HomeMy WebLinkAboutSOUTHERN CALIFORNIA WATER COMPANY, SCWC - 2005-01-03 O
O'MELVENY & MYEM LLP
BEIJING 400 South Hope Street NEW YORK
BRUSSELS Los Angeles, California 90071-2899 R E C E i v SAN FRANCISCO
CENTURY CITY E D SHANGHAI
TELEPHONE (213) 430-6000
HONG KONG FACSIMILE (213) 430-6407 FEB 0 7 2005 SILICON VALLEY
IRVINE SPECTRUM TOKYO
WWW.omm.COM
LONDON WASHINGTON,D.C.
NEWPORT BEACH CCitYAtity Of onttn t
CitYAttorneyS Ofce
February 2, 2005 OUR FILE NUMBER
814,675-0514
VIA U.S.MAIL
WRITER'S DIRECT DIAL
(213)430-6482
Scott Field, Esq.
City of Huntington Beach WRITER'S E-MAIL ADDRESS
2000 Main Street, 4th Floor RSwerdlow@omm.com
Huntington Beach, California 92648
Re: Southern California Water Company v. Huntington Beach
Dear Scott,
Please find enclosed a copy of the Settlement Agreement And Mutual Release signed by
the Water Company. Please feel free to contact me should you have any questions about this
matter.
Sincerely,
Robert M. Swe dlow
O'MELVENY &MYERS LLP
RMS:ct
Enclosure
cc: James Colbert III, Esq. (w/out encl.)
Mark Mulkerin, Esq. (w/out encl.)
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SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This settlement and mutual release agreement ("Agreement") is entered into as
Ta h vex ry 3� 2 805'
of , by the Southern California Water ("SCWC"), on the one hand,
and City of Huntington Beach (the "City") on the other hand.
RECITALS
A. On October 5, 2000, SCWC, a California corporation ("SCWC"), pursuant
to Decision No. 00-10-029 of the California Public Utilities Commission ("CPUC"),
obtained a Certificate of Public Convenience and Necessity ("CPCN") to construct a
i
pipeline to provide water service to a development on Bolsa Chica Mesa.
B. SCWC applied to the City on February 1, 2002, for a pipeline franchise
pursuant to the CPCN.
C. On January 23, 2003, SCWC filed a writ of mandate action to compel the
City to issue it a pipeline franchise, entitled SCWC v. City of Huntington Beach, et al.,
Orange County Superior Court Case No. 03CCO2021 ("Case No. 03CCO2021").
Judgment was entered in that proceeding and, on March 30, 2004, the City appealed
from the judgment, which matter has been assigned Fourth District Civil No. G033562
("Appeal No. G033562").
D. SCWC then filed on August 2, 2004, an eminent domain suit against the
City, entitled SCWC v. City of Huntington Beach, et al., Orange County Superior Court
Case No. 04CC08141 ("Case No. 04CC08141").
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E. Case No. 03CCO2021, Appeal No. G033562, and Case No. 04CCO8141
are referred to collectively as the "Litigation."
F. It is the intention and desire of the Parties to this Agreement to settle,
compromise and resolve all the differences, disagreements and disputes which exist or
may exist between them, relating to the disputes which are the subject matter of the
Litigation.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained in this Agreement and the valuable consideration to be paid
hereunder, the sufficiency of which is acknowledged, the Parties hereto agree as
follows:
1. Recitals. The above Recitals A through F are incorporated herein as a
material part of this Agreement.
2. Grant of Franchise.
A. This Agreement is subject to two conditions precedent; namely, that (1)
the City grant to SCWC a Pipeline Franchise in the form of Exhibit A{attached) and (2)
enter into a Construction Agreement in the form of Exhibit B (attached).
B. By entering into this Settlement Agreement, the City is not committing to
or agreeing to grant or enter the Pipeline Franchise or the Construction Agreement.
The parties acknowledge that the City Council must conduct a public hearing on
whether to approve the Pipeline Franchise, and that the City Council retains its full
discretion whether to grant or deny the Pipeline Franchise or enter into the Construction
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Agreement. This Agreement becomes null and void if the City should deny the Pipeline
Franchise, or fail to sign the Construction Agreement within a reasonable time. If the
City Council grants the Pipeline Franchise or approves the Construction Agreement on
terms other than those set forth in Exhibits A and B, this Agreement becomes null and
void, unless SCWC, in its sole discretion, accepts the Pipeline Franchise and
Construction Agreement as approved by the City Council.
3. Satisfaction of Judgment in Case No. 03CCO2021 and Dismissal of Case
No. 04CC08141. Immediately after the City issues the Pipeline Franchise in the form of
Exhibit A and enters the Construction Agreement in the form of Exhibit B, or if SCWC
otherwise accepts the Pipeline Franchise and Construction Agreement the City Council
grants and enters, SCWC shall dismiss Case No. 04CC08141, the City shall dismiss
Appeal No. G033562, and SCWC shall file a satisfaction of judgment in Case No.
03CCO2021.
4. Payment.
In consideration of the release granted and obligations undertaken by the City
herein, SCWC shall pay One Hundred Twenty-Six Thousand Dollars ($126,000)to the
City within thirty (30) days of the effective date of this Agreement, the Pipeline
Franchise or Construction Agreement (whichever is latest in time).
5. Reciprocal Release.
Except for the rights and obligations arising from this Agreement and Exhibits A
and B (attached), City does hereby release and discharge SCWC (including its officers,
directors, servants, employees, joint venturers, agents, representatives, descendants,
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heirs, executors, administrators, assigns, and attorneys) and SCWC does hereby
release and discharge City (including its officers, directors, servants, employees, joint
venturers, agents, representatives, descendants, heirs, executors, administrators,
assigns, and attorneys) of and from any and all known claims, causes of action, or
demands, of whatever nature which exist before the date of execution of this
Agreement, which are contained in, may arise out of or be in any way connected with or
related to the Litigation, including any claim for litigation expenses, attorneys' fees or
other compensation under The Eminent Domain Law including Code of Civil Procedure
section 1268.610.
