',.
...1"•• . • ,), ')
. 4... .,..\\., / ,.>•
. ....P.O.. ,., • 4
• • •••• \\.\..r 4 ‘re..\\‘.
\ . -% .'' . /.. ..\\ • '.
• .. 0, 4'1C•4
•S."4"„
\S. ' ',N.'...'").4.• 1'....7%/....t.:0, ''...-‘,\.
<fr • .:6..,,
..... ..7,lo • .1'• '..„,.‘2.:.....,./..........?r\ss„. . .''
. 0 •
1... .. \•,s ''..\1/4‘...',< y‘,.,
. .
' .•<•>% '''r/
• \ 1.'••0...\\....s
s'. • s • XX.
'4,1 ... • .. .4411 1,..
• '..1
, ..•..
.':•,.. ...
.....'....,
00101 6 .
EXHIBIT "B"
WELLS TO BE ABANDONED
COMMENCE THREE MONTHS OR LESS:
WELL: PE # 1 WELL: PE # 38A
WELL: PE # 7 WELL: PE # 45
WELL: PE #10 WELL: PE # 46
WELL: PE #11 WELL: PE # 47
WELL: PE #17 WELL: PE # 48
WELL: PE #18 WELL: PE # 49
WELL: PE #25 WELL: PE # 52
WELL: PE #26A WELL: PE # 53
WELL: PE #28 WELL: PE # 54
WELL: PE #31 WELL: PE # 56
COMMENCE ONE YEAR OR LESS:
WELL: PE # 2
WELL: PE # 5
WELL: PE # 14A
WELL: PE # 16
WELL: PE # 57
DNV:bmh:exhibb
EXHIBIT "C"
Major service companies to be used on Well Abandonments on Pacific
Electric Lease:
SUBSURFACE:
COMPANY LOCATION
Pool Well service (Rig) Long Beach
Welltech (Rig) Long Beach
Dowell/Schumberger (Cement) Long Beach
Midway Fishing Long Beach
John Thomas (Transport) Long Beach
B. J. Titan (Cement) Long Beach
H&H Tool Santa Fe Springs
Tristate Long Beach
Homco Fishing Tool Long Beach
Prime Wireline Long Beach
John Phillips Long Beach
SURFACE:
COMPANY LOCATION
Ecco Equipment (Equip. Rental) Santa Ana
R. G. Durda (Equip. Rental) Huntington Beach
J. C. Aseltine Vacuum Pumping Huntington Beach
Steve' s Backhoe Huntington Beach
J. G. Construction (Labor) Brea
P. W. Stephens (Asbestos Removal) City of Industry
John R. Hays (Welding) Dana Point
DNV:bmh: exhibc
6,00./b
REQUES i FOR CITY COUNCIL ACTION
Date March 5, 1990
Submitted to:
Honorable Mayor and City Council
Submitted by: APPROVED BY CITY COUNCIL
Michael T. Uberuaga, City Administrator
Prepared by: 3- S
Louis F. Sandoval, Director of Public Works 191.0
Subject: CHEVRON AGREEMENT _.._ Or ' '
Consistent with Council Policy? [X Yes [ ] New Policy or Exception
Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions, Attachments:
STATEMENT OF ISSUE:
The City has reached agreement with Chevron U.S.A. to close and remove equipment from
twenty (20) well sites north of the pier.
RECOMMENDATION:
Approve the attached agreement to eliminate the wells at a cost not to exceed $650,000.
ANALYSIS:
Pursuant to City Council direction, the Director of Public Works entered into protracted
negotiations with Chevron U.S.A. with the objective of eliminating oil operations on the
beach front near the junction of Golden West Street and Pacific Coast Highway. To this
end, Chevron U.S.A. has agreed to close and remove equipment from twenty (20) low
production wells for a flat $400,000 from five (5) other high production wells for a sum not
to exceed $250,000.
FUNDING SOURCE:
Capital Improvement Funds budgeted in Account No. E—CP—AS-157-6-35-00.
ALTERNATIVE ACTION:
Reject the agreement and advise staff on how to proceed.
ATTACHMENTS:
Agreement with Exhibits A, B, and C.
