8B
Date: June 23, 2026
To: Honorable Mayor and Members of the City Council
From: Rebecca Poirier, City Clerk
By: Robert Williams, Deputy City Clerk I | [email protected] Subject: SECOND AND FINAL READING OF ORDINANCE NO. 3967
RECOMMENDATION
Second and Final Reading of ORDINANCE NO. 3967 repealing Ordinance Number 3499 and granting to Air Products and Chemicals, Inc., a franchise to construct, lay, operate, test, maintain, use, renew, repair, replace, move, change the size and number of, and remove or abandon in place a system of pipelines and appurtenances, for the purpose of conducting, transporting, conveying and carrying hydrogen on, along, in, under and across public streets, ways, alleys and places within the City of Torrance and approval of the Ordinance Summary for publication. This item is for consideration of adoption of the ordinance only. The item was previously discussed, and action was taken at a prior council meeting.
FUNDING
None required.
DISCUSSION
At the regular meeting of the City Council held on June 9, 2026, this Ordinance was discussed, introduced, and approved for its first reading by the following roll call vote:
AYES: COUNCILMEMBERS Gerson, Lewis, Mattucci, Sheikh, and Mayor Pro-Tem Kalani.
NOES: COUNCILMEMBERS None.
ABSTAIN: COUNCILMEMBERS None.
RECUSED: COUNCILMEMBERS Kaji.
ABSENT: COUNCILMEMBERS Mayor Chen.
ATTACHMENTS
1. Ordinance No. 3967
2. Ordinance Summary
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ORDINANCE NO. 3967
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF TORRANCE, CALIFORNIA, REPEALING
ORDINANCE NUMBER 3499 AND GRANTING TO AIR
PRODUCTS AND CHEMICALS, INC. , A FRANCHISE TO
CONSTRUCT, LAY, OPERATE, TEST, MAINTAIN, USE,
RENEW, REPAIR, REPLACE, MOVE, CHANGE THE
SIZE AND NUMBER OF, AND REMOVE OR ABANDON
IN PLACE A SYSTEM OF PIPELINES AND
APPURTENANCES, FOR THE PURPOSE OF
CONDUCTING, TRANSPORTING, CONVEYING AND
CARRY ING HYDROGEN ON, ALONG, IN, UNDER AND
ACROSS PUBLIC STREETS, WAYS, ALLEYS AND
PLACES WITHIN THE CITY OF TORRANCE
WHEREAS, Franchise Ordinance No. 3499 was granted to Air Products and Chemicals, Inc, a Delaware Corporation, on May 15, 2001 and became effective June 14, 2001 for a 25-year term; and
WHEREAS, Franchise Ordinance No. 3499 operates a 10-inch hydrogen pipeline at 2,790 feet in length along 190th Street between Western Avenue and 100 west of Van Ness Avenue; and WHEREAS, the current Franchise Ordinance No. 3499 is set to expire on July 1, 2026; and WHEREAS, Air Products and Chemicals, Inc. has applied for a new 20-year term; and
WHEREAS , the adoption of this Ordinance is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 of the State CEQA Guidelines, and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TORRANCE DOES ORDAIN AS FOLLOWS:
Section 1 DEFINITIONS : Whenever in this Ordinance the words or phrases defined in this Section are used, it is intended that they will have the respective meanings assigned to them in the following definitions (unless, in the given instance, the context in which they are used clearly imports a different meaning):
(a) The word "Grantee" means legal person, corporation or entity to which the Franchise contemplated in this Ordinance is granted and its lawful successors and assigns. (b) The word "City" means the City of Torrance, a municipal corporation of the State of California, in its present incorporated form or in any later reorganized, consolidated, enlarged or reincorporated form.
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2 (c) The word "streets" means the public streets, ways, alleys and places as the same now or may hereafter exist within the City.
(d) The phrase "pipes and appurtenances" means pipe, pipeline, cable, main, service, trap, vent, vault, manhole, meter, gauge, regulator, valve, conduit, appliance, attachment, appurtenance and any other property located or to be located in, upon, along, acros s, under or over the streets of the City, and used or useful in, or in carrying on the business of, conducting, transporting, conveying and carrying hydrogen. (e) The phrase "lay and use" means to lay, construct, excavate, erect, install, encroach, operate, maintain, use, repair, replace, relocate, or remove. (f) The word "Franchise" means and includes any authorization granted by this Ordinance in terms of a franchise, privilege, permit, license or otherwise to lay and use a system of pipes and appurtenances for conducting, transporting, conveying, and carrying ga s, oil, petroleum products and water for any and all purposes in, along, across, upon, over, and under streets within the City. Any authorization, in whatever terms granted, means and includes any license or permit required for the privilege of transacting and carrying on the Grantee’s pipeline business within the City.
(g) The phrase “Pipeline Safety Act” means the Elder California Pipeline Safety Act of 1981 (Government Code §51010, et seq.).
(h) The phrase “City Manager” is the City Manager of the City of Torrance or designee.
