Agenda packet — San Luis Obispo City Council, January 11, 2022 (part 1 of 4)

City Council
AGENDA

Tuesday, January 11, 2022, 6:00 p.m.

Teleconference - Broadcast via Webinar
Pursuant to Executive Orders N-60-20 and N-08-21 executed by the Governor of California, and subsequently Assembly Bill 361, enacted in response to the state of emergency relating to novel coronavirus disease 2019 (COVID-19) and enabling teleconferencing accommodations by suspending or waiving specified provisions in the Ralph M. Brown Act (Government Code § 54950 et seq.), members of the public, City Council, City Manager, City Attorney, City Staff, and City Consultants may participate in this regular meeting by teleconference.

Using the most rapid means of communication available at this time, members of the public are encouraged to participate in Council meetings in the following ways:

Remote Viewing - Members of the public who wish to watch the meeting can:

Join the Webinar:

URL: https://slocityorg.zoom.us/j/89667383772?pwd=enRTdCtFTWtlQ0FQT2doNzVyMWhoUT09 Telephone Attendee: +1 (669) 900-6833
Webinar ID: 896 6738 3772; Passcode: 579738
Note: The City utilizes Zoom Webinar for City Council Meetings. All attendees will enter the meeting muted. An Attendee tutorial is available on YouTube; test your audio settings.

Watch the meeting televised live on Charter Cable Channel 20 View a livestream of the meeting on the City’s YouTube channel: http://youtube.slo.city Public Comment - Public comment can be submitted in the following ways:

Mail or Email Public Comment
Received by 3:00 PM on the day of meeting - Can be submitted via email to [email protected] or U.S. Mail to City Clerk at 990 Palm St. San Luis Obispo, CA 93401. All emails will be archived/distributed to councilmembers, however, submissions after 3:00 p.m. on the day of the meeting may not be archived/distributed until the following day. Emails will not be read aloud during the meeting.

Verbal Public Comment
In Advance of the Meeting – Call (805) 781-7164; state and spell your name, the agenda item number you are calling about and leave your comment. The verbal comments must be limited to 3 minutes. All voicemails will be forwarded to the Council Members and saved as Agenda Correspondence. Voicemails will not be played during the meeting.

During the meeting – Join the webinar (instructions above). Once public comment for the item you would like to speak on is called, please raise your virtual hand, your name will be called, and your microphone will be unmuted. If you have questions, contact the office of the City Clerk at [email protected] or (805) 781-7100.

Pages

1. CALL TO ORDER
Mayor Erica A. Stewart will call the Regular Meeting of the San Luis Obispo City Council to order.

2. PLEDGE OF ALLEGIANCE
Council Member Andy Pease will lead the Council in the Pledge of Allegiance.

3. PRESENTATIONS

3.a. CITY MANAGER REPORT
Receive a brief report from City Manager Derek Johnson.

3.b. INTRODUCTION - BRENDAN PRINGLE, ADMINISTRATIVE ANALYST

FOR THE PARKS & RECREATION DEPARTMENT
Community Services Business Manager Rebecca Bernstorff will introduce Brendan Pringle, Administrative Analyst for the Parks & Recreation Department.

4. PUBLIC COMMENT PERIOD FOR ITEMS NOT ON THE AGENDA
Not to exceed 15 minutes. The Council welcomes your input. State law does not allow the Council to discuss or take action on issues not on the agenda, except that members of the Council or staff may briefly respond to statements made or questions posed by persons exercising their public testimony rights (Gov. Code sec. 54954.2). Staff may be asked to follow up on such items.

5. CONSENT AGENDA
Not to exceed 15 minutes. Matters appearing on the Consent Calendar are expected to be non-controversial and will be acted upon at one time. A member of the public may request the Council to pull an item for discussion. Pulled items shall be heard at the close of the Consent Agenda unless a majority of the Council chooses another time. The public may comment on any and all items on the Consent Agenda within the three-minute time limit.

Recommendation:

To approve Consent Calendar Items 5a to 5e.

5.a. WAIVE READING IN FULL OF ALL RESOLUTIONS AND

ORDINANCES
Recommendation:

Waive reading of all resolutions and ordinances as appropriate.

5.b. MINUTES REVIEW - NOVEMBER 29, 2021 CLOSED SESSION AND DECEMBER 7, 2021 REGULAR MEETING MINUTES
9 Recommendation:

Approve the minutes of the City Council Closed Session on November 29, 2021 and the Regular Meeting Minutes of December 7, 2021.

5.c. REAFFIRM RESOLUTION NO. 11278 AUTHORIZING CONTINUING TO MEET VIRTUALLY PURSUANT TO ASSEMBLY BILL 361
19 Recommendation:

Reaffirm Resolution No. 11278 (2021 Series) entitled, “A Resolution of the City of San Luis Obispo, California, proclaiming the continued need to meet by teleconference pursuant to Government Code Section 54953(e).”

5.d. ADOPT A RESOLUTION OF INTENTION TO APPROVE A RENEWED FRANCHISE AGREEMENT WITH PHILLIPS 66 PIPELINE, LLC FOR

EXISTING PIPELINES LOCATED WITHIN THE CITY RIGHT-OF-WAY 25 Recommendation:

Adopt a Resolution of Intention entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, declaring the City’s intent to approve an Ordinance, superseding Ordinance 1564 (2011 Series), to continue to allow the use of the City’s right of way for the continued operation and maintenance of existing pipelines for the transportation of oil and other specified materials in the City of San Luis Obispo by Phillips 66 Pipeline LLC and setting a public hearing for February 15, 2022” to consider a renewed franchise agreement with Phillips 66 Pipeline LLC pursuant to the provisions of Article X of the City Charter and Section 6232 of the California Public Utilities Code.

5.e. REQUEST TO INCLUDE PROPERTY AT 211 CHORRO IN THE

INVENTORY OF HISTORIC RESOURCES AS A MASTER LIST
RESOURCE (HIST-0608-2021)
165
Recommendation:

As recommended by the Cultural Heritage Committee, adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, adding the property located at 211 Chorro Street to the Master List of Historic Resources as ‘The Muller-Noggle House and Garage’.”

6. PUBLIC HEARING AND BUSINESS ITEMS

6.a. INTRODUCE AN ORDINANCE AMENDING THE CITY’S PARKING PERMIT PROGRAM FOR COMMERCIAL PROPERTIES (Estimated
Time: 60 minutes)
227
Recommendation:

Introduce an Ordinance entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Title 10, Chapter 36 (Stopping, Standing and Parking for Certain Purposes or in Certain Places), of the San Luis Obispo Municipal Code” to revise the City's parking permit program allowing for the formation of preferential permit parking districts in commercial areas to address on-street parking impacts in those areas.

6.b. 3580 AND 3584 BULLOCK LANE (ARCH-0489-2020) REVIEW OF A 192-UNIT MIXED-USE DEVELOPMENT PROJECT INCLUDING 7
LIVE/WORK UNITS AND A 585 SQUARE FOOT COMMERCIAL UNIT
ON A 10.93-ACRE SITE LOCATED IN THE ORCUTT AREA SPECIFIC PLAN (Estimated Time: 60 minutes)
239
Recommendation:

Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving a Common Interest Vesting Tentative Tract Map (VTTM 3136), a 192-unit Mixed-Use Development, including 7 Live/Work Units, a 585 square foot Commercial Unit, on-site parking, and other residential community amenities on a 10.93-acre site located within the 231-Acre Orcutt Area Specific Plan (OASP), a request to allow Live/Work Units on the ground floor within the first 50 feet of floor area measured from the building face adjacent to a street, a Sign Program, the summary abandonment of 30 feet offer of dedication for public street and utility purposes, and adopt a Mitigated Negative Declaration of Environmental Review as represented in the City Council Agenda Report and attachments dated January 11, 2022 (3580/3584 Bullock Lane File #ARCH-0489-2019, SBDV-0490-2019, EID-0345- 2020).”

6.c. REVIEW OF AN APPEAL OF THE PLANNING COMMISSION’S

DECISION TO UPHOLD THE DENIAL OF A SETBACK REDUCTION
REQUEST AT 1953 CHORRO ST. (APPL-0512-2021) (Estimated Time:
60 minutes)
427
Recommendation:

Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, denying an appeal and upholding the Planning Commission’s decision to uphold the Community Development Director’s decision denying a request for a Discretionary Exception from Side and Rear Setback Standards for an Accessory Structure at 1953 Chorro Street (APPL-0512-2021).”

7. LIAISON REPORTS AND COMMUNICATIONS
Not to exceed 15 minutes. Council Members report on conferences or other City activities. At this time, any Council Member or the City Manager may ask a question for clarification, make an announcement, or report briefly on their activities. In addition, subject to Council Policies and Procedures, they may provide a reference to staff or other resources for factual information, request staff to report back to the Council at a subsequent meeting concerning any matter or take action to direct staff to place a matter of business on a future agenda. (Gov. Code Sec. 54954.2)

8. ADJOURNMENT
The next Regular Meeting of the City Council will be held on January 18, 2022 at 6:00 p.m., via teleconference
LISTENING ASSISTIVE DEVICES for the hearing impaired - see the Clerk.

The City of San Luis Obispo wishes to make all of its public meetings accessible to the public. Upon request, this agenda will be made available in appropriate alternative formats to persons with disabilities. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the City Clerk’s Office at (805) 781-7100 at least 48 hours before the meeting, if possible. Telecommunications Device for the Deaf (805) 781-7410.

City Council regular meetings are televised live on Charter Channel 20. Agenda related writings or documents provided to the City Council are available for public inspection in the City Clerk’s Office located at 990 Palm Street, San Luis Obispo, California during normal business hours, and on the City’s website www.slocity.org. Persons with questions concerning any agenda item may call the City Clerk’s Office at (805) 781-7100.

Page 8 of 466 ends

1 Council Minutes
November 29, 2021, 4:30 p.m.

Teleconference - Broadcast via Webinar
Council Members

Present:

Council Member Jan Marx, Council Member Andy Pease, Vice Mayor Carlyn Christianson, Mayor Erica A. Stewart
Council Members

Absent:

Council Member Michelle Shoresman
City Staff Present: Derek Johnson, City Manager, Christine Dietrick, City Attorney, Teresa Purrington, City Clerk
_____________________________________________________________________

1. CALL TO ORDER
A Special Meeting of the San Luis Obispo City Council was called to order on November 29, 2021 at 4:33 p.m. by Mayor Stewart, with Members present via teleconference.

2. CLOSED SESSION

2.a PUBLIC COMMENT ON CLOSED SESSION ITEMS ONLY
Public Comment:

None
--End of Public Comment--

2.b CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Council Member Shoresman was recused due to her employment with the County of San Luis Obispo.

City Attorney Christine Dietrick reported that the Council met on one matter regarding anticipated litigation as described on the agenda. There was no reportable action taken.

Page 9 of 466 ends

2 2.c ADJOURN CLOSED SESSION
The Closed Session was adjourned at 5:33 p.m. The next Regular City Council Meeting is scheduled for December 7, 2021 at 6:00 p.m. via teleconference.

APPROVED BY COUNCIL: XX/XX/202X

Page 10 of 466 ends

1 Council Minutes
December 7, 2021, 6:00 p.m.

Teleconference - Broadcast via Webinar
Council Members

Present:

Council Member Jan Marx, Council Member Andy Pease,
Council Member Michelle Shoresman, Vice Mayor Carlyn
Christianson, Mayor Erica A. Stewart
City Staff Present: Derek Johnson, City Manager, Christine Dietrick, City Attorney, Teresa Purrington, City Clerk
_____________________________________________________________________

1. CALL TO ORDER - CITY COUNCIL / GROUNDWATER SUSTAINABILITY AGENCY
A Regular Meeting of the San Luis Obispo City Council, also acting as the San Luis Obispo Sustainable Groundwater Agency, was called to order on December 7, 2021 at 6:03 p.m. by Mayor Stewart, with all Members present via teleconference.

2. PLEDGE OF ALLEGIANCE
Vice Mayor Christianson led the Council in the Pledge of Allegiance.

3. PRESENTATIONS

3.a CITY MANAGER REPORT
City Manager Derek Johnson provided a report on upcoming projects and a status update on COVID-19.

3.b INTRODUCTIONS - ALEAH BERGAM, BUSINESS MANAGER FOR

UTILITIES AND PAUL FIELDS, ADMINISTRATIVE ANALYST FOR

PUBLIC WORKS
Community Services Business Manager Rebecca Bernstorff introduced Aleah Bergam, Business Manager for the Utilities Department and Paul Fields, Administrative Analyst for the Public Works Department.

Page 11 of 466 ends

2 4. PUBLIC COMMENT PERIOD FOR ITEMS NOT ON THE AGENDA
Public Comment:

Kris Roudebush
Christina Lefevre Latner
--End of Public Comment--

5. CONSENT AGENDA
Motion By Vice Mayor Christianson
Second By Council Member Shoresman
To approve Consent Calendar Items 5a to 5n.

Ayes (5): Council Member Marx, Council Member Pease, Council Member Shoresman, Vice Mayor Christianson, and Mayor Stewart
CARRIED (5 to 0)

5.a WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES Waive reading of all resolutions and ordinances as appropriate.

5.b MINUTES REVIEW - NOVEMBER 9, 2021 AND NOVEMBER 16, 2021

COUNCIL MINUTES
Approve the minutes of the City Council meetings held on November 9, 2021 and November 16, 2021.

5.c REAFFIRM RESOLUTION NO. 11278 AUTHORIZING CONTINUING TO MEET VIRTUALLY PURSUANT TO ASSEMBLY BILL 361
Reaffirm Resolution No. 11278 (2021 Series) entitled A Resolution of the City of San Luis Obispo, California, proclaiming the continued need to meet by teleconference pursuant to Government Code Section 54953(e).

5.d SECOND READING OF ORDINANCE NO. 1703 (2021 SERIES) TO AMEND TITLE 17 (ZONING REGULATIONS) OF THE MUNICIPAL
CODE ADDING OBJECTIVE DESIGN STANDARDS CHAPTER 17.69

FOR QUALIFYING RESIDENTIAL PROJECTS
Adopt Ordinance No. 1703 (2021 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Title 17 (Zoning Regulations) of the Municipal Code with Objective Design Standards for qualifying residential projects with an exemption from Environmental Review (CEQA).”

Page 12 of 466 ends

3 5.e SECOND READING OF ORDINANCE NO. 1704 (2021 SERIES)

APPROVING REVISIONS TO WATER AND WASTEWATER CHAPTERS
OF MUNICIPAL CODE TITLE 13, PUBLIC SERVICES
Adopt Ordinance No. 1704 (2021 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Title 13, Sections 13.04, 13.06, 13.07, 13.08, and 13.24 of the San Luis Obispo Municipal Code.”

5.f SECOND READING OF ORDINANCE NO. 1705 (2021 SERIES) TO AMEND TITLE 6 (ANIMALS) AND TITLE 17 (ZONING REGULATIONS)

OF THE MUNICIPAL CODE
Adopt Ordinance No. 1705 (2021 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, approving clarification of Bee Keeping Regulations (Title 6); and an update to the City’s Zoning Regulations (Title 17) of the Municipal Code including amendments to implement several 6th Cycle Housing Element Policies to streamline development review processes for certain housing projects, provide consistency with the updated San Luis Obispo County Airport Land Use Plan, and additional miscellaneous clean-up items with an exemption from Environmental Review (CEQA) (Zoning Regulations, CODE-0663-2021).”

5.g SECOND READING OF ORDINANCE NO. 1706 (2021 SERIES)

APPROVING REVISIONS TO SOLID WASTE AND RECYCLING
SECTIONS OF MUNICIPAL CODE TITLE 8, HEALTH AND SAFETY
Adopt Ordinance No. 1706 (2021 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Title 8, Chapters 8.04 and 8.05 of the San Luis Obispo Municipal Code.”

5.h REVIEW OF A MILLS ACT HISTORICAL PROPERTY CONTRACT FOR 201 BUENA VISTA AVENUE (THE KENNETH AND MARTHA

SCHWARTZ HOUSE)
Adopt Resolution No. 11292 (2021 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving a Historic Property Preservation Agreement between the City and the owners of the Kenneth and Martha Schwartz House at 201 Buena Vista Avenue (Application No. HIST07482021).”

Page 13 of 466 ends

4 5.i REVIEW OF A MILLS ACT HISTORICAL PROPERTY CONTRACT FOR 531 DANA STREET (THE DANA/BARNEBERG HOUSE)
Adopt Resolution No. 11293 (2021 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving a Historic Property Preservation Agreement between the City and the Owners of the Dana / Barneberg House at 531 Dana Street (Application No. HIST05722021).”

5.j AWARD THE PARKS AND RECREATION OFFICE REHABILITATION CONSTRUCTION CONTRACT TO PRE CON, INC., SPEC. NO. 91562

1. Award a Construction Contract to Pre Con Industries, Inc. in the amount of $544,000 for the Parks and Recreation Office Rehabilitation Project, Specification Number 91562; and

2. Appropriate $150,000 from the Capital Reserve Funds to support the completion of the Parks & Recreation Office Rehabilitation project; and

3. Authorize the Finance Director to return unspent Capital Reserve funding to the Capital Reserve fund balance after project completion.

5.k ADVERTISEMENT OF GROUNDWATER CONTAMINATION

CHARACTERIZATION PROJECT AND APPLICATION FOR
PROPOSITION 1 GROUNDWATER GRANT

1. Approve the specifications for the Groundwater Contamination Characterization Project (Project), Specification No. 91506A and authorize staff to advertise the Project for bids; and

2. Authorize the City Manager to award the construction contract if the lowest responsible bid is within available project funding; and

3. Authorize staff to prepare and submit a grant application for Proposition 1 Groundwater Grant Program (Round 3, Implementation Phase), for the Project; and

4. Approve the use of up to $642,295 of available funding for Proposition 1 Groundwater Grant Program (Round 3, Implementation Phase) application preparation ($20,000) and a local match of a maximum of 10 percent of the total project cost ($622,295); and

5. Authorize the City Manager, or their designee, to execute required grant application documents; and

6. Adopt Resolution No. 11294 (2021 Series) entitled “A Resolution authorizing entering into a Funding Agreement with the State Water Resources Control Board and authorizing and designating a representative for Phase 3 of the Groundwater Contamination Characterization Project”.

Page 14 of 466 ends

5 5.l ADVISORY BODY APPOINTMENTS FOR UNSCHEDULED
VACANCIES: ACTIVE TRANSPORTATION COMMITTEE, CULTURAL

HERITAGE COMMITTEE, PROMOTIONAL COORDINATING

COMMITTEE, TREE COMMITTEE
Confirm the appointments of Nathan Stong to the Active Transportation Committee (ATC); Leslie Terry to the Cultural Heritage Committee (CHC); Anni Wang to the Promotional Coordinating Committee (PCC); and Sadie Mae Weller to the Tree Committee (TC).

5.m CALIFORNIA DEPARTMENT OF TRANSPORTATION (CALTRANS)

CLEAN CALIFORNIA REIMBURSEMENT AGREEMENT
Adopt Resolution No. 11295 (2021 Series) entitled, “A Resolution of City Council of the City of San Luis Obispo, California, authorizing the Mayor and City Manager to enter into a Reimbursement Agreement with Caltrans for the Clean California Program.”

5.n APPROVE PARTICIPATION IN NATIONAL OPIOID LITIGATION

SETTLEMENT AGREEMENTS

1. Approve City participation in the nationally negotiated opioid related settlement agreements with pharmaceutical distributors, McKesson, Cardinal Health and AmerisourceBergen (“Distributors”), and with manufacturer Janssen Pharmaceuticals, Inc. and its parent company Johnson & Johnson (“Janssen”).

2. Authorize the City Manager and City Attorney to execute documents as needed to participate in the settlement agreements.

Page 15 of 466 ends

6 6. PUBLIC HEARING AND BUSINESS ITEMS

6.a SUSTAINABLE GROUNDWATER MANAGEMENT PLAN ADOPTION
(Estimated Time: 60 minutes)
Utilities Director Aaron Floyd and Utilities Deputy Director of Water Mychal Boerman provided an in-depth staff report and responded to Council questions.

Public Comments:

None
---End of Public Comment---
Motion By Council Member Pease
Second By Vice Mayor Christianson

1. Acting as the City of San Luis Obispo Groundwater Sustainability Agency, adopt Resolution No. 11296 (2021 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, acting as the City of San Luis Obispo Groundwater Sustainability Agency, adopting the San Luis Obispo Valley Basin Groundwater Sustainability Plan”; and

2. Authorize the County of San Luis Obispo Groundwater Sustainability Director, or their designee, to serve as the authorized representative for submittal of the Groundwater Sustainability Plan, and annual reports required under the Sustainable Groundwater Management Act, to the California Department of Water Resources.

Including the change in the staff agenda correspondence provided prior to the meeting.

Ayes (5): Council Member Marx, Council Member Pease, Council Member Shoresman, Vice Mayor Christianson, and Mayor Stewart
CARRIED (5 to 0)

6.b CONSIDER CREATING A COUNCIL COMPENSATION COMMITTEE
(Estimated Time: 45 minutes)
Deputy City Manager Greg Hermann and City Clerk Teresa Purrington provided an in-depth staff report and responded to Council questions.

Page 16 of 466 ends

7 Public Comments:

None
---End of Public Comment---
Motion By Vice Mayor Christianson
Second By Council Member Marx
To defer appointment of a Council Compensation Committee and directed staff to return to Council with a Resolution amending the Council Policies and Procedures (CP&P) to allow biennial Consumer Price Index (CPI) increases to Council and Planning Commission and Architectural Review Commission salaries without appointing a Council Compensation Committee.

Ayes (5): Council Member Marx, Council Member Pease, Council Member Shoresman, Vice Mayor Christianson, and Mayor Stewart
CARRIED (5 to 0)

7. LIAISON REPORTS AND COMMUNICATIONS
Council Member Pease provided updates on SLOCOG and the Nacimiento Water Commission.

Council Member Marx provided an update on IWMA.

Mayor Stewart provided an update on City/University Quarterly Meeting, the Multi-Cultural Workshop and SLOMA.

8. ADJOURNMENT
The meeting was adjourned at 8:35 p.m. The next Regular City Council Meeting been rescheduled to January 11, 2022 at 6:00 p.m., via teleconference.

APPROVED BY COUNCIL: XX/XX/202X

Page 17 of 466 ends

Page 18 of 466 ends

Item 5c
Department: Administration
Cost Center: 1021
For Agenda of: 1/11/2022
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Prepared By: Teresa Purrington, City Clerk
SUBJECT: REAFFIRM RESOLUTION NO. 11278 AUTHORIZING CONTINUING TO MEET VIRTUALLY PURSUANT TO ASSEMBLY BILL 361

RECOMMENDATION
Reaffirm Resolution No. 11278 (2021 Series) entitled, “A Resolution of the City of San Luis Obispo, California, proclaiming the continued need to meet by teleconference pursuant to Government Code Section 54953(e).”

DISCUSSION
On October 5, 2021, City Council adopted Resolution No. 11278 (2021 Series) (Attachment A) which proclaimed the continued need to meet by teleconference pursuant to Government Code Section 54953 (e). Adoption of the Resolution reaffirms current County Public Health Officer orders and guidance as well as CalOSHA requirements as the basis for continuing to meet virtually. It should be noted that adoption of the Resolution does not prohibit the conduct of a traditional or hybrid meeting if the circumstances of the declared health emergency change. Additionally, as required by Gov. Code § 54953(e)(G)(3), the City Council must make these findings every 30 days for as long as the City is conducting virtual meetings. Reaffirming the adoption of Resolution 11278 (2021 Series) satisfies this requirement.

Public Engagement
This is an administrative item, so no outside public engagement was completed. Public comment can be provided to the City Council through written correspondence prior to the meeting or through public testimony at the meeting.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommendation in this report, because the action does not constitute a “Project” under CEQA Guidelines sec. 15378.

Page 19 of 466 ends

Item 5c

FISCAL IMPACT
Budgeted: Yes Budget Year: 2021-22
Funding Identified: Yes
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ N/A $ $ $
State
Federal
Fees
Other:

Total $N/A $ $ $
The cost to run the meetings virtually and associated staff time are included in the City Clerk and IT annual budget appropriation. Additional costs will be incurred if a hybrid meeting format is desired. If Council would like to move to hybrid meetings then staff would submit a request for additional funding at the mid-year budget review.