6. No Pending Claims.
City and SCWC specifically represent that they have no pending or planned
complaints, grievances or charges against one another (including their respective
officers, directors, servants, employees, joint venturers, agents, representatives,
descendants, heirs, executors, administrators, assigns, and attorneys) based on any
event(s) occurring prior to the date of this Agreement, and that to the extent they have
any such complaints, grievances or charges pending, within thirty (30) days of the date
of execution of this Agreement, they shall take all steps necessary to effect the
dismissal with prejudice or the withdrawal of such complaints, claims, charges,
grievances, accusations, or proceeding of any kind whatsoever.
7. Entire Agreement. This Agreement (including its exhibits) contains the
sole, complete and entire agreement and understanding of the Parties concerning the
matters contained in this Agreement and may not be altered, modified or changed in
any manner except by a writing signed by the Parties and acknowledging it as an
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alteration, modification, or change of this Agreement. None of the Parties is relying on
any representation other than those expressly set forth in this Agreement. All prior
discussions and negotiations have been and are merged and integrated into, and
superceded by, this Agreement.
8. Warranties. The Parties, and each of them, warrant: (i) that they, and
each of them, have the sole right and exclusive authority to execute this Agreement;
and (ii) that they have not sold, assigned, transferred, conveyed or otherwise disposed
of any claim, demand, cause of action, obligation, damage or liability covered in this
Agreement.
9. Successors and Assigns. The terms and provisions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and assigns
of the Parties, and each of them.
10. Counsel. In executing this Agreement, each of the Parties acknowledges
that they have consulted with and have had the advice and counsel of attorneys duly
licensed to practice law in all the courts of the State of California.
11. Further Assurances. Each of the Parties shall promptly execute, as
appropriate, and deliver to the other party any and all additional papers, documents and
other assurances, and shall promptly do any and all acts and things reasonably
necessary in connection with the performance of their obligations and agreements as
expressed in this Agreement.
12. Headings. The headings of this Agreement are for reference purposes
only and shall not limit or define the meaning of the provisions of this Agreement.
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13. Interpretation. This Agreement is made and entered into in the State of
California and shall in all respects be interpreted, enforced and governed under the laws
of the State of California. Each party has cooperated in the drafting and preparation of
this Agreement; hence, this Agreement shall not be construed against any particular
party.
14. Notices. Any notification or communication between the Parties relating to
this Agreement shall be made to the parties themselves and their respective attorneys
If to SCWC:
Vice President of Customer Service
Southern California Water Company
2143 Convention Center Way, Suite 100
Ontario, California 91764
and to:
Robert M. Swerdlow, Esq.
O'MELVENY & MYERS LLP
400 South Hope Street
Los Angeles, California 90071-2899
(213) 430-6000
If to the City:
City of Huntington Beach
Office of the City Clerk
2000 Main Street
Huntington Beach, California 92648
and to:
Jennifer McGrath, City Attorney
2000 Main Street
Huntington Beach, CA 92648
(714) 536-5555
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15. No Admission. Nothing contained in this Agreement shall be construed as
an admission of liability by any party. Each party acknowledges that the other party
denies any liability.
16. Costs. Except insofar as provision is made in this Agreement for payment
to the City of$126,000, the Parties agree no other sums are owed to the City and that
they will each bear their own costs and attorney's fees in connection with the
Agreement and with the Litigation including any claim for litigation expenses, attorneys'
fees or other compensation under The Eminent Domain Law including Code of Civil
Procedure section 1268.610.
IN WITNESS WHEREOF, the Parties have executed this Agreement so that it
may be effective as of the date first written above.
SOUTHERN CALIFORNIA WATER COMPANY,
a California corporation
B 69644
Y•
James B. Gallagher
print name �-
ITS: (circle one) Chairman/Presiden ice President
AND
By: � �=T
R�I ,ar --r- SeAoOJ L-.s
print name
ITS: (circle one) Secretary hief Financial Offic Asst. Secretary—Treasurer
CITY OF HUNTINGTON BEACH
By: is-6-q'X—� C"(-,�L
ENELO E CULBRETH-GRAFT,
CITY ADMINISTRATOR
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APPROVED AS TO FORM:
For SCWC:
O'MELVENY & MYERS LLP
By:
ROBERT M. SWERDLOW, ESQ.
For City of Huntington Beach:
JENNIFER McGRATH, City Attorney
By:
SCOTr FIELD, Assistant City Attorney
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w
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF HUNTINGTON BEACH GRANTING A PIPELINE
FRANCHISE FOR TRANSMITTING WATER IN,UNDER
ALONG AND ACROSS STREETS, IN THE CITY OF HUNTINGTON BEACH
On October 5, 2000, Southern California Water Company, a California corporation
("SCWC," or "Grantee"), pursuant to Decision No. 00-10-029 of the California Public Utilities
Commission ("CPUC"), obtained a Certificate of Public Convenience and Necessity ("CPCN") to
construct a pipeline to provide potable water service to a development on Bolsa Chica Mesa; and
SCWC applied to the City on February 1, 2002 for a franchise to construct, operate and
maintain a water pipeline pursuant to the CPCN;
WHEREAS, on , 2004, the City Council of the City of Huntington
Beach adopted Resolution No. setting forth the Council's intention to grant a water pipeline
franchise; and,
WHEREAS, pursuant to Resolution .No. the City Council set the date of
, 2004, at the hour of 7:00 p.m., as the time for a public hearing to allow
interested persons to voice any objections to the granting of the franchise; and,
WHEREAS, on , 2004, the City Council conducted and concluded the
duly noticed public hearing and it is now the desire of this Council to grant the franchise, in
accordance with the terms and conditions specified in this Ordinance; and,
NOW, THEREFORE, the City Council of the City of Huntington Beach does ordain as
follows:
SECTION 1. Definitions. Whenever in this Ordinance the words or phrases set forth in this
Section are used, they shall have the respective meanings ascribed to them in the following
definitions (unless, in the given instance, the context clearly indicates a different meaning):
(a) "Applicable Law" shall mean all present or future Federal, State, City, or other local
laws, rules, regulations, franchises, codes, orders, permit requirements, judgments, injunctions, or
decrees, or any judgment or order or decree by a court applicable to Grantee's Facilities or activities
under this Franchise. Whenever the term "Applicable Law" is used, it shall be understood that
SCWC shall not be required to comply with any City or other local laws, rules, regulations, orders,
or permit requirements which are unconstitutional or which conflict with or which are inconsistent
with the paramount authority of the State of California.
