Amendment to Pipeline Franchise Agreement
Cardinal Pipeline L.P
Statement of Issue
The Mayor and City Council are being asked to approve for introduction Ordinance No. 4230 and authorize execution of an Amendment to the Pipeline Franchise Agreement with Cardinal Pipeline L.P.
Financial Impact
The City will continue to receive a Base Annual Fee which will be deposited to the General Fund (Account Number 10000100.41230). Each annual period, this fee is adjusted by a rate of change as determined by HBMC 3.44.290.
Financial Impact
Under this agreement Cardinal Pipeline owes a Base Annual Fee of $117,024.35 + annual CPI escalation as per HBMC 3.44. The following table details the annual fee breakdown under this agreement:
Local Market
Staff have reviewed both State and local agencies to determine how the City’s pipeline franchise base annual fee structure compares to the greater market.
We have found that the City of Huntington Beach is currently charging a higher base annual rate than all agencies reviewed.
The following table provides details
Local Market
Terms of Amendment
10-year extension. New expiration would be 2/13/2034.
Base Annual Fee: $117,024.35 + Annual CPI adjustment.
Corporate Surety Bond of $100,000
Liability, Environmental and Workers Compensation Insurance
Recommended Action
Approve for introduction Ordinance 4230 “An Ordinance of the City of Huntington Beach Amending Ordinance No. 4008 which Granted and Oil Pipeline Franchise” Approve and authorize the Mayor and City Clerk to execute the “Amendment to Franchise Agreement between the City of Huntington Beach and Cardinal Pipeline L.P”.
Alternative Action
Do not approve the Agreement and direct staff to draft correspondence informing Franchisee that existing pipeline must be abandoned pursuant to HBMC and State code.
This action would result in revenue loss for the City.
Questions?