Section 2 - NATURE OF FRANCHISE: A Franchise is granted to Air Products and Chemicals, Inc., its successors and assigns, to construct, lay, operate, test, maintain, use, renew, repair, replace, move, change the size and number of and remove or abandon in place a system of pipes and appurtenances, not to exceed ten (10) inches in internal diameter, including any pipes and appurtenances already laid and constructed, together with such valves, fittings, manholes, vaults, pumps and other appliances, appurtenances, attachments or equipment as the Grantee, its successors and assigns may deem necessary or convenient for the purpose of conducting, transporting, conveying and carrying hydrogen, on, along, in, under, over and across the public streets, ways, alleys and places within the City of Torrance, County of Los Angeles, State of California, described on the attached Exhibit A, which is incorporated into this Ordinance by this reference, upon the terms and conditions set forth in the Franchise Act of 1937.
The pipelines and appurtenances will be operated, maintained, replaced or repaired in conformity with all ordinances, rules or regulations in effect at the time of granting of this Franchise, or as prescribed by the City Council and in accordance with the terms and conditions of any permit issued by the City.
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Section 3 LOCATION OF PIPES AND APPURTENANCES: So far as is practicable, any pipes and appurtenances laid pursuant to this Franchise will be located along the edge or shoulder of the streets or in the parking areas adjacent to the streets so as not to unreasonably disturb the flow of traffic and where possible will be laid in the unpaved portion of the street.
If the pipes and appurtenances are laid across or along the paved portion of a street, the repair of the street, after the pipes and appurtenances have been laid, will be made by the Grantee at the expense of the Grantee. In the event of an emergency or if the Grantee fails or neglects to make the repairs within, thirty (30) days after notice is given to the Grantee by the City, the City may repair the street at the expense of the Grantee, including, but not limited to, reasonable overhead expenses in the sum no greater than an additional 30% of the actual cost of such work and upon presentation of a bill for the expense, the Grantee will pay the bill within thirty (30) days.
The amount chargeable to the Grantee will be the actual and reasonable cost of the repair.
All pipes and appurtenances will be located in conformity with the orders of the City Manager of the City of Torrance.
Section 4 RIGHT TO CONSTRUCT AND MAINTAIN PIPES AND APPURTENANCES:
The Grantee will have the right to construct and maintain pipes and appurtenances as may be necessary or convenient for the proper maintenance and operation of the pipes and appurtenances under the Franchise. The Grantee has the right, subject to the terms of the Franchise and such applicable ordinances, rules, or regulations as are now or may hereafter be in force, to make all necessary excavations in the streets, for the construction, testing, and repair of new or existing pipes and appurtenances.
Section 5 TERM: The term of the Franchise is twenty (20) years, commencing on the Effective Date, as provided by Section 30, unless the Franchise is forfeited prior to the end of the term.
Section 6 COMPENSATION:
A. Base Granting Fee As consideration for the Franchise herewith granted, the Grantee shall pay to the City on or before the effective date of this Ordinance a granting fee in the amount of Twenty-Five Thousand Dollars ($25,000.00).
B. Base Construction Charges The Grantee shall pay at the time of the commencement of installation, relocation , or replacement of any pipeline or other facility covered by this franchise, a base construction charge of three thousand three hundred eighty-four ($3,384.00) dollars for each one -half (1/2) mile of trench or fractional part thereof installed, replaced, or relocated on major streets and two thousand two hundred thirty two ($2,232.00) dollars per one-half (1/2) mile of trench or fractional part thereof, on minor streets or actual cost of inspection, whichever is greater. The City of Torrance reserves the right to change such base fees at any time after the effective date of this Ordinance, but the base fees applicable to the franchise may only be changed five (5) times during the life of the franchise.
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C. Product Flow Fee The Grantee shall pay to the City of Torrance a product flow fee based on the actual hydrogen volume flow through the pipeline measured in Standard Cubic Feet (SCF shall mean a quantity of gas contained in one (1) cubic foot of volume, dry, at a temperature of 70 degrees F and at a pressure of 14.7 psia) in the following amount. Total annual volume divided by 365 (days) divided by 1,000,000 multiplied by $450.
EXAMPLE:
If the pipeline flowed 10,000,000,000 standard cubic fee in a year, the total flow would be divided by 365 then divided by 365 then divided by 1,000,000 and finally multiplied by $450.00 to determine the annual flow fee for that year:
10,000,000,000 ÷ 365 ÷ 1,000,000 x $450.00 = $12,228.77
The product flow fee shall commence accruing July 1, 2026, and be due and payable annually commencing July 1, 2027.
D. Base Franchise Fee A base franchise fee shall be paid by the Grantee to the City of Torrance for the pipeline volume occupied by the pipeline at an annual rate of four dollars and nineteen ($4.19) centers per cubic foot. The franchise fee shall be due and payable annually, commencing July 1, 20 26. Such franchise fee shall accrue at the end of each annual period for the pipeline area occupied by the greatest number of feet of pipeline covered by the franchise during the franchise payment period. For purposes of this paragraph, the pipeline area occupied by a pipeline or conduit including protective covering, pipe connectors, cathodic protection facilities, pipe castings and other minor appurtenances shall be taken as equivalent to the volume occupied by a cylinder of equal length having a diameter of one (1) inch (for metal pipe) or two (2) inches (for plastic pipe) greater than the nominal internal diameter of the pipe or conduit but in no case with an equivalent cylinder diameter less than four (4) inches, and the payment rate therefore shall be computed to the nearest tenth of a cent per lineal foot of pipe. Pipeline volume occupied by an appurtenances such as manholes or vaults shall be comp uted from the outside dimensions of the structure. The calculation of pipeline volume shall be provided to the Finance Director no later than 30 days after completion of construction of the pipeline by Grantee. The annual fee shall be paid no later than Ju ly 1st of each calendar year. A penalty at the rate of ten (10) percent per month of fraction thereof beyond thirty (30) days after the payment due date shall be charged, but in no event shall such penalty exceed fifty (50) percent.