(b) "City" shall mean the City of Huntington Beach, a charter city, in its present
incorporated form or in any later reorganized,consolidated or reincorporated form;
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(c) "City Property" shall mean the property or facilities owned by the City of
Huntington Beach or the Redevelopment Agency of the City of Huntington Beach.
(d) "Contaminant" shall mean any "hazardous waste" as that term is defined in Section
1004(3)of the Resource Conservation and Recovery.Act(RCRA) (42 U.S.C. § 6903(5)).
(e) "Damages" shall mean all claims, losses, liabilities, causes of action, damages,
judgments, debts, costs, contribution or indemnity, expenses (including but not limited to attorney's
fees and costs) fines, penalties, orders injunctions and liens of every kind and nature, including, but
not limited to claims relating to any Release of any Contaminant, claims for personal or bodily
injury, wrongful death, injury to real or personal property, and including claims based on active
negligence, gross negligence, contractual, statutory or strict liability, or otherwise, and any claims
seeking judicial or administrative relief, or relating to any administrative proceedings by any
governmental agency,whether or not any such claim is ultimately defeated.
(f) "Director"shall mean the Public Works Director of the City;
(g) "Facility" or "Facilities" shall mean the water pipeline, together with such related
equipment including but not limited to valves, fittings, manholes, vaults, pumps and other
appliances, appurtenances, or attachments located within the City, as Grantee may deem necessary
or convenient for the purpose of conducting, transporting, conveying and carrying water under,
along, across and upon the public Streets.
(h) "Franchise" shall mean this Ordinance granting a Franchise to SCWC, unless some
other franchise is specified.
(i) "Grantee" shall mean Southern California Water Company, a California corporation
and its lawful successors or assigns;
6) "Lay and use" shall mean to lay, construct, erect, install, operate, maintain, use,
repair, replace or remove;
(k) "Municipal Code" shall mean the Municipal Code of the City of Huntington Beach.
(1) "Person"shall mean any individual,person, firm,partnership or corporation.
(m) "Release" shall mean any release (as that term is defined in Section 101(22) of the
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, 42 U.S.C.
§9601(22)), or disposal (as that term is defined in Section 1004(3) of the Resource Conservation
and Recovery Act (RCRA, 42 U.S.C. §6903(3)), originating from any Facility(s) under this
Franchise.
(n) "Remediation Costs" shall mean all costs and expenses, including the City's current
rate of overhead, incurred by the City in performing any Remedial Work.
(o) "Remedial Work" means all "Remedial Action," as that term is defined in Section
101(24) of CERCLA [42 U.S.C. § 9601(24)], and all other actions necessary to Respond to,
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Remove, or Remedy, as those terms are defined in Sections 101(23), 101(24) and 101(25) of
CERCLA [42 U.S.C. § 9601(23)(24) and(25)] a Release of a Contaminant.
(p) "Streets" shall mean the public streets, ways, alleys and places as the same may now
or hereafter exist within the City.
SECTION 2. Grant of Franchise.
The City hereby grants a non-exclusive water pipeline franchise to Grantee to lay and use up
to an 18-inch pipeline, together with such related equipment and Facilities as Grantee may deem
necessary or convenient for the purpose of conducting, transporting, conveying and carrying water,
under, along, across or upon the Streets and extending generally along the following route:
southerly along Bolsa Chica Street from and including the intersection of Bolsa Chica Street and
Rancho Road to the intersection of Bolsa Chica Street and Los Patos Street, then westerly on Los
Patos Street to the intersection of Los Patos Street and Lynn Street, as more particularly depicted in
Exhibit A attached hereto and in any additional territory, if any, annexed pursuant to Section 5, in
which SCWC has a franchise.
This Franchise only authorizes the transportation of water in an underground pipeline. This I
Franchise does not authorize the transportation of any other hazardous or non-hazardous substances
in the pipeline.
All street coverings or openings of traps, vaults, and manholes shall be constructed flush
with the surface of the streets; provided, however, that vents for underground traps, vaults and
manholes may extend above the surface of the streets when said vents are located in parkways
between the curb and the property line subject to the prior approval of the Director, which approval
shall not be unreasonably withheld.
SECTION 3. Term.
The term of this Franchise shall commence thirty (30) days after this Ordinance is adopted,
and shall continue for a period of fifteen (15) years, unless (1) shortened by the voluntary surrender
or abandonment by Grantee, (2) the State of California or some municipal or public corporation
duly authorized by law shall purchase by voluntary agreement or shall condemn and take under the
power of eminent domain, this Franchise or all property actually used and useful in the exercise of
this Franchise, and situated within the territorial limits of this state, municipal or public corporation
purchasing or condemning such property; (3) this Franchise is forfeited for non-compliance with its
terms and provisions; or(4) the CPUC revokes or terminates Grantee's CPCN to serve Bolsa Chica.
SECTION 4. Franchise Fee.