LFS:JS:lw
2340g
DIl1 G IQ=
- - - .. Y f r Y W V i.
aft 401,
POWER OF ATTORNEY
kNOW ALL MEN BY Ti IESE PRESENTS THAT CHEVRON U.S.A. INC., a
Pennsylvcmin corporation, ("CHEVRON"), acting herein through J. T. Cameron, its
Regionai Vice-President, hereunto duly authorized by rusutvtiorr of thee Dotard of
Directors, hereby makes, constitutes, and appoints each of the following listed
persons:
O. F. Baldwin i1
R. J. Harris
J. P. Flarrington
to he its true arid lawful attorney-in-fact with full power of substitution and
delegation and with authority, for and on its behalf, without the necessity of
affirming the corporate seal, to execute, acknowledge, deliver, file and record ail
papers requiring execution in the name of Chevron, except no authority is
conferred by this resolution for execution of any of the fallowing:
I. leases or deeds to others covering oil, gas or other hydrocarbon or
non-hydrocarbon minerals underlying fee lands of Chevron whore either book
venue or sale price exceeds $5 million or the acreage exceeds 1,280 acres;
2. deeds or conveyances to others covering fee lands of Chevron, other than
rights of way and similar easements, where either bank value or sole price
exceeds $500,000;
3. documents, instruments or promissory notes in support of any borrowings;
provided, however, that promissory notes and other documents given as
consideration for the acquisition of real or persandl property shall not be
deemed to constitute a borrowing;
4. documents or agreements establishing hank accounts in the name of Chevron.
This power of attorney shall remain in full force and effect for a term of five
years cif ter the date hereof to October I, 1994.
IN WITNESS WI IEREOF, CHEVRON has caused its name to be subscribed
hereto by its Regional Vice-President for that purpose duly authorized, effective
October 1, 1989.
CHEVRON U.S.A. INC.
By:
+
J. T. Cameron.3Regional Vice-President
STATE. OF CALIFORNIA
Certificate No.��90-026� Dd:Y
RETUR PTO: !RTI FICATE OF INSURANCE ROVED AS TO FORM
City of Hurnington Beach TO PRO �{ - yg-
Ins-rrarice&Benefits Division � (;,1 II_ -_„P.O.Box 190 CITY OF HUNTINGTON BEACH, CALIFORNIA City Atto 1` '' --LIT AttorII9�
Huntington Beach,CA 92648 D flu •x I.ZZ;y At OrIIA
A MUNICIPAL CORPORATION
This is to certify that the'policies of Insurance as described below have been issued to the insured by the undersigned and re i force
at this time. If these policies are cancelled or changed in such a manner that will affect this certificate,the insurance company agrees
to give 30 days prior written notice,by mail,to City of Huntington Beach, Insurance and Benefits Division, P.O. Box 190, Huntington
Beach, California 92648.
Name of Insured Chevron U.S.A. Inc.
Address of Insured 575 Market Street, San Francisco. CA 94105
Location of Work or Operations to be performed Various locations within the City of Huntington Beach, CA.
Description of Work or Operations Each permit application wi 1 1 speci fy particular pipeline or
oilfield operations.
POLICY DATES LIMITS OF LIABILITY Name of Insurance Co.&
POLICIES IN FORCE POLICY NO. Self Insured Retention or
Effective Expiration In Thousands(000) Deductible.
GENERAL LIABILITY
Mil COMPREHENSIVE FORM
Insurance Company
PREMISES—OPERATIONS $ 1,000,000 CSL of North America
IN EXPLOSION AND HDC GO Each Occurence
COLLAPSE HAZARD 569930-7 03/01/90 03/01/91
MI UNDERGROUND HAZARD .
Ng PRODUCTS COMPLETED
OPERATIONS HAZARD
is CONTRACTUAL INSURANCE
ill BROAD FORM PROPERTY •
DAMAGE
[O INDEPENDENT
CONTRACTORS i
[ ] PROFESSIONAL LIABILITY/
ERRORS&OMISSIONS
AUTOMOBILE LIABILITY
[X COMPREHENSIVE FORM ISA 002054 03/01/90 03/01/91 Insurance Company
[ ] OWNED $ 300,000 csL of North America
Each Occurence
[ ] HIRED
[ I NON-OWNED
EXCESS LIABILITY Vill— `0 , C�M.t
I I UMBRELLA FORM S 'u fj
[ ] OTHER INSURANCE // / J
COVERAGE / 5
Qualified s if—insur r in the hate
of Cal fornia under
WORK Eec'CO,MPE!'!S"T!OR a
Permit No. 381 of tle Departure t of Industrial Relations.
