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TO: Honorable Mayor and Members of the City Council
ATTENTION: Ryan Smoot, City Manager
FROM: Len Gorecki, Assistant City Manager/Director of Public Works Wangsu Lee, Management Analyst
SUBJECT: Consideration and possible action to adopt Resolution No. 24-08 - A Resolution declaring its intention to grant an oil pipeline franchise to Air Products Manufacturing, LLC (“Air Products”), a Delaware Limited Liability Company, and setting a public hearing date for March 11, 2024.
DATE: February 12, 2024
EXECUTIVE SUMMARY
On November 14, 2023, Air Products Manufacturing, LLC (“Air Products”; “Purchaser”) completed its Asset Purchase and Sale Agreement with Paramount Pipeline, LLC (“Paramount Pipeline”; “Seller”) for all the pipeline assets in the City of Bellflower covered under Franchise Agreement No. 216.1.2. Franchise Agreement No. 216.1.2 expired on January 25, 2024, and Air Products now seeks to be granted by the City of Bellflower, a new franchise agreement for ten (10) years with the option for a ten (10) year renewal, for the same pipelines previously owned by Paramount Pipeline under Agreement File No. 216.1.2. The adoption of Resolution No. 24-08 would declare the City’s intention to grant the proposed franchise to Air Products and set a Public Hearing date for March 11, 2024.
RECOMMENDATION TO CITY COUNCIL
1) Adopt Resolution No. 24-08, a Resolution declaring its intention to grant an oil pipeline franchise to Air Products Manufacturing, LLC, a Delaware Limited Liability Company, and set a public hearing date for March 11, 2024; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
The proposed franchise with Air Products is a non-public utility; therefore, fees are negotiable. Air Products will pay the negotiated base annual fee of $.229 per lineal foot, adjusted annually based on the change in Consumer Price Index for the Los Angeles-Long Beach-Anaheim area. The increase is based on the Consumer Price Index, All Urban Consumers, for the Los Angeles-Long Beach-Anaheim area for the month of September immediately preceding the month in which payment is due and payable, divided by the Consumer Price Index, All Urban Consumers, for the Los Angeles-Long Beach-Anaheim area for June 30, 1989. Air Products’ annual base fee for 2023 due in March 2024 is $4,049.27.
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Staff Report - Consideration and Possible Action to Adopt Resolution No. 24-08 February 12, 2024
ENVIRONMENTAL REVIEW
The proposed franchise is exempt from additional environmental review under the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., “CEQA”) and CEQA regulations (14 California Code of Regulations §§ 15000, et seq.) because the granting of the oil pipeline franchises fit within the definition of the Class 1 exemption, “Existing Facilities,” as defined in Section 15301(c) of the CEQA regulations. The proposed grants of franchises involve no or negligible alteration of existing facilities involving no or negligible expansion of use beyond that existing at the time of the determination that the Categorical Exemption applies. Furthermore, the proposed grants of franchises will not adversely impact air quality or any other environmental area, as they will be subject to applicable regulatory requirements.
DISCUSSION
On January 24, 1994, the City Council of the City of Bellflower adopted Ordinance No. 823, granting a public utility oil pipeline franchise (Agreement File No. 216) to Four Corners Pipe Line Company (“Four Corners”), dba ARCO Pipe Line Company (“ARCO”), which expired on January 24, 2004. On July 17, 1996, Paramount Petroleum Corporation (“Paramount Petroleum”) purchased a portion of the pipeline from ARCO.
On June 27, 2013, the City received a letter from Paramount Petroleum requesting a 20-year franchise agreement for the pipelines Paramount Petroleum purchased from ARCO. On March 17, 2014, the City received a statement from Paramount Petroleum, requesting the franchise to be granted as a non-public utility service pipeline franchise.
On June 23, 2014, the City Council adopted Ordinance No. 1276, granting a 20-year non-public utility service pipeline franchise agreement (Agreement File No. 216.1.2) to Paramount Petroleum Corporation from January 25, 2004, through January 25, 2024.
On April 8, 2019, the City Council approved and adopted Resolution No. 19-22, approving the transfer of oil pipeline franchise (Agreement File No. 216.1.2) from Paramount Petroleum to Paramount Pipeline. On November 14, 2023, Air Products completed its Asset Purchase and Sale Agreement with Paramount Pipeline to purchase the pipeline assets in the City of Bellflower covered under Franchise Agreement No. 216.1.2. Air Products now seeks to be granted by the City a new franchise agreement for ten (10) years, with the option for a ten (10) year renewal for the same pipelines previously owned by Paramount Pipeline under Agreement File No. 216.1.2.