ALTERNATIVES
Council could choose not to adopt the Resolution. Staff does not recommend this action because doing so would put the city out of alignment with County Public Health Order No. 6 and would require that meetings be conducted according to the unamended requirements of the Brown Act.

ATTACHMENTS
A – Resolution No. 11278 (2021 Series)

Page 20 of 466 ends

R 11278
RESOLUTION NO. 11278 (2021 SERIES)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS

OBISPO, CALIFORNIA, PROCLAIMING THE CONTINUED NEED TO

MEET BY TELECONFERENCE PURSUANT TO GOVERNMENT CODE
SECTION 54953(E).

WHEREAS, on March 4, 2020, the Governor of California proclaimed a State of Emergency to exist in California as a result of the threat of novel coronavirus disease 2019 (COVID-19); and
WHEREAS, on March 16, 2020, the City Manager, acting as the Emergency Services Director, approved a proclamation declaring a local emergency as defined in the City of San Luis Obispo Municipal Code Section 2.24.020, due to the threat of the existence and spread of COVID-19; and
WHEREAS, on March 17, 2020, the Governor of California executed Executive Order N-29-20 which suspended and modified specified provisions in the Ralph M. Brown Act (Government Code Section § 54950 et seq.) and authorized local legislative bodies to hold public meetings via teleconferencing and to make public meeting accessible telephonically or otherwise electronically to all members of the public seeking to observe and address the local legislative body; and
WHEREAS, on June 11, 2021, the Governor of California executed Executive Order N-08-21 which extended the provisions of Executive Order N-29-20 concerning teleconference accommodations for public meetings through September 30, 2021; and WHEREAS, on August 31, 2021, the San Luis Obispo County Health Officer, Penny Borenstein, M.D., executed Order No. 6 requiring face coverings in all public indoor settings
WHEREAS, on September 16, 2021, the Governor of California signed into law Assembly Bill 361 amending Government Code § 54953 and providing alternative teleconferencing requirements to conduct public meetings during a proclaimed state of emergency; and
WHEREAS, AB 361 imposes requirements to ensure members of the public are able to attend and participate in public meetings conducted via teleconference, including:
• Notice of the means by which members of the public may access the meeting and offer public comment, including an opportunity for all persons to attend via a call-in option or an internet-based service option;
DocuSign Envelope ID: 75944827-1C51-4DAC-B82C-ECEA431430EA

Page 21 of 466 ends

Resolution No. 11278 (2021 Series) Page 2
R 11278
• The legislative body shall take no further action on agenda items when there is a disruption which prevents the public agency from broadcasting the meeting, or in the event of a disruption within the local agency’s control which prevents members of the public from offering public comments, until public access is restored;
• Prohibits the legislative body from requiring public comments to be submitted in advance of the meeting and specifies that the legislative body must provide an opportunity for members of the public to address the legislative body and offer comments in real time;
• Prohibits the legislative body from closing the public comment period until the public comment period has elapsed or until a reasonable amount of time has elapsed; and
WHEREAS, the City has already implemented and is in full compliance with the requirements listed above when conducting public meetings via teleconference, which are now codified in Government Code § 54953(e)(2)(B-G); and WHEREAS, pursuant to Government Code § 54953(e)(B), the legislative body shall hold a meeting during a proclaimed state of emergency for the purpose of determining, by majority vote, whether as a result of the emergency, meeting in person would present imminent risks to the health and safety of attendees. The City Council must make these findings no later than 30 days after the first teleconferenced meeting is held pursuant to AB 361 (Stats. 2021, ch. 165) after September 30, 2021, and must also make these findings every 30 days thereafter, in order to continue to allow teleconference accessibility for conducing public meetings.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows:

SECTION 1. The City Council hereby declares that the recitals set forth above are true and correct, and incorporated into this resolution as findings of the City Council.

SECTION 2. The City Council hereby declares that a state of emergency as a result of the threat of COVID-19 still exists and continues to impact the ability of members of the public, the City Council, City Boards, Commissions, and Committees, City staff and consultants to meet safely in person.

SECTION 3. The State of California and the City of San Luis Obispo continue to follow safety measures in response to COVID-19 as ordered or recommended by the Centers for Disease Control and Prevention (CDC), California Department of Public Health (DPH), and/or County of San Luis Obispo, as applicable, including facial coverings when required and social distancing.

DocuSign Envelope ID: 75944827-1C51-4DAC-B82C-ECEA431430EA

Page 22 of 466 ends

Resolution No. 11278 (2021 Series) Page 3
R 11278
SECTION 4. The City Council hereby declares that, pursuant to the findings listed in this Resolution, the City Manager is authorized to utilize teleconferencing accessibility to conduct public meetings pursuant to AB 361 and Government Code § 54953, as amended thereby.

SECTION 5. Effective Date of Resolution. This Resolution shall take effect immediately upon its adoption and shall be effective for 30 days. In accordance with AB 361, the City Council shall re-consider the passage of this resolution not less than every 30 days to determine whether a state of emergency continues to directly impact the ability of the members to meet safely in person or whether state or local officials continue to impose or recommend measures to promote social distancing.

Upon motion of Vice Mayor Christianson, seconded by Council Member Marx, and on the following roll call vote:

AYES: Council Member Christianson, Marx, Pease, and Mayor Stewart NOES: None
ABSENT: None
The foregoing resolution was adopted this 5
th day of October 2021.
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk
DocuSign Envelope ID: 75944827-1C51-4DAC-B82C-ECEA431430EA 10/12/2021 | 9:16 AM PDT

Page 23 of 466 ends

Page 24 of 466 ends

Item 5d
Department: Public Works
Cost Center: 5001
For Agenda of: 1/11/2022
Placement: Consent
Estimated Time: N/A
FROM: Matt Horn, Public Works Director
Prepared By: Paul Fields, Administrative Analyst
SUBJECT: ADOPT A RESOLUTION OF INTENTION TO APPROVE A RENEWED FRANCHISE AGREEMENT WITH PHILLIPS 66 PIPELINE, LLC FOR

EXISTING PIPELINES LOCATED WITHIN THE CITY RIGHT-OF-WAY

RECOMMENDATION
Adopt a Resolution of Intention entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, declaring the City’s intent to approve an Ordinance, superseding Ordinance 1564 (2011 Series), to continue to allow the use of the City’s right of way for the continued operation and maintenance of existing pipelines for the transportation of oil and other specified materials in the City of San Luis Obispo by Phillips 66 Pipeline LLC and setting a public hearing for February 15, 2022” to consider a renewed franchise agreement with Phillips 66 Pipeline LLC pursuant to the provisions of Article X of the City Charter and Section 6232 of the California Public Utilities Code.

DISCUSSION
On June 24, 2021, Phillips 66 Pipeline LLC requested to renew its existing franchise agreement pertaining to common carrier pipelines located in the City’s right-of-way.

Common carrier pipelines transport the products of other companies as well as the products of the franchisee.

Background
The City has several franchise agreements with utility companies to allow the use of public rights of ways for both the transmission and distribution of different products or services.

For example, currently the City has franchise agreements with Pacific Gas and Electric, the Gas Company, and Charter Communications.

On July 10, 2001, the City Council adopted Ordinance No. 1391 granting a franchise to Union Pipeline Company (UNOCAP) for a period of ten years (Attachment A). On April 17, 2007, the City Council adopted Ordinance No. 1504 transferring the franchise from UNOCAP to ConocoPhillips Pipeline Company (Attachment B). On June 21, 2011, the City Council adopted Ordinance No. 1564 to renew the franchise agreement with ConocoPhillips Pipeline Company (Attachment C). On February 5, 2013, the City Council adopted ordinance 1587, transferring the franchise from ConocoPhillips Pipeline Company to Phillips 66 Pipeline LLC (Attachment D).

Page 25 of 466 ends

Item 5d
This agreement expired on June 20, 2021 and Phillips 66 Pipeline LLC is subject to encroachment permit requirements until a new franchise agreement is approved. The City received an application for renewal from Phillips 66 Pipeline LLC on November 5, 2021 (Attachment E).

Additional Franchise Agreement Held by Phillips 66 Company Phillips 66 Pipeline LLC is a wholly owned subsidiary of Phillips 66 Company. Phillips 66 Company holds a separate franchise with the City pertaining to proprietary pipelines.

Those pipelines exclusively used for transferring the products of the franchisee. The public hearing following this Resolution of Intention, would be for the “common carrier” pipelines franchise held by Phillips 66 Pipeline LLC, not the proprietary pipelines franchise held by Phillips 66 Company. The franchise agreement for proprietary pipelines expired on October 17, 2021, and the City is awaiting a renewal proposal from Phillips 66 Company.

Scope of Franchise Agreement
The proposed renewed franchise agreement would provide Phillips 66 Pipeline LLC the non-exclusive right to “construct, erect, maintain, operate, repair, renew and change the size of and remove pipelines … for the transportation of oil, products, thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines…” The application requests approval of a three-year term as Phillips 66 Pipeline LLC is planning to divest operations within the San Luis Obispo region. Currently, Phillips 66 has no plans to install new pipelines. The franchise agreement will require Phillips 66 Pipeline LLC to provide the City with plans for the decommissioning and removal of pipelines form the City right of way. All its existing pipelines are shown in an exhibit attached to the application requesting franchise approval (Attachment F).

Franchise Fee
Franchise fees for distribution pipelines are set by the Public Utilities Code Section 6231.5. The fee ranges from $0.088 to $0.66 per lineal foot based on pipeline diameter, with CPI adjustments added since 1989 when these rates were first established. The proposed franchise agreement limits pipeline diameter to 12 inches, which corresponds to a fee of $.264 (plus CPI) per lineal foot. The majority of the pipeline length installed has an 8-inch internal diameter, resulting in a fee of $.176 (plus CPI) per lineal foot. Based on the Phillips 66 Pipeline facilities that are installed within City Rights of Way, the resulting annual revenue is approximately $6,700.

In addition to the annual franchise fee, the City is proposing a granting fee of $10,000 to cover staff costs associated with preparing the agreement, advertising the request, holding the required public meetings (three total and described below), and managing the franchise agreement after adoption.

Page 26 of 466 ends

Item 5d
Previous Council or Advisory Body Action
The City Council renewed the franchise agreement for common carrier pipelines in July 2011 and approved the transfer of the franchise from ConocoPhillips Pipeline Company to Phillips 66 Pipeline LLC in February 2013. No other advisory body review is required for this action.

Policy Context
The process for adoption of a new franchise agreement is prescribed by the Public Utilities Code (Section 6232-6234). The following schedule is proposed:
 January 11, 2022: Introduce and pass resolution of intent  February 15, 2022: Hold public hearing and introduce ordinance  March 15, 2022: Second reading and final adoption or ordinance  April 14, 2022: Ordinance becomes effective
Per the above schedule, the proposed renewal agreement will be presented to the Council on February 15. The resolution proposed as part of this agenda report simply indicates the Council’s intent to renew the franchise (Attachment F). The February 15, meeting would serve as Council and the Community’s public hearing at which public comment and Council discussion on the merits of this renewed franchise agreement would occur. At that meeting, staff will come prepared with additional alternatives for Council’s consideration.

Article X of the City Charter empowers the City Council to grant by ordinance a franchise to furnish the City and its inhabitants with public utilities. In line with the Public Utilities Code, the City Charter requires the adoption of a resolution declaring an intention to grant the franchise and the setting of a public hearing.

Public Engagement
Adoption of the resolution would schedule a public hearing on February 15, 2022, to allow for public comment on the agreement.

CONCURRENCE
The finance department concurs with this recommendation.

ENVIRONMENTAL REVIEW
The renewal of the franchise agreements is categorically exempt from the provisions for the California Environmental Quality Act in accordance with section 15061(b)(3).

FISCAL IMPACT
Budgeted: No Budget Year: 2021-22
Funding Identified: Yes

Page 27 of 466 ends

Item 5d
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Other:

Total $ $ $ $
There is a minor positive fiscal impact to the General Fund in the amount of $6,700 associated with granting of the proposed franchise agreement for pipeline services.

ALTERNATIVES
The City Council may reject the application by Phillips 66 Pipeline LLC for a new franchise agreement. This alternative is not recommended because it is in the City’s best interest to have a qualified company operate and maintain the existing pipeline infrastructure within the City’s right-of-way. Should the City Council express its intention to not award the franchise to Phillips 66 Pipeline LLC, the applicant would have three available options. The first would be to request City approval to physically remove the pipeline from the City’s right-of-way. The second option would be to leave the pipeline in its current location but seal it where it enters and leaves the City, thereby rendering it unusable. The third option would be to initiate a condemnation action against the City under the Public Utilities Code in order to obtain through eminent domain a subsurface easement or other rights to utilize the pipeline within the City. The proposed $10,000 granting fee is sufficient to cover the staff time associated with preparing the franchise agreement and holding and advertising the associated public hearings.

ATTACHMENTS
A - Ordinance No. 1391 granting a franchise to Union Pipeline Company (UNOCAP) B - Ordinance No.1504 transferring the franchise from UNOCAP to ConocoPhillips Pipeline Company. Phillips 66 Franchise Application
C - Ordinance No. 1564 to renew the franchise agreement with ConocoPhillips Pipeline Company. Proposed Resolution of Intention to approve a new franchise agreement D - Ordinance No. 1587, transferring the franchise from ConocoPhillips Pipeline Company to Phillips 66 Pipeline LLC
E - Phillips 66 Pipeline LLC Franchise Application
F - Draft Resolution of Intention to approve a new franchise agreement with Phillips 66 Pipeline LLC

Page 28 of 466 ends

council7/10/ 01
j
acEnba REpoRt
m"° m
C 2

C I T Y OF SAN LUI S OBI S PO
FROM: Jeffrey G. Jorgensen, City Attorney
Prepared By: Gilbert A. Trujillo, Assistant City Attorney C0" SUBJECT: FINAL ADOPTION OF ORDINANCES 1390 and 1391GRANTING

FRANCHISES TO CONSTRUCT, OPERATE, AND MAINTAIN

PIPELINES TO TOSCO CORPORATION AND UNION PIPELINE
COMPANY.

CAO RECOMMENDATION
Give final passage to Ordinance No. 1390 ( 2001 Series), Granting a Franchise to Construct, Operate, and Maintain Pipelines for the Transportation of Oil and Other Specified Materials in the City of San Luis Obispo to Tosco Corporation; and to Ordinance No. 1391 ( 2001 Series) Granting a Franchise to Construct, Operate, and Maintain Pipelines for the Transportation of Oil and Other Specified Materials in the City of San Luis Obispo to Union Pipeline Company.

DISCUSSION
On June 19, 2001, the Council voted 4- 1 to introduce Ordinance No. 1390 ( 2001 Series) which grants to Tosco Corporation a non-exclusive ten year franchise to construct, operate and maintain pipelines for the transportation of oil and hydrocarbons within the City of San Luis Obispo.

Council also voted 4- 1 to introduce Ordinance No. 1391 ( 2001 Series) which grants to Union Pipeline Company a non-exclusive ten year franchise to construct, operate and maintain pipelines for the transportation of oil and hydrocarbons within the City of San Luis Obispo.

The Ordinances are now ready for adoption and will become effective thirty days after the date of their final passage.

ATTACHMENTS

1. Ordinance No. 1390, Granting Franchise to Tosco Corporation

2. Ordinance No. 1391, Granting Franchise to Union Pipeline Company Ca- 1

Page 29 of 466 ends

ORDINANCE NO. 1390 ( 2001 Series)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO

GRANTING TO TOSCO CORPORATION, A NEVADA CORPORATION,

A FRANCHISE TO CONSTRUCT, OPERATE, AND MAINTAIN PIPELINES

FOR THE TRANSPORTATION OF OIL, AND OTHER SPECIFIED

MATERIALS, IN THE CITY OF SAN LUIS OBISPO,

STATE OF CALIFORNIA
WHEREAS, the City of San Luis Obispo adopted Ordinance No. 1038 on April 2, 1985 granting a franchise to Union Oil Company of California for a term of 25 years for the transportation and distribution of oil and other specified materials in the City of San Luis Obispo; and
WHEREAS, Union Oil Company of California sold or transferred a portion of its pipelines subject to Ordinance No. 1038 to TOSCO Corporation and Unocal California Pipeline Company; and
WHEREAS, Union Oil Company of California informed the City of San Luis Obispo that it intends to commence the abandonment process for its remaining interests under Ordinance No. 1038 that have not been sold or transferred to TOSCO Corporation and Unocal California Pipeline Company; and
WHEREAS, Union Oil Company ofCalifornia' s remaining pipeline interests in the City of San Luis Obispo are still subject to the existing franchise agreement granted in Ordinance No. 1038 until such time that Union Oil Company of California has abandoned such pipelines pursuant to applicable law; and
WHEREAS, TOSCO Corporation and Unocal California Pipeline Company have requested the City of San Luis Obispo to enter into new franchise agreements for the oil transportation and distribution pipelines acquired from Union Oil Company of California.

NOW, THEREFORE, BE IT ORDAINED by the Council ofthe City of San Luis Obispo to grant a franchise to construct, operate, and maintain pipelines for the transportation of oil, and other specified materials in the City of San Luis Obispo to TOSCO Corporation, a Nevada corporation as follows:
2):

SECTION 1: Terms and Conditions of Franchise ( Table of Contents begins on page 01390

Page 30 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 2 of 29 ends

TABLE OF CONTENTS
K
Page
ARTICLE I NATURE OF FRANCHISE 4
A. Grant of Franchise 5
B. Limitations Upon Grant 6
C. Rights Reserved to the City of San Luis Obispo 6
ARTICLE 2 APPURTENANCES 6
ARTICLE 3 LOCATION OF PIPELINES 6
ARTICLE 4 CONSTRUCTION OF PIPELINES 7
A. Terms of Construction 7
B. Restoration of Streets 7
ARTICLE 5 COMMENCEMENT OF CONSTRUCTION 7
ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED 8
ARTICLE 7 COMPENSATION TO THE CITY 9
ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS 10
ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAIR OF
DAMAGE TO CITY STREETS 10
ARTICLE 10 REARRANGEMENT OF FACILITIES 11
A. Expense of Grantee 11
B. Expense of Others 12
C. Rearrangement of the Facilities of Others 13
D. Notice 13

ARTICLE I I GRANTEE' S REMOVAL OR ABANDONMENT
OF FACILITIES 13
ARTICLE 12 COMPLETION OF WORK 13
K

Page 31 of 466 ends

Ordinance No. 1390 ( 2002 6eries)

Page 3 of 29 ends

TABLE OF CONTENTS, CONTINUED
Page
ARTICLE 13 RECOVERY OF COSTS OF REPAIRS AND
3 UNPAID FEES 16
ARTICLE 14 BOND 18
ARTICLE 15 INSURANCE 19
ARTICLE 16 INDEMNIFICATION BY GRANTEE 20
ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE 21
ARTICLE 18 WAIVER OF BREACH 24
ARTICLE 19 DEFAULT 24
ARTICLE 20 SCOPE OF RESERVATION 25
ARTICLE 21 NOTICE 25
ARTICLE 22 SUCCESSORS 25
ARTICLE 23 ACCEPTANCE OF FRANCHISE 26
ARTICLE 24 FORCE MAJEURE 26
ARTICLE 25 LIQUIDATED DAMAGES 26
ARTICLE 26 ATTORNEYS' FEES 28
ARTICLE 27 CONDEMNATION 28
3

Page 32 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 4 of 29 ends

ARTICLE I

NATURE OF FRANCHISE
A. Grant of Franchise.

1. The City of San Luis Obispo (hereinafter referred to as " City "), hereby grants to TOSCO Corporation, a Nevada corporation, (hereinafter referred to as " Grantee "), pursuant to the provisions ofArticle X ofthe San Luis Obispo City Charter, Article XI, Section 9(b) of the California Constitution, and Section 39732( b) of the California Government Code, the nonexclusive right, privilege and franchise, subject, however, to all the limitations and restrictions herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change the size of and remove pipelines, not to exceed twelve ( 12) inches nominal internal diameter, for the transportation of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance ofthe pipelines, water and mixtures thereof, movable by pipeline, in, under, along, and across the public streets, ways, alleys and places within the City of San Luis Obispo ( hereinafter collectively referred to as " streets "), as described in Exhibit No. 1, attached hereto and made a part hereof.

2. The term of the franchise granted under this Ordinance shall be for a term often ( 10) years, commencing with the date on which it is accepted by Grantee.

3. Unless otherwise specifically stated, the following provisions shall govern the interpretation and construction of the franchise granted herein:
a) This franchise shall include the right, for the period and subject to the conditions hereof, to construct, erect, maintain, operate, repair, renew, abandon and change the size and remove the said pipelines, if any, of Grantee, as laid and constructed in said streets. b) The terms and conditions of this franchise shall also apply to any pipe or other facilities of Grantee which are located within the right of way of any existing public road or street at the time such road or street becomes a City street through annexation or otherwise, subject to any other existing rights enjoyed by Grantee. c) Grantee shall not be relieved of its obligation to promptly comply with any provision of this franchise by failure of the City to enforce prompt compliance. d) Any right or power conferred, or duty imposed upon any officer, employee, department, or other City entity, by the terms of this franchise, may be legally transferred to any other City officer, employee, department, or other City entity. e) Grantee shall have no recourse whatsoever against the City for any loss, cost, expense, or damage suffered by Grantee and arising out of any provision or requirement of this franchise or its lawful enforcement by the City.
f) This franchise does not relieve Grantee of any applicable requirements of the San Luis Obispo Municipal Code or of any federal, state, or City law, ordinance, rule, 4

Page 33 of 466 ends

Ordinance No. 1390 ( 2002 beries)

Page 5 of 29 ends

regulation, or specification, including, but not limited to, any requirement relating to street work, street excavation permits, or the use, removal or relocation of property in streets, except as specifically prescribed herein.
g) This franchise is non - exclusive. Neither the granting of this franchise nor any of the provisions contained herein shall be construed to prevent the City from granting any identical or similar franchise to any other person.
h) The compensation provided for in this franchise is for (i) the rights and privileges granted by this franchise, and ( ii) the right and privilege granted to the Grantee to construct, erect, maintain, operate, repair, renew, abandon and change the size of and remove the said pipelines pursuant to this franchise within the City's streets. The City expressly reserves the right to impose and collect from Grantee, on a non - discriminatory basis, its normal, duly established processing and inspection fees from street cutting and excavation permits to the extent such fees are imposed generally on all non - governmental applicants for such permits within the City.
i) Any activities involving the use of a pipeline system for the transmitting of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance ofthe pipelines, water and mixtures thereof, which are not specifically authorized under this franchise are prohibited under this franchise. Except as provided in Article 2, any telecommunication or other uses not authorized in this franchise Ordinance must be approved by the City under a separate franchise.
0) If any provision of this franchise, or the application of this franchise to any person or circumstance is held invalid by a court of competent jurisdiction or is not in compliance with any requirement ofthe City, or any other federal or state body or agency having jurisdiction over Grantee' s franchise activities, the remainder of this franchise Ordinance, or the application of this franchise to persons or circumstances other than those to which it is held invalid or not in such compliance, shall not be affected thereby.

B. Limitations Upon Grant.

1. No privilege or exemption is granted or conferred by this franchise except those specifically prescribed herein.

2. Any privilege claimed under this franchise by Grantee in any street shall be subordinate to any prior lawful occupancy ofthe street.

3. The rights and privileges of this franchise are granted solely to Grantee except as provided within this franchise Ordinance. This franchise is not be to sold, transferred, leased, assigned, or disposed of as a whole or in part, either by forced sale, merger, consolidation, or otherwise, without the City's prior consent as described in Article 17, infra, or as otherwise expressly provided herein. The City agrees that such prior consent shall not be unreasonably withheld or conditioned.

Page 34 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 6 of 29 ends

C. Rights Reserved to the City.

1. The rights reserved to the City under this franchise Ordinance are in addition to all other rights of the City, whether authorized by the San Luis Obispo City Municipal Code, San Luis Obispo City Charter, or any other federal, state, or City law, rule, or regulation. No action, proceeding or exercise of a right shall affect any other rights which may be held by the City.

Grantee, by acceptance of this franchise, shall be bound thereby and shall comply with any action or requirement of the City in its exercise of any such right or power.