A. Amount of Franchise Fee.
The Grantee shall pay annually to the City at the times and places hereinafter specified, in
lawful money of the United States, a sum equivalent to two percent (2%) of the gross annual
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receipts of Grantee arising from the use, operation or possession of the Franchise; provided,
however, that such payments be not less than one percent (1%) of the Grantee's gross annual
receipts derived under this franchise from the sale of water within the limits of the City.
B. Verified Statement.
The Grantee shall file with the City Clerk, within three months after the expiration of
each calendar year, or fractional calendar year, following the effective date of this
Franchise, and within three months after the expiration of each and every calendar year
thereafter, a verified statement setting forth in detail the total gross receipts of the Grantee for
the preceding calendar year or such fractional calendar year derived from the sale of
water within the City, or otherwise arising from the use, operation or possession of this
Franchise. Within fifteen (15) days after the time for filing such verified statement,
Grantee shall pay to the City, the specified percentage of its gross receipts for the
calendar year, or fractional calendar year, covered by the verified statement. Any
neglect, omission or refusal by the Grantee to file the verified statement, or to pay the
specified percentage of gross receipts at the times or in the manner herein provided shall
constitute grounds for the declaration of a forfeiture of this Franchise and all rights of
the Grantee hereunder.
C. Late Franchise Fee Pa,. nit
Franchise fees due from Grantee are delinquent if not received by the City Treasurer on or
before the due date during normal business hours. Should the due date occur on a weekend
or legal holiday, the Franchise fees must be received by the Treasurer during normal
business hours on the first regular working day following the weekend or legal holiday. If
Grantor fails to remit any Franchise fee on or before the due date, Grantee shall pay interest
at the rate of one percent (1%) per month or any fraction thereof on the amount of the fee
from the date on which the fee first became delinquent,until paid.
D. Records. SCWC shall keep and preserve for a period of five (5) years subsequent to the date
of the most recent Franchise fee determination all the records necessary to determine the
amount of such Franchise fee. Upon request, Grantee shall permit the City or its duly
authorized representative to examine all of Grantee's books, accounts, papers, maps, and
other records kept or maintained by SCWC or under its control which concern the
calculation of the Franchise fee. Said records shall be made available to the City for review
at a location in the County of Orange designated by SCWC.
SECTION 5. Written Acceptance; Annexation/Consolidation.
The Franchise granted hereunder shall not become effective until written acceptance thereof
shall have been filed by Grantee with the City Clerk of City. When so filed, such acceptance shall .
constitute a continuing agreement of Grantee that if and when City shall thereafter annex or
consolidate with additional territory, any and all franchise rights and franchise privileges owned by
Grantee therein, except a franchise derived under Section 19 of Article XI of the California
Constitution as that section existed prior to the amendment thereof adopted on October 11, 1911,
shall be deemed abandoned in the additional territory.
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SECTION 6. City's Right of Eminent Domain.
The Franchise granted hereunder shall not in any way or to any extent impair or affect the
right of City to acquire the property of Grantee hereof either by purchase or through the exercise of
the right of eminent domain, and nothing herein contained shall be construed to contract away or to
modify or to abridge, either for the term hereof, or in perpetuity, City's right of eminent
domain in respect to Grantee or any public utility, nor shall this Franchise ever be given any
value before any court or other public authority in any proceeding of any character in excess of the
cost to Grantee of the necessary publication and other sum paid by it to City at the time of
acquisition thereof.
SECTION 7. Grantee's Construction, Repair and Indemnity Obligations.
A. Construction.
Grantee shall construct all Facilities, in accordance and in conformity with the parties'
"Agreement Between the City of Huntington Beach and Southern California Water
Company Regarding Construction of a Water Pipeline" and Applicable Law, including
but not limited to the National Pollutant Discharge Elimination System (NPDES) and
governing Air Quality Management District (AQMD) requirements, and all local
ordinances, rules and regulations heretofore, or hereafter adopted by the City Council of
City in the exercise of its police powers and not in conflict or inconsistent with the
paramount authority of the United States of America, the State of California and, as to
state highways, subject to the provisions of general laws relating to the location and
maintenance of such facilities.
B. Repair.
Grantee shall replace, relocate, abandon, remove, operate and maintain all Facilities, in
accordance and in conformity with Applicable Law, including but not limited to the
National Pollutant Discharge Elimination System (NPDES) and governing Air Quality
Management District (AQMD) requirements, and all local ordinances, rules and
regulations heretofore, or hereafter adopted by the City Council of City in the exercise of
its police powers and not in conflict or inconsistent with the paramount authority of the
United States of America, the State of California and, as to state highways, subject to
the provisions of general laws relating to the location and maintenance of such
facilities.
C. Indemnity.
Grantee shall indemnify, defend and hold harmless the City, its officers and
employees, when acting within the scope of their employment, from and against any
and all liability for all Damages proximately resulting from any operations under this
Franchise, and for all Damages proximately resulting from the failure of Grantee to
well and faithfully observe and perform each and every provision of this Franchise.
Nothing contained herein shall be construed to require the Grantee to indemnify the
City, its officers or employees against any Damages or liability caused by the active
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negligence or willful misconduct of the City, its officers, agents, employees or
independent contractors. Grantee shall be solely responsible for complying with
Applicable Law in connection with the installation, repair, relocation or removal by
Grantee of any of its facilities or by any person engaged by Grantee to install, repair,
relocate or remove any such Facilities.
D. Compliance With Applicable Law.
Grantee shall comply at all times with Applicable Law.
E. Relocation.
Grantee shall, at the request of the City and at Grantee's sole cost and expense, remove or
relocate any Facilities installed, used or maintained under this Franchise if and when made
necessary by any change in grade, alignment or width of any public street, way, alley or
place, or the construction of any subway or viaduct, or any other street improvement-of
any kind required by the City or the City Redevelopment Agency. Grantee shall relocate its
Facilities to the nearest alternative location or other location as reasonably established by the
Director, and within such time as the Director reasonably establishes. If Grantee fails to
relocate its Facility within the required time, the City may cause the work to be done and
shall keep an itemized account of the entire cost thereof, and Grantee shall reimburse the
City or other public entity for its reasonable costs within ninety(90) days after presentation
to Grantee of an itemized account of such costs.