E. Adjustments
(1) The amount of each fee specified above shall be adjusted at the time payment is due by the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) for the Los Angeles-Long Beach-Anaheim, CA area (1982-84 = 100). The adjustment shall be calculated based on the change in the index from July 1, 2026, to the date which is sixty (60) days prior to the due date of the fee.
(2) In no event shall any fee be charged which is less than the base fee amount established above.
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(3) The indices specified in paragraph (1) above are calculated and published by the United States Department of Labor, Bureau of Labor Statistics. If the Bureau discontinues the calculation or publication of the Consumer Price Index for All Urban Consumers fo r the Los Angeles-Long Beach-Anaheim, CA area, and no transposition table is available to convert to another index, the amount of each adjustment shall be computed using the most comparable governmental index then available.
F. Proration of Payments: In the event of abandonment or removal of pipes and appurtenances with the approval of the City as stated elsewhere in this Franchise, construction of new pipes and appurtenances as provided for elsewhere in this Franchise, or in the event that Grantee has paid franchise fees for any of the pipes and appurt enances under a previous franchise agreement with the City, the annual franchise fee required by this Franchise for impacted pipes and appurtenances for the calendar year of suc h occurrence shall be prorated based on the date of completion for removal or abandonment work, date of commencement of any new construction, or the date payments for pipeline and appurtenances ceased under a previous franchise agreement.
Section 7 MAPS AND CAPITAL IMPROVEMENT PLAN : Within ninety (90) days following the date in which any pipes and appurtenances or additional pipes and appurtenances have been laid or constructed under this Franchise, the Grantee will file a map or maps in such forms as may be required by the City Manager showing the accurate location and size of all its pipes and appurtenances then in place, and will, upon installation of any additional pipes and appurtenances, or upon removal, change, or abandonment of all or any portion of the pipes and appurtenances, file a revised map or maps showing the location and size of all such additional, removed, or abandoned pipes and appurtenances as of that day.
Annually, prior to January 1st, the Grantee will submit a projected five-year capital improvement plan for its facilities subject to this Franchise. Scheduling for repair, replacement or modifications will be described by year and location in order to provide information to the City for coordination with its public works capital improvement program. Projects not on such a schedule may be denied a permit unless the work is an emergency or the need was unforeseen. Justification may be required from the Grantee.
Section 8 CONSTRUCTION OF PIPES AND APPURTENANCES:
A. Terms of Construction. The pipes and appurtenances
constructed or maintained pursuant to Section 4 of this Franchise will be constructed and maintained in a good, workmanlike manner and in conformity with all applicable ordinances, rules or regulations now or subsequently adopted or prescribed by the City Council. Gra ntee will only construct pipelines laid under this Franchise that are subject to the jurisdiction of the State Fire Marshal pursuant to the Pipeline Safety Act and will meet State Fire Marshal standards, and no pipe laid under this Franchise may exceed ten (10) inches in internal diameter. All new pipes and appurtenances laid under this Franchise shall only be constructed in approved locations and under the terms and conditions of a Construction – Excavation Permit granted by the City, in its sole discretion.
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Except in an emergency, the Grantee may not excavate in a City street right -of- way without having first applied for and obtained a Construction - Excavation Permit from the City.
Such application may include a traffic control plan and other information as required by the City Manager. The Grantee will pay any fees (including inspection) required by such permit. In event of an emergency, the Grantee will apply for a Construction - Excavation Permit from the City no later than the business day following commencement of such emergency work.
B. Restoration of Streets. The work of constructing, maintaining or repairing all pipes and appurtenances will be conducted with the least practicable hindrance to the use of the streets for purposes of travel, and as soon as such work is completed, all portions of the street that have been excavated or otherwise damaged will be placed in as good condition as they were before the commencement of such work, to the satisfaction of the City Manager. All street repair work will be made by the Grantee at the expense of the Grantee in accordance with the ordinances of the City and the conditions of the Construction – Excavation Permit issued by the City.
If the pipelines and appurtenances are laid across or along the paved portion of a street, the repair of the street, after the pipelines and appurtenances have been laid, will be made by the Grantee at the expense of the Grantee. If the Grantee fails or neglects to make the repairs, then 30 days after notice is given to the Grantee by the City or if an emergency necessitates immediate repair of the damage, the City may, in its sole discretion, repair the street at the expense of the Grantee, and upon presentation of a bill for the expense, the Grantee will pay the bill at once. The amount chargeable to the Grantee will be the cost of the repair including reasonable overhead expenses attributed to such repairs in the sum no greater than an additional 30% of the actual cost of such repairs.
C. Certified Test Results: Conformance Requirements.
(1) Certified Test Results: For those pipes and appurtenances subject to the provisions of the Pipeline Safety Act the testing will be performed in accordance with State Fire Marshal requirements, and certified test results will be requested by the City from the Fire Marshal. In the event the State Fire Marshal fails to provide certified test results to the City, Grantee will provide the test results to the City upon request.