2. The City shall have the power and right at all times during the term of this franchise to require Grantee to conform to the laws, rules and regulations governing the operation of pipelines now or hereafter adopted by the City Council to the extent permitted by law.

3. The City may enforce, to the maximum extent permitted by law, the inspection and testing of pipelines, pursuant to state and federal standards and require appropriate remuneration and fees to cover such enforcement activities.

ARTICLE 2

APPURTENANCES
The Grantee shall have the right, subject to the prior approval of the City Public Works Department, to construct and maintain such traps, manholes, conduits, valves, appliances, attachments, and appurtenances ( hereinafter for convenience collectively referred to as appurtenances "), as may be necessary or convenient for the proper maintenance and operation of the pipelines under said franchise. Said appurtenances shall be so located as to conform to any order of the City Public Works Department in regard thereto and not to interfere with the use ofthe streets for travel. The Grantee shall have the right, subject to such ordinances, rules, or regulation as are now or may hereafter be in force, to make all necessary excavations in said street for the construction and repair of said pipelines and appurtenances subject to the prior approval of the City Public Works Department. " Appurtenances" shall also include any adjunct communications lines and/ or conduits as coaxial cable, optical fiber, wire, or other transmission lines or forms of transmission, and associated equipment and devices located in, upon, along, across, under or over the streets of the City, the sole function of which is to monitor or control the operation or safety of the pipeline system via the distribution of video, audio, voice, or data signals. An adjunct communications line shall not include any facility which distributes, through any means, to subscribers or persons other than Grantee, the signal of one or more broadcast television or radio stations or other sources of video, audio, voice, or data signals.

ARTICLE 3

LOCATION OF PIPELINES
So far as is practicable and within the requirements of the California State Fire Marshall, any pipeline hereinafter laid shall be located along the edge or shoulder of the streets or in the parking areas adjacent thereto so as not unreasonably to disturb the flow of traffic and where possible shall be laid in the unpaved portion of the street. on

Page 35 of 466 ends

Ordinance No. 1390 ( 2002 aeries)

Page 7 of 29 ends

ARTICLE 4

CONSTRUCTION OF PIPELINES
A. Terms of Construction. The pipelines and appurtenances laid, constructed or maintained under the provisions of this franchise shall be installed, maintained, and inspected by the Grantee in a satisfactory, safe, and workmanlike manner, of good material, and in conformity with all ordinances, rules, or regulations now or hereafter adopted or prescribed by the City Council, State, or Federal authorities.

B. Restoration of Streets. The work of laying, constructing, maintaining, operating, renewing, repairing, changing size and moving any of the pipeline system contemplated by this franchise and all other work in exercise of this franchise shall be conducted according to the provisions of the City' s encroachment ordinances from time to time prevailing, and otherwise in accordance with federal and state law and applicable City ordinances, and with the least possible hindrance or interference to the use of City roads by the public or by the City of San Luis Obispo, and Grantee shall provide all necessary warning, safety and traffic control devices as are or may be required by City, State or Federal regulations. All excavations shall be back filled and adequately compacted. As part of any work completed under provisions ofthis franchise agreement, the surface of City streets shall be repaired and replaced to meet current City standards and specifications. Under no circumstances shall the surface of City streets be placed in a manner less than as good and serviceable condition as existed at the beginning of said work, to the satisfaction of the City Public Works Department.

ARTICLE 5

COMMENCEMENT OF CONSTRUCTION
The Grantee, in good faith, shall commence with work of laying the pipelines and appurtenances within four ( 4) months from the date of passage of the approval of this franchise, and if any such pipelines be not so commenced within said time, this franchise shall be declared forfeited; provided, however, that if the Grantee is maintaining and operating an existing pipeline system over the route referred to in Article I herein, it shall be deemed to be in compliance with the foregoing. The Grantee shall not commence the construction of any new pipelines under the provision of this franchise or add to such existing pipeline system, if any there be, until it first shall have applied for and obtained a permit therefore from the City Public Works Department.

The application of the Grantee shall show the following facts: the length, approximate depth and proposed location of the pipeline proposed to be laid or constructed, the size and description of the pipeline intended to be used, and such other relevant facts as the City Public Works Department may require. The Grantee shall pay any and all encroachment permit fees of the City. Upon the completion of the construction of any pipelines constructed pursuant to said franchise, the Grantee shall render a statement to the City of San Luis Obispo showing in detail the permit or permits issued and the total length of pipeline, the construction ofwhich was 7

Page 36 of 466 ends

Ordinance No. 1390 ( 2002 6eries)

Page 8 of 29 ends

authorized under such permit, or permits, and the total length of pipeline actually laid, and the Grantee shall make payment to the City for the pipelines which have actually been constructed under said franchise as provided in Article 7, Section C.

ARTICLE 6

MAPS AND REPORTS TO BE FURNISHED
A. Within six ( 6) months of the effective date of this franchise for existing pipelines, and within ninety ( 90) days following the date in which any additional pipelines have been laid or constructed under this franchise, the Grantee shall file a map in such form as may be required by the City Public Works Department 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 ofthis date. Cathodic protection is to be used for all facilities installed or maintained pursuant to this franchise. For facilities previously in liquid service and where the liquids have been removed and the facilities inerted, or for facilities previously in gas service that are not pressurized, cathodic protection shall be maintained consistent with State Fire Marshall or other agency requirements. A description of all the protective devices shall be furnished to the City Public Works Department which shall show the location and types of anodes, including a description of methods to be used as a protection against corrosion and electrolytic leakage.

B. Grantee shall file with the City Finance Director, within thirty (30) days after the expiration of the calendar year, or fractional calendar year, following the date of the granting of this franchise and within thirty (30) days after the expiration of each calendar year thereafter, two copies of a report verified by the oath of Grantee or by the oath of a duly authorized representative of Grantee, showing, for the immediately preceding franchise period, the length ofmain lines in streets, the nominal internal diameter of such main lines, the rate per foot per year ( when applicable) and the total amount due to the City. In this report, Grantee shall also show any change in franchise footage since the last franchise report, segregating such footage as to new main lines and adjunct communications lines laid, old main lines and adjunct communications lines removed, old main lines and adjunct communications lines abandoned in place, and the footage of main lines and adjunct communications lines in territory annexed by the City since the last franchise report.

C. Grantee shall file with the City Public Works Department within sixty ( 60) days after the end ofthe calendar year a report, in duplicate, showing the permit number of each permit obtained for the installation of new main lines during the immediately preceding franchise report period, together with the length and size of said main lines.

Page 37 of 466 ends

Ordinance No. 1390 ( 2002 aeries)

Page 9 of 29 ends

ARTICLE 7

COMPENSATION TO THE CITY
A. During the term of this franchise, Grantee shall pay to the City an annual fee for this franchise, said fee to be those fees prescribed by the California Public Utilities Code section 6231. 5, provided that the rate is subject to increase to the maximum rate established in subsequent amendments of the California Public Utilities Code. Annual payments to be made pursuant to this franchise shall be due and payable in arrears April 1 of each year of this franchise. The initial payment hereunder shall be prorated for the remainder of the current calendar year based on a 365 -day year.

At the time of payment of fees by Grantee, Grantee shall file a verified statement with the Clerk of the City of San Luis Obispo, with a copy to the City Public Works Department showing in detail the number of lineal feet and the diameter thereof, expressed in inches, of pipelines covered by this franchise during the previous calendar year, or portion thereof.

The compensation provided for in this Article shall be subject to an increase after the first year of the franchise and each subsequent year during the term of this franchise, based on the provisions of California Public Utilities Code section 6231. 5, as amended.

The fees set forth will be adjusted annually each year by the annual percentage change in the U.S. Bureau of Labor Statistics ( or successor agency) consumer price index for all urban consumers ( CPI -U) all cities average for the prior calendar year.

Notwithstanding the provisions as otherwise stated in this Article and franchise, the Grantee shall be liable to pay the City the annual fee for the period to and including the date of either actual removal of the facilities or the effective date of the abandonment " in place," and until the Grantee shall have fully complied with all ofthe provisions of law or ordinances relative to such abandonments.

In the event ofpartial abandonment of facilities as provided in the Ordinance, or in the event of partial removal of such facilities by the Grantee, the payments otherwise due the City for occupancy of the streets by such facilities shall be reduced by the length and diameter of pipelines abandoned or the actual pipeline removed beginning with the first day of the next succeeding franchise year, and for each franchise year thereafter; provided, however, that the base rate shall be modified to reflect the adjustment ( per this Article) applicable to such abandoned or removed pipeline at the beginning ofthe next succeeding franchise year following abandonment or removal.

Page 38 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 10 of 29 ends

and one -half percent ( 1. 5 %) per month ( based upon a 30 -day calendar month) or any lesser amount if required by law. Any neglect, omission or refusal by said Grantee to pay any undisputed delinquent franchise fee with any late charges, within thirty ( 30) days of delinquency, at the times or in the manner herein provided, shall be grounds for a declaration of a forfeiture of this franchise and of all rights hereunder.

Payments are to be made to the City Finance Director, 990 Palm Street, San Luis Obispo, California 93401, or at such place as the City shall, from time to time, designate in writing.

B. Grantee shall pay the City a granting fee of $5, 000.00 within thirty (30) days after the date the City Council adopts this franchise Ordinance.

C. Grantee shall pay the City Public Works Department, within sixty (60) days after the end of each calendar year, for each year during the life of this franchise, an initial construction charge calculated at the rate of One Dollar ($ 1. 00) per foot for all new main lines laid pursuant to this franchise Ordinance during the preceding year.

D. Right of Inspection. The City shall have the right to inspect Grantee' s pipeline accounting and other records relating to its annual report and to audit and recompute any and all accounts payable under this franchise. Costs of audit shall be borne by Grantee when an audit results in an increase of more than five percent of Grantee' s annual payments to the City.

Acceptance of any payment shall not be construed as a release, waiver, acquiescence, or accord and satisfaction of any claim the City may have for further or additional sums payable under this franchise or for the performance of any other obligation hereunder.

ARTICLE 8

EMERGENCY EQUIPMENT AND CREWS
At all times during the term of this franchise, the Grantee shall maintain or arrange for, on a 24- hour -a -day basis, adequate emergency equipment and a properly trained emergency crew within a reasonable distance from any pipelines, appurtenances and facilities installed or maintained pursuant hereto for the purpose of monitoring the leak detection system and the communications systems if applicable, and of shutting off the pressure and the flow of contents of such facilities in the event of an emergency resulting from an earthquake, act of war, civil disturbance, fire, flood, or any other cause or nature whatsoever.

ARTICLE 9

REPAIR OF DEFECTIVE FACILITIES AND

Page 39 of 466 ends

Ordinance No. 1390 ( 2002 aeries)

Page 11 of 29 ends

in as good condition as it was before such damage was incurred, to the satisfaction of the City Public Works Department. If Grantee, within ten ( 10) days after receipt of written notice from the City Public Works Department instructing it to repair such damage, fails to commence to comply with such instruction, or, thereafter, fails diligently to prosecute such work to completion, then the City Public Works Director immediately may take any actions which are, in the sole judgment and discretion of the City Public Works Director, necessary to repair said damage. Any and all costs and expenses so incurred shall be the sole responsibility of Grantee including the current rate of overhead being charged by the City for reimbursable work, which cost and expense, by the acceptance of this franchise, Grantee agrees to pay upon demand. If such damage constitutes an immediate danger to public health or safety requiring the immediate repair thereof, the City Public Works Department, without notice, may repair such damage and Grantee agrees to pay the cost thereof upon demand.

ARTICLE 10

REARRANGEMENT OF FACILITIES
A. Expense of Grantee.

1. If any of the Grantee' s facilities, in the opinion of the City Public Works Director, shall endanger the public or interfere with the use of any street by the public or, for public purposes, the City shall have the right to require the Grantee, and the Grantee shall repair, replace, move, alter or relocate the same ( hereinafter called " rearrangement ") to avoid such danger, interference or obstruction, in conformity with the written notice of the City Public Works Department, at the Grantee' s sole expense.

2. The City reserves the right to change the grade, to construct grade separation facilities, to change the width or to alter or change the location, of any street which is located within the service area for which this franchise is granted. If any of the facilities heretofore or hereafter constructed, installed or maintained by Grantee pursuant to this franchise on, along, under, over, in, upon or across any street are located in a manner which prevents or interferes with the change of grade, traffic needs, operation, maintenance, improvement, repair, construction, reconstruction, widening, grade separation, alteration or relocation of the street, or any work or improvement upon the street, Grantee shall relocate permanently or temporarily, as directed at the sole discretion of the City Public Works Director, any such facility at no expense to the City, upon receipt of a written request from the City Public Works Department to do so, and shall commence such work, by beginning engineering, surveying, or other pre - construction activities, on or before the date specified in such written request, which date shall be not less than sixty (60) days from receipt of such written request. Grantee shall thereafter diligently prosecute such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, 11

Page 40 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 12 of 29 ends

while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California.

The Grantee shall thereafter diligently prosecute such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 ofthe Streets and Highways Code of the State of California.

4. If Grantee, after the notice provided for herein from the City, fails or refuses to relocate permanently or temporarily its facilities located in, on, upon, along, under, over, across, or above any street, or to pave, surface, grade, repave, resurface, or regrade as required pursuant to any provision of this franchise, the City may cause the work to be done, and shall keep an itemized account of the entire costs thereof, and Grantee shall hold harmless the City, its officers and employees from any liability which may arise or be claimed to arise from the moving, cutting or alteration of any of Grantee' s facilities, or any necessary relocation of the facilities of other utilities.

5. Grantee agrees to, and shall, reimburse the City for such cost within thirty (30) days after presentation to Grantee of an itemized account arising out of the actions taken in this Article 10A.

B. Expense of Others.
1) The City shall have the right to require the Grantee to rearrange any part of the Grantees' facilities for the accommodation of the City when such rearrangement is done for the accommodation of any water, electric, gas or other utility system now or hereafter owned or operated by the City.

Except as otherwise provided in Article 10A, such arrangement shall be at the City' s expense.
12

Page 41 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 13 of 29 ends

2) The City shall have the right to require the Grantee to rearrange any part ofthe Grantee' s facilities for the accommodation of any person, firm or corporation. When such rearrangement is done for the accommodation of any person, firm or corporation, other than one of said utility systems owned or operated by the City, the cost of such rearrangement shall be borne by the accommodated party. Such accommodated party, in advance of such rearrangement, shall deposit with the Grantee or the City Clerk cash or a letter of credit or other cash equivalent in an amount, as in the reasonable discretion of the City Public Works Department, shall be required to pay the costs of such rearrangement, and such accommodated party shall execute an instrument agreeing to indemnify and hold harmless the Grantee from any and all damages or claims caused by such rearrangement. 3) The rearrangement referred to in subsection ( 1) and ( 2) of Section B of this Article 10 shall be accomplished in conformity with the written notice of the City Public Works Department.

C. Rearrangement of the Facilities of Others.

Nothing in this franchise shall be construed to require the City to move, alter or relocate any of its facilities upon said streets, at its own expense, for the convenience, accommodation or necessity of any other public utility, person, firm or corporation now or hereafter owning a public utility system of any type or nature, to move, alter or relocate any part of its system upon said streets for the convenience, accommodation or necessity of the Grantee.

D. Notice.

The Grantee shall be given not less than sixty ( 60) days written notice of any rearrangement of facilities which the Grantee is required to make hereunder. Such notice shall specify in reasonable detail the work to be done by the Grantee and shall specify a reasonable time that such work is to be accomplished. In the event that the City shall change the provisions of any such notice given to the Grantee, the Grantee shall be given an additional period of not less than thirty (30) days to initiate such work.

ARTICLE 11

Further, so long as any abandoned facilities installed under the authority of this franchise remain in a City street, Grantee shall maintain a performance bond, security fund, or other form of collateral, acceptable to the City, sufficient to cover the cost of the removal of all such facilities from the City streets.
13

Page 42 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 14 of 29 ends

B. At the expiration, revocation or termination of this franchise or of the permanent discontinuance of the use of all or a portion of its facilities, Grantee shall, within thirty ( 30) days thereafter, make written application to the City Public Works Department for authority either:

To abandon all or a portion of such facilities in place; or

2. To remove all or a portion of such facilities. Such application shall describe the facilities desired to be abandoned, their location with reference to City streets, and shall describe with reasonable accuracy the physical condition of such facilities. As part of the application for removal or abandonment of these facilities, Grantee shall submit a soil test, taken within thirty ( 30) days of the submittal of the application, for those materials to be tested annually pursuant to federal, state and local laws. A soil test shall be taken along that portion of the pipeline to be removed or abandoned at such intervals as directed in writing by the City Public Works Department and reasonably consistent with established sampling protocols. The City Public Works Department shall determine whether any abandonment or removal which is thereby proposed may be effected without detriment to the public interest and the conditions under which such proposed abandonment or removal may be effected. The City Public Works Department shall then notify Grantee of the City' s determinations. Grantee shall also obtain permits to abandon or remove the pipeline from the City Public Works Department for all pipelines prior to the removal, abandonment or discontinuation of use of all or a portion of Grantee' s facilities. The City also reserves the right to require removal of Grantee' s abandoned facilities in place at any time following the expiration, revocation or termination of this franchise. Grantee shall be required to meet the bonding, insurance, indemnification and annual franchise fee requirements ofthis franchise, for facilities abandoned in place.

C. Within thirty ( 30) days after receipt of Notification from the City Public Works Department pursuant to Article 11. B. 2 above, Grantee shall apply for a permit from the City Public Works Department to abandon or remove the facility.

D. Grantee shall, within sixty (60) days after obtaining such permit, commence and diligently prosecute to completion the work authorized by the City' s permit.

E. In the event Grantee applies to remove its facilities, and the City Public Works Department determines that any or all of the facilities cannot be removed due to a moratorium preventing work in the City streets, the payment of annual franchise fees shall be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation ofthe moratorium and direction to remove such facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty (30) days of notice to pay. Deferred annual franchise fees shall otherwise be waived.

F. Failure to Comply with City's Orders Regarding the Removal or Abandonment of Facilities.

1. If any orders or prescribed conditions relating to the abandonment of any facilities are not complied with, the City Public Works Department may impose such additional orders 14

Page 43 of 466 ends

Ordinance No. 1390 ( 2002 aeries)

Page 15 of 29 ends

and conditions as the City deems appropriate, including an order that the Grantee remove any or all of such facilities. Grantee shall comply with such additional orders.

2. In the event that Grantee fails to comply with the terms and conditions of abandonment or removal as may be required by this franchise Ordinance, and within such time as may be prescribed by the City Public Works Department, then the City may remove or cause to be removed such facilities at Grantee's expense. Grantee shall pay to the City all of the costs ofremoving and disposing of these facilities, as well as returning the rights -of -way occupied pursuant to this franchise, including, but not limited to: ( a) the cost of all environmental testing the City must conduct to determine the environmental condition of any rights -of -way occupied pursuant to this franchise and to ascertain what procedures the City must undertake, if any, to return any such rights -of -way to the environmental condition required by applicable Federal, State or local environmental laws; ( b) all cleanup costs, disposal costs, and any other costs associated with returning these rights -of -way to such environmental condition; ( c) all costs of removing, storing, and disposing of the Grantee' s facilities; ( d) all costs ofreturning all streets to the structural conditions they were in immediately at the beginning of Grantee' s use of these streets pursuant to this franchise agreement; ( e) plus the current rate of overhead being charged by the City for reimbursable work..:

3. If, at the non - renewal, revocation or termination of this franchise, or of the permanent discontinuance ofthe use of all or a portion of its facilities, Grantee, within thirty (30) days thereafter, fails or refuses to make written application for the above - mentioned authority to remove or abandon its facilities, the City Public Works Department shall make the determination as to whether the facilities shall be abandoned in place or removed. The City Public Works Department shall then notify Grantee of its determinations. Grantee shall thereafter comply with the applicable provisions ofthis Article 11.

G. For those facilities Grantee abandons in place, Grantee shall be required to maintain an acceptable performance bond, letter of credit or security fund, as determined by the City Public Works Department, to cover the costs for the removal of any such abandoned facilities from the City streets for any and all periods of time, including those periods following the expiration, revocation or termination of this franchise, that Grantee' s facilities remain in the City streets. Grantee shall be required to maintain insurance and to indemnify the City pursuant to this Article during any periods the abandoned facilities remain within the City streets. Provided, however, that any pipelines which cannot be removed due to a moratorium preventing work in the City streets, may be deferred from the payment of the annual franchise fee. The payment of annual franchise fees may be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such Facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty ( 30) days of notice to pay.
15

Page 44 of 466 ends

Ordinance No. 1390 ( 2002 6eries)

Page 16 of 29 ends

ARTICLE 12

COMPLETION OF WORK
In the event that the Grantee fails to commence any work or act and diligently proceed therewith or to complete any such act or work required of the Grantee by the terms of this franchise within the time limits required hereby ( and except as is otherwise provided in Articles 10 and 11), the City may cause such act or work to be completed by the City or, at the election of the City, by a private contractor. The Grantee agrees to pay the City, within thirty ( 30) days after delivery of an itemized bill, the cost of performing such act or work plus an amount equal to fifteen percent ( 15 %) thereof for overhead. If the Grantee is dissatisfied with any decision made by the City Public Works Department hereunder or the determination of the cost of any work performed by the City pursuant to this Agreement, it may petition the City Council to review the same within ten ( 10) days after such decision or determination.

ARTICLE 13

RECOVERY OF COSTS OF REPAIRS AND UNPAID FEES
Ifthe Grantee has not paid the City for such fees and expenses and/ or liquidated damages incurred by or payable to the City as hereinabove set forth, the City may institute the following collection procedures ( which procedures are in addition to any other rights, in law or equity, which the City has to correct amounts due under this franchise and to enforce the terms of this franchise):

A. The City Public Works Department shall keep an itemized account of the expenses incurred by the City pursuant hereto, or the fees unpaid by the Grantee. Sixty ( 60) days after the presentation of the bill to the Grantee therefore, the City Public Works Department shall prepare and file with the City Clerk a report specifying the work done by the City, or the unpaid fees, the itemized and total cost of the work, a description of the work performed, and the name and address ofthe Grantee entitled to notice pursuant to this Article.

B. Upon receipt of said report, the City Clerk shall present it to the City Council for consideration. The City Council shall fix a time, date and place for hearing said report, and any protest or objections thereto. The City Clerk shall cause notice of said hearing to be posted in a newspaper of general circulation in the City, and served by certified mail, postage prepaid, addressed to the Grantee as set forth herein. Such notice shall be given at least ten ( 10) days prior to the date set for hearing and shall specify the day, hour, and place when the City Council will hear and pass upon the City Public Works Department' s report, together with any objections or protests which may be filed as hereinafter provided.

C. The Grantee may file written protests or objections with the City Clerk at any time prior to the time set for the hearing on the report of the City Public Works Department. Any such protest or objection must contain a description ofthe work or unpaid fee or liquidated damages in which the Grantee is contesting and the grounds of such protest or objection and the date it was received by him. He shall present such protest or objection to the City Council at the 16

Page 45 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 17 of 29 ends

time set for the hearing, and no other protest or objection shall be considered, except as determined by the City Council for good cause shown.

D. Upon the day and hour fixed for the hearing, the City Council shall hear and pass upon the report of the City Public Works Department together with any such objections or protests, make such revision, correction or modification to the charge as it may deem just; and when the City Council is satisfied with the correctness of the charge, the report ( as revised, corrected or modified), together with the charge, shall be confirmed or rejected. The decision of the City Council on the report and the charge, and on all protests or objections, shall be the final and conclusive decision of the City.

E. The City Council may thereupon order that such charge shall be made a personal obligation ofthe Grantee or assess such charge against the property ofthe Grantee. 1) If the City Council orders that the charge shall be a personal obligation of the Grantee, it shall direct the City Attorney to collect the same on behalf of the City by use of all appropriate legal remedies.
2) If the City Council orders that the charge shall be assessed against the property ofthe Grantee, it shall confirm the assessment, cause the same to be recorded on the assessment roll, and thereafter, said assessment shall constitute a special assessment against a lien upon any property held in the City of San Luis Obispo by the Grantee.

F. The validity of any assessment made under the provisions of this franchise shall not be contested in any action or proceeding unless the same is commenced within ninety (90) days after the assessment is placed upon the assessment roll as provided herein.