F. Sale, Transfer or Assignment
At least thirty (30) days prior to any sale, transfer, assignment or lease of this Franchise, or
any part thereof, or any of the rights or privileges granted thereby, Grantee shall file with the
City written evidence of the same, certified thereto by Grantee or its duly authorized
officers.
SECTION 8. Emergency Response Plans.
Grantee shall, at all times during the term of this franchise, maintain emergency response
plans as required by regulatory agencies having jurisdiction.
SECTION 9. Authority of Director.
Grantee shall not perform any work pursuant to the Franchise without first obtaining an
encroachment permit from the Director pursuant to Applicable Law; provided, that in cases of
emergency affecting public health or safety or the preservation of life or property, Grantee shall to
the extent reasonably practicable, apply for such permits no later than the next business day. All
modifications and repairs of the Facilities shall be accomplished pursuant to Applicable Law.
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SECTION 10. Facility Location Maps.
Within ninety (90) days following the installation of any Facility, Grantee shall file a
map or maps showing the accurate location and size of all its Facilities then in place, and
shall, upon installation of any additional Facilities or upon removal, change or abandonment
of all or any portion thereof, file a revised map or maps showing the location and size of all
such additional and/or abandoned Facilities as of that date.
SECTION 11. Tunnel or Bore When Possible.
Where it is necessary to lay any underground pipes in or under any portion of a paved
street, the same shall be done by a tunnel or bore, so as not to disturb the foundation of such
paved street, to the extent it is practicable and economically reasonable to do. In the event that
the same cannot be done, such work shall be done under a permit to be granted by the Director
upon application therefor and subject to ordinances and rules adopted by the City in the exercise
of its police powers and not in conflict with or inconsistent with the paramount authority of
the State.
SECTION 12. Damage to Street or Property.
If any portion of any street shall be damaged by reason of defect in any of the
Facilities maintained or constructed under this Franchise, or by reason of any other cause
arising from the operation or existence of any Facilities constructed or maintained under this
Franchise, Grantee shall, as soon as reasonably practicable and at its own cost and expense,
repair such damage and restore such street or portion of street to as good a condition as
existed before such defect or other cause or damage occurred, and so that the useful life of the
street is not reduced. Such work shall be completed under the direction and approval of the
Director, which approval shall not be unreasonably withheld, and in accordance with
Applicable Law. Grantee shall obtain from the City an encroachment permit before doing any such
work.
In the event of Release of a Contaminant by Grantee or from any Facility of Grantee,
Grantee shall immediately conduct such Remedial Work and pay all Remediation Costs, at its sole
expense, as is reasonably necessary to remedy the same in accordance with Applicable Law.
In the event that Grantee shall fail or neglect to make such Street repair, replacement,
restoration work or conduct such Remedial Work, then thirty(30) days after written notice therefor
has been given Grantee by the Director, the City may repair, replace or restore said Street at the
expense of Grantee. Grantee agrees to pay to the City the reasonable cost of performing such work.
The amount so chargeable shall be the direct cost of such work or the reasonable cost of such work
(whichever is lower) plus the current rate of overhead being charged by the City for reimbursable
work.
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SECTION 13. Grantee's Failure to Comply With Franchise.
The City may declare this Franchise forfeited at such time that Grantee fails, neglects,
or refuses to comply with any of the provisions or conditions hereof following thirty (30) days'
written demand for compliance or as soon thereafter as is reasonably practicable under the
circumstances and as mutually agreed by the Director and the Grantee. Grantee shall, upon
commencement of the work of compliance, prosecute the same with due diligence to
completion. Grantee's obligations under Section 7(c) shall survive termination of this
franchise.
SECTION 14. Grantee's Obligations Upon Expiration, Revocation or Termination.
Upon the permanent discontinuation of use of the Facilities or any portion thereof,
Grantee shall, within twenty (20) days thereafter, provide written notice to the Director of Grantee's
intention to either (1) abandon all, or a portion, of such Facilities in place, or (2) remove all,
or a portion, of such Facilities. Such notice shall describe the location of the Facilities desired to
be abandoned or removed and the relative physical condition of such Facilities. The Director shall
determine whether such abandonment or removal may be effected without detriment to the
public interest and under what conditions and terms the proposed abandonment or removal may
be safely accomplished and shall then notify Grantee of such requirements. Grantee shall,
within ninety (90) days thereafter, either remove or abandon all or a portion of such Facilities
as may be reasonably necessary to comply with all provisions of Applicable Law.
SECTION 15. Surety Bond.
Grantee shall, within ten (10) days after the posting of this Ordinance, file with the City
Clerk of City a corporate surety bond in the sum of Fifty Thousand Dollars ($50,000,00) on
condition that Grantee shall well and truly observe, fulfill and perform each and every term,
condition and requirement of this franchise. In the event of any breach of any condition of the
aforesaid bond, the whole amount of the sum therein named shall be deemed to be liquidated
damages, and the same shall be recoverable from the principal and sureties upon the bond. In the
event that such breach does not result in a forfeiture of the franchise, Grantee shall be required to
replenish the bond in the original amount as a condition to continued operation of the franchise.
SECTION 16. Insurance.
Grantee shall, at Grantee's sole cost and expense, keep or cause to be kept in full force
and effect at all times, for the mutual benefit of City and Grantee, a comprehensive form of
general public liability insurance against claims and liability for personal injury, death, or
property damages arising from the use, construction, or maintenance of this franchise of at least
One Million Dollars ($1,000,000.00) for bodily injury or death to any one person, at least
Two Million Dollars ($2,000,000.00) for any one accident or occurrence, and at least Five-Hundred-
Thousand Dollars($500,000.00)for property damage.