In the event that any pipes and appurtenances cease to be subject to the jurisdiction of the State Fire Marshal pursuant to the Pipeline Safety Act, Grantee will immediately notify the City by written notice. The City reserves the right to require Grantee, at its expense, to abandon or remove any pipes and appurtenances not subject to the jurisdiction of the State Fire Marshal pursuant to the Pipeline Safety Act in a manner as prescribed in Section 12. In lieu of abandonment or removal provided for in this paragraph, the City, in its sole discretion and where not in conflict with Federal or State law, may accept Grantee’s written response plan for such pipes and appurtenances that will include monitoring of pipeline location in compliance with Federal 49CFR195.442 and State law 1CCR4216. Grantee acknowledges that all pipelines abandoned under this franchise shall be subject to Section 11 and 12 of this Ordinance and shall remain the property of Grantee until such time as the pipes or appurtenance have been re moved from their existing location or transfer of ownership has occurred.
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(2) Conformance Requirements:The pipes and appurtenances will be operated, maintained, replaced or repaired in accordance with the latest applicable revision of the “American National Standard Code for Pressure Piping ANSI/ASME B31.4 -2006;” the American Petroleum Institute Standard 1104; the Code of Federal Regulations, Part 195, Title 49 U.S.C. or other applicable standards and codes, whichever is the most stringent. The pipes and appurtenances will further be operated, maintained, replaced or repaired in acc ordance with all applicable Federal and/or State standards for the construction of intrastate pipelines as set forth in Federal laws, rules and regulations. Whenever there is a conflict in Federal or State standards, the more stringent standard will prevail. Grantee will provide the City a complete copy of the most current contingency plan required by California Government Code Section 51015, upon request of the City.
Section 9 EMERGENCY EQUIPMENT AND CREWS: At all times during the term of this Franchise, the Grantee will maintain on a twenty-four hour a day basis adequate equipment and a properly trained crew, or qualified contractors, with the ability to quickly shut off the pressure and the flow of contents of the pipes and appurtenances in th e event of an emergency resulting from an earthquake, act of war, civil disturbance, flood, computer malfunction or other cause.
Section 10 BREAKS OR LEAKS: If any portion of any street is damaged by reason of breaks or leaks in any pipe or appurtenance constructed under this Franchise, the Grantee will, at its own expense, immediately following written or oral notification, repair any such damage and put the street in as good condition as it was in before the b reak or leak, to the satisfaction of the City Manager. In the event of an emergency or if the Grantee fails or neglects to make the repairs within thirty (30) days after notice is given to the Grantee by the City, the City may repair the street at the expense of the Grantee including, but not limited to, reasonable overhead expenses in the sum no greater than an additional 30% of the actual cost of such work, and upon presentation of a bill for the expense, the Grantee will pay the bill within thirty (30) days.
Section 11 REARRANGEMENT OF PIPES AND APPURTENANCES:
A. Expense of Grantee.
(1) If any of the Grantee’s pipes and appurtenances endanger the public in the use of the public streets or interfere with or obstruct the use of any street by the public or for the public purposes, the City will have the right to require the Grantee, at the G rantee’s expense, to move, alter or relocate the pipes and appurtenances (the “rearrangement”) to avoid such danger, interference or obstruction, in conformity with the written notice of the City Manager.
(2) Whenever, during the existence of this Franchise, the City changes the grade, width or location of any street or improves any street in any manner, including the laying of any city sewer, storm drain, conduits, gas, water or other pipes, or construct any pedestrian tunnels, or other work of the City, (the right to do all of which is specifically reserved to the City without any admission on its part that it would not otherwise have such rights) and such work will, in the opinion of the City Manager, render necessary any change in the position or location of any pipes and appurtenances of the Grantee in the street, while such work is being done or performed, the Grantee will, at its own cost and expense, do any and all things reasonable to effect such change in position, in conformity with the written notice of the City Manager if the work is for City purposes, including relocation to alternative streets; provided, however, that the City will not require the Grantee to remove its conduits or lines entirely from the streets.
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(3) In case the Grantee fails to commence work in compliance with written notice provided in work referenced in subsection A(1), within thirty (30) days after service of the notice upon Grantee, (unless Grantee is unable to comply with such notice by reason of strikes, riots, acts of God, or acts of public enemies), the City Manager may cause the work required in the notice to be done to be performed by the City or, at the election of the City, by a qualified private contractor. City will pay for, or cause the entity who performs the work to pay for, the cost to effect such change in position. The Grantee agrees to pay all costs attributed to the work including, but not limited to, reasonable overhead expenses in the sum no greater than an additional 30% of the actual cost of such work, within sixty (60) days after delivery of an itemized bill. The cost of doing the work will be considered the actual cost. If the Grantee is dissatisfied with any determination of the City Manager permitted by this Section, it may petition the City Manager to review the City Manager’s decision within ten (10) days after the City Manager’s decision. During the pendency of such petition, the work required to be done will be suspended.
C. City Utility Systems; Rearrangement at Expense of Others.
(1) The City will have the right to require the Grantee to rearrange any part of the Grantee’s pipes and appurtenances 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 subsection B(2) of this Section 11, such rearrangement will be at the Grantee’s expense.