To approve the franchise, the following four steps must be completed:
1. Adopt Resolution of Intention to Grant a Franchise .......................... February 12, 2024
2. Publish Notice of Public Hearing ................................ February 19 and March 4, 2024
3. Conduct Public Hearing and Introduce Ordinance ................................ March 11, 2024
4. Adopt Ordinance................................................................................... March 25, 2024
ATTACHMENT
Resolution No. 24-08....................................................................................................... 3
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CITY OF BELLFLOWER
RESOLUTION NO. 24-08
A RESOLUTION DECLARING ITS INTENTION TO GRANT AN OIL
PIPELINE FRANCHISE TO AIR PRODUCTS MANUFACTURING, LLC
(“AIR PRODUCTS”), A DELAWARE LIMITED LIABILITY COMPANY, AND SETTING A PUBLIC HEARING DATE FOR MARCH 11, 2024
THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1. Recitals. The City Council finds and declares as follows:
A. On June 23, 2014, the City Council adopted Ordinance No. 1276, granting a 20-year non-public utility service pipeline franchise agreement (Agreement File No. 216.1.2) to Paramount Petroleum Corporation (“Paramount Petroleum”) from January 25, 2004, through January 25, 2024;
B. On April 8, 2019, The City Council approved and adopted Resolution No. 19-22, approving the transfer of Agreement File No. 216.1.2 from Paramount Petroleum Corporation to Paramount Pipeline, LLC (“Paramount Pipeline”);
C. On November 14, 2023, Air Products Manufacturing, LLC (“Air Products”; “Purchaser”) completed its Asset Purchase and Sale Agreement with Paramount Pipeline (“Seller”) to purchase the pipeline assets in the City of Bellflower covered under Franchise Agreement No. 216.1.2;
D. Paramount Pipeline had a 20-year oil pipeline franchise agreement with the City which expired on January 25, 2024. Air Products now seeks to be granted by the City a new franchise agreement for ten (10) years, with the option of a ten (10) year renewal, for the same pipelines previously owned by Paramount Pipeline under Agreement File No. 216.1.2;
E. The purpose of the pipeline is to transport oil or products thereof;
F. It is the intent of the City Council of the City of Bellflower to grant said franchise upon the applicant fulfilling all requirements of the law and additional conditions as may be required by the City;
G. The City Council will hold a public hearing on the proposed granting of the oil pipeline franchise on March 11, 2024, at 7:00 p.m. in the City Council Chambers at Bellflower City Hall, 16600 Civic Center Drive, Bellflower, California 90706. 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.
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City of Bellflower
Resolution No. 24-08
SECTION 2. Factual Findings.
A. On January 24, 1994, the City Council adopted Ordinance No. 823, granting a public utility oil pipeline franchise (Agreement File No. 216) to Four Corners Pipe Line Company (“Four Corners”), dba ARCO Pipe Line Company (“ARCO”), which expired on January 24, 2004;
B. On July 17, 1996, Paramount Petroleum purchased a portion of the pipeline from ARCO;
C. On June 27, 2013, the City received a letter from Paramount Petroleum requesting a 20-year franchise agreement for the pipelines Paramount Petroleum purchased from ARCO;
D. On March 17, 2014, the City received a statement from Paramount Petroleum, requesting the franchise be granted as a non-public utility service pipeline franchise;
H. On June 23, 2014, The City Council adopted Ordinance No. 1276, granting a 20-year non-public utility service pipeline franchise agreement (Agreement File No. 216.1.2) to Paramount Petroleum Corporation (“Paramount Petroleum”) from January 25, 2004, through January 25, 2024;
E. On April 8, 2019, The City Council approved and adopted Resolution No. 19-22, a resolution approving the transfer of oil pipeline franchise (Agreement File No. 216.1.2) from Paramount Petroleum to Paramount Pipeline.
F. On November 14, 2023, Air Products completed its Asset Purchase and Sale Agreement with Paramount Pipeline to purchase the pipeline assets in the City of Bellflower covered under Franchise Agreement No. 216.1.2.
G. Air Products now seeks to be granted by the City a new franchise agreement for ten (10) years, with the option of a ten (10) year renewal, for the same pipelines previously owned by Paramount Pipeline under Agreement File No. 216.1.2;
H. Air Products’ pipelines within the City’s public right-of-way consist of ten thousand one hundred thirty-nine (10,139) lineal feet of four-inch (4”) pipes in Lakewood Boulevard from Somerset Boulevard to south City boundary approximately two hundred thirty (230) feet south of Rose Street;
I. The City Clerk is hereby directed to transmit a certified copy of this Resolution to:
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City of Bellflower
Resolution No. 24-08
Paragon Partners Consultants, Inc.
Attention: Michael Boss, Senior Director
5660 Katella Avenue, Suite 100
Cypress, CA 90630
SECTION 3. Approval. By adopting this resolution, City Council declares its intention to grant said franchise agreement to Air Products and its successors. To the extent that any other resolution pertaining to a franchise agreement with Air Products is incorporated into this Resolution, it is superseded or amendment in its entirety.
SECTION 4. 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 5. Limitations. The City Council’s analysis and evaluation of the project is based on the best information currently available. It is inevitable that in evaluating a project that absolute and perfect knowledge of all possible aspects of the project will not exist. One of the major limitations on analysis of the project is the City Council’s lack of knowledge of future events. In all instances, best efforts were made to form accurate assumptions. Somewhat related to this are the limitations on the City's ability to solve what are in effect regional, state, and national problems and issues. The City must work within the political framework within which it exists and with the limitations inherent in that framework.
SECTION 6. Summaries of Information. All summaries of information in the findings, which precede this section, are based on the substantial evidence in the record.
The absence of any particular fact from any such summary is not an indication that a particular finding is not based in part on that fact.
SECTION 7. Construction. This Resolution must be broadly construed to achieve the purposes stated in this Resolution. It is the City Council’s intent that the provisions of this Resolution be interpreted or implemented by the City and others in a manner that facilitates the purposes set forth in this Resolution.
SECTION 8. Severability. 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 9. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
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City of Bellflower
Resolution No. 24-08
SECTION 10. The Mayor, or presiding officer, is authorized to affix his signature to this Resolution signifying its adoption by the City Council of the City of Bellflower, and the City Clerk, or her duly appointed deputy, is directed to attest.
SECTION 11. Effective Date. 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 12TH DAY OF FEBRUARY 2024.
________________________________
Dan Koops, Mayor
ATTEST:
________________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
________________________________
Karl H. Berger, City Attorney
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