8
Grantee shall furnish City with certificates or endorsements representing all insurance
required by this Ordinance. All such certificates or endorsements shall contain language to the
effect that (1) the City, its officers and employees are listed as additional insureds, (2) the insurer
waives the right of subrogation against City and against City's agents and representatives, (3) the
policies are primary and noncontributing with any insurance that may be carried by City, and(4)the
policies cannot be canceled or materially changed except after thirty (30) days notice by the insurer
to City. Grantee shall furnish City with copies of all such certificates or endorsements promptly
upon receipt of them. Grantee may effect for its own account any insurance not required under this
Ordinance.
Grantee shall deliver to City, in the manner provided for notices, certificates or
endorsements of all insurance policies required by this Ordinance, together with evidence
satisfactory to City of payment required for procurement and maintenance of the policy, within
the following time limits:
(i) For insurance required at the commencement of this Ordinance, within ten
(10) days after this Ordinance becomes effective; and
(ii) For any renewal or replacement of a policy already in existence, within ten
(10) days following the expiration or other termination of the existing policy.
If Grantee fails or refuses to procure or maintain insurance as required by this Ordinance, or
fails or refuses to furnish City with required proof that the insurance has been procured and is in
force and paid for, City shall have the right at City's election and on ten (10) days notice, to declare
the forfeiture of this Franchise.
SECTION 17. Notices.
Any notice required to be given under the terms of this Franchise may be served as follows:
Upon City, by serving the City Clerk personally, or by sending a written notice to the City
Manager of the City Clerk of the City of Huntington Beach, 2000 Main Street, Huntington Beach,
California 92648,by certified mail, overnight mail service, confirmed or hand delivery.
Upon Grantee, by sending a written notice to Grantee addressed to Southern California
Water Company, 2143 Convention Center Way, Suite 110, Ontario, California 91764, Attention:
Vice President Customer Service, by certified mail, overnight mail service, or hand delivery.
Either party may from time to time provide the other a notice of change of address in
writing, which shall become operative upon receipt for purposes of this agreement.
.SECTION 18. Severability.
If any section, subsection, sentence, clause, phrase, or portion 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. The City
9
Council of the City of Huntington Beach hereby declares that it would have adopted this Ordinance
and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that
any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
SECTION 19. Effective Date.
This Ordinance shall take effect thirty (30) days after the date of its adoption. The City
Clerk shall certify to the passage and adoption of this Ordinance and within fifteen (15) days shall
cause same to be published in a newspaper of general circulation in the manner provided by law.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular
meeting thereof held on the day of 2004.
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk City Attorney
REVIEWED AND APPROVED: INITIATED AND APPROVED:
City Administrator Director of Public Works
INITIATED AND APPROVED
Director of Administrative Services
10
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40
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AN AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH
AND SOUTHERN CALIFORNIA WATER COMPANY REGARDING
CONSTRUCTION OF A WATER PIPELINE
WHEREAS, on October 5, 2000, Southern California Water Company, a California
corporation ("SCWC'), pursuant to Decision No. 00-10-029 of the California Public Utilities
Commission ("CPUC"), obtained a Certificate of Public Convenience and Necessity ("CPCN") to
extend water service to a development on the Bolsa Chica Mesa; and
WHEREAS, SCWC applied to the City on February 1, 2002, for a pipeline franchise
pursuant to the CPCN; and
WHEREAS, a dispute has arisen between the City and SCWC regarding the terms of the
franchise and the conditions under which SCWC will initially construct and install the pipeline and
related appurtenances; and
WHEREAS, in order to resolve the dispute, the City and SCWC have agreed that prior to
issuing a franchise to SCWC, the City and SCWC shall enter into this Agreement. This Agreement
shall be null and void if the City does not issue a franchise in substantially the form of Exhibit A
hereto (the "Franchise").
NOW, THEREFORE, the City Council of the City of Huntington Beach and SCWC agree
as follows:
Section 1. Encroachment Permit.
SCWC shall not begin constructing the Facilities authorized by the Franchise without first
obtaining an encroachment permit from the City Director of Public Works pursuant to Chapter
12.13 of the Municipal Code. As part of the encroachment permit application, SCWC shall submit
to the Director detailed engineering and traffic control plans, including site-specific hours of
construction, prepared under the supervision of a professional civil engineer or traffic engineer
licensed to practice in the State of California. The application shall include a construction schedule
identifying reasonable time periods for the completion of each stage of construction. If SCWC
applies for the encroachment permit within 365 days of the effective date of the Franchise, SCWC
shall pay any permit and inspection fees required by the terms of City Council Resolution No. 2003-
64, as amended through December 1, 2004. If SCWC applies for the encroachment permit more
than 365 days after the effective date of the Franchise, SCWC shall pay any permit and inspection
fees required by the terms of City Council Resolution No. 2003-64, as it exists at the time SCWC
applies.
Upon submission of such plans and payment of such fees, the Director shall issue SCWC an
encroachment permit, which permit shall constitute the sole encroachment permit necessary to
construct the pipeline including a construction schedule. Such encroachment permit shall be
consistent with this Agreement, shall not discriminate against SCWC, and shall include such terms
and conditions that the Director may reasonably establish which are not in conflict with or
inconsistent with this Agreement or the paramount authority of the State of California.
1
Upon request, the Director shall grant reasonable time extensions to the construction
,schedule or modifications to the other terms and conditions due to changed conditions,inclement
weather or inspection delays. Such requests may be made at any time during construction of the
Facilities.
Section 2. Liquidated Damages.
.(a) The Director may levy, and SCWC shall pay liquidated damages of Eight Hundred
Dollars ($800.00) per 1,320 feet of lane closure per day, or any portion thereof, that exceeds
without good cause the lane closures permitted under the construction schedule submitted by
SCWC or any extensions granted by the Director pursuant to Section 1.
