2) Alternatively, discuss and take other action related to this item.

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1 14-M TO: ATTENTION: FROM: Honorable Mayor and Members of the City Council Jeffrey L. Stewart, City Manager Len Gorecki, Assistant City Manager/ Director of Public Works Bernardo Iniguez, Public Works Manager SUBJECT: Consideration and possible action to adopt Resolution No A Resolution declaring the City Council s intention to grant oil pipeline franchises to Paramount Petroleum Corporation and Cardinal Pipeline, L.P., and setting a public hearing date for October 22, DATE: September 24, 2018 EXECUTIVE SUMMARY This action would declare the City Council s intention to grant oil pipeline franchises to Paramount Petroleum Corporation (Paramount) and Cardinal Pipeline, L.P. (Cardinal), for an existing pipeline in the City. This action would also set a Public Hearing for October 22, RECOMMENDATION TO CITY COUNCIL 1) Adopt Resolution No ; or 2) Alternatively, discuss and take other action related to this item. FISCAL IMPACT The franchise fee payment for Paramount was $45.81 for year 2016 and $47.03 for year 2017, based on the rates for a public utility oil pipeline. The payment for year 2018 will be calculated based on the Consumer Price Index for June 2000 and will be due by March 1, The franchise fee payment for Cardinal was $15, for year 2016 and $15, for year 2017, based on the rates for a nonpublic utility pipeline. The payment for 2018 will be calculated based on the Consumer Price Index for June 30, 1989, and will be due by March 1, Cardinal will also pay a granting fee of $10,000 when the ordinance is adopted. BACKGROUND Agreement File No. 317, a public utility oil pipeline franchise with Paramount, expired on January 2, On September 24, 2014, Paramount and Cardinal entered into a Purchase and Sale Agreement, in which Paramount transferred the majority of its rights, title, and interest, of the pipeline to Cardinal. The City received letters from both Cardinal and Paramount requesting franchise agreements reflecting their respective portions of the pipeline. Page 1 of 2-1-

2 Staff Report - Resolution of Intention to Grant oil Pipeline Franchises September 24, 2018 Page 2 of 2 BACKGROUND - Continued The franchises for both Cardinal and Paramount would be effective for the ten-year period starting retroactively on January 3, 2016, and continuing through January 2, Both Cardinal and Paramount would have the option to extend the term of their respective franchise for up to four additional five-year terms. Cardinal has requested that their portion of the pipeline be converted from a public utility to a nonpublic utility pipeline. To approve the franchises, the following four steps must be completed: 1) Adopt Resolutions of Intention to Grant a Franchise; 2) Publish Notice of Public Hearing; 3) Conduct Public Hearing and Introduce Ordinance; and, 4) Ordinance Second Reading and Adoption. If the City Council adopts the attached Resolutions, then a Public Hearing will take place on October 22, ATTACHMENTS Resolution No Draft Notice of Public Hearing... 6 Pipeline Location Maps

3 CITY OF BELLFLOWER RESOLUTION NO A RESOLUTION DECLARING THE CITY COUNCIL S INTENTION TO GRANT OIL PIPELINE FRANCHISES TO PARAMOUNT PETROLEUM CORPORATION AND CARDINAL PIPELINE, L.P., AND SETTING A PUBLIC HEARING DATE FOR OCTOBER 22, 2018 THE CITY COUNCIL RESOLVES AS FOLLOWS: SECTION 1. The City Council finds and declares as follows: A. The City Council adopted Ordinance No. 991 on January 3, 2001, granting a public utility oil pipeline franchise (Agreement File No. 317) to Paramount Petroleum Corporation (Paramount), formerly CENCO; B. On November 13, 2000, the City Council adopted Resolution No ; C. On September 24, 2014, Paramount and Cardinal Pipeline entered into that certain Purchase and Sale Agreement, pursuant to which Paramount transferred the majority of its rights, title, and interest in and to certain pipelines to Cardinal Pipeline; D. Agreement File No. 317 expired on January 2, 2016; E. On April 3, 2018, the City of Bellflower (City) received a letter from Paramount requesting a modified franchise agreement reflecting the remaining pipeline under Paramount s ownership; F. The purpose of the pipeline is to transport oil or products thereof; G. The proposed term of the franchise is ten (10) years, commencing retroactively as of January 3, 2016, and continuing through January 2, 2026; H. Paramount and Cardinal Pipeline L.P. (Cardinal) will have the option to extend the term of the franchise for up to four (4) additional five-year (5-year) terms; and I. It is the intent of the City s City Council to grant said franchises upon the applicants fulfilling all requirements of the law and additional conditions as may be required by the City. Page 1 of 2-3-