G. The City Council, in its discretion, may determine that assessments in amounts of 500.00 or more shall be payable in not more than five (5) equal annual installments. The City Council' s determination to allow payment of such assessments in installments, the number of installments, whether they shall bear interest, and the rate thereof shall be adopted by a resolution prior to the confirmation of the assessment.

H. Immediately upon its being placed on the assessment roll, the assessment shall be deemed to be complete, the several amounts assessed shall be payable, and the assessments shall be liens against the property of the grantee in the City of San Luis Obispo. The lien shall be subordinate to all existing special assessment liens previously imposed upon the same property, and shall be paramount to all other liens except for state, county, and municipal taxes with which it shall be upon a parity. The lien shall continue until the assessment and all interest due and payable thereon are paid.
1) All such assessments remaining unpaid after thirty (30) days from the date of recording on the assessment roll shall become delinquent and shall bear interest at the highest rate permitted by law from and after said date.
17

Page 46 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 18 of 29 ends

I. After confirmation of the report, certified copies of the assessment shall be filed with the County Auditor on or before August 10th. The descriptions of the parcels reported shall be those used for the same parcels on the County Assessors map books for the current year.

J. The amount of the assessment shall be collected at the same time and in the same manner as ordinary county taxes are collected and shall be subject to the same penalties and procedure and sale in case of delinquency as provided for ordinary county taxes. All laws applicable to the levy collection and enforcement of taxes shall be applicable to such assessment. If the City Council has determined that the assessment shall be paid in installments, each installment and any interest thereon shall be collected in the same manner as ordinary City taxes is in successive years. If any installment is delinquent, the amount thereof is subject to the same penalties and procedure for sale as provided for ordinary county taxes.

K. All money recovered by payment of the charge or assessment or from the sale of the property at foreclosure sale shall be paid to the City Finance Director.

ARTICLE 14
BOND
A. Grantee shall, concurrently with the filing of and acceptance of award of this franchise, file with the City Clerk, and yearly thereafter, maintain in full force and effect, a bond guaranteeing to the City of San Luis Obispo the penal sum of One Million Dollars ($ 1, 000, 000. 00), with a surety to be approved by the City Public Works Director and City Risk Manager, conditioned that Grantee shall, well and truly observe, fulfill and perform each and every term and condition ofthis franchise, and in case of a material breach of condition of said franchise, at the discretion of the City Public Works Director, a percentage of the amount of the bond shall be paid to the City according to the following schedule, which cumulative amount for any said breach not cured within the time specified below shall not exceed the full amount ofthe bond, in addition to any damages recoverable by the City and shall be recoverable from the principal and sureties of the bond:

Following receipt of notice by Certified
Mail sent by the City, failure to cure
said breach of condition, within:
10 business days
30 calendar days
60 calendar days
90 calendar days
M.

Penal sum paid to City:
5% of the amount of the bond
30% cumulative amount of the
bond
70% cumulative amount of the
bond
100% cumulative amount of the
bond

Page 47 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 19 of 29 ends

The amount oftime specified above shall be tolled while City and Grantee resolve, or until the City Council rules on, any written appeal, protest or objection to the City Public Works Director' s decision as set forth in Articles 12, 13, 19, and 25, and elsewhere in this agreement; however, if Grantee' s appeal, protest or objection is found by the City Council to be the result of bad -faith actions or tactics that are frivolous or intended to cause unnecessary delay, such amount of time shall not be tolled.

If said bond is not so filed, the award of this franchise and privileges will be set aside and any money paid therefore will be forfeited. Whenever a bond is taken and deemed to be liquidated damages for any breach of a term or condition of this franchise, the Grantee must immediately file another bond of like amount and character, and if the Grantee fails to do so within the time set by the City Public Works Director, the City Council may, by resolution, declare said franchise automatically forfeited. Nothing herein shall insulate Grantee from liability in excess ofthe amount of said bond or shall be construed as a waiver by the City of any remedy at law against the Grantee for any breach of the terms and conditions of this franchise, or for any damage, loss or injuries suffered by the City of San Luis Obispo in case of any damage, loss or injury suffered by any person, firm, or corporation by reason of any work done or any activity conducted by the Grantee in exercise of this franchise.

B. The faithful performance bond shall continue to exist for one ( 1) year following the City' s approval of any sale, transfer, assignment or other change of ownership of this franchise, or ofthe expiration or termination ofthis franchise. The City may release said bond prior to the end ofthe one ( 1) year period upon satisfaction by Grantee of all the obligations under this franchise.

ARTICLE 15

INSURANCE
A. The Grantee shall procure and shall keep in force for the term of the franchise, at the sole cost and expense ofthe Grantee, the following insurance. All insurance coverages are to be placed with insurers which have a Best' s rating of not less than B +VIII and are admitted insurance companies in the State of California. Grantee may satisfy the requirements ofthis Article 15 by showing proof of self - insurance reasonably satisfactory to the City Attorney and Risk Manager.

Commercial General Liability Insurance ( CGL): Grantee shall maintain in full force and effect Commercial General Liability Insurance with the following coverages:

1. Personal Injury and Bodily Injury, including death resulting therefrom.

2. Property Damage.

3. Automobile coverage which shall include owned, non -owned and hired vehicles. 19

Page 48 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 20 of 29 ends

The amount of insurance shall not be less than the following: Single limit on the coverage applying to bodily and personal injury, including death resulting therefrom, property damage, and automobile coverage in the total amount of Ten Million Dollars ($ 10, 000,000.00).

The following endorsements must be provided in the CGL policy:

1. If the insurance policy covers on an " accident" basis, it must be changed to occurrence."

2. The policy must cover personal injury as well as bodily injury.

3. Blanket contractual liability must be afforded and the policy must contain a cross - liability or severability of interest endorsement.

4. Broad Form Property Damage Liability must be afforded.

5. Products and Completed Operations coverage must be provided.

6. The City, its officers, employees and agents shall be named as additional insured under the policy. The policy shall include the appropriate insurance company endorsement, as required under City regulations. The policy shall provide that the insurance will operate as primary insurance. No other insurance effected by the City, whether commercial or self - insurance will be called upon to contribute to a loss hereunder.

The following requirements apply to all insurance to be provided by Grantee:

1. A certificate of insurance shall be furnished to the City. Upon request by the City, Grantee shall provide a certified copy of any insurance policy to the City within forty -five working days of the City' s request.

2. Certificates and policies shall state that the policies will not be canceled or reduced in coverage or changed in any other material respect without thirty days prior written notice to the City.

B. Failure on the part of Grantee to procure or maintain required insurance and bonding shall constitute a material breach ofthis franchise upon which the City may immediately terminate or suspend this franchise.

ARTICLE 16

Page 49 of 466 ends

Ordinance No. 1390 ( 2002 aeries)

Page 21 of 29 ends

whatsoever nature, arising out ofthe use by it ofthe City streets hereunder or arising out of any ofthe operations or activities ofthe Grantee. pursuant to this franchise, whether such damage shall be caused by its own sole negligence or negligence concurrent with the City, excepting therefrom, however, any claim or demand based on the sole negligence and willful misconduct of the City, and any claim, demand, or cause of action which may be asserted, prosecuted or established against the City under the provision ofthe Worker' s Compensation Act for injury to or the death of any of City' s officers, agents or employees while acting within the scope of their employment. Grantee shall not be responsible for any criminal, fraudulent or malicious conduct ofthe City.

ARTICLE 17

CHANGES IN CONTROL OF FRANCHISE
A. On and after the Grantee' s acceptance of this franchise as provided in Article 23 herein, Grantee, its partners, its shareholders, or any other person or persons holding an interest in Grantee shall not transfer any interest in the franchise where such a transfer would lead to another person achieving a twenty -five percent ( 25 %) or greater interest in this franchise or change control of this franchise, unless the City approves such a transfer or change in control.

The City shall approve a request for transfer or change in control only if doing so serves the public interest. As used in this franchise Ordinance, " control" includes actual working control in whatever manner exercised.

1. The City shall deny any such request for transfer or change in control if the transferor or transferee fails to comply with any applicable provision ofthis Article ofthis franchise Ordinance, or ifthe City determines the transferor is in non - compliance with the terms and conditions of this franchise Ordinance, or if a transferee is lacking in experience and/ or financial ability to operate the pipelines authorized by this franchise Ordinance, or if the proposed transfer will be detrimental to the public interest.

B. Both the Grantee and the proposed transferee shall inform the City Public Works Department of any pending change in control of this franchise or of any pending transfer of an interest in the franchise requiring the City's consent pursuant to this Article, and each shall provide applications containing all documents on which the transfer or change in control is predicated and all documents which the City Public Works Department determines are necessary to evaluate the transfer or change of control. These applications shall be signed by duly authorized representatives of the Grantee and the proposed transferee, with signatures acknowledged by a notary. The appropriate transfer fee described in Article 17( C), infra shall accompany these applications.

1. Grantee' s application shall include:
a. Identification and ownership of the proposed transferee in the same detail as if the proposed transferee were an applicant for an initial grant; 21

Page 50 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 22 of 29 ends

b. Current financial statements showing the financial condition of the Grantee as of the date of the application. In this application, the Grantee shall also agree to submit financial statements showing the condition of the franchise as of the closing. Said financial statements shall have been audited and certified by an independent certified public accountant, and shall be submitted within ninety ( 90) days of the closing.

2. The proposed transferee' s application shall contain current financial statements ofthe proposed transferee and other such information and data, including but not limited to sources of capital, as will demonstrate conclusively that the proposed transferee has all the financial resources necessary to acquire the pipeline( s), carry out all of the terms and conditions of the franchise, remedy any and all defaults and violations of the provisions of this franchise in the Grantee' s past and present operations, make such other improvements and additions as may be required or proposed to maintain and conduct the services and facilities required under this franchise. The proposed transferee will be required to authorize release of financial information to the City from financial institutions relating to information supplied by the proposed transferee in support of the application. The proposed transferee' s application shall also include:
a. A construction schedule, describing type and placement of construction, detail phases of construction, and include map( s) correlated to the phases of construction. Map( s) shall include detail on the location, length, depth, and internal diameter of any planned pipelines.
b. Copies of any agreements with utility companies for the use of any facilities including, but not limited to, poles, lines and conduit. c. A description of plans for emergency equipment and personnel enabling the transferee to meet the emergency equipment personnel requirements in Article 8 herein. d. Any information indicating as specifically as possible that any principal, manager, or associate of the proposed transferee or a parent entity of the proposed transferee has previously been or is currently:
i. A party to a criminal proceeding (involving felonies or misdemeanors) in which any of the following offenses have been charged: fraud, embezzlement, tax evasion, bribery, extortion, jury tampering, obstruction ofjustice ( or other misconduct affecting public or judicial officers in the performance oftheir duties), false /misleading advertising, perjury, antitrust violations ( state or federal), violation of environmental laws or regulations, or conspiracy to commit any of the foregoing;
ii. A party to a civil proceeding concerning liability for any of the following: unfair or anticompetitive business practice, antitrust violations ( state or federal) including instances in which consent decrees were entered, violations of security laws ( state or federal), false /misleading advertising, racketeer influences and corrupt organizations, violation of environmental laws or regulations, or contraband forfeitures; 22

Page 51 of 466 ends

Ordinance No. 1390 ( 2002 Series)

Page 23 of 29 ends

iii. Subject to any penalty, criminal or civil, involving failure to comply with the requirements of a pipeline franchise;
iv. Involved in instituting legal action against its franchising authorities; v. Involved in revocation/ non- renewal of any other franchise; e. Any other details, statements, information or references pertinent to the subject matter of such application which shall be required or requested by the City or by any provision of law.
f. An express and unconditional written acceptance of the terms and conditions of this Franchise Ordinance, in its most current form, as a condition to the transfer.

C. A fee shall be submitted with the applications for the City's consent to transfer or change of control.

1. Where the City' s consent to a transfer or a change of control of this franchise does not result in the modification of this franchise by adoption of an amending ordinance, this fee for each application shall be as set forth in the City's fee ordinance.

2. Where the City's consent to a transfer or a change of control of this franchise results in the modification of this franchise by adoption of an amending ordinance this fee shall be as set forth in the City's fee ordinance.

3. In the event the costs to process the applications exceed the fees detailed above, the applicants may be required to pay any additional costs incurred by the City in processing the applicants' requests for the City's consent to the transfer or_change of control of this franchise. Such costs may include the cost incurred for hiring consultants to assist in evaluating the applications. Such costs shall be paid by the applicants prior to final consideration of the request by City Public Works Department, or the City Council, as applicable.

D. Within thirty ( 30) days of the effective date of the City' s approval of the transfer or change of control, or within thirty (30) days of the date ofthe close of the transfer or change of control, the Grantee shall file with the City Public Works Department: ( 1) a certified copy of each duly executed instrument of such a transfer or change in control; and ( 2) the submittal of a final accounting and report of all fees due under this franchise. The proposed transferee shall be responsible for any underpayment, and shall be entitled to a credit for any overpayment. Within ninety ( 90) days of the closing ofthe transfer or change of control, the Grantee shall submit financial statements, audited and certified by an independent certified public accountant, showing the condition of the franchise as ofthe closing. If such duly executed instruments are not filed with the City Public Works Department by the deadlines imposed in this Article, or if the final documents are different from the preliminary documents, the City Public Works Department may inform the proposed transferee that the transfer or change in control is not deemed to be in force and effect. The City Public Works Department may then administratively 23

Page 52 of 466 ends

Ordinance No. 1390 ( 2002 Series)

Page 24 of 29 ends

determine that this franchise is forfeited and the City Council may, without notice, by ordinance repeal this franchise.

E. As a condition to the granting of consent to such a transfer or change in control, the City Council may impose such additional terms and conditions upon this franchise and upon the proposed transferee as are in the public interest. Such additional terms and conditions shall be imposed by ordinance. Nothing herein contained shall be construed to grant Grantee the right to transfer or change control of this franchise or any part thereof, except in the manner aforesaid.

This Article 17 applies to any transfer of this franchise, or of any change in control of this franchise, whether by operation of law, by voluntary act of Grantee, or otherwise.

ARTICLE 18

WAIVER OF BREACH
No waiver of the breach of any of the covenants, agreements, restrictions, or conditions of this franchise by the City shall be construed to be a waiver of any succeeding breach of the same or other covenant, agreements, restrictions or conditions ofthis franchise. No delay or omission of the City in exercising the right, power or remedy herein provided in the event of default shall be construed as a waiver thereof, or acquiescence therein, nor shall the acceptance of any payments made in a manner or at a time other than is herein provided be construed as a waiver of or variation in any ofthe terms of this franchise.

ARTICLE 19

DEFAULT
A. In the event that the Grantee shall default in the performance of any ofthe terms, covenants and conditions herein, the City may give written notice to the Grantee of such default by certified mail. In the event that the Grantee does not commence the work necessary to cure such default within five (5) business days after such notice is received or prosecute such work diligently to completion, the City may declare this franchise forfeited by giving written notice thereof to the Grantee, whereupon this franchise shall be void and the rights of the Grantee hereunder shall terminate and the Grantee shall execute an instrument of surrender and deliver the same to the City. If the City Council declares this franchise forfeited, it may thereupon and thereafter exclude the Grantee from further occupancy or use of all City roads and streets authorized under this franchise. A forfeiture of said franchise shall not of itself operate to release any bond filed for said franchise. Upon declaring a franchise forfeited, the City Council may elect to take and accept any bond as liquidated damages therefore or pursue any other legal remedy for any damage, loss or injury suffered by the City as a result of such breach or both.

After forfeiture, any bond shall remain in full force and effect for a period of one ( 1) year unless exonerated by the City Council. No bond shall be exonerated unless a release is obtained from the City Public Works Department and is filed with the City Clerk. The release shall state whether all excavations have been back filled, all obstructions removed, and whether the substratum or surface of City streets occupied or used have been placed in good and serviceable condition. A release shall not constitute a waiver of any right or remedy which the City of San 24

Page 53 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 25 of 29 ends

Luis Obispo may have against the Grantee or any person, firm or corporation for any damage, loss or injury suffered by the City as a result of any work or activity performed by the Grantee in the exercise of this franchise.

B. No provision herein made for the purpose of securing the enforcement ofthe terms and conditions ofthis franchise shall be deemed an exclusive remedy, or to afford the exclusive procedure, for the enforcement of said terms and conditions, but the remedies and procedure herein provided, in addition to those provided by law shall be deemed to be cumulative.

ARTICLE 20

SCOPE OF RESERVATION
Nothing herein contained shall ever be construed so as to exempt the Grantee from compliance with all ordinances of the City now in effect or which may be hereafter adopted which are not inconsistent with the terms of this franchise. The enumeration herein of specific rights reserved shall not be construed as exclusive, or as limiting the general reservation herein made or as limiting such rights as the City may now or hereafter have in law.

ARTICLE 21
NOTICE
Any notice required to be given under the terms of this franchise, the manner of service of which is not specifically provided for, may be served as follows:

Upon the City, by serving the City Clerk, personally or by addressing a written notice to the City Clerk ofthe City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, and depositing such notice in the United States mail, postage prepaid.

Upon the Grantee, by addressing a written notice to Grantee addressed to Tosco Corporation, c/ o Tosco Refining Company, 9645 Santa Fe Springs Road, P. O. Box 2628, Santa Fe Springs, CA 90670 - 0628, Attn: Supervisor, R/ W Administration, or such other address as may from time to time be furnished in writing by one party to the other and depositing said notice in the United States mail, postage prepaid. When service of any such notice is made by mail, the time of such notice shall begin with and run from the date of the deposit of same in the United States mail.

ARTICLE 22

SUCCESSORS
The terms herein shall inure to the benefit of and shall bind, as the case may be, the successors and assigns of the parties hereto, subject, however, to the provisions ofArticle 17. 25

Page 54 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 26 of 29 ends

ARTICLE 23

ACCEPTANCE OF FRANCHISE
A. This franchise is granted and shall be held and enjoyed only upon the terms and conditions herein contained. By accepting this grant of franchise, Grantee shall agree to be bound by each and all of the requirements ofArticle X, Sections 1001 through 1007 of the San Luis Obispo City Charter.

B. Grantee shall, within ten ( 10) days after the passage of this franchise Ordinance, file with the City Clerk an express and unconditional written letter of acceptance of, and consent to, the terms and conditions ofthis franchise Ordinance, in its current version, and as subsequently amended pursuant to San Luis Obispo City Charter, Article X, Section 1004.

C. The parent entity, or entities, if any, of Grantee, shall file a letter with the City, concurrent with Grantee' s letter of acceptance, which guarantees the performance of each and every term, covenant and condition imposed on Grantee pursuant to the franchise Ordinance.

D. Grantee's letter of acceptance shall be signed by two (2) duly authorized representatives of Grantee, whose signatures shall be acknowledged by a notary, and shall be accompanied by the performance bond and evidence of insurance required by this franchise Ordinance.

ARTICLE 24

FORCE MAJEURE
The time within which Grantee is obligated hereunder to construct, erect, maintain, operate, repair, renew, change the size of and remove pipelines or other improvements shall be extended for a period oftime equal in duration to, and performance in the meantime shall be excused on account of, and for, and during the period of any delay caused by strikes, threats of strikes, lockouts, war, threats of war, insurrection, invasion, acts of God, calamities, violent action of the elements, fire, action or regulation of any governmental agency law or ordinance, impossibility of obtaining materials, or other things beyond the reasonable control of Grantee.

ARTICLE 25

Page 55 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 27 of 29 ends

requirements as described in this section. The liquidated damages set forth below shall be chargeable to the bond, letter of credit or security fund provided for in Article 14, supra, should Grantee not make payment within thirty (30) days ofwritten notice by certified mail by the City that the following amounts are due for the following concerns:

1. Failure to provide data, documents, or reports within ten ( 10) business days after receipt of written request by the City, by certified mail, or such longer time as may be specified in said request: Two Hundred Fifty Dollars ($ 250. 00) per day for each day, or part thereof that each violation continues.

2. Failure to provide to the City within ten ( 10) business days after receipt of written request by the City, by certified mail, current evidence of insurance and bonding: Two Hundred Fifty Dollars ($250. 00) per day for each day, or part thereof, that each noncompliance continues. Nothing in this Section shall preclude immediate termination or suspension of this franchise as provided for under Article 15B., supra.

3. Failure by Grantee to timely restore public or private property after performance ofwork and following Grantee' s receipt of written request by the City to do so within ten ( 10) business days thereafter by certified mail: Two Hundred Fifty Dollars ($ 250. 00) per day or part thereof, that each non - compliance continues. Any fines paid pursuant to this Subsection 3 shall be paid solely to the Street Fund ofthe City Public Works Department.

B. Ifthe City Public Works Department determines that Grantee is liable for liquidated damages, the City Public Works Department shall issue to Grantee by certified mail written notice ofintention to charge liquidated damages. Liquidated damages shall begin to accrue as of the date of the written notice and as set forth in said notice. The notice shall set forth the basis for the liquidated damages and give Grantee a reasonable time in which to remedy the violation.

C. Grantee shall have the right to appeal any notice to the City Public Works Department by certified mail, within twenty ( 20) days after issuance of the notice by the City Public Works Department. The City Public Works Department shall hold an administrative hearing within sixty (60) days after receipt of an appeal. The City Public Works Director's decision shall be the final decision of the City.

D. If Grantee does not appeal the notice within said twenty ( 20) day period, Grantee shall pay the amount( s) of liquidated damages as stated in the notice. If payment is not paid as provided for in this Article, the City may withdraw against the bond provided for in Article 14 herein.
27

Page 56 of 466 ends

Ordinance No. 1390 ( 2002 series)

Page 28 of 29 ends

ARTICLE 26

ATTORNEYS' FEES
In the event the City or Grantee brings legal action against the other, or against Grantee' s bonding companies or insurance carriers to compel performance of, or to recover for breach of any covenant, agreement or condition contained in this franchise, or for damages, the prevailing party shall be entitled to, in addition to any other relief obtained, such reasonable attorneys' fees as are fixed by the judge ofthe court in which such action is brought.

ARTICLE 27

CONDEMNATION
Notwithstanding anything to the contrary contained herein and in accordance with San Luis Obispo City Charter Article X, Section 1005, this Ordinance shall not in any way affect the right of the City to acquire the property of the Grantee thereof 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 a term or in perpetuity the City' s right of eminent domain with respect to any public utility. The City reserves the right to purchase the property of such utility at an agreed price. In fixing the price to be paid by the City for any utility, no allowance shall be made for franchise value ( other than the actual amount paid to the City at the time of the franchise acquisition), goodwill, going concern, earning power, increased cost of reproduction, severance damage, or increased value of right -of -way.

SECTION 2: 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 ofthe remaining portions of this Ordinance. The City Council ofthe City of San Luis Obispo hereby declares that they would have adopted this ordinance and each 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 3: This ordinance shall take effect and be in full force and effect thirty (30) days after its passage, and before the expiration offifteen ( 15) days after passage ofthis ordinance, it shall be published once with the names of the members of the City Council voting for and against the ordinance in a newspaper of general circulation published in the City of San Luis Obispo, State of California.

Page 57 of 466 ends

Ordinance No. 1390 ( 2002 aeries)

Page 29 of 29 ends

text of this ordinance shall be on file in the Office of the City Clerk on and after the date following the introduction and passage to print and shall be available to any interested member of the public.