.AND ti:
Waiver of subrogation from c lI t
Workers'Compensation PF
Insurer. I I �;
z
Additional Insured Endorsement: The insurer agrees to provide an endorsement to each policy shown above as follows (excluding
t,;, 4V11llll,4411J11S, uuarus anu any otner t,iry t,ouncii appointee may, ana/or elective and appointive officers, servants or
employees of the City of Huntington Beach,when acting as such are additional insureds hereunder. Such insurance is primary and not
excess or contributing_to any other insurance of the City of Huntington Beach.
This certificate is issued as a matter of Information.This certificate is not an insurance policy and does not amend,extend or alter the coverage afforded
by the policies listed herein.Notwithstanding any requirement,term or condition of any contract or other document with respect to which this certificate
of insurance may be issued or may pertain,the insurance afforded by the policies described herein is subject to all the terms, exclusions and conditions of
such policies.
Marsh & McLennan, Inc. Insurance Company of North America
Agency or Brokerage Insurance Company
Three Embarcadero Center, San Francisco, CA _160 _Arc Street , P i�ladelphia. PA 19101
Addreu Home f is \1 /
��� 90
CPCU,
Thomas, Vice President
Name of Person to be Contacted Authorized Signat a ate
(415) 393-5000 NOTE:Authorized signature may be the agents if agent has placed insurance
Telephone number through an agency agreement with the insurer. If insurance is brokered,
authorized signature must be that of an official of the insurance company.
SEE REVERSE SIDE FOR HOLD HARMLESS AGREEMENT
T
.PMIf' _ - ,.•n...�e.w�+.' - _ .,....ors._. ..
STATE OF CALIFORNIA
•
DEPARTMENT OF INDUSTRIAL RELATIONS '
' OFFICE OF THE DIRECTOR
NUMBER 0381
CERTIFICATE OF CONSENT TO SELF-INSURE
'
r THIS IS TO CERTIFY, That CHEVRON CORPORATION Ca Delaware corporation)* — -_
9
has complied with the requirements of the Director of Industrial Relations under the provisions of
Il Sections 3700 to 3705, inclusive, of the Labor Code of the State of California and is hereby granted this
Certificate of Consent to Self-Insure.
This c-.r.ificate may be revoked at any time for good cause shown.°
r. 1.,' ,"j f• ad
•
�� �� "�`� y ,. • EFFECTIVE
• Y y,:: �f` DEPARTMENT OF INDUSTRIAL RELATIONS
o t"% .,- ., E Al OF CALIFORNIA
• %as _ .3!-_�.• : ~•. �' % THE 28th DAY OF January 19 27 • � 0
ti
s•�L �J, •`ram• �'' A= R. T. R]N , DIRECTOR ry
a .�'.4
`�'. �, i.}1 --Zr RICHARD 11 T(11T•Dc(\AT MANAGER ti
•Revocation of Certificate.—"A certificate of consent to self-insure may be revoked by the Director of Industrial Relations at any time for good cause after a
hearing. Good cause includes, among other things, the impairment of the solvency of such employer, the inability of the employer to fulfill his obligations, or the
practice by such employer or his agent in charge of the administration of obligations under this division of any of the following: (a) Habitually and as a matter of
practice and custom inducing claimants for compensation to accept less than the compensation due or making it necessary for them to resort to proceedings
against the employer to secure the compensation due: (h) Discharging his compensation obligations in a dishonest manner: (c) Discharging his compensation
obligations in such a manner as to cause injury to the public or those dealing with him." (Section 3702 of Labor Code.) The Certificate may be revoked for
noncompliance with Title 8, California Administrative Code, Croup 2—Administration of Self-Insurance. it1
:.� *Supersedes Certificate No. 0381 issued to STANDARD OIL COMPANY OF CALIFORNIA (a Delaware corporation),
{it i dated January 15, 1958.