AGENDA STAFF REPORT

Agenda Item AGENDA STAFF REPORT ASR Control 19-000903
MEETING DATE:	01/14/20
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	4
SUBMITTING Agency/Department:	OC Public Works (Approved)
Department contact person(s):	Julie Lyons (714) 667-9701
	Larry Stansifer (714) 667-3286

Subject: Approve Torrance Pipeline Company LLC Franchise

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Resolution(s) and Ordinance(s)

Discussion

3 Votes Board Majority

Budgeted: No

Current Year Cost: N/A

Annual Cost: N/A

Staffing Impact:

# of Positions:

Sole Source: N/A

Current Fiscal Year Revenue: $4,000

Funding Source: N/A	County Audit in last 3 years: No

Prior Board Action: 7/9/1996 #67

RECOMMENDED ACTION(S):

Find that the project is categorically exempt from CEQA, Class 1 (Existing Facilities) pursuant to CEQA Guidelines, Section 15301.

Adopt Resolution of intention to grant a new 10-year refined petroleum, non-exclusive franchise to Torrance Pipeline Company LLC.

Direct the Clerk of the Board to set February 11, 2020, as the first reading of a proposed ordinance and public hearing and February 25, 2020, as the second reading of the proposed ordinance for adoption of the Torrance Pipeline Company LLC franchise and publish a Notice of Public Hearing for adoption of the franchise in a newspaper of general circulation at least once within 15 days after passage of this Resolution.

SUMMARY:

Adoption of a Resolution of intention to grant a utility franchise to Torrance Pipeline Company LLC adheres to the requirements of the California Public Utilities Code and sets forth the statutory annual fee to be paid by the holder of the franchise.

BACKGROUND INFORMATION:

The Franchise Act of 1937 authorizes the Board of Supervisors (Board) to grant a franchise to gas, oil, electric and water companies to install and use pipes, connections and appurtenances for the transmission and distribution of the utility service under, along, across and upon public streets and alleys.

On July 9, 1996, the County of Orange (County) granted ExxonMobil a franchise to construct, operate and maintain pipelines for the transportation of hydrocarbon substances. In 2016, ExxonMobil sold their North Orange County assets to PBF Holding Company LLC. Shortly thereafter, Exxon Mobile Pipeline Assets were transferred from PBF Holding Company LLC to Torrance Pipeline Company LLC (Company), a designated affiliate. On June 27, 2017, the Company filed an application for a franchise and OC Public Works began negotiating the proposed franchise ordinance for a 10-year term at that time.

The Public Utilities Code Sections 6201-6302 set forth the statutory annual fees to be paid by the holder of the franchise transporting oil or products thereof. OC Public Works completed an audit of associated fees for this franchise and recommends that the Company pay the County a one-time administration fee of $4,000 to process the franchise plus an annual estimated franchise fee of $1,000. The most recent annual fees paid by the Company were $979 for FY 2017-18 and $931 for FY 2018-19. The annual franchise fee is based upon the length and diameter of the pipe located within the franchised area and will be adjusted per the Consumer Price Index (CPI) as published by the United States Department of Labor (USDL) for future calendar years. Upon execution of the franchise renewal, future relocation efforts by the Company will be governed by the franchise.

Prior to granting a franchise, the Board must pass a Resolution declaring its intention to grant the franchise applied for and direct the Clerk of the Board to publish a Notice of Public Hearing for adoption of the franchise. This notice must be published in a newspaper of general circulation, printed and published at least once within 15 days after passage of this Resolution. OC Public Works will return to the Board on two future dates for required public hearings on the franchise. Attachment C is the proposed Ordinance that will be brought back to the Board for adoption at public hearings on February 11, 2020 and February 25, 2020.

Compliance with CEQA: The proposed project is categorically exempt (Class 1) from the provisions of CEQA pursuant to Section 15301, because it renews an original existing Franchise Agreement (Ordinance No. 3962) granting a new 10-year refined petroleum, nonexclusive franchise right to the Company.

FINANCIAL IMPACT:

There will be a revenue deposit of a one-time administrative fee of $4,000 to General Fund Budget Control 001. The annual franchise fee is estimated to be approximately $1,000 and will be adjusted annually based on the CPI published by the USDL for future years. The annual franchise fee will continue to be recorded to General Fund Budget Control 001.

STAFFING IMPACT:

N/A

ATTACHMENT(S):

Attachment A - Resolution
Attachment B - Location Map
Attachment C - Proposed Ordinance
Attachment D - CA Public Utilities Code Sections 6201- 6302
Attachment E - Prior Ordinance No. 3962
Attachment F - Public Notice