INTRODUCED on the 19th day of June 2001 AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the 10' day of July 2001, on the following roll call vote:

AYES: Council Members Marx, Mulholland, Schwartz, Vice Mayor Ewan and Mayor Settle
NOES: None
ABSENT: None
e Price; Ciiy Clerk
APPROVED:

Yef G. Jo,.gens, Ci Attorney
29

Page 58 of 466 ends

ORDINANCE NO. 1391 ( 2001 Series)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO

GRANTING TO UNION PIPELINE COMPANY, A CALIFORNIA CORPORATION, A

FRANCHISE TO CONSTRUCT, OPERATE, AND MAINTAIN

PIPELINES FOR THE TRANSPORTATION OF OIL, AND OTHER SPECIFIED

MATERIALS IN THE CITY OF SAN LUIS OBISPO,

STATE OF CALIFORNIA
WHEREAS, the City of San Luis Obispo adopted Ordinance No. 1038 on April 2, 1985 granting a franchise to Union Oil Company of California for a term of 25 years for the transportation and distribution of oil and other specified materials in the City of San Luis Obispo; and
WHEREAS, Union Oil Company of California sold or transferred a portion of its pipelines subject to Ordinance No. 1038 to TOSCO Corporation and Union Pipeline Company, a California Corporation; and
WHEREAS, Union Oil Company of California informed the City of San Luis Obispo that it intends to commence the abandonment process for its remaining interests under Ordinance No. 1038 that have not been sold or transferred to TOSCO Corporation and Union Pipeline Company, a California Corporation; and
WHEREAS, Union Oil Company of California' s remaining pipeline interests in the City of San Luis Obispo are still subject to the existing franchise agreement granted in Ordinance No. 1038 until such time that Union Oil Company of California has abandoned such pipelines pursuant to applicable law; and
WHEREAS, TOSCO Corporation and Union Pipeline Company have requested the City of San Luis Obispo to enter into new franchise agreements for the oil transportation and distribution pipelines acquired from Union Oil Company of California.

NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo to grant a franchise to construct, operate, and maintain pipelines for the transportation of oil, and other specified materials in the City of San Luis Obispo to Union Pipeline Company Unocap "), a California corporation as follows:

SECTION 1: Terms and Conditions of Franchise ( Table of Contents begins on page 2):
01391

Page 59 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 2 of 28 ends

TABLE OF CONTENTS
2 Page
ARTICLE I NATURE OF FRANCHISE 4
A. Grant of Franchise 4
B. Limitations Upon Grant 5
C. Rights Reserved to the City of San Luis Obispo 6
ARTICLE 2 APPURTENANCES 6
ARTICLE 3 LOCATION OF PIPELINES 7
ARTICLE 4 CONSTRUCTION OF PIPELINES 7
A. Terms of Construction 7
B. Restoration of Streets 7
ARTICLE 5 COMMENCEMENT OF CONSTRUCTION 7
ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED 8
ARTICLE 7 COMPENSATION TO THE CITY 9
ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS 10
ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAIR OF
DAMAGE TO CITY STREETS 11
ARTICLE 10 REARRANGEMENT OF FACILITIES 11
A. Expense of Grantee 11
B. Expense of Others 12
C. Rearrangement of the Facilities of Others 13
D. Notice 13

ARTICLE I I GRANTEE' S REMOVAL OR ABANDONMENT
OF FACILITIES 13
ARTICLE 12 COMPLETION OF WORK 16
2

Page 60 of 466 ends

Ordinance No. 1391 ( 2001 aeries)

Page 3 of 28 ends

TABLE OF CONTENTS, CONT' D.

ARTICLE 13 RECOVERY OF COSTS OF REPAIRS
k,
AND UNPAID FEES 16
ARTICLE 14 BOND 18
ARTICLE 15 INSURANCE 19
ARTICLE 16 INDEMNIFICATION BY GRANTEE 20
ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE 20
ARTICLE 18 WAIVER OF BREACH 23
ARTICLE 19 DEFAULT 23
ARTICLE 20 SCOPE OF RESERVATION 24
ARTICLE 21 NOTICE 24
ARTICLE 22 SUCCESSORS 25
ARTICLE 23 ACCEPTANCE OF FRANCHISE 25
ARTICLE 24 FORCE MAJEURE 25
ARTICLE 25 LIQUIDATED DAMAGES 26
ARTICLE 26 ATTORNEYS' FEES 27
ARTICLE 27 CONDEMNATION 27
k,

Page 61 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 4 of 28 ends

ARTICLE I

NATURE OF FRANCHISE
A. Grant of Franchise.

1. The City of San Luis Obispo ( hereinafter referred to as " City "), hereby grants to Union Pipeline Company, a California Corporation, ( hereinafter referred to as " Grantee "), pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9( b) of the California Constitution, and Section 39732( b) of the California Government Code, the non - exclusive right, privilege and franchise, subject, however, to all the limitations and restrictions herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change the size of and remove pipelines, not to exceed twelve ( 12) inches nominal internal diameter, for the transportation of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, movable by pipeline, in, under, along, and across the public streets, ways, alleys and places within the City of San Luis Obispo ( hereinafter collectively referred to as " streets "), as described in Exhibit No. 1, attached hereto and made a part hereof.

2. The term of the franchise granted under this Ordinance shall be for a term often ( 10) years, commencing with the date on which it is accepted by Grantee.

3. Unless otherwise specifically stated, the following provisions shall govern the interpretation and construction of the franchise granted herein:
a) This franchise shall include the right, for the period and subject to the conditions hereof, to construct, erect, maintain, operate, repair, renew, abandon and change the size and remove the said pipelines, if any, of Grantee, as laid and constructed in said streets. b) The terms and conditions ofthis franchise shall also apply to any pipe or other facilities of Grantee which are located within the right of way of any existing public road or street at the time such road or street becomes a City street through annexation or otherwise, subject to any other existing rights enjoyed by Grantee. c) . Grantee shall not be relieved ofits obligation to promptly comply with any provision of this franchise by failure of the City to enforce prompt compliance. d) Any right or power conferred, or duty imposed upon any officer, employee, department, or other City entity, by the terms of this franchise, may be legally transferred to any other City officer, employee, department, or other City entity. e) Grantee shall have no recourse whatsoever against the City for any loss, cost, expense, or damage suffered by Grantee and arising out of any provision or requirement of this franchise or its lawful enforcement by the City.
4

Page 62 of 466 ends

Ordinance No. 1391 ( 2001 6eries)

Page 5 of 28 ends

f) This franchise does not relieve Grantee of any applicable requirements ofthe San Luis Obispo Municipal Code or of any federal, state, or City law, ordinance, rule, regulation, or specification, including, but not limited to, any requirement relating to street work, street excavation permits, or the use, removal or relocation of property in streets, except as specifically prescribed herein.
g) This franchise is non - exclusive. Neither the granting ofthis franchise nor any ofthe provisions contained herein shall be construed to prevent the City from granting any identical or similar franchise to any other person.
h) The compensation provided for in this franchise is for (i) the rights and privileges granted by this franchise, and (ii) the right and privilege granted to the Grantee to construct, erect, maintain, operate, repair, renew, abandon and change the size of and remove the said pipelines pursuant to this franchise within the City' s streets. The City expressly reserves the right to impose and collect from Grantee, on a non - discriminatory basis, its normal duly established processing and inspection fees from street cutting and excavation permits to the extent such fees are imposed generally on all non - governmental applicants for such permits within the City.
i) Any activities involving the use of a pipeline system for the transmitting of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, which are not specifically authorized under this franchise are prohibited under this franchise. Except as provided in Article 2, any telecommunication or other uses not authorized in this franchise Ordinance must be approved by the City under a separate franchise.
0) If any provision of this franchise, or the application of this franchise to any person or circumstance is held invalid by a court of competent jurisdiction or is not in compliance with any requirement ofthe Public Utilities Commission, the City, or any other federal or state body or agency having jurisdiction over Grantee's franchise activities, the remainder of this franchise Ordinance, or the application of this franchise to persons or circumstances other than those to which it is held invalid or not in such compliance, shall not be affected thereby.

B. Limitations Upon Grant.

1. No privilege or exemption is granted or conferred by this franchise except those specifically prescribed herein.

2. Any privilege claimed under this franchise by Grantee in any street shall be subordinate to any prior lawful occupancy of the street.

Page 63 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 6 of 28 ends

otherwise, without the City's prior consent as described in Article 17, infra, or as otherwise expressly provided herein. The City agrees that such prior consent shall not be unreasonably withheld or conditioned.

C. Rights Reserved to the City.

1. The rights reserved to the City under this franchise Ordinance are in addition to all other rights of the City, whether authorized by the San Luis Obispo City Charter, San Luis Obispo City Municipal Code, or any other federal, state, or City law, rule, or regulation. No action, proceeding or exercise of a right shall affect any other rights that may be held by the City.

Grantee, by acceptance of this franchise, shall be bound thereby and shall comply with any action or requirement of the City in its exercise of any such right or power.

ARTICLE 2

APPURTENANCES
The Grantee shall have the right, subject to the prior approval of the City Public Works Department, to construct and maintain such traps, manholes, conduits, valves, appliances, attachments, and appurtenances (hereinafter for convenience collectively referred to as appurtenances "), as may be necessary or convenient for the proper maintenance and operation ofthe pipelines under said franchise. Said appurtenances shall be so located as to conform to any order of the City Public Works Department in regard thereto and not to interfere with the use of the streets for travel. The Grantee shall have the right, subject to such ordinances, rules, or regulation as are now or may hereafter be in force, to make all necessary excavations in said street for the construction and repair of said pipelines and appurtenances subject to the prior approval of the City Public Works Department. " Appurtenances" shall also include any adjunct communications lines and/ or conduits as coaxial cable, optical fiber, wire, or other transmission lines or forms of transmission, and associated equipment and devices located in, upon, along, across, under or over the streets of the City, the sole function of which is to monitor or control the operation or safety of the pipeline system via the distribution of video, audio, voice, or data signals. An adjunct communications line shall not include any facility which distributes, through any means, to subscribers or persons other than Grantee, the signal of one or more broadcast television or radio stations or other sources of video, audio, voice, or data signals. rel

Page 64 of 466 ends

Ordinance No. 1391 ( 2001 6eries)

Page 7 of 28 ends

ARTICLE 3

LOCATION OF PIPELINES
So far as is practicable and within the requirements of the California State Fire Marshall, any pipeline hereinafter laid shall be located along the edge or shoulder ofthe streets or in the parking areas adjacent thereto so as not unreasonably to disturb the flow of traffic and where possible shall be laid in the unpaved portion of the street.

ARTICLE 4

B. Restoration of Streets. The work of laying, constructing, maintaining, operating, renewing, repairing, changing size and moving any of the pipeline system contemplated by this franchise and all other work in exercise ofthis franchise shall be conducted according to the provisions of the City' s encroachment ordinances from time to time prevailing, and otherwise in accordance with federal and state law and applicable City ordinances, and with the least possible hindrance or interference to the use of City roads by the public or by the City of San Luis Obispo, and Grantee shall provide all necessary warning, safety and traffic control devices as are or may be required by City, State or Federal regulations. All excavations shall be back filled and adequately compacted. As part of any work completed under provisions of this franchise agreement, the surface of City streets shall be repaired and replaced to meet current City standards and specifications. Under no circumstances shall the surface of City streets be placed in a manner less than as good and serviceable condition as existed at the beginning of said work, to the satisfaction ofthe City Public Works Department.

ARTICLE 5

COMMENCEMENT OF CONSTRUCTION
The Grantee, in good faith, shall commence with work of laying the pipelines and appurtenances within four ( 4) months from the date of passage of the approval of this franchise, and if any such pipelines be not so commenced within said time, this franchise shall be declared forfeited; provided, however, that ifthe Grantee is maintaining and operating an existing pipeline system over the route referred to in Article I herein, it shall be deemed to be in compliance with the foregoing. The Grantee shall not commence the construction of any new pipelines under the provision ofthis franchise or add to such existing pipeline system, if any there be, until it first shall have applied for and obtained a permit therefore from the City Public Works Department. 7

Page 65 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 8 of 28 ends

ARTICLE 6

MAPS AND REPORTS TO BE FURNISHED
A. Within six (6) months of the effective date of this franchise for existing pipelines, and within ninety (90) days following the date in which any additional pipelines have been laid or constructed under this franchise, the Grantee shall file a map in such form as may be required by the City Public Works Department 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 this date. Cathodic protection is to be used for all facilities installed or maintained pursuant to this franchise. For facilities previously in liquid service and where the liquids have been removed and the facilities inerted, or for facilities previously in gas service that are not pressurized, cathodic protection shall be maintained consistent with State Fire Marshall or other agency requirements. A description of all the protective devices shall be furnished to the City Public Works Department which shall show the location and types of anodes, including a description of methods to be used as a protection against corrosion and electrolytic leakage.

B. Grantee shall file with the City Finance Director, within thirty (30) days after the expiration of the calendar year, or fractional calendar year, following the date of the granting of this franchise and within thirty ( 30) days after the expiration of each calendar year thereafter, two copies of a report verified by the oath of Grantee or by the oath of a duly authorized representative of Grantee, showing, for the immediately preceding franchise period, the length of main lines in streets, the nominal internal diameter of such main lines, the rate per foot per year when applicable) and the total amount due to the City. In this report, Grantee shall also show any change in franchise footage since the last franchise report, segregating such footage as to new main lines and adjunct communications lines laid, old main lines and adjunct communications lines removed, old main lines and adjunct communications lines abandoned in place, and the footage of main lines and adjunct communications lines in territory annexed by the City since the last franchise report.

C. Grantee shall file with the City Public Works Department within sixty ( 60) days after the end ofthe calendar year a report, in duplicate, showing the permit number of each permit

Page 66 of 466 ends

Ordinance No. 1391 ( 2001 beries)

Page 9 of 28 ends

obtained for the installation of new main lines during the immediately preceding franchise report period, together with the length and size of said main lines.

ARTICLE 7

COMPENSATION TO THE CITY
A. During the term of this franchise, Grantee shall pay to the City an annual fee for this franchise, said fee to be those fees prescribed by the California Public Utilities Code section 6231. 5, provided that the rate is subject to increase to the maximum rate established in subsequent amendments ofthe California Public Utilities Code. Annual payments to be made pursuant to this franchise shall be due and payable in arrears April 1 of each year of this franchise. The initial payment hereunder shall be prorated for the remainder of the current calendar year based on a 365 -day year.

At the time of payment of fees by Grantee, Grantee shall file a verified statement with the Clerk of the City of San Luis Obispo, with a copy to the City Public Works Department showing in detail the number oflineal feet and the diameter thereof, expressed in inches, of pipelines covered by this franchise during the previous calendar year, or portion thereof.

Notwithstanding the provisions as otherwise stated in this Article and franchise, the Grantee shall be liable to pay the City the annual fee for the period to and including the date of either actual removal of the facilities or the effective date of the abandonment " in place," and until the Grantee shall have fully complied with all of the provisions of law or ordinances relative to such abandonments.

In the event of partial abandonment offacilities as provided in the Ordinance, or in the event of partial removal of such facilities by the Grantee, the payments otherwise due the City for occupancy of the streets by such facilities shall be reduced by the length and diameter of pipelines abandoned or the actual pipeline removed beginning with the first day ofthe next succeeding franchise year, and for each franchise year thereafter; provided, however, that the base rate shall be modified to reflect the adjustment (per this Article) applicable to such abandoned or removed pipeline at the beginning of the next succeeding franchise year following abandonment or removal.

Page 67 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 10 of 28 ends

of this franchise Ordinance, unless disputed in good faith, shall be paid when due or shall be deemed delinquent. Any undisputed delinquent amounts shall be charged a 10% penalty and, in addition, shall accrue interest commencing thirty ( 30) days after the due date, at a rate of one and one -half percent ( 1. 5 %) per month ( based upon a 30 -day calendar month) or any lesser amount if required by law. Any neglect, omission or refusal by said Grantee to pay any undisputed delinquent franchise fee with any late charges, within thirty (30) days of delinquency, at the times or in the manner herein provided, shall be grounds for a declaration of a forfeiture of this franchise and of all rights hereunder.

Payments are to be made to the City Finance Department, 990 Palm Street, San Luis Obispo, California 93401, or at such place as the City shall, from time to time, designate in writing.

B. Grantee shall pay the City a granting fee of $5, 000. 00 within thirty ( 30) days after the date the City Council adopts this franchise Ordinance.

D. Right of Inspection. The City shall have the right to inspect Grantee's pipeline accounting and other records relating to its annual report and to audit and recompute any and all accounts payable under this franchise. Costs of audit shall be borne by Grantee when an audit results in an increase of more than five percent of Grantee's annual payments to the City.

ARTICLE 8

Page 68 of 466 ends

Ordinance No. 1391 ( 2001 6eries)

Page 11 of 28 ends

ARTICLE 9

REPAIR OF DEFECTIVE FACILITIES AND

REPAIR OF DAMAGE TO CITY STREETS
If any portion of any street shall be damaged by any reason related to the Grantee's operations pursuant to this franchise including defective facilities laid or constructed under this franchise, Grantee shall, at its own expense, repair any defect of its facilities and put such street in as good condition as it was before such damage was incurred, to the satisfaction of the City Public Works Department. If Grantee, within ten ( 10) days after receipt of written notice from the City Public Works Department instructing it to repair such damage, fails to commence to comply with such instruction, or, thereafter, fails diligently to prosecute such work to completion, then the City Public Works Director immediately may take any actions which are, in the sole judgment and discretion of the City. Public Works Director, necessary to repair said damage. Any and all costs and expenses so incurred shall be the sole responsibility of Grantee including the current rate of overhead being charged by the City for reimbursable work, which cost and expense, by the acceptance ofthis franchise, Grantee agrees to pay upon demand. If such damage constitutes an immediate danger to public health or safety requiring the immediate repair thereof, the City Public Works Department, without notice, may repair such damage and Grantee agrees to pay the cost thereof upon demand.

ARTICLE 10

REARRANGEMENT OF FACILITIES
A. Expense of Grantee.

Page 69 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 12 of 28 ends

such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California.

3. The City reserves the right to lay, construct, repair, alter, relocate and maintain subsurface, surface or other improvements of any type of description in a governmental but not proprietary capacity within, over or under the streets over which this franchise is granted. If the City finds that the location or relocation of such subsurface, surface or other improvements conflicts with the facilities laid, constructed or maintained under this franchise, whether such facilities were laid before or after the improvements of the City, Grantee shall relocate permanently or temporarily, as directed at the sole discretion of the City Public Works Director, any such facility at no expense to the City upon receipt of a written request from the City Public Works Department to do so and shall commence such work, by beginning engineering, surveying or other pre - construction activities, on or before the date specified in such written request, which date shall not be less than sixty ( 60) days from receipt of such written request. The Grantee shall thereafter diligently prosecute such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California.

5. Grantee agrees to, and shall, reimburse the City for such cost within thirty ( 30) days after presentation to Grantee of an itemized account arising out of the actions taken in this Article I OA.

Page 70 of 466 ends

Ordinance No. 1391 ( 2001' aeries)

Page 13 of 28 ends

accommodation of any water, electric, gas or other utility system now or hereafter owned or operated by the City.

Except as otherwise provided in Article 10A, such arrangement shall be at the City's expense.
2) The City shall have the right to require the Grantee to rearrange any part of the Grantee's facilities for the accommodation of any person, firm or corporation. When such rearrangement is done for the accommodation of any person, firm or corporation, other than one of said utility systems owned or operated by the City, the cost of such rearrangement shall be borne by the accommodated party. Such accommodated party, in advance of such rearrangement, shall deposit with the Grantee or the City Clerk cash or a letter of credit or other cash equivalent in an amount, as in the reasonable discretion of the City Public Works Department, shall be required to pay the costs of such rearrangement, and such accommodated party shall execute an instrument agreeing to indemnify and hold harmless the Grantee from any and all damages or claims caused by such rearrangement. 3) The rearrangement referred to in subsection ( 1) and ( 2) of Section B of this Article 10 shall be accomplished in conformity with the written notice of the City Public Works Department.

C. Rearrangement of the Facilities of Others.

D. Notice.

The Grantee shall be given not less than sixty (60) days written notice of any rearrangement of facilities which the Grantee is required to make hereunder. Such notice shall specify in reasonable detail the work to be done by the Grantee and shall specify a reasonable time that such work is to be accomplished. In the event that the City shall change the provisions of any such notice given to the Grantee, the Grantee shall be given an additional period of not less than thirty (30) days to initiate such work.

ARTICLE 11

GRANTEE' S REMOVAL OR ABANDONMENT OF FACILITIES
A. The City reserves the right to require Grantee to remove its facilities from the City streets and City public property in the event of the non - renewal, revocation or termination ofthis franchise or at any time thereafter with respect to those facilities abandoned in place, or for the facilities affected by the permanent discontinuance of all or a portion ofthe facilities. Further, so long as any abandoned facilities installed under the authority of this franchise remain in a City street, Grantee shall maintain a performance bond, security fund, or other form of collateral, 13

Page 71 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 14 of 28 ends

acceptable to the City, sufficient to cover the cost of the removal of all such facilities from the City streets.

B. At the expiration, revocation or termination of this franchise or of the permanent discontinuance ofthe use of all or a portion of its facilities, Grantee shall, within thirty (30) days thereafter, make written application to the City Public Works Department for authority either:

1. To abandon all or a portion of such facilities in place; or

2. To remove all or a portion of such facilities. Such application shall describe the facilities desired to be abandoned, their location with reference to City streets, and shall describe with reasonable accuracy the physical condition of such facilities. As part ofthe application for removal or abandonment of these facilities, Grantee shall submit a soil test, taken within thirty ( 30) days of the submittal of the application, for those materials to be tested annually pursuant to federal, state and local laws. A soil test shall be taken along that portion of the pipeline to be removed or abandoned at such intervals as directed in writing by the City Public Works Department and reasonably consistent with established sampling protocols. The City Public Works Department shall determine whether any abandonment or removal which is thereby proposed may be effected without detriment to the public interest and the conditions under which such proposed abandonment or removal may be effected. The City Public Works Department shall then notify Grantee of the City' s determinations. Grantee shall also obtain permits to abandon or remove the pipeline from the City Public Works Department for all pipelines prior to the removal, abandonment or discontinuation of use of all or a portion of Grantee' s facilities. The City also reserves the right to require removal of Grantee' s abandoned facilities in place at any time following the expiration, revocation or termination of this franchise.

Grantee shall be required to meet the bonding, insurance, indemnification and annual franchise fee requirements of this franchise, for facilities abandoned in place.

C. Within thirty (30) days after receipt ofNotification from the City Public Works Department pursuant to Article 11. B.2 above, Grantee shall apply for a permit from the City Public Works Department to abandon or remove the facility.

D. Grantee shall, within sixty ( 60) days after obtaining such permit, commence and diligently prosecute to completion the work authorized by the City's permit.

E. In the event Grantee applies to remove its facilities, and the City Public Works Department determines that any or all of the facilities cannot be removed due to a moratorium preventing work in the City streets, the payment of annual franchise fees shall be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty ( 30) days of notice to pay.

Deferred annual franchise fees shall otherwise be waived.

F. Failure to Comply with City' s Orders Regarding the Removal or Abandonment of Facilities.
14

Page 72 of 466 ends

Ordinance No. 1391 ( 2001 beries)

Page 15 of 28 ends

1. If any orders or prescribed conditions relating to the abandonment of any facilities are not complied with, the City Public Works Department may impose such additional orders and conditions as the City deems appropriate, including an order that the Grantee remove any or all of such facilities. Grantee shall comply with such additional orders.

2. In the event that Grantee fails to comply with the terms and conditions of abandonment or removal as may be required by this franchise Ordinance, and within such time as may be prescribed by the City Public Works Department, then the City may remove or cause to be removed such facilities at Grantee' s expense. Grantee shall pay to the City all of the costs of removing and disposing of these facilities, as well as returning the rights -of -way occupied pursuant to this franchise, including, but not limited to: ( a) the cost of all environmental testing the City must conduct to determine the environmental condition of any rights -of -way occupied pursuant to this franchise and to ascertain what procedures the City must undertake, if any, to return any such rights -of -way to the environmental condition required by applicable Federal, State or local environmental laws; ( b) all cleanup costs, disposal costs, and any other costs associated with returning these rights -of -way to such environmental condition; ( c) all costs of removing, storing, and disposing of the Grantee' s facilities; ( d) all costs ofreturning all streets to the structural conditions they were in immediately at the beginning of Grantee' s use of these streets pursuant to this franchise agreement; ( e) plus the current rate of overhead being charged by the City for reimbursable work.

3. If, at the nonrenewal, revocation or termination of this franchise, or of the permanent discontinuance ofthe use of all or a portion of its facilities, Grantee, within thirty (30) days thereafter, fails or refuses to make written application for the above - mentioned authority to remove or abandon its facilities, the City Public Works Department shall make the determination as to whether the facilities shall be abandoned in place or removed. The City Public Works Department shall then notify Grantee of its determinations. Grantee shall thereafter comply with the applicable provisions of this Article 11.