(2) When such rearrangement is done for the accommodation of any person, firm or corporation other than one of the utility systems owned or operated by the City, the cost of such rearrangement will be borne by the accommodated party. The accommodated party, in advance of any rearrangement, will deposit with the Grantee or the City Clerk cash or a corporate surety bond in an amount based upon an itemized statement of costs for the rearrangement, as prepared by Grantee, required to pay t he costs of such rearrange ment and such accommodated party will execute an instrument agreeing to indemnify and hold harmless the Grantee and the City from any and all damages or claims caused by the rearrangement.
(3) The rearrangement referred to in subsection (1) of this subsection B of this Section 11 will be accomplished in conformity with the written notice of the City Manager. In case the Grantee fails to commence work in compliance with the written notice within 120 days after service of the notice upon the Grantee (unless the Grantee is unable to comply with the notice by reason of strikes, riots, acts of God, or acts of pub lic enemies), the City Manager may cause the work required in the notice to be done to be performed by the City or, at the election of the City, by private contractor. The Grantee agrees to pay to the City within sixty (60) days after delivery of an itemized bill covering the cost attributed to the work including, but not limited to, reasonable overhead expenses in the sum no greater than an additional 30% of the actual cost of such work. If the Grantee is dissatisfied with any determination of the City Manager permitted by this Section, it may petition the City Manager to review the decision within ten (10) days after the determination. The decision of the City Manager will be final and conclusive City action.
C. Rearrangements of the Pipes and Appurtenances of Others: Nothing in this Franchise will be construed to require the City, or any 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 the streets for the convenience, accommod ation or necessity of the Grantee.
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D. Notice: Grantee will be given not less than 120 days written notice of any rearrangement of pipes and appurtenances, which Grantee is required to make under this Franchise. The notice will specify in reasonable detail the work to be done by the Grantee and will specify the time that the work is to be accomplished. In the event that the City changes the provisions of any such notice given to Grantee, the Grantee will be given an additional period not less than thirty (30) days to accomplish the work.
Section 12 REMOVAL OR ABANDONMENT OF PIPES AND
APPURTENANCES: At the time of expiration, revocation, or termination of this Franchise or of the permanent discontinuance of the use of its pipes and appurtenances, the Grantee will, within thirty (30) days thereafter, make a written application to the City Manager for authority to engage in one, or a combination, of the following: (1) abandon all, or a portion, of such pipes and appurtenances in place; (2) remove all, or a portion, of such pipes and appurtenances; or (3) to transfer ownership of the pipes and appur tenances to the City to use as a conduit. Such application will describe the pipes and appurtenances desired to be abandoned by reference to the map or maps required by Section 7 of this Franchise and will also describe with reasonable accuracy the relative physical condition of the pipes and appu rtenances. Thereupon, the City Manager will determine whether any abandonment, removal or transfer that is proposed may be effected without detriment to the public interest or under what conditions the proposed abandonment, removal or transfer may be safely effected and will then notify the Grantee of any such requirements and to either remove all, or a portion of such pipes and appurtenances, abandon in place all, or a portion, of such pipes and appurtenances, or transfer ownership of the pipes and appurtenances to the City to use as a conduit. If abandonment in place is approved, Grantee will pay the City an abandonment fee of Thirty -Two Dollars ($32.00) per linear foot of pipe so abandoned.
If, for any reason, Grantee suspends operations of any of the pipes and appurtenances contained in this Franchise for a period in excess of ninety (90) days, Grantee will notify the City Manager. During this period of suspended operations, the Grantee will maintain said pipes and appurtenances in accordance with all applicable Federal and/or State standards as directed by the California State Fire Marshal.
If any pipes and appurtenances to be abandoned in place subject to prescribed conditions are not abandoned in accordance with all such conditions, then the City Manager may make additional appropriate orders at his or her sole discretion, including, an order that the Grantee remove all such pipes and appurtenances in accordance with applicable requirements. In the event the Grantee fails to remove any pipes and appurtena nces which it is obligated to remove in accordance with such applicable requirements wit hin such time as may be prescribed by the City Manager, then the City may remove such pipes and appurtenances at the Grantee's expense and the Grantee will pay to the City within 60 days after delivery of an itemized bill the cost of removal including, but not limited to, reasonable overhead expenses in the s um no greater than an additional 30% of the actual cost of such work.
Should any pipes and appurtenances abandoned under this Franchise interfere at a future time with any public works project, Grantee will, upon request of the City Manager, remove the pipes and appurtenances and restore the streets and other public property at Grantee's expense.
Following completion of the removal of the pipelines and appurtenances and restoration of the streets to the satisfaction of the City Manager , the City will reimburse to the Grantee any abandonment fees paid to the City attributed to the facilities removed. In the event the Grantee fails to remove any pipelines and appurtenances as prescribed by the City Manager, then the City may remove such pipes and appurtenances at the Grantee's expense and the Grantee will pay 10 10
to the City within 60 days after delivery of an itemized bill the cost of removal including, but not limited to, reasonable overhead expenses in the sum no greater than an additional 30% of the actual cost of such work, less any abandonment fees paid to th e City attributed to the facilities removed.
This Section 12 will survive the termination or expiration of this Franchise.