(b) As a condition to the issuance of the encroachment permit, SCWC shall file with the
City Clerk of City a corporate surety bond in the sum of Fifty Thousand Dollars ($50,000.00) to i
secure SCWC's obligations hereunder. In the event SCWC fails to pay the amount of any
liquidated damages owed to City within thirty days of receiving written notification from the City
or, if SCWC files an appeal, within the timeframe established by Section 9, the City may recover
from the principal and sureties upon the bond the amount of liquidated damages owed by SCWC.
Section 3. Construction Requirements.
(a) Construction of the Facilities shall be accomplished pursuant to the terms of this
Agreement,the encroachment permit and Applicable Law.
(b) SCWC shall provide the City a telephone contact number, and staff it during regular
business hours, to enable the City to report any concerns regarding Street work. After business
hours such calls will be routed to an on-call supervisor. In the event that the City reports any
concerns to SCWC, SCWC shall use its best efforts to respond in such time as the Director
reasonably establishes, but SCWC shall not be required by the City to deviate from the terms of
construction set forth in this Agreement and the encroachment permit.
(c) SCWC shall use directional boring or trenchless construction on the segments of the
pipeline traveling through the intersections at Warner, Heil,Edinger, McFadden and Rancho Road.
(d) Every working day during construction, SCWC shall notify the designated City staff
member of the location of the next day's construction activities. The number of concurrent
construction locations may be limited by the City.
(e) When repairing Street work, SCWC shall grind and overlay the full width of the
primary lane which has been excavated or otherwise damaged. •In no case, shall SCWC be required
to grind and overlay more than 12 feet in roadway width for any given section of roadway.
(f) SCWC will provide at its sole cost such shoring or other support as shall be
reasonably required to support, maintain, and protect City Property, any storm drain or sewer
constructed by the County of Orange, or any similar facilities by any other governmental agencies,
from damages during construction of the Facilities.
2
(g) The bearing area for all thrust block restraints shall be constructed against
undisturbed earth and shall not impact the existing City water pipelines. Bearing area calculations
shall be prepared by a licensed civil engineer and submitted to the City for review and approval.
The civil engineer shall verify that the existing City water pipelines are not affected by any
surcharge loading caused by the Facilities. All mechanical restraints for the Facilities shall be
identified on the construction plans.
(h) During the excavation and construction of the Facilities, SCWC shall use its best
efforts to maintain the condition of plant material on the landscaped medians. At the conclusion of
construction, SCWC shall replace in-kind any dead or damaged plant material, clean any valves,
lines and heads that are plugged by materials entering the lines due to the cutting/breaking of lines
caused by SCWC, and otherwise restore the medians to their condition at the beginning of
construction.
(i) SCWC's construction activities shall be confined to the hours between 9:00 a.m. and
4:00 p.m., Monday through Friday, with the exception that Bolsa Chica, north of Argosy shall be
limited to 7:00 p.m. to 5:00 a.m.
All traffic lanes shall be reopened for traffic outside of the identified lane closure
periods.
0) Parking prohibitions on all roadways, where parking is currently permitted, shall be
confined to the hours between 7:00 a.m. and 5:00 p.m. or to the hours of 5:00 p.m. to 6:00 a.m. in
the case of nighttime construction for Bolsa Chica,north of Argosy.
(k) Street closures will not be allowed during construction except as permitted by the
Director, who shall not unreasonably prohibit them. The maximum length of any lane closure
activity on Bolsa Chica Street shall be one-quarter mile in each direction, excluding lane reduction
tapering. The following minimum lane requirements shall be provided at all times during
construction, subject to time of day restrictions as established above. These lane requirements are
based on the alignment using the number 1 northbound lane of Bolsa Chica Street. Any
modification to this alignment may result in the minimum lane requirements being modified during
construction of the pipeline. Arterial street closures shall be limited as follows:
(i) Bolsa Chica Street — Rancho Road to Warner Avenue: Maintain two
northbound through travel lanes and three southbound lanes in each direction
during work hours.
Bolsa Chica Street—Warner Avenue to Los Patos: Maintain one southbound
travel lane and one northbound travel lane during working hours.
Warner Avenue: No lane closures at any time.
(ii) Trenchless intersections: As provided by Section 3(c), construction at the
following intersections shall use directional boring or trenchless construction.
Should lane closures still be necessary at these intersections, they shall be
limited as follows:
3
Rancho Road at Bolsa Chica Street: Maintain one eastbound through travel
lane, one westbound left turn lane and one westbound right turn lane during
working hours.
McFadden Avenue at Bolsa Chica Street: Maintain one eastbound through
travel lane and one westbound left / right turn lane during working hours, in
addition to required through lanes on Bolsa Chica Street.
Edinger Avenue at Bolsa Chica Street: Maintain one eastbound through
travel lane and one westbound left turn lane during working hours, in
addition to required through lanes on Bolsa Chica Street.
Heil Avenue at Bolsa Chica Street: Maintain one eastbound through travel
lane and one westbound left turn lane during working hours, in addition to
required through lanes on Bolsa Chica Street. j
Warner Avenue at Bolsa Chica Street: Maintain one eastbound through
travel lane, one eastbound left turn lane, one westbound through travel lane
and one westbound left turn lane during working hours, in addition to
required through lanes on Bolsa Chica Street.
(iii) During construction of the Facilities, lane closures of local streets shall allow
one two-way travel lane with flagger control.
(iv) Where traffic signal detection is impacted by the construction activities,
signal control for the impacted lanes shall be placed on recall. All
modifications to existing signal controls will be coordinated with the City
Engineer. If traffic signal detection is impacted longer than ten working
days, the City may require video detection be furnished and installed by the
contractor.