G. For those facilities Grantee abandons in place, Grantee shall be required to maintain an acceptable performance bond, letter of credit or security fund, as determined by the City Public Works Department, to cover the costs for the removal of any such abandoned facilities from the City streets for any and all periods of time, including those periods following the expiration, revocation or termination ofthis franchise, that Grantee's facilities remain in the City streets. Grantee shall be required to maintain insurance and to indemnify the City pursuant to this Article during any periods the abandoned facilities remain within the City streets. Provided, however, that any pipelines which cannot be removed due to a moratorium preventing work in the City streets, may be deferred from the payment ofthe annual franchise fee. The payment of annual franchise fees may be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such Facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty (30) days ofnotice to pay.
15

Page 73 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 16 of 28 ends

ARTICLE 12

COMPLETION OF WORK
In the event that the Grantee fails to commence any work or act and diligently proceed therewith or to complete any such act or work required of the Grantee by the terms of this franchise within the time limits required hereby ( and except as is otherwise provided in Articles 10 and 11), the City may cause such act or work to be completed by the City or, at the election of the City, by a private contractor. The Grantee agrees to pay the City, within thirty ( 30) days after delivery of an itemized bill, the cost of performing such act or work plus an amount equal to fifteen percent ( 15 %) thereof for overhead. Ifthe Grantee is dissatisfied with any decision made by the City Public Works Department hereunder or the determination of the cost of any work performed by the City pursuant to this Agreement, it may petition the City Council to review the same within ten ( 10) days after such decision or determination.

ARTICLE 13

A. The City Public Works Department shall keep an itemized account ofthe expenses incurred by the City pursuant hereto, or the fees unpaid by the Grantee. Sixty ( 60) days after the presentation of the bill to the Grantee therefore, the City Public Works Department shall prepare and file with the City Clerk a report specifying the work done by the City, or the unpaid fees, the itemized and total cost of the work, a description of the work performed, and the name and address of the Grantee entitled to notice pursuant to this Article.

C. The Grantee may file written protests or objections with the City Clerk at any time prior to the time set for the hearing on the report of the City Public Works Department. Any such protest or objection must contain a description of the work or unpaid fee or liquidated damages in which the Grantee is contesting and the grounds of such protest or objection and the date it was received by him. He shall present such protest or objection to the City Council at the 16

Page 74 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 17 of 28 ends

time set for the hearing, and no other protest or objection shall be considered, except as determined by the City Council for good cause shown.

E. The City Council may thereupon order that such charge shall be made a personal obligation of the Grantee or assess such charge against the property of the Grantee. 1) Ifthe City Council orders that the charge shall be a personal obligation of the Grantee, it shall direct the City Attorney to collect the same on behalf of the City by use of all appropriate legal remedies.
2) Ifthe City Council orders that the charge shall be assessed against the property of the Grantee, it shall confirm the assessment, cause the same to be recorded on the assessment roll, and thereafter, said assessment shall constitute a special assessment against a lien upon any property held in the City of San Luis Obispo by the Grantee.

F. The validity of any assessment made under the provisions of this franchise shall not be contested in any action or proceeding unless the same is commenced within ninety ( 90) days after the assessment is placed upon the assessment roll as provided herein.

H. Immediately upon its being placed on the assessment roll, the assessment shall be deemed to be complete, the several amounts assessed shall be payable, and the assessments shall be liens against the property of the grantee in the City of San Luis Obispo. The lien shall be subordinate to all existing special assessment liens previously imposed upon the same property, and shall be paramount to all other liens except for state, county, and municipal taxes with which it shall be upon a parity. The lien shall continue until the assessment and all interest due and payable thereon are paid.
1) All such assessments remaining unpaid after thirty ( 30) days from the date of recording on the assessment roll shall become delinquent and shall bear interest at the highest rate permitted by law from and after said date.
17

Page 75 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 18 of 28 ends

Ifthe City Council has determined that the assessment shall be paid in installments, each installment and any interest thereon shall be collected in the same manner as ordinary City taxes is in successive years. If any installment is delinquent, the amount thereof is subject to the same penalties and procedure for sale as provided for ordinary county taxes.

K. All money recovered by payment of the charge or assessment or from the sale of the property at foreclosure sale shall be paid to the City Finance Director.

ARTICLE 14
BOND
A. Grantee shall, concurrently with the filing of and acceptance of award of this franchise, file with the City Clerk, and yearly thereafter, maintain in full force and effect, a bond guaranteeing to the City of San Luis Obispo the penal sum of One Million Dollars ($ 1, 000, 000. 00), with a surety to be approved by the City Public Works Director and City Risk Manager, conditioned that Grantee shall, well and truly observe, fulfill and perform each and every term and condition of this franchise, and in c, material breach of condition of said franchise, at the discretion of the City Public Works Director, a percentage of the amount of the bond shall be paid to the City according to the following schedule, which cumulative amount for any said breach not cured within the time specified below shall not exceed the full amount of the bond, in addition to any damages recoverable by the City and shall be recoverable from the principal and sureties of the bond:

Page 76 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 19 of 28 ends

The amount of time specified above shall be tolled while City and Grantee resolve, or until the City Council rules on, any written appeal, protest or objection to the City Public Works Director' s decision as set forth in Articles 12, 13, 19, and 25, and elsewhere in this agreement; however, if Grantee' s appeal, protest or objection is found by the City Council to be the result of bad -faith actions or tactics that are frivolous or intended to cause unnecessary delay, such amount of time shall not be tolled.

If said bond is not so filed, the award ofthis franchise and privileges will be set aside and any money paid therefore will be forfeited. Whenever a bond is taken and deemed to be liquidated damages for any breach of a term or condition of this franchise, the Grantee must immediately file another bond of like amount and character, and ifthe Grantee fails to do so within the time set by the City Public Works Director, the City Council may, by resolution, declare said franchise automatically forfeited. Nothing herein shall insulate Grantee from liability in excess of the amount of said bond or shall be construed as a waiver by the City of any remedy at law against the Grantee for any breach of the terms and conditions of this franchise, or for any damage, loss or injuries suffered by the City of San Luis Obispo in case of any damage, loss or injury suffered by any person, firm, or corporation by reason of any work done or any activity conducted by the Grantee in exercise of this franchise.

B. The faithful performance bond shall continue to exist for one ( 1) year following the City's approval of any sale, transfer, assignment or other change of ownership of this franchise, or of the expiration or termination of this franchise. The City may release said bond prior to the end of the one ( 1) year period upon satisfaction by Grantee of all the obligations under this franchise.

ARTICLE 15

INSURANCE
A. The Grantee shall procure and shall keep in force for the term of the franchise, at the sole cost and expense of the Grantee, the following insurance. All insurance coverages are to be placed with insurers which have a Best's rating ofnot less than B +VIII and are admitted insurance companies in the State of California. Grantee may satisfy the requirements ofthis Article 15 by showing proof of self - insurance reasonably satisfactory to the City Attorney and Risk Manager.

Commercial General Liability Insurance ( CGL): Grantee shall maintain in full force and effect Commercial General Liability Insurance with the following coverages:

1. Personal Injury and Bodily Injury, including death resulting therefrom.

2. ' Property Damage.

3. Automobile coverage which shall include owned, non -owned and hired vehicles.

The following endorsements must be provided in the CGL policy:

1. Ifthe insurance policy covers on an " accident" basis, it must be changed to occurrence."
19

Page 77 of 466 ends

Ordinance No. 1391 ( 2001 Series)

Page 20 of 28 ends

2. The policy must cover personal injury as well as bodily injury.

3. Blanket contractual liability must be afforded and the policy must contain a cross - liability or severability of interest endorsement.

4. Broad Form Property Damage Liability must be afforded.

5. Products and Completed Operations coverage must be provided.

6. The City, its officers, employees and agents shall be named as additional insured under the policy. The policy shall include the appropriate insurance company endorsement, as required under.City regulations. The policy shall provide that the insurance will operate as primary insurance. No other insurance effected by the City, whether commercial or self - insurance will be called upon to contribute to a loss hereunder.

The following requirements apply to all insurance to be provided by Grantee:

2. Certificates and policies shall state that the policies will not be canceled or reduced in coverage or changed in any other material respect without thirty days prior written notice to the City.

B. Failure on the part of Grantee to procure or maintain required insurance and bonding shall constitute a material breach of this franchise upon which the City may immediately terminate or suspend this franchise.

ARTICLE 16

INDEMNIFICATION BY GRANTEE
The Grantee, by the acceptance or use of the franchise hereby granted, shall defend, indemnify and shall keep and save free and harmless the City, its officers, agents and/ or employees against any and all claims, demands or causes of action which may be asserted, prosecuted or established against them, or any of them, for damage to persons, or property, of whatsoever nature, arising out of the use by it of the City streets hereunder or arising out of any of the operations or activities of the Grantee pursuant to this franchise, whether such damage shall be caused by its own sole negligence or negligence concurrent with the City, excepting therefrom, however, any claim or demand based on the sole negligence or willful misconduct of the City and any claim, demand, or cause of action which may be asserted, prosecuted or established against the City under the provision of the Worker' s Compensation Act for injury to or the death of any of City' s officers, agents or employees while acting within the scope of their employment. Grantee shall not be responsible for any criminal, fraudulent or malicious conduct of the City.

ARTICLE 17

Page 78 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 21 of 28 ends

in Grantee shall not transfer any interest in the franchise where such a transfer would lead to another person achieving a twenty -five percent ( 25 %) or greater interest in this franchise or change control ofthis franchise, unless the City approves such a transfer or change in control.

1. The City shall deny any such request for transfer or change in control ifthe transferor or transferee fails to comply with any applicable provision of this Article of this franchise Ordinance, or if the City determines the transferor is in non - compliance with the terms and conditions of this franchise Ordinance, or if a transferee is lacking in experience and/ or financial ability to operate the pipelines authorized by this franchise Ordinance, or if the proposed transfer will be detrimental to the public interest.

1. Grantee' s application shall include:
a. Identification and ownership of the proposed transferee in the same detail as if the proposed transferee were an applicant for an initial grant; b. Current financial statements showing the financial condition of the Grantee as ofthe date ofthe application. In this application, the Grantee shall also agree to submit financial statements showing the condition of the franchise as ofthe closing. Said financial statements shall have been audited and certified by an independent certified public accountant, and shall be submitted within ninety ( 90) days of the closing.

Page 79 of 466 ends

Ordinance No. 1391 ( 2001 aeries)

Page 22 of 28 ends

a. A construction schedule, describing type and placement of construction, detail phases of construction, and include map( s) correlated to the phases of construction. Map( s) shall include detail on the location, length, depth, and internal diameter of any planned pipelines. b. Copies of any agreements with utility companies for the use of any facilities including, but not limited to, poles, lines and conduit. c. A description of plans for emergency equipment and personnel enabling the transferee to meet the emergency equipment personnel requirements in Article 8 herein. d. Any information indicating as specifically as possible that any principal, manager, or associate of the proposed transferee or a parent entity of the proposed transferee has previously been or is currently:
i. A party to a criminal proceeding ( involving felonies or misdemeanors) in which any ofthe following offenses have been charged: fraud, embezzlement, tax evasion, bribery, extortion, jury tampering, obstruction ofjustice ( or other misconduct affecting public or judicial officers in the performance of their duties), false /misleading advertising, perjury, antitrust violations ( state or federal), violation of environmental laws or regulations, or conspiracy to commit any of the foregoing;
ii. A party to a civil proceeding concerning liability for any of the following: unfair or anticompetitive business practice, antitrust violations ( state or federal) including instances in which consent decrees were entered, violations of security laws ( state or federal), false /misleading advertising, racketeer influences and corrupt organizations, violation of environmental laws or regulations, or contraband forfeitures; iii. Subject to any penalty, criminal or civil, involving failure to comply with the requirements of a pipeline franchise;
iv. Involved in instituting legal action against its franchising authorities; v. Involved in revocation/ non- renewal of any other franchise; e. Any other details, statements, in or references pertinent to the subject matter of such application which shall be required or requested by the City or by any provision of law.
f. An express and unconditional written acceptance of the terms and conditions of this Franchise Ordinance, in its most current form, as a condition to the transfer.

C. A fee shall be submitted with the applications for the City' s consent to transfer or change of control.

3. In the event the costs to process the applications exceed the fees detailed above, the applicants may be required to pay any additional costs incurred by the City in processing the applicants' requests for the City' s consent to the transfer or change of control of this franchise. Such costs may include the cost incurred for hiring consultants to assist in evaluating the applications. Such costs shall be paid by the applicants prior to final consideration of the request by City Public Works Department, or the City Council, as applicable. 22

Page 80 of 466 ends

Ordinance No. 1391 ( 2001 Neries)

Page 23 of 28 ends

D. Within thirty ( 30) days of the effective date of the City' s approval of the transfer or change of control, or within thirty (30) days of the date ofthe close of the transfer or change of control, the Grantee shall file with the City Public Works Department: ( 1) a certified copy of each duly executed instrument of such a transfer or change in control; and ( 2) the submittal of a final accounting and report of all fees due under this franchise. The proposed transferee shall be responsible for any underpayment, and shall be entitled to a credit for any overpayment. Within ninety (90) days of the closing of the transfer or change of control, the Grantee shall submit financial statements, audited and certified by an independent certified public accountant, showing the condition of the franchise as of the closing. If such duly executed instruments are not filed with the City Public Works Department by the deadlines imposed in this Article, or if the final documents are different from the preliminary documents, the City Public Works Department may inform the proposed transferee that the transfer or change in control is not deemed to be in force and effect. The City Public Works Department may then administratively determine that this franchise is forfeited and the City Council may, without notice, by ordinance repeal this franchise.

This Article 17 applies to any transfer of this franchise, or of any change in control ofthis franchise, whether by operation of law, by voluntary act of Grantee, or otherwise.

ARTICLE 18

WAIVER OF BREACH
No waiver of the breach of any ofthe covenants, agreements, restrictions, or conditions of this franchise by the City shall be construed to be a waiver of any succeeding breach of the same or other covenant, agreements, restrictions or conditions ofthis franchise. No delay or omission of the City in exercising the right, power or remedy herein provided in the event of default shall be construed as a waiver thereof, or acquiescence therein, nor shall the acceptance of any payments made in a manner or at a time other than is herein provided be construed as a waiver of or variation in any of the terms of this franchise.

ARTICLE 19

Page 81 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 24 of 28 ends

hereunder shall terminate and the Grantee shall execute an instrument of surrender and deliver the same to the City. Ifthe City Council declares this franchise forfeited, it may thereupon and thereafter exclude the Grantee from further occupancy or use of all City roads and streets authorized under this franchise. A forfeiture of said franchise shall not ofitself operate to release any bond filed for said franchise. Upon declaring a franchise forfeited, the City Council may elect to take and accept any bond as liquidated damages therefore or pursue any other legal remedy for any damage, loss or injury suffered by the City as a result of such breach or both.

B. No provision herein made for the purpose of securing the enforcement of the terms and conditions ofthis franchise shall be deemed an exclusive remedy, or to afford the exclusive procedure, for the enforcement of said terms and conditions, but the remedies and procedure herein provided, in addition to those provided by law shall be deemed to be cumulative.

ARTICLE 20

ARTICLE 21
NOTICE
Any notice required to be given under the terms of this franchise, the manner of service of which is not specifically provided for, may be served as follows:

Upon the City, by serving the City Clerk, personally or by addressing a written notice to the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, and depositing such notice in the United States mail, postage prepaid.

Upon the Grantee, by addressing a written notice to Grantee addressed to Union Pipeline Company, c/ o Tosco Refining Company, 9645 Santa Fe Springs Road, P.O. Box 2628, Santa Fe Springs, CA 90670 -0628, Attn: Supervisor, R/W Administration, or such other address as may 24

Page 82 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 25 of 28 ends

from time to time be furnished in writing by one party to the other and depositing said notice in the United States mail, postage prepaid. When service of any such notice is made by mail, the time of such notice shall begin with and run from the date ofthe deposit of same in the United States mail.

ARTICLE 22

SUCCESSORS
The terms herein shall inure to the benefit of and shall bind, as the case may be, the successors and assigns of the parties hereto, subject, however, to the provisions of Article 17.

ARTICLE 23

ACCEPTANCE OF FRANCHISE
A. This franchise is granted and shall be held and enjoyed only upon the terms and conditions herein contained. By accepting this grant of franchise, Grantee shall agree to be bound by each and all ofthe requirements ofArticle X, Sections 1001 through 1007 ofthe San Luis Obispo City Charter.

B. Grantee shall, within ten ( 10) days after the passage of this franchise Ordinance, file with the City Clerk an express and unconditional written letter of acceptance of, and consent to, the terms and conditions of this franchise Ordinance, in its current version, and as subsequently amended, pursuant to San Luis Obispo City Charter, Article X, Section 1004.

D. Grantee' s letter of acceptance shall be signed by two ( 2) duly authorized representatives of Grantee, whose signatures shall be acknowledged by a notary, and shall be accompanied by the performance bond and evidence of insurance required by this franchise Ordinance.

ARTICLE 24

FORCE MAJEURE
The time within which Grantee is obligated hereunder to construct, erect, maintain, operate, repair, renew, change the size of and remove pipelines or other improvements shall be extended for a period of time equal in duration to, and performance in the meantime shall be excused on account of, and for, and during the period of any delay caused by strikes, threats of strikes, lockouts, war, threats ofwar, insurrection, invasion, acts of God, calamities, violent action of the elements, fire, action or regulation of any governmental agency law or ordinance, impossibility of obtaining materials, or other things beyond the reasonable control of Grantee.

Page 83 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 26 of 28 ends

ARTICLE 25

LIQUIDATED DAMAGES
A. By acceptance of this franchise, Grantee understands and acknowledges that failure to timely comply with any performance requirements stipulated in this franchise Ordinance will result in damages to the City, and that it is and will be impractical to determine the actual amount of such damage in the event of delay or nonperformance. Each ofthe amounts set forth below has been set in recognition of the difficulty of affixing actual damages arising from breach of these time of performance requirements. Each of said amounts constitutes a reasonable estimate of these damages. This section does not limit the rights and remedies available to the City for damages other than the timely compliance with performance requirements as described in this section. The liquidated damages set forth below shall be chargeable to the bond, letter of credit or security fund provided for in Article 14, supra, should Grantee not make payment within thirty ( 30) days of written notice by certified mail by the City that the following amounts are due for the following concerns:

3. Failure by Grantee to timely restore public or private property after performance of work, and following Grantee' s receipt of written request by the City to do so within ten ( 10) business days thereafter by certified mail: Two Hundred Fifty Dollars ($ 250.00) per day or part thereof, that each non - compliance continues. Any fines paid pursuant to this Subsection 3 shall be paid solely to the Street Fund of the City Public Works Department.

B. Ifthe City Public Works Department determines that Grantee is liable for liquidated damages, the City Public Works Department shall issue to Grantee by certified mail written notice of intention to charge liquidated damages. Liquidated damages shall begin to accrue as ofthe date ofthe written notice and as set forth in said notice. The notice shall set forth the basis for the liquidated damages and give Grantee a reasonable time in which to remedy the violation.

C. Grantee shall have the right to appeal any notice to the City Public Works Department by certified mail, within twenty (20) days after issuance ofthe notice by the City Public Works Department. The City Public Works Department shall hold an administrative hearing within sixty (60) days after receipt of an appeal. The City Public Works Director's decision shall be the final decision of the City.
26

Page 84 of 466 ends

Ordinance No. 1391 ( 2001 series)

Page 27 of 28 ends

ARTICLE 26

ARTICLE 27

SECTION 2: If any section, subsection, sentence, clause, phrase or portion ofthis 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 ofthe remaining portions ofthis Ordinance. The City Council of the City of San Luis Obispo hereby declares that they would have adopted this ordinance and each 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 3: This ordinance shall take effect and be in full force and effect thirty (30) days after its passage, and before the expiration of fifteen ( 15) days after passage of this ordinance, it shall be published once with the names of the members of the City Council voting for and against the ordinance in a newspaper of general circulation published in the City of San Luis Obispo, State of California.

Page 85 of 466 ends

Ordinance No. 1391 ( 2001 6eries)

Page 28 of 28 ends

effect at the expiration of thirty ( 30) days after its said final passage. A copy of the full final text of this ordinance shall be on file in the Office of the City Clerk on and after the date following the introduction and passage to print and shall be available to any interested member ofthe public.

INTRODUCED on the 19th day of June 2001 AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the 10"' day of July 2001, on the following roll call vote:

AYES: Council Members Marx, Mulholland, Schwartz, Vice Mayor Ewan and Mayor Settle
NOES: None
ABSENT: Non
a
Mayor Allen Settle
ATTE
l:ce Price, City Clerk
APPROVED:
f y G. J rgen , C&4 Attorney

Page 86 of 466 ends

V
council
M D
j
agenda Report

C I T Y OF SAN LU IS O B I S P O
FROM: Jonathan P. Lowell, City Attorney
SUBJECT: ADOPTION OF ORDINANCE NO. 1504 APPROVING THE

TRANSFER OF RIGHTS AND OBLIGATIONS UNDER
FRANCHISE ORDINANCE 1391 FROM UNION PIPELINE
COMPANY (" UNOCAP"), A CALIFORNIA CORPORATION AND

WHOLLY OWNED SUBSIDIARY OF CONOCOPHILLIPS

COMPANY TO CONOCOPHILLIPS PIPELINE COMPANY AND
AMENDING ORDINANCE NO. 1391 TO REFLECT THE

TRANSFER

CAO RECOMMENDATION
Adopt Ordinance No. 1504.

DISCUSSION
On April 3, 2007, the Council voted 5- 0 to introduce Ordinance No.1504 which transfers the rights and obligations under Franchise Ordinance 1391 from Union Pipeline Company Unocap") to ConocoPhillips Pipeline Company and amends the existing franchise ordinance to reflect accurately the corporate ownership and responsibility for the franchise. The amendment makes no other substantive change to the terms or conditions of the existing franchise agreement.

Ordinance No. 1504 is now ready for adoption and will become effective thirty days after the date of its final passage.

ATTACHMENT
Ordinance No. 1504
G:\ Franchises\ ConocoPhillips\ 2006 Franchise Transfer( from Tosco- Unocal)\ CAR. Final Adoption UnionPipeline Ord 1391 now 1504. doc

Page 87 of 466 ends

ORDINANCE NO. 1504 ( 2007 Series)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO

APPROVING THE TRANSFER FROM UNION PIPELINE COMPANY,

A CALIFORNIA CORPORATION, TO CONCOCOPHILLIPS PIPELINE COMPANY,

A DELAWARE CORPORATION, OF A FRANCHISE TO CONSTRUCT, OPERATE,

AND MAINTAIN PIPELINES FOR THE TRANSPORTATION OF OIL, AND

OTHER SPECIFIED MATERIALS IN THE CITY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND AMENDING ORDINANCE NO. 1391

TO REFLECT THE TRANSFER
WHEREAS, the City of San Luis Obispo adopted Ordinance No. 1391 on July 10, 2001, granting a franchise to Union Pipeline Company ( " Unocap "), a California Corporation for a term of 10 years for the transportation and distribution of oil and other specified materials in the City of San Luis Obispo; and
WHEREAS, effective February 1, 2005, Unocap merged into ConocoPhillips Pipe Line Company ( "CPPLC "), a wholly owned subsidiary of ConocoPhillips Company, and is no longer a legal entity; and
WHEREAS, CPPLC is currently operating pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo and expressly agrees to assume the rights and obligations of Unocap under Franchise Ordinance 1391; and WHEREAS, ConocoPhillips Pipeline Company has requested that Gouncil approve the transfer of the subject franchise from Unocap to ConcocoPhillips; and WHEREAS, on March 6, 2007, pursuant to Section 1002 of the Charter of the City of San Luis Obispo and Article 17 of Franchise Ordinance 1391, the City Council adopted Resolution No. 9881 ( 2007 Series), declaring its intention to consent to the transfer of Franchise Ordinance number 1391 from Unocap to ConocoPhillips Pipe Line Company; and and
WHEREAS, the City Clerk published said Resolution in the Tribune on March 17; 2007; WHEREAS, a public hearing was held on April 3, 2007; and WHEREAS, the City Council finds that the requested transfer is in the best interest of the City.

NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo that the transfer from Union Pipeline Company, a California corporation, to ConcocoPhillips Pipeline Company, a Delaware corporation, of the franchise granted by Ordinance No. 1391, to construct, operate, and maintain pipelines for the transportation of oil, 01504

Page 88 of 466 ends

Ordinance No. 1504 ( 2007)

Page 2 ends

and other specified materials in the City of San Luis Obispo is approved and Ordinance No. 1391is amended to reflect the transfer, as follows:

SECTION 1: Subsection A of Article I and Article 21 of the franchise set forth in Ordinance No. 1391 ( 2001 Series) are amended to read as follows:

ARTICLE I

NATURE OF FRANCHISE
A. Grant of Franchise.

1. The City of San Luis Obispo ( hereinafter referred to as " City "), hereby grants to ConocoPhillips Pipeline Company, a Delaware Corporation, ( hereinafter referred to as Grantee "), pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9( b) of the California Constitution, and Section 39732( b) of the California Government Code, the non - exclusive right, privilege and franchise, subject, however, to all the limitations and restrictions herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change the size of and remove pipelines, not to exceed twelve ( 12) inches nominal internal diameter, for the transportation of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, movable by pipeline, in, under, along, and across the public streets, ways, alleys and places within the City of San Luis Obispo ( hereinafter collectively referred to as " streets "), as described in Exhibit No. 1, attached hereto and made a part hereof.

ARTICLE 21
NOTICE
Any notice required to be given under the terms of this franchise, the manner of service of which is not specifically provided for, may be served as follows:

Upon the City, by serving the City Clerk, personally or by addressing a written notice to the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, and depositing such notice in the United States mail, postage prepaid.

Upon the Grantee, by addressing a written notice to Grantee addressed to ConocoPhillips Company, 3900 Kilroy Airport Way, Suite 210, Long Beach, CA 90806, Attn: Supervisor, R/ W Administration, or such other address as may from time to time be furnished in writing by one party to the other and depositing said notice in the United States mail, postage prepaid. When service of any such notice is made by mail, the time of such notice shall begin with and run from the date of the deposit of same in the United States mail.

Page 89 of 466 ends

Ordinance No. 1504 ( 2007)

Page 3 ends

SECTION 2: The rights and obligations of the parties pursuant to Franchise Ordinance No. 1391 shall continue and remain otherwise unchanged and ConocoPhillips Pipeline Company expressly assumes all rights and obligations conferred upon it by Ordinance No. 1391, as amended.

SECTION 3: This ordinance shall take effect and be in full force and effect thirty ( 30) days after its passage, and before the expiration of fifteen ( 15) days after passage of this ordinance, it shall be published once with the names of the members of the City Council voting for and against the ordinance in a newspaper of general circulation published in the City of San Luis Obispo, State of California.

SECTION 4: A synopsis of this ordinance, approved by the City Attorney, together with the ayes and noes shall be published once in full at least five ( 5) days prior to its final passage, in a newspaper published and circulated in said City, and at the same time shall go into effect at the expiration of thirty ( 30) days after its said final passage. A copy of the full final text of this ordinance and Ordinance 1391, as amended, shall be on file in the Office of the City Clerk on and after the date following the introduction and passage to print and shall be available to any interested member of the public.

INTRODUCED on the 3rd day of April 2007, AND FINALLY ADOPTED by the Council of -the City of San Luis Obispo on the
17th
day of April 2007, on the following roll call
vote:

AYES: Council Members Brown, Carter and Settle, Vice Mayor Mulholland and Mayor Romero
NOES: None
ABSENT: None
weed
Mayor David F. Romero
ATTEST:

Audrey 14 er 1 hereby certify that this docurnertt is a true City Clerk and accurate original of Ordinance No. 1504 , and that the ordinance was published pursuant
APPROVED AS TO FORM:
to C or 8ectio
Dab ny Clerk
VDffath1h"P. Lowell
City Attorney

Page 90 of 466 ends

couml( w- I
j
Agenda nepoat
CITY . OF SAN LUIS OBISPO
FROM: Michael Codron, Assistant City Manager
Prepared By: Amy Lopez, Administration Intern
SUBJECT: ADOPTION OF ORDINANCE NO. 1564, GRANTING

CONOCOPHILLIPS PIPELINE COMPANY A FRANCHISE TO

CONSTRUCT, OPERATE AND MAINTAIN PIPELINES FOR THE

TRANSPORTATION OF OIL, AND OTHER SPECIFIED

MATERIALS IN THE CITY OF SAN LUIS OBISPO

RECOMMENDATION
Adopt Ordinance No. 1564 to renew an existing franchise agreement with ConocoPhillips, pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9( b) of the California Constitution, and Section 39732( b) of the California Government Code.

DISCUSSION
Background
ConocoPhillips is currently operating pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo. ConocoPhillips has requested the City of San Luis Obispo enter into a new franchise agreement. The proposed agreement covers issues such as purpose, term, fees, insurance, and indemnity. In addition, the franchise agreement covers all other subjects commonly found in such franchise documents such as: the type of maintenance and operation of the pipelines, permitted transfers of the franchise, requirement for moving pipelines to accommodate public works and utilities, encroachment permits, and pipeline abandonment and removal requirements. The term of the franchise granted under this Ordinance shall be for a term of ten ( 10) years, commencing with the date on which it is accepted by Grantee.

ALTERNATIVE
Council may reject the application by ConocoPhillips for a new franchise agreement and direct Staff to initiate appropriate procedures by which ConocoPhillips begins removal of the pipelines. This alternative is not recommended because it is in the City' s best interest to have a qualified company operate and maintain the existing pipeline infrastructure within the City' s right-of-way.

ATTACHMENT
Ordinance No. 1564
G:\ Stan\ Codron\ CAR\ CC 2nd read Conocoftllips. doc
C8- 1

Page 91 of 466 ends

ORDINANCE NO. 1564 ( 2011 Series)

AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO GRANTING TO

CONOCOPHILLIPS PIPELINE COMPANY, A DELAWARE CORPORATION

CONOCOPHILLIPS), A FRANCHISE TO CONSTRUCT, OPERATE, AND MAINTAIN

PIPELINES FOR THE TRANSPORTATION OF OIL, AND OTHER SPECIFIED

MATERIALS IN THE CITY OF SAN LUIS OBISPO
WHEREAS, on May 3, 2011, the City of San Luis Obispo passed Resolution No. 10261, a resolution of intention to approve a franchise agreement with ConocoPhillips; and WHEREAS, the Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on June 7, 2011, for the purpose of considering approval of the franchise agreement; and WHEREAS, notices of said public hearing were made at the time and in the manner required by law; and
WHEREAS, ConocoPhillips is currently operating pipelines for the transportation of oil and other specified materials within the City of San Luis Obispo; and WHEREAS, ConocoPhillips has requested the City of San Luis Obispo enter into a new franchise agreement; and
WHEREAS, the proposed agreement covers issues such as purpose, term, fees, insurance, and indemnity. In addition, the franchise agreement covers all other subjects commonly found in such franchise documents such as: the type of maintenance and operation of the pipelines, permitted transfers of the franchise, requirement for moving pipelines to accommodate public works and utilities, encroachment permits, and pipeline abandonment and removal requirements.

NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo to grant a franchise to construct, operate, and maintain pipelines for the transportation of oil, and other specified materials in the City of San Luis Obispo to ConocoPhillips, as follows:

SECTION 1: Terms and Conditions of Franchise ( Table of Contents begins on page 2):
01564

Page 92 of 466 ends

City Council Ordinance No. 15o4 ( 2011 Series)

TABLE OF CONTENTS
Page
ARTICLE I NATURE OF FRANCHISE 4
A. Grant of Franchise 4
B. Limitations Upon Grant 5
C. Rights Reserved to the City of San Luis Obispo 6
ARTICLE 2 APPURTENANCES 6
ARTICLE 3 LOCATION OF PIPELINES 7
ARTICLE 4 CONSTRUCTION OF PIPELINES 7
A. Terms of Construction 7
B. Restoration of Streets 7
ARTICLE 5 COMMENCEMENT OF CONSTRUCTION 7
ARTICLE 6 MAPS AND REPORTS TO BE FURNISHED 8
ARTICLE 7 COMPENSATION TO THE CITY 9
ARTICLE 8 EMERGENCY EQUIPMENT AND CREWS 10
ARTICLE 9 REPAIR OF DEFECTIVE FACILITIES AND REPAIR
OF DAMAGE TO CITY STREETS 11
ARTICLE 10 REARRANGEMENT OF FACILITIES 11
A. Expense of Grantee 11
B. Expense of Others 12
C. Rearrangement of the Facilities of Others 13
D. Notice 13

ARTICLE II GRANTEE' S REMOVAL OR ABANDONMENT
OF FACILITIES 13
ARTICLE 12 COMPLETION OF WORK 16
ARTICLE 13 RECOVERY OF COSTS OF REPAIRS
AND UNPAID FEES 16
ARTICLE 14 BOND 18
ARTICLE 15 INSURANCE 19
0

Page 93 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)
ARTICLE 16 INDEMNIFICATION BY GRANTEE
ARTICLE 17 CHANGES IN CONTROL OF FRANCHISE
ARTICLE 18 WAIVER OF BREACH
ARTICLE 19 DEFAULT
ARTICLE 20 SCOPE OF RESERVATION
ARTICLE 21 NOTICE
ARTICLE 22 SUCCESSORS
ARTICLE 23 ACCEPTANCE OF FRANCHISE
ARTICLE 24 FORCE MAJEURE
ARTICLE 25 LIQUIDATED DAMAGES
ARTICLE 26 ATTORNEYS' FEES
ARTICLE 27 CONDEMNATION
3 20
20 23
23 24
24 25
25 25
26 27
27

Page 94 of 466 ends

City Council Ordinance No. 15o4 ( 2011 Series)

ARTICLE I

NATURE OF FRANCHISE
A. Grant of Franchise.

1. The City of San Luis Obispo ( hereinafter referred to as " City "), hereby grants to ConocoPhillips Pipe Line Company, a Delaware corporation, (hereinafter referred to as Grantee ") pursuant to the provisions of Article X of the San Luis Obispo City Charter, Article XI, Section 9( b) of the California Constitution, and Section 39732( b) of the California Government Code, the non - exclusive right, privilege and franchise, subject, however, to all the limitations and restrictions herein contained, to construct, erect, maintain, operate, repair, renew, abandon, and change the size of and remove pipelines, not to exceed twelve ( 12) inches nominal internal diameter, for the transportation of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance of the pipelines, water and mixtures thereof, movable by pipeline, in, under, along, and across the public streets, ways, alleys and places within the City of San Luis Obispo ( hereinafter collectively referred to as " streets "), as described in Exhibit No. 1, attached hereto and made a part hereof.

2. The term of the franchise granted under this Ordinance shall be for a term of ten 10) years, commencing with the date on which it is accepted by Grantee.

Page 95 of 466 ends

City Council Ordinance No. 1544 ( 2011 Series)
or specification, including, but not limited to, any requirement relating to street work, street excavation permits, or the use, removal or relocation of property in streets, except as specifically prescribed herein.
g) This franchise is non - exclusive. Neither the granting of this franchise nor any of the provisions contained herein shall be construed to prevent the City from granting any identical or similar franchise to any other person.
h) The compensation provided for in this franchise is for (i) the rights and privileges granted by this franchise, and (ii) the right and privilege granted to the Grantee to construct, erect, maintain, operate, repair, renew, abandon and change the size of and remove the said pipelines pursuant to this franchise within the City' s streets . The City expressly reserves the right to impose and collect from Grantee, on a non - discriminatory basis, its normal duly established processing and inspection fees from street cutting and excavation permits to the extent such fees are imposed generally on all non - governmental applicants for such permits within the City.
i) Any activities involving the use of a pipeline system for the transmitting of oil, products thereof, hydrocarbon gases and other gas necessary for the operation and maintenance ofthe pipelines, water and mixtures thereof, which are not specifically authorized under this franchise are prohibited under this franchise. Except as provided in Article 2, any telecommunication or other uses not authorized in this franchise Ordinance must be approved by the City under a separate franchise.
0) If any provision of this franchise, or the application of this franchise to any person or circumstance is held invalid by a court of competent jurisdiction or is not in compliance with any requirement of the Public Utilities Commission, the City, or any other federal or state body or agency having jurisdiction over Grantee' s franchise activities, the remainder of this franchise Ordinance, or the application of this franchise to persons or circumstances other than those to which it is held invalid or not in such compliance, shall not be affected thereby.

B. Limitations Upon Grant.

1. No privilege or exemption is granted or conferred by this franchise except those specifically prescribed herein.

2. Any privilege claimed under this franchise by Grantee in any street shall be subordinate to any prior lawful occupancy of the street.

3. The rights and privileges of this franchise are granted solely to Grantee except as provided within this franchise Ordinance. This franchise is not be to sold, transferred, leased assigned, or disposed of as a whole or in part, either by forced sale, merger, consolidation, or otherwise, without the City' s prior consent as described in Article 17, infra, or as otherwise expressly provided herein . The City agrees that such prior consent shall not be unreasonably withheld or conditioned.

Page 96 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)
C. Rights Reserved to the City.

Grantee, by acceptance of this franchise, shall be bound thereby and shall comply with any action or requirement of the City in its exercise of any such right or power.

ARTICLE 2

APPURTENANCES
The Grantee shall have the right, subject to the prior approval of the City Public Works Department, to construct and maintain such traps, manholes, conduits, valves, appliances, attachments, and appurtenances ( hereinafter for convenience collectively referred to as appurtenances "), as may be necessary or convenient for the proper maintenance and operation of the pipelines under said franchise. Said appurtenances shall be so located as to conform to any order of the City Public Works Department in regard thereto and not to interfere with the use of the streets for travel. The Grantee shall have the right, subject to such ordinances, rules, or regulation as are now or may hereafter be in force, to make all necessary excavations in said street for the construction and repair of said pipelines and appurtenances subject to the prior approval of the City Public Works Department. " Appurtenances" shall also include any adjunct communications lines and /or conduits as coaxial cable, optical fiber, wire, or other transmission lines or forms of transmission, and associated equipment and devices located in, upon, along, across, under or over the streets of the City, the sole function of which is to monitor or control the operation or safety of the pipeline system via the distribution of video, audio, voice, or data signals. An adjunct communications line shall not include any facility which distributes, through any means, to subscribers or persons other than Grantee, the signal of one or more broadcast television or radio stations or other sources of video, audio, voice, or data signals.

ARTICLE 3

Page 97 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)
parking areas adjacent thereto so as not unreasonably to disturb the flow of traffic and where possible shall be laid in the unpaved portion of the street.

ARTICLE 4

B. Restoration of Streets. The work of laying, constructing, maintaining, operating, renewing, repairing, changing size and moving any of the pipeline system contemplated by this franchise and all other work in exercise of this franchise shall be conducted according to the provisions of the City' s encroachment ordinances from time to time prevailing, and otherwise in accordance with federal and state law and applicable City ordinances, and with the least possible hindrance or interference to the use of City roads by the public or by the City of San Luis Obispo, and Grantee shall provide all necessary warning, safety and traffic control devices as are or may be required by City, State or Federal regulations. All excavations shall be back filled and adequately compacted. As part of any work completed under provisions of this franchise agreement, the surface of City streets shall be repaired and replaced to meet current City standards and specifications. Under no circumstances shall the surface of City streets be placed in a manner less than as good and serviceable condition as existed at the beginning of said work, to the satisfaction of the City Public Works Department.

ARTICLE 5

COMMENCEMENT OF CONSTRUCTION
The Grantee, in good faith, shall commence with work of laying the pipelines and appurtenances within four ( 4) months from the date of passage of the approval of this franchise, and if any such pipelines be not so commenced within said time, this franchise shall be declared forfeited; provided, however, that ifthe Grantee is maintaining and operating an existing pipeline system over the route referred to in Article I herein, it shall be deemed to be in compliance with the foregoing. The Grantee shall not commence the construction of any new pipelines under the provision of this franchise or add to such existing pipeline system, if any there be, until it first shall have applied for and obtained a permit therefore from the City Public Works Department.

Page 98 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)
Grantee shall make payment to the City for the pipelines which have actually been constructed under said franchise as provided in Article 7, Section C.

ARTICLE .6

MAPS AND REPORTS TO BE FURNISHED
A. Within six ( 6) months of the effective date of this franchise for existing pipelines, and within ninety ( 90) days following the date in which any additional pipelines have been laid or constructed under this franchise, the Grantee shall file a map in such form as may be required by the City Public Works Department 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 this date. Cathodic protection is to be used for all facilities installed or maintained pursuant to this franchise. For facilities previously in liquid service and where the liquids have been removed and the facilities inerted, or for facilities previously in gas service that are not pressurized, cathodic protection shall be maintained consistent with State Fire Marshall or other agency requirements. A description of all the protective devices shall be furnished to the City Public Works Department which shall show the location and types of anodes, including a description of methods to be used as a protection against corrosion and electrolytic leakage.

B. Grantee shall file with the City Finance Director, within thirty ( 30) days after the expiration of the calendar year, or fractional calendar year, following the date of the granting of this franchise and within thirty ( 30) days after the expiration of each calendar year thereafter, two copies of a report verified by the oath of Grantee or by the oath of a duly authorized representative of Grantee, showing, for the immediately preceding franchise period, the length of main lines in streets, the nominal internal diameter of such main lines, the rate per foot per year when applicable) and the total amount due to the City. In this report, Grantee shall also show any change in franchise footage since the last franchise report, segregating such footage as to new main lines and adjunct communications lines laid, old main lines and adjunct communications lines removed, old main lines and adjunct communications lines abandoned in place, and the footage of main lines and adjunct communications lines in territory annexed by the City since the last franchise report.

C. Grantee shall file with the City Public Works Department within sixty ( 60) days after the end of the calendar year a report, in duplicate, showing the permit number of each permit obtained for the installation of new main lines during the immediately preceding franchise report period, together with the length and size of said main lines.

ARTICLE 7

Page 99 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)
pursuant to this franchise shall be due and payable in arrears April 1 of each year of this franchise. The initial payment hereunder shall be prorated for the remainder of the current calendar year based on a 365 -day year.

The fees set forth will be adjusted annually each year by the annual percentage change in the U S. Bureau of Labor Statistics (or successor agency) consumer price index for all urban consumers ( CPI -U) all cities average for the prior calendar year.

Notwithstanding the provisions as otherwise stated in this Article and franchise, the Grantee shall be liable to pay the City the annual fee for the period to and including the date of either actual removal of the facilities or the effective date of the abandonment " in place," and until the Grantee shall have fully complied with all of the provisions of law or ordinances relative to such abandonment.

In the event of partial abandonment of facilities as provided in the Ordinance, or in the event of partial removal of such facilities by the Grantee, the payments otherwise due the City for occupancy of the streets by such facilities shall be reduced by the length and diameter of pipelines abandoned or the actual pipeline removed beginning with the first day of the next succeeding franchise year, and for each franchise year thereafter; provided, however, that the base rate shall be modified to reflect the adjustment ( per this Article) applicable to such abandoned or removed pipeline at the beginning of the next succeeding franchise year following abandonment or removal.

Grantee shall pay to the City, upon demand, the cost of all repairs made by the City to public property arising out of the operations of the Grantee under this franchise. Any fees charged or expenses charged to Grantee by City pursuant to this Article, or any other provision of this franchise Ordinance, unless disputed in good faith, shall be paid when due or shall be deemed delinquent. Any undisputed delinquent amounts shall be charged a 10% penalty and, in addition, shall accrue interest commencing thirty ( 30) days after the due date, at a rate of one and one -half percent ( 1. 5 %) per month ( based upon a 30 -day calendar month) or any lesser amount if required by law. Any neglect, omission or refusal by said Grantee to pay any undisputed delinquent franchise fee with any late charges, within thirty ( 30) days of delinquency, at the times or in the manner herein provided, shall be grounds for a declaration of a forfeiture ofthis franchise and of all rights hereunder.
6

Page 100 of 466 ends

City Council Ordinance No. 15o4 ( 2011 Series)
Payments are to be made to the City Finance Department, 990 Palm Street, San Luis Obispo, California 93401, or at such place as the City shall, from time to time, designate in writing.

B. Grantee shall pay the City a granting fee of $10, 000. 00 within thirty (30) days after the date the City Council adopts this franchise Ordinance.

C. Grantee shall pay the City Public Works Department, within sixty ( 60) days after the end of each calendar year, for each year during the life of this franchise, an initial construction charge calculated at the rate of One Dollar ($ 1. 00) per foot for all new main lines laid pursuant to this franchise Ordinance during the preceding year .

ARTICLE 8

ARTICLE 9

REPAIR OF DEFECTIVE FACILITIES AND

REPAIR OF DAMAGE TO CITY STREETS
If any portion of any street shall be damaged by any reason related to the Grantee' s operations pursuant to this franchise including defective facilities laid or constructed under this franchise, Grantee shall, at its own expense, repair any defect of its facilities and put such street in as good condition as it was before such damage was incurred, to the satisfaction of the City Public Works Department. If Grantee, within ten ( 10) days after receipt of written notice from the City Public Works Department instructing it to repair such damage, fails to commence to comply with such instruction, or, thereafter, fails diligently to prosecute such work to completion, then the City Public Works Director immediately may take any actions which are, in the sole judgment and discretion of the City Public Works Director, necessary to repair said damage. Any and all costs and expenses so incurred shall be the sole responsibility of Grantee including the current rate of overhead being charged by the City for reimbursable work, which 10

Page 101 of 466 ends

City Council Ordinance No. 1 Su4 ( 2011 Series)
cost and expense, by the acceptance of this franchise, Grantee agrees to pay upon demand. If such damage constitutes an immediate danger to public health or safety requiring the immediate repair thereof, the City Public Works Department, without notice, may repair such damage and Grantee agrees to pay the cost thereof upon demand.

ARTICLE 10

REARRANGEMENT OF FACILITIES
A. dense of Grantee.

2. The City reserves the right to change the grade, to construct grade separation facilities, to change the width or to alter or change the location, of any street which is located within the service area for which this franchise is granted. If any of the facilities heretofore or hereafter constructed, installed or maintained by Grantee pursuant to this franchise on, along, under, over, in, upon or across any street are located in a manner which prevents or interferes with the change of grade, traffic needs, operation, maintenance, improvement, repair, construction, reconstruction, widening, grade separation, alteration or relocation of the street, or any work or improvement upon the street, Grantee shall relocate permanently or temporarily, as directed at the sole discretion of the City Public Works Director, any such facility at no expense to the City, upon receipt of a written request from the City Public Works Department to do so, and shall commence such work, by beginning engineering, surveying, or other pre - construction activities, on or before the date specified in such written request, which date shall be not less than sixty ( 60) days from receipt of such written request . Grantee shall thereafter diligently prosecute such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California.

Page 102 of 466 ends

City Council Ordinance No. 1544 ( 2011 Series)
any such facility at no expense to the City upon receipt of a written request from the City Public Works Department to do so and shall commence such work, by beginning engineering, surveying or other pre- construction activities, on or before the date specified in such written request, which date shall not be less than sixty ( 60) days from receipt of such written request.

The Grantee shall thereafter diligently prosecute such work to completion. Should Grantee neglect or fail to relocate its facilities in a timely manner after receipt of any such notice, in addition to the liquidated damages as set forth in Article 25, Grantee shall be responsible for and shall reimburse the City for any and all additional costs or expenses incurred by City due to or resulting from such delay in the relocation of the facilities plus, where applicable, the current rate of overhead being charged by the City for reimbursable work. If such street be subsequently constituted a state highway, while it remains a state highway the rights of the State of California shall be as provided in Section 680 of the Streets and Highways Code of the State of California.

5. Grantee agrees to, and shall, reimburse the City for such cost within thirty ( 30) days after presentation to Grantee of an itemized account arising out of the actions taken in this Article 10A.

B. Expense of Others.

1. The City shall have the right to require the Grantee to rearrange any part of the Grantees' facilities for the accommodation of the City when such rearrangement is done for the accommodation of any water, electric, gas or other utility system now or hereafter owned or operated by the City.

Except as otherwise provided in Article 10A, such arrangement shall be at the City' s expense.