Section 13 COMPLETION OF WORK : Whenever the Grantee fails to complete any work required of the Grantee by the terms of this Franchise within the time limits required under this Franchise, the City may cause the work to be completed by the City or, at the election of the City, by a qualified private contractor. The Grantee agrees to pay to the City within sixty (60) days after delivery of an itemized bill covering the costs attributed to the work including, but not limited to, reasonable overhead expenses in the sum no greater than an additional 30% of the actual cost of such work. If the Grantee is dissatisfied with the determination of the amount, it may petition the City Manager to review the amount within ten (10) days after such determination. The decision of the City Manager will be final and conclusive City action.
Section 14 FAITHFUL PERFORMANCE BOND:
A. Delivery of Performance Bond.Prior to the effective date of any sale, transfer, assignment, or lease of this Franchise, or any part thereof, to a person or entity that is not either an affiliate of Grantee or a public utility pipeline, the buyer, transferee, assignee, or lessee (hereinafter referred to as the Grantee) will deliver to City a performance bond in the sum of $100,000, which secures the faithful performance of the Grantee’s obligations under this Franchise. The bond will contain the original notarized signature of an authorized officer of the surety. The bond will be unconditional and remain in full force and effect during the remaining term of this Franchise and will be null and void at the conclusion of the term of this Franchise only if Grantee promptly and faithfully performs all terms and conditions of this Franchise.
B. Forfeiture.In the event Grantee for any reason becomes unable to, or fails in any way to, perform as required by this Franchise, City may declare the portion of the performance bond that is necessary to recompense and make whole the City, forfeited to the City.
Upon partial or full forfeiture of the performance bond, Grantee will promptly take all steps necessary to restore the performance bond to its face amount.
Section 15 INSURANCE:
A. Grantee must maintain at its sole expense the following insurance, subject to self- insurance provisions:
(1) Automobile Liability, including owned, non-owned and hired vehicles with at least the following limits of liability:
(a) Primary Bodily Injury with limits of at least $250,000 per person, $500,000 per occurrence; and
(b) Primary Property Damage of at least $100,000 per occurrence, or combined single limits of at least $1,000,000.
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(2) Commercial General Liability (“CGL”) insurance written on an occurrence basis, including coverage for premises and operations, products and completed operations, independent contractors and vendors, personal and advertising injury, contractual liability, a nd explosion, collapse, and underground (“XCU”) hazards, with limits of not less than $10,000,000 per occurrence and $10,000,000 aggregate. The CGL policy shall not contain exclusions or limitations inconsistent with the coverage required by this Agreement.
B. Workers’ Compensation with limits as required by the State of California with statutory limits, and Employers Liability with limits of at least $1,000,000 per accident for bodily injury or disease.
Contractor hereby grants to Entity a waiver of any right to subrogation which any insurer of said Contractor may acquire against the Entity by virtue of the payment of any loss under such insurance. Contractor agrees to obtain any endorsement that may be n ecessary to affect this waiver of subrogation and provide a copy to the Entity, but this provision applies regardless of whether or not an endorsement has been issued.
C. C. City of Torrance, a municipal corporation of the State of California , the City Council, and each member thereof, members of boards and commissions, every officer, agent, official, employee and volunteer must be named as additional insured s under the General Liability and Automobile Liability policies.
D. Except as permitted in subsection " G" of this Section 15, Grantee must provide certificates of insurance and/or endorsements to the City Clerk of the City of Torrance at the request of the City Clerk.
E. Each Insurance policy required by this Section may not be canceled or reduced by the insured without procuring comparable insurance or self-insurance.
F. Insurance required by this Franchise will be satisfactory only if issued by companies admitted to do business in California, and/or surplus lines approved carriers, rated "A-" or better in the most recent edition of Best's Key Rating Guide, and/or the equi valent with other established rating agencies, and only if they are of a financial category Class VII or better, unless these requirements are waived by the Risk Manager of City ("Risk Manager") due to unique circumstances. In the event the Risk Manager determines that an increased or decreased risk of loss is posed to City, Grantee agrees that the minimum limits of any insurance policies or performance bonds required by this Agreement may be changed accordingly upon receipt of written notice from the Risk Manager; provided that Grantee will have the right to appeal a determination of increased coverage by the Risk Manager to the City Council of City within 10 days of receipt of notice from the Risk Manager.
G. Grantee will have the option to self-assume such risks and insurance obligations, for which Grantee will, at the request of the City, provide its standard letter of self -assumption, in a form acceptable to City, for risks and insurance obligations agreed to under this Franchise. If, in the sole discretion of the Risk Manager, the Grantee does not have sufficient assets to guarantee self-assumption of such risks and insurance obligations, the Risk Manager may reject or rescind any previous approval by written notice to the Grantee and the Grantee shall obtain the required insurance and provide the City proof of insurance within ten (10) days of receiving notice of such determination from the City. Grantee will have the right to appeal a determination of rejection or rescinding a self -assumption approval from the Risk Manager to the City Council of the City within 10 days of receipt of notice from the Risk Manager. 12 12
Section 16 INDEMNIFICATION BY GRANTEE:Grantee will indemnify, defend, and hold harmless City, the City Council, each member thereof, present and future, its officers, agents and employees from and against any and all liability, expenses, including defense costs and legal fees, and claims for damages whatsoever, including, but not limited to, those arising from breach of contract, bodily injury, death, personal injury, property damage, loss of use, or property loss arising out of Grantee’s exercise of its r ights under this Franchise, unless caused by the negligence of the City. The obligation to indemnify, defend and hold harmless includes, but is not limited to, any liability or expense, including defense costs and legal fees, arising from the negligent acts or omissions, or willful misconduct of Grantee, its officers, employees, agents, subcontractors or vendors in the exercise of its rights under this Franchise. It is further agreed, Grantee’s obligations to indemnify, defend and hold harmless will apply e xcept to the extent of concurrent negligence, sole negligence, or willful misconduct, on the part of City, the City Council, each member thereof, present and future, or its officers, agents and employees. In the event of any dispute between Grantee and Cit y, as to whether liability arises from the negligence of the City or its officers, employees, agents, subcontractors or vendors, Grantee will be obligated to pay for City’s defense until such time as a final judgment has been entered adjudicating the City as negligent.