4 City of Bellflower Resolution No Page 2 of 3 SECTION 2. follows: The City Council does hereby find, determine, and declare as (A) Subject to Paramount and Cardinal s acceptance of terms of the proposed agreement between the City and Paramount, the City Council intends to grant to Paramount a public utility oil pipeline franchise for the following areas of the City: Paramount: In Artesia Boulevard from west city boundary to 150 feet east of west city boundary. Cardinal: In Artesia Boulevard from 150 feet east of West City boundary to Artesia Place; In Artesia Place from Artesia Boulevard to Woodruff Avenue; In Woodruff Avenue from Artesia Place to Trabuco Street; In Trabuco Street from Woodruff Avenue to East City limit. (B) The City Council will hold a public hearing on the proposed granting of the oil pipeline franchise on October 22, 2018, at 7:00 p.m. in the City Council Chambers at Bellflower City Hall, Civic Center Drive, Bellflower, California. Any persons having any objection to the granting of the oil pipeline franchise may appear before the City Council and be heard at that time. SECTION 3. This Resolution does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Resolution s effective date. Any such amended part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Resolution. SECTION 4. If any part of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Resolution are severable. SECTION 5. The City Council hereby directs the City Clerk publish the notice of the public hearing on the oil pipeline franchise at least once within the fifteen (15) days after the passage of this resolution. The notice shall indicate that during the term of the franchise Paramount will pay to the City the amount specified in the franchise and if such payment is not made, then the franchise will be forfeited. The notice shall also indicate the oil pipeline franchise will be for a term of ten (10) years commencing as of January 3, 2016, and continuing through January 2, SECTION 6. The Mayor, or presiding officer, is authorized to sign this Resolution signifying its adoption by the City Council of the City of Bellflower and the City Clerk, or her duly appointed deputy, may attest thereto. -4-

5 City of Bellflower Resolution No Page 3 of 3 SECTION 7. This Resolution will become effective immediately upon adoption and will remain effective unless repealed or superseded. PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 24 th DAY OF SEPTEMBER ATTEST: Ray Dunton, Mayor Mayra Ochiqui, City Clerk APPROVED AS TO FORM: Karl H. Berger, City Attorney -5-

6 CITY OF BELLFLOWER NOTICE OF PUBLIC HEARING TO CONSIDER GRANTING A PUBLIC UTILITY OIL PIPELINE FRANCHISE TO PARAMOUNT PETROLEUM CORPORATION AND CARDINAL PIPELINE L.P. (ORDINANCE NO. 13XX) NOTICE IS HEREBY GIVEN that a Public Hearing will be held by the Bellflower City Council to consider granting a public utility oil pipeline franchise (Ordinance No. 13XX) to Paramount Petroleum Corporation (Paramount) and Cardinal Pipeline L.P (Cardinal). The Public Hearing will be held on Monday, October 22, 2018, at 7 p.m., and will be held in the City Hall Council Chambers, Civic Center Drive, Bellflower, California. Testimony will be heard for and against granting an oil pipeline franchise to Paramount and Cardinal. Also, any person interested may make written protest or objections. Such written protest or objection shall be signed by the person protesting or objecting and delivered to the City Clerk before the end of the subject Public Hearing. Timely received written testimony will be submitted as evidence for the Public Hearing. Oral testimony may be presented at the appropriate time during the Public Hearing. The proposed franchise agreement is for a period of ten (10) years, commencing retroactively as of January 3, Paramount, Cardinal, and its successors and assigns, will pay to the City an annual fee specified therein, from the date of granting the franchise, and in the event payment is not made the franchise will be forfeited. Copies of the staff report, the proposed resolution, and attachments may be inspected by the public in the Public Works Department, City Maintenance Yard, 9944 Flora Vista Street, Bellflower, California. Questions should be directed to Bernardo Iniguez, Public Works Manager, at (562) , ext If you wish to challenge this matter in court, then you may be limited to raising only those issues you or someone else raised at the Public Hearing described in this notice, or in written correspondence timely delivered to the City Clerk for submission at the Public Hearing. By order of the City Council of the City of Bellflower, County of Los Angeles, State of California. MAYRA OCHIQUI, CITY CLERK -6-

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