2. The City shall have the right to require the Grantee to rearrange any part of the Grantee' s facilities for the accommodation of any person, firm or corporation. When such rearrangement is done for the accommodation of any person, firm or corporation, other than one of said utility systems owned or operated by the City, the cost of such rearrangement shall be borne by the accommodated party. Such accommodated party, in advance of such rearrangement, shall deposit with the Grantee or the City Clerk cash or a letter of credit or other cash equivalent in an amount, as in the reasonable discretion of the City Public Works Department, shall be required to pay the costs of such rearrangement, and such accommodated party shall execute an instrument agreeing to indemnify and hold harmless the Grantee from any and all damages or claims caused by such rearrangement.
12

Page 103 of 466 ends

City Council Ordinance No. 1 5u4 ( 2011 Series)

3. The rearrangement referred to in subsection ( 1) and ( 2) of Section B of this Article 10 shall be accomplished in conformity with the written notice of the City Public Works Department.

C. Rearrangement of the Facilities of Others.

D. Notice.

The Grantee shall be given not less than sixty ( 60) days written notice of any rearrangement of facilities which the Grantee is required to make hereunder. Such notice shall specify in reasonable detail the work to be done by the Grantee and shall specify a reasonable time that such work is to be accomplished. In the event that the City shall change the provision s of any such notice given to the Grantee, the Grantee shall be given an additional period of not less than thirty (30) days to initiate such work.

ARTICLE 11

GRANTEE' S REMOVAL OR ABANDONMENT OF FACILITIES
A. The City reserves the right to require Grantee to remove its facilities from the City streets and City public property in the event of the non - renewal, revocation or termination of this franchise or at any time thereafter with respect to those facilities abandoned in place, or for the facilities affected by the permanent discontinuance of all or a portion of the facilities. Further, so long as any abandoned facilities installed under the authority of this franchise remain in a City street, Grantee shall maintain a performance bond, security fund, or other form of collateral, acceptable to the City, sufficient to cover the cost of the removal of all such facilities from the City streets.

B. At the expiration, revocation or termination ofthis franchise or of the permanent discontinuance of the use of all or a portion of its facilities, Grantee shall, within thirty ( 30) days thereafter, make written application to the City Public Works Department for authority either:

To abandon all or a portion of such facilities in place; or

Page 104 of 466 ends

City Council Ordinance No. 15o4 ( 2011 Series)
the pipeline to be removed or abandoned at such intervals as directed in writing by the City Public Works Department and reasonably consistent with established sampling protocols. The City Public Works Department shall determine whether any abandonment or removal which is thereby proposed may be effected without detriment to the public interest and the conditions under which such proposed abandonment or removal may be effected. The City Public Works Department shall then notify Grantee of the City' s determinations. Grantee shall also obtain permits to abandon or remove the pipeline from the City Public Works Department for all pipelines prior to the removal, abandonment or discontinuation of use of all or a portion of Grantee' s facilities. The City also reserves the right to require removal of Grantee' s abandoned facilities in place at any time following the expiration, revocation or termination of this franchise. Grantee shall be required to meet the bonding, insurance, indemnification and annual franchise fee requirements ofthis franchise, for facilities abandoned in place.

C. Within thirty ( 30) days after receipt of Notification from the City Public Works Department pursuant to Article I I. B. 2 above, Grantee shall apply for a permit from the City Public Works Department to abandon or remove the facility.

D. Grantee shall, within sixty ( 60) days after obtaining such permit, commence and diligently prosecute to completion the work authorized by the City' s permit.

E. In the event Grantee applies to remove its facilities, and the City Public Works Department determines that any or all of the facilities cannot be removed due to a moratorium preventing work in the City streets, the payment of annual franchise fees shall be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty ( 30) days of notice to pay.

Deferred annual franchise fees shall otherwise be waived.

F. Failure to Comply with City's Orders Regarding the Removal or Abandonment of Facilities.

Page 105 of 466 ends

City Council Ordinance No. I5u4 ( 2011 Series)
State or local environmental laws; ( b) all cleanup costs, disposal costs, and any other costs associated with returning these rights -of -way to such environmental condition; ( c) all costs of removing, storing, and disposing of the Grantee' s facilities; ( d) all costs of returning all streets to the structural conditions they were in immediately at the beginning of Grantee's use of these streets pursuant to this franchise agreement; ( e) plus the current rate of overhead being charged by the City for reimbursable work.

3. If, at the nonrenewal, revocation or termination of this franchise, or of the permanent discontinuance of the use of all or a portion of its facilities, Grantee, within thirty ( 30) days thereafter, fails or refuses to make written application for the above - mentioned authority to remove or abandon its facilities, the City Public Works Department shall make the determination as to whether the facilities shall be abandoned in place or removed. The City Public Works Department shall then notify Grantee of its determinations. Grantee shall thereafter comply with the applicable provisions of this Article 11.

Provided, however, that any pipelines which cannot be removed due to a moratorium preventing work in the City streets, may be deferred from the payment of the annual franchise fee. The payment of annual franchise fees may be deferred during any such moratorium period, provided that Grantee promptly removes its facilities after notice by the City Public Works Department of the cessation of the moratorium and direction to remove such Facilities. In the event Grantee does not promptly remove such facilities as directed, any deferred annual franchise fees shall be due and payable within thirty ( 30) days of notice to pay.

ARTICLE 12

COMPLETION OF WORK
In the event that the Grantee fails to commence any work or act and diligently proceed therewith or to complete any such act or work required of the Grantee by the terms of this franchise within the time limits required hereby (and except as is otherwise provided in Articles 10 and 11), the City may cause such act or work to be completed by the City or, at the election of the City, by a private contractor. The Grantee agrees to pay the City, within thirty ( 30) days after delivery of an itemized bill, the cost of performing such act or work plus an amount equal to fifteen percent ( 15 %) thereof for overhead. Ifthe Grantee is dissatisfied with any decision made by the City Public Works Department hereunder or the determination of the cost of any work performed by the City pursuant to this Agreement, it may petition the City Council to review the same within ten ( 10) days after such decision or determination. 15

Page 106 of 466 ends

City Council Ordinance No. 15o4 ( 2011 Series)
ARTICLE 13

RECOVERY OF COSTS OF REPAIRS AND UNPAID FEES
If the Grantee has not paid the City for such fees and expenses and /or liquidated damage s incurred by or payable to the City as hereinabove set forth, the City may institute the following collection procedures ( which procedures are in addition to any other rights, in law or equity, which the City has to correct amounts due under this franchise and to enforce the terms of this franchise):

A. The City Public Works Department shall keep an itemized account of the expenses incurred by the City pursuant hereto, or the fees unpaid by the Grantee. Sixty (60) days after the presentation of the bill to the Grantee therefore, the City Public Works Department shall prepare and file with the City Clerk a report specifying the work done by the City, or the unpaid fees, the itemized and total cost of the work, a description of the work performed, and the name and address of the Grantee entitled to notice pursuant to this Article.

B. Upon receipt of said report, the City Clerk shall present it to the City Council for consideration. The City Council shall fix a time, date and place for hearing said report, and any protest or objections thereto. The City Clerk shall cause notice of said hearing to be posted in a newspaper of general circulation in the City, and served by certified mail, postage prepaid, addressed to the Grantee as set forth herein . Such notice shall be given at least ten ( 10) days prior to the date set for hearing and shall specify the day, hour, and place when the City Council will hear and pass upon the City Public Works Department' s report, together with any objections or protests which may be filed as hereinafter provided.

C. The Grantee may file written protests or objections with the City Clerk at any time prior to the time set for the hearing on the report of the City Public Works Department. Any such protest or objection must contain a description of the work or unpaid fee or liquidated damages in which the Grantee is contesting and the grounds of such protest or objection and the date it was received by him. He shall present such protest or objection to the City Council at the time set for the hearing, and no other protest or objection shall be considered, except as determined by the City Council for good cause shown.

E. The City Council may thereupon order that such charge shall be made a personal obligation of the Grantee or assess such charge against the property of the Grantee. 16

Page 107 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)

1. If the City Council orders that the charge shall be a personal obligation of the Grantee, it shall direct the City Attorney to collect the same on behalf of the City by use of all appropriate legal remedies.

2. Ifthe City Council orders that the charge shall be assessed against the property of the Grantee, it shall confirm the assessment, cause the same to be recorded on the assessment roll, and thereafter, said assessment shall constitute a special assessment against a lien upon any property held in the City of San Luis Obispo by the Grantee.

F. The validity of any assessment made under the provisions of this franchise shall not be contested in any action or proceeding unless the same is commenced within ninety ( 90) days after the assessment is placed upon the assessment roll as provided herein .

G. The City Council, in its discretion, may determine that assessments in amounts of 500. 00 or more shall be payable in not more than five ( 5) equal annual installments. The City Council' s determination to allow payment of such assessments in installments, the number of installments, whether they shall bear interest, and the rate thereof shall be adopted by a resolution prior to the confirmation of the assessment.

1. All such assessments remaining unpaid after thirty ( 30) days from the date of recording on the assessment roll shall become delinquent and shall bear interest at the highest rate permitted by law from and after said date.

I. After confirmation of the report, certified copies of the assessment shall be filed with the County Auditor on or before August 10th. The descriptions ofthe parcels reported shall be those used for the same parcels on the County Assessors map books for the current year.

If the City Council has determined that the assessment shall be paid in installments, each installment and any interest thereon shall be collected in the same manner as ordinary City taxes is in successive years . If any installment is delinquent, the amount thereof is subject to the same penalties and procedure for sale as provided for ordinary county taxes.

K. All money recovered by payment of the charge or assessment or from the sale of the property at foreclosure sale shall be paid to the City Finance Director. 17

Page 108 of 466 ends

City Council Ordinance No. 15o4 ( 2011 Series)
ARTICLE 14
BOND
A. Grantee shall, concurrently with the filing of and acceptance of award of this franchise, file with the City Clerk, and yearly thereafter, maintain in full force and effect, a bond guaranteeing to the City of San Luis Obispo the penal sum of One Million Dollars 1, 000, 000. 00), with a surety to be approved by the City Public Works Director and City Risk Manager, conditioned that Grantee shall, well and truly observe, fulfill and perform each and every term and condition of this franchise, and in a material breach of condition of said franchise, at the discretion ofthe City Public Works Director, a percentage of the amount of the bond shall be paid to the City according to the following schedule, which cumulative amount for any said breach not cured within the time specified below shall not exceed the full amount of the bond, in addition to any damages recoverable by the City and shall be recoverable from the principal and sureties of the bond:

Following receipt of notice by Certified
Mail sent by the City, failure to cure
said breach of condition, within:
10 business days
30 calendar days
60 calendar days
90 calendar days
Penal sum paid to City:
5% of the amount of the bond
30% cumulative amount of the bond
70% cumulative amount of the bond
100% cumulative amount of the bond
The amount of time specified above shall be tolled while City and Grantee resolve, or until the City Council rules on, any written appeal, protest or objection to the City Public Works Director' s decision as set forth in Articles 12, 13, 19, and 25, and elsewhere in this agreement; however, if Grantee' s appeal, protest or objection is found by the City Council to be the result of bad -faith actions or tactics that are frivolous or intended to cause unnecessary delay, such amount of time shall not be tolled.

If said bond is not so filed, the award ofthis franchise and privileges will be set aside and any money paid therefore will be forfeited. Whenever a bond is taken and deemed to be liquidated damages for any breach of a term or condition of this franchise, the Grantee must immediately file another bond of like amount and character, and if the Grantee fails to do so within the time set by the City Public Works Director, the City Council may, by resolution, declare said franchise automatically forfeited. Nothing herein shall insulate Grantee from liability in excess of the amount of said bond or shall be construed as a waiver by the City of any remedy at law against the Grantee for any breach of the terms and conditions of this franchise, or for any damage, loss or injuries suffered by the City of San Luis Obispo in case of any damage, loss or injury suffered by any person, firm, or corporation by reason of any work done or any activity conducted by the Grantee in exercise of this franchise. 18

Page 109 of 466 ends

City Council Ordinance No. I) u4 ( 2011 Series)
B. The faithful performance bond shall continue to exist for one ( 1) year following the City' s approval of any sale, transfer, assignment or other change of ownership ofthis franchise, or of the expiration or termination of this franchise. The City may release said bond prior to the end of the one ( 1) year period upon satisfaction by Grantee of all the obligations under this franchise.

ARTICLE 15

INSURANCE
A. The Grantee shall procure and shall keep in force for the term of the franchise, at the sole cost and expense of the Grantee, the following insurance. All insurance coverages are to be placed with insurers which have a Best' s rating of not less than B +VIII and are admitted insurance companies in the State of California. Grantee may satisfy the requirements of this Article 15 by showing proof of self - insurance reasonably satisfactory to the City Attorney and Risk Manager.

Commercial General Liability Insurance ( CGL): Grantee shall maintain in full force and effect Commercial General Liability Insurance with the following coverages:

1. Personal Injury and Bodily Injury, including death resulting therefrom.

2. Property Damage.

3. Automobile coverage which shall include owned, non -owned and hired vehicles.

The following endorsements must be provided in the CGL policy:

1. If the insurance policy covers on an " accident" basis, it must be changed to occurrence."

2. The policy must cover personal injury as well as bodily injury.

3. Blanket contractual liability must be afforded and the policy must contain a cross - liability or severability of interest endorsement.

4. Broad Form Property Damage Liability must be afforded.

5. Products and Completed Operations coverage must be provided.

The following requirements apply to all insurance to be provided by Grantee:
19

Page 110 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)

2. Certificates and policies shall state that the policies will not be canceled or reduced in coverage or changed in any other material respect without thirty days prior written notice to the City.

B. Failure on the part of Grantee to procure or maintain required insurance and bonding shall constitute a material breach of this franchise upon which the City may immediately terminate or suspend this franchise.

ARTICLE 16

INDEMNIFICATION BY GRANTEE
The Grantee, by the acceptance or use of the franchise hereby granted, shall defend, indemnify and shall keep and save free and harmless the City, its officers, agents and /or employees against any and all claims, demands or causes of action which may be asserted, prosecuted or established against them, or any of them, for damage to persons, or property, of whatsoever nature, arising out of the use by it of the City streets hereunder or arising out of any of the operations or activities of the Grantee pursuant to this franchise, whether such damage shall be caused by its own sole negligence or negligence concurrent with the City, excepting therefrom, however, any claim or demand based on the sole negligence or willful misconduct of the City and any claim, demand, or cause of action which may be asserted, prosecuted or established against the City under the provision of the. Worker' s Compensation Act for injury to or the death of any of City' s officers, agents or employees while acting within the scope of their employment. Grantee shall not be responsible for any criminal, fraudulent or malicious conduct of the City.

ARTICLE 17

CHANGES IN CONTROL OF FRANCHISE
A. On and after the Grantee' s acceptance of this franchise as provided in Article 23 herein, Grantee, its partners, its shareholders, or any other person or persons holding an interest in Grantee shall not transfer any interest in the franchise where such a transfer would lead to another person achieving a twenty -five percent (25 %) or greater interest in this franchise or change control of this franchise, unless the City approves such a transfer or change in control.

1. The City shall deny any such request for transfer or change in control if the transferor or transferee fails to comply with any applicable provision of this Article of this franchise Ordinance, or if the City determines the transferor is in non - compliance with the terms and conditions of this franchise Ordinance, or if a transferee is lacking in experience and /or financial ability to operate the pipelines authorized by this franchise Ordinance, or if the proposed transfer will be detrimental to the public interest . 20

Page 111 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)
B. Both the Grantee and the proposed transferee shall inform the City Public Works Department of any pending change in control of this franchise or of any pending transfer of an interest in the franchise requiring the City's consent pursuant to this Article, and each shall provide applications containing all documents on which the transfer or change in control is predicated and all documents which the City Public Works Department determines are necessary to evaluate the transfer or change of control. These applications shall be signed by duly authorized representatives of the Grantee and the proposed transferee, with signatures acknowledged by a notary. The appropriate transfer fee described in Article 17( C), infra shall accompany these applications.

Grantee' s application shall include:
a. Identification and ownership of the proposed transferee in the same detail as if the proposed transferee were an applicant for an initial grant; b. Current financial statements showing the financial condition of the Grantee as of the date of the application. In this application, the Grantee shall also agree to submit financial statements showing the condition of the franchise as of the closing. Said financial statements shall have been audited and certified by an independent certified public accountant, and shall be submitted within ninety ( 90) days of the closing.

C. A description of plans for emergency equipment and personnel enabling the transferee to meet the emergency equipment personnel requirements in Article 8 herein. d. Any information indicating as specifically as possible that any principal, manager, or associate of the proposed transferee or a parent entity of the proposed transferee has previously been or is currently:
i. A party to a criminal proceeding (involving felonies or misdemeanors) in which any of the following offenses have been charged: fraud, embezzlement, tax evasion, bribery, extortion, jury tampering, obstruction ofjustice ( or other misconduct affecting public or judicial officers in the performance of their duties), false /misleading 21

Page 112 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)
advertising, perjury, antitrust violations ( state or federal), violation of environmental laws or regulations, or conspiracy to commit any of the foregoing; ii. A party to a civil proceeding concerning liability for any of the following: unfair or anticompetitive business practice, antitrust violations (state or federal) including instances in which consent decrees were entered, violations of security laws ( state or federal), false /misleading advertising, racketeer influences and corrupt organizations, violation of environmental laws or regulations, or contraband forfeitures; iii. Subject to any penalty, criminal or civil, involving failure to comply with the requirements of a pipeline franchise;
iv. Involved in instituting legal action against its franchising authorities;
V. Involved in revocation/ non- renewal of any other franchise; e. Any other details, statements, information or references pertinent to the subject matter of such application which shall be required or requested by the City or by any provision of law.
f. An express and unconditional written acceptance of the terms and conditions of this Franchise Ordinance, in its most current form, as a condition to the transfer.

C. A fee shall be submitted with the applications for the City' s consent to transfer or change of control.

2. Where the City' s consent to a transfer or a change of control of this franchise results in the modification of this franchise by adoption of an amending ordinance this fee shall be as set forth in the City's fee ordinance.

Such costs may include the cost incurred for hiring consultants to assist in evaluating the applications. Such costs shall be paid by the applicants prior to final consideration of the request by City Public Works Department, or the City Council, as applicable.

D. Within thirty ( 30) days of the effective date of the City' s approval of the transfer or change of control, or within thirty (30) days of the date of the close of the transfer or change of control, the Grantee shall file with the City Public Works Department: ( 1) a certified copy of each duly executed instrument of such a transfer or change in control; and ( 2) the submittal of a final accounting and report of all fees due under this franchise. The proposed transferee shall be responsible for any underpayment, and shall be entitled to a credit for any overpayment. Within ninety ( 90) days of the closing of the transfer or change of control, the Grantee shall submit financial statements, audited and certified by an independent certified public accountant, showing the condition of the franchise as of the closing. If such duly executed instruments are not filed with the City Public Works Department by the deadlines imposed in this Article, or if 22

Page 113 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)
the final documents are different from the preliminary documents, the City Public Works Department may inform the proposed transferee that the transfer or change in control is not deemed to be in force and effect. The City Public Works Department may then administratively determine that this franchise is forfeited and the City Council may, without notice, by ordinance repeal this franchise.

This Article 17 applies to any transfer of this franchise, or of any change in control of this franchise, whether by operation of law, by voluntary act of Grantee, or otherwise.

ARTICLE 18

WAIVER OF BREACH
No waiver ofthe breach of any of the covenants, agreements, restrictions, or conditions of this franchise by the City shall be construed to be a waiver of any succeeding breach of the same or other covenant, agreements, restrictions or conditions of this franchise. No delay or omission of the City in exercising the right, power or remedy herein provided in the event of default shall be construed as a waiver thereof, or acquiescence therein, nor shall the acceptance of any payments made in a manner or at a time other than is herein provided be construed as a waiver of or variation in any of the terms of this franchise.

ARTICLE 19

DEFAULT
A. In the event that the Grantee shall default in the performance of any of the terms, covenants and conditions herein, the City may give written notice to the Grantee of such default by certified mail. In the event that the Grantee does not commence the work necessary to cur e such default within five ( 5) business days after such notice is received or prosecute such work diligently to completion, the City may declare this franchise forfeited by giving written notice thereof to the Grantee, whereupon this franchise shall be void and the rights of the Grantee hereunder shall terminate and the Grantee shall execute an instrument of surrender and deliver the same to the City. If the City Council declares this franchise forfeited, it may thereupon and thereafter exclude the Grantee from further occupancy or use of all City roads and streets authorized under this franchise. A forfeiture of said franchise shall not of itself operate to release any bond filed for said franchise. Upon declaring a franchise forfeited, the City Council may elect to take and accept any bond as liquidated damages therefore or pursue any other legal remedy for any damage, loss or injury suffered by the City as a result of such breach or both.

Page 114 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)
condition. A release shall not constitute a waiver of any right or remedy which the City of San Luis Obispo may have against the Grantee or any person, firm or corporation for any damage, loss or injury suffered by the City as a result of any work or activity performed by the Grantee in the exercise of this franchise.

B. No provision herein made for the purpose of securing the enforcement of the term s and conditions ofthis franchise shall be deemed an exclusive remedy, or to afford the exclusive procedure, for the enforcement of said terms and conditions, but the remedies and procedure herein provided, in addition to those provided by law shall be deemed to be cumulative.

ARTICLE 20

ARTICLE 21
NOTICE
Any notice required to be given under the terms of this franchise, the manner of service of which is not specifically provided for, may be served as follows:

Upon the City, by serving the City Clerk, personally or by addressing a written notice to the City Clerk of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401, and depositing such notice in the United States mail, postage prepaid.

Upon the Grantee, by addressing a written notice to Grantee addressed to ConocoPhillips, Property Tax, Real Estate, Right of Way and Claims, 3900 Kilroy Airport Way, Suite 210, Long Beach, CA, 90806, or such other address as may from time to time be furnished in writing by one party to the other and depositing said notice in the United States mail, postage prepaid.

When service of any such notice is made by mail, the time of such notice shall begin with and run from the date of the deposit of same in the United States mail.

ARTICLE 22

SUCCESSORS
The terms herein shall inure to the benefit of and shall bind, as the case may be, the successors and assigns ofthe parties hereto, subject, however, to the provisions ofArticle 17. 24

Page 115 of 466 ends

City Council Ordinance No. 1504 ( 2011 Series)
ARTICLE 23

ACCEPTANCE OF FRANCHISE
A. This franchise is granted and shall be held and enjoyed only upon the terms and conditions herein contained. By accepting this grant of franchise, Grantee shall agree to be bound by each and all of the requirements of Article X, Sections 1001 through 1007 of the San Luis Obispo City Charter.

B. Grantee shall, within ten ( 10) days after the passage of this franchise Ordinance, file with the City Clerk an express and unconditional written letter of acceptance of, and consent to, the terms and conditions of this franchise Ordinance, in its current version, and as subsequently amended, pursuant to San Luis Obispo City Charter, Article X, Section 1004.

D. Grantee' s letter' of acceptance shall be signed by two ( 2) duly authorized representatives of Grantee, whose signatures shall be acknowledged by a notary, and shall be accompanied by the performance bond and evidence of insurance required by this franchise Ordinance.

ARTICLE 24

FORCE MAJEURE
The time within which Grantee is obligated hereunder to construct, erect, maintain, operate, repair, renew, change the size of and remove pipelines or other improvements shall be extended for a period of time equal in duration to, and performance in the meantime shall be excused on account of, and for, and during the period of any delay caused by strikes, threats of strikes, lockouts, war, threats of war, insurrection, invasion, acts of God, calamities, violent action of the elements, fire, action or regulation of any governmental agency law or ordinance, impossibility of obtaining materials, or other things beyond the reasonable control of Grantee.

ARTICLE 25

LIQUIDATED DAMAGES
A. By acceptance of this franchise, Grantee understands and acknowledges that failure to timely comply with any performance requirements stipulated in this franchise Ordinance will result in damages to the City, and that it is and will be impractical to determine the actual amount of such damage in the event of delay or nonperformance. Each of the amounts set forth below has been set in recognition of the difficulty of affixing actual damages arising from breach of these time of performance requirements. Each of said amounts constitutes a reasonable estimate of these damages. This section does not limit the rights and remedies available to the City for damages other than the timely compliance with performance requirements as describe d in this section. The liquidated damages set forth below shall be chargeable to the bond, letter o f credit or security fund provided for in Article 14, supra, should 25

Page 116 of 466 ends

San Luis Obispo City CouncilJanuary 11, 2022

San Luis Obispo City Council
January 11, 2022