Section 17 ASSIGNMENT:
A. Grantee will not sell, transfer, assign or lease the Franchise, or any part thereof, except with the consent of the City Council. Such sale, transfer, assignment or lease will be made only by filing with the City Council a copy of the duly executed instrument of such sale, transfer, assignment or lease, and a written request for the consent of the Council to such sale, transfer, assignment or lease. If such duly executed instrument and such written request are not filed with the City Council before the expi ration of 30 days after the effective date of such sale, transfer, assignment or lease then, upon the expiration of said 30 days, the Franchise will be subject to forfeiture and the City Council may, without notice, by ordinance, repeal the Franchise.
B. As a condition to the granting of consent to such sale, transfer, assignment or lease, the Council may impose such additional terms and conditions upon the Franchise and upon the Grantee or assignee which the City Council may deem to be in the public interest. The City may also condition transfer upon payment of a transfer fee of $ 25,000 to be paid by the transferee to the City. Such additional terms and conditions will be expressed by ordinance.
C. Nothing herein contained will be construed to grant to the Grantee the right to sell, transfer, assign or lease the Franchise, or any part thereof except in the manner aforesaid. This Section applies to any assignment, whether by operation of law, by volu ntary act of the Grantee or otherwise. No such consent will be required to any transfer of the Franchise in trust or by way of mortgage or hypothecation with all or a part of grantee’s other property for the purpose of securing any indebtedness of Grantee. A merger will not be deemed a sale, transfer, assignment or lease of the Franchise under this Section.
Section 18 DEFAULT:
A. Noncurable Default.
In the event that the Grantee defaults in the performance of any of the terms, covenants or conditions contained in this Franchise and the default is not curable, the City may declare this Franchise forfeited. Upon giving written notice of the forfeiture t o the Grantee, this Franchise will be void and the rights of the Grantee under this Franchise will cease and terminate and the Grantee will execute an instrument of surrender and deliver the surrender to the City. 13 13
Upon termination, Grantee will begin the process of abandonment or removal of pipelines and appurtenances as provided for in Section 12.
B. Curable Default.
In the event that the Grantee defaults in the performance of any of the terms, covenants and conditions contained in this Franchise and the default is curable, the City will give written notice to the Grantee of the default. In the event that the Grantee does not commence the work necessary to cure the default within thirty (30) days after notice is sent or fails to prosecute the work diligently to completion, the City may declare this Franchise forfeited. Upon giving written notice of the forfeiture to the Grantee, this Franchise will be void and the rights of the Grantee under this Franchise will cease and terminate and Grantee will execute an instrument of surrender and deliver the surrender to the City. Upon termination, Grantee will begin the process of abandonment or removal of pipelines and appurtenances as provided for in Section 12.
C. Cumulative Remedies.
No provision made for the purpose of securing the enforcement of the terms and conditions of this Franchise will be deemed an exclusive remedy, or to afford the exclusive procedure, for the enforcement of the terms and conditions, but the remedies and proc edure provided in this Franchise, in addition to those provided by law, will be deemed to be cumulative.
Section 19 SUPERSEDURE: This Franchise will be in lieu of any like franchise, if any has been previously granted by the City to the Grantee and any such other franchise, if any, will be deemed to be and will be repealed as of the date upon which the grant of this Franchise is effective, and the rights, liabilities and obligations of the Grantee under such other franchise will thereupon cease and terminate. Should the foregoing be applicable to the grant of this Franchise, the Grantee will pay to the City any and all amounts accrue d up to the effective date of this Franchise under such other franchise so repealed as shown by statement of such amounts in the form required by such other franchise filed not later than ninety (90) days after this Ordinance becomes effective. Payment of such amounts will be made with the filing of such statement.
Section 20 SCOPE OF RESERVATION: Nothing contained in this Franchise will ever be construed so as to exempt the Grantee from compliance with all applicable ordinances of the City now in effect or which may be subsequently adopted which are not inconsistent with the terms of this Franchise. The enumeration in this Franchise of specific rights reserved will not be construed as exclusive, or as limiting the general reservation in the Franchise made or as limiting such rights as the City may now or hereafter have in law.
Section 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 Manager, or the City Clerk personally, or by addressing a written notice to the City Clerk of the City of Torrance, City Hall, 3031 Torrance Boulevard, Torrance, California, 90503 and depositing such notice in the United States mail, postage prepaid.
Upon the Grantee by addressing a written notice to Grantee, addressed
Real Estate Manager Pipeline and Rights of Way
Air Products and Chemicals, Inc.
1940 Air Products Blvd.
Allentown, PA 18106
14 14
(or such other address as may from time to time be furnished in writing by one party to the other and depositing the notice in the United States mail, postage prepaid).