(1) Loop detectors shall be restored to full operation within 10 days of completion of an
intersection. Under no circumstances shall detectors be out of operation at more than one
intersection at the same time.
(m) Prior to construction, SCWC shall contact the City's traffic signal maintenance crew
to coordinate the installation of the video detection and the replacement of traffic signal detection
on an as-needed basis as is reasonably determined by the Director.
(n) K-rail may be used to control traffic on an as needed basis.
Section 4. Completion Statement.
Upon the completion of the construction of the Facilities, SCWC shall submit as-built
drawings and a statement to the Director identifying the permit or permits issued by the Director,
the total length of, material and diameter of the pipeline, and any other Facility actually constructed.
4
Section 5. Damage to CityPProperty.
SCWC shall promptly repair any damage it causes to City property while constructing the
Facilities, at its sole cost and expense to as good a condition as it was before such damage occurred.
If SCWC, within thirty(30) days after receipt of written notice from the City instructing it to repair
such damage, fails to commence with such repairs, or thereafter fails to diligently complete them,
then the City immediately may do all work reasonably necessary to complete the repairs at the cost
and expense of SCWC,which cost and expense SCWC agrees to pay upon demand. The amount so
chargeable shall be the reasonable or direct cost of such work (whichever is lower) plus the current
rate of overhead being charged by the City for reimbursable work. The Director may establish a
repair period shorter than 30 days if public safety so demands. If such damage constitutes an
immediate danger to the public health or safety requiring the immediate repair thereof, the City,
without notice, may repair such damage and SCWC agrees to pay all reasonable costs the City
incurs.
Section 6. Changes by Mutual Agreement.
Any of the terms of this Agreement may be changed upon the mutual consent and written
agreement of the Director and SCWC.
Section 7. Insurance.
In addition to the insurance required from SCWC pursuant to the Franchise, SCWC shall
cause the City to be named as an additional insured on all insurance policies of SCWC's general
contractor. In addition, the City shall be named as an additional insured on all insurance policies of
SCWC's subcontractors where SCWC also is named as an additional insured.
Section 8. Definitions.
All capitalized terms used herein shall have the same meaning as in the Ordinance granting
SCWC its pipeline franchise.
Section 9. Dispute Resolution.
(a) In the event SCWC disagrees with any City decision related to the obligations and
duties imposed by Sections 1-6 of this Agreement (including but not limited to the terms of the
encroachment permit, the reasonableness of the construction schedule and the imposition of
liquidated damages), SCWC may appeal any such decision by filing a notice of appeal with
(the "Hearing Officer") within 30 days of receiving written notice
of the City's decision. No other disputes relating to this Agreement, the Franchise Ordinance or the
Settlement Agreement shall be subject to arbitration of any kind unless the parties voluntarily agree
to submit such dispute to arbitration. The remedies SCWC and the City may seek include, without
limitation, specific performance, injunctive relief, damages, rescission and declaratory relief.
(b) After receiving notice of the appeal, the Hearing Officer shall promptly hold an
evidentiary hearing and issue a written determination resolving the dispute. SCWC shall bear the
cost of any fees charged by the Hearing Officer related to the hearing. Each party shall bear its own
costs and fees in preparing and presenting their case to the Hearing Officer. The decision of the
5
Hearing Officer shall be final and binding. There shall be no right of appeal, except as provided
under California Code of Civil Procedure §§ 1285.8 - 1287.
,(c) With respect to an appeal of the imposition of liquidated damages, SCWC shall pay
the City any amount the Hearing Officer determines is owed to City hereunder within 30 days after
receipt of the Hearing Officer's written determination.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
, to be effective as of the effective date of the Franchise.
SOUTHERN CALIFORNIA WATER COMPANY, CITY OF HUNTINGTON BEACH,a municipal
a California corporation corporation of the State of California
By:
Mayor
print name City Clerk I
ITS: (circle one)Chairman/President/Vice
President
AND
APPROVED AS TO FORM:
By:
print name City Attorney
ITS: (circle one) Secretary/Chief Financial
Officer/Asst. Secretary—Treasurer
REVIEWED AND APPROVED: INITIATED AND APPROVED:
City Administrator Director of Building& Safety
6
0 0
H. B. INDEPENDENT
PUBLISH DATE: 3/3/05
CITY OF HUNTINGTON BEACH
LEGAL NOTICE
ORDINANCE NO. 3698
Adopted by the City Council on FEBRUARY 7, 2005
"AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING ORDINANCE
NO. 3117 WHICH GRANTED TO SOUTHERN CALIFORNIA GAS COMPANY THE
FRANCHISE TO LAY AND USE PIPES AND APPURTENANCES FOR
TRANSMITTING, DISTRIBUTING AND MEASURING GAS FOR ANY AND ALL
PURPOSES."
SYNOPSIS:
THE CURRENT AGREEMENT HAS BEEN IN PLACE SINCE 1958 AND WAS MOST RECENTLY
AMENDED IN 1991. IN OCTOBER 2003,THE PUBLIC UTILITIES CORPORATION (PUC) ISSUED
RESOLUTION G-3557,THAT CHANGED THE FORMULA USED TO CALCULATE FRANCHISE
REVENUE TO HUNTINGTON BEACH AND ALL OTHER CITIES IN CALIFORNIA. THE REVISIONS
TO ORDINANCE 3117 ALIGN THE CITY WITH THE INTENT OF THE PUC.
COPIES OF THIS ORDINANCE ARE AVAILABLE IN THE CITY CLERK'S OFFICE.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting held February 22, 2005 by the following roll call vote:
AYES: Hansen, Coerper, Sullivan, Hardy, Green, Bohr, Cook
NOES: None
ABSENT: None
This ordinance is effective 30 days after adoption.
CITY OF HUNTINGTON BEACH
2000 MAIN STREET
HUNTINGTON BEACH, CA 92648
714-536-5227
JOAN L. FLYNN, CITY CLERK