When the service of any such notice is made by mail, the time of such notice will begin with and run from the date of the deposit of the notice in the United States mail.
Section 22 SUCCESSORS:The terms and conditions of this Franchise will inure to the benefit of or will bind, as the case may be, the successors and assigns of the parties to this Franchise, subject, however, to the provisions of Section17.
Section 23 ACCPTANCE OF FRANCHISE: This Franchise is granted and will be held and enjoyed only upon the terms and conditions contained within this Franchise, and the Grantee must, within thirty (30) days after the passage of the Ordinance granting this Franchise, file with the City Clerk of the City of Torrance a written acceptance of the terms and conditions.
Section 24 FRANCHISE TO BE STRICTLY CONSTRUED AGAINST GRANTEE:
This Franchise is granted upon each and every condition contained within this Franchise and will be strictly construed against Grantee. Nothing will pass hereby unless it be granted in plain and unambiguous terms. Each of the conditions is a material and e ssential condition to the granting of this Franchise.
Section 25 FORCE MAJEURE: The time within which Grantee is obligated under this Franchise to construct, erect, maintain, operate, repair, renew, change the size of and remove pipes and appurtenances or other improvements will be extended for a period of time equal induration to, and performance in the meantime will 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, viole nt 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.
Section 26 DAMAGE TO PUBLIC PROPERTY: Any damage done directly or indirectly to any public property by Grantee, in exercising directly or indirectly any right, power, or privilege under this Franchise, or in performing any duty under or pursuant to the provisions of this Franchise, will be promptly repaired by Grantee at its sole cost and expense.
Section 27 RECORDS AND PERIODIC REPORTS: At all reasonable times and after prior written notice, Grantee will permit the City, at the request of the City Manager , to examine all property of Grantee erected, constructed, laid, operated or maintained pursuant to this Franchise, together with any appurtenant property of Grantee, and to examine and transcribe any and all books, accounts, papers, maps, and other records kept or maintained by Grantee or under its control, with regard to safety issues associated with this Franchise.
Annually during the life of this Franchise, and concurrently with provision of the annual payment pursuant to Section 6, Grantee will file with the City Manager, for the immediately preceding Franchise period the length of lines in streets, the internal diameter of such lines, the rate per foot per year, and the total amount due to the City.
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Section 28 PRIOR FRANCHISES: All pipes and appurtenances erected, constructed, laid, operated or maintained by Grantee in the streets, whether installed by Grantee or not, in the area described in and by virtue of the authority provided by the Ordinance granting this Franchise, prior to the effective date of this Ordinan ce, except those maintained under prior right other than franchise, will become subject to all the terms and conditions of this Ordinance upon its effective date. The parties intend by this provision to ensure that no lineal footage of pipes and appurtenances which is constructed, erected, maintained, operated, repaired, renewed, changed in size, or removed by Grantee within the streets of the City of Torrance is inadvertently omitted from this Franchise.
Section 29 SEVERABILITY: If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, the decision will not affect the validity of the remaining portions of the Ordinance. The City Council declares that it would ha ve passed this Ordinance and each section, subsection, sentence, clause and phrase, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases are declared invalid or unconstitutional.
Section 30 EFFECTIVE DATE: This Ordinance will take effect thirty (30) days after the date of its adoption, provided Grantee files an acceptance of the Franchise as required by Section 23. Within fifteen (15) days following adoption, this Ordinance or a summary of this Ordinance, if authorized by the City Council, will be published at least once in the Daily Breeze, a newspaper of general circulation, published and circulated in the City of Torrance.
Section 31 ATTORNEY’S FEES: Except as provided for in Paragraph 16, in any dispute, litigation, arbitration, or other proceeding by which one party either seeks to enforce its rights under this Franchise (whether in contract, tort or both) or seeks a declaration of any rights or obligations under this Franchise, the prevailing party will be awarded reasonable attorney’s fees, together with any costs and expenses, to resolve the dispute and to enforce any judgment.
INTRODUCED and APPROVED this 9th day of June 2026.
ADOPTED and PASSED this 23rd day of June 2026.
Mayor George K. Chen
APPROVED AS TO FORM:
PATRICK Q. SULLIVAN, City Attorney
by:
Tatia Y. Strader, Assistant City Attorney
ATTEST:
Rebecca Poirier, MMC, City Clerk
16 ORDINANCE NO. 3967 SUMMARY
On June 23, 2026, the City Council of the City of Torrance adopted Ordinance No. 3967, granting a twenty-year franchise to Air Products and Chemicals, Inc. (“Air Products”) for the operation and maintain of hydrogen pipeline located in the public right-of-way.
The existing ten -inch diameter pipeline enters the City at Westen Avenue and 190 th Street.
Pipeline proceeds west on 190 th Street and terminates 100 feet west of Van Ness Avenue. The pipeline is a total of 2,790 linear feet.
Air Products will pay a $25,000 one -time franchise granting fee within 30 days after the Council adopts the Ordinance granting the Franchise. Furthermore, Air Products will pay annual franchise fees calculated by cubic footage and product flow rate schedul e agreed to by the City and Air Products pursuant to Section 6231.5(b) of the California Public Utilities Code. Failure to pay such fees as prescribed will result in forfeiture of the franchise. 17 ATTACHMENT 2