TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Erick Lee, Public Works Director
Katherine Doherty, City Engineer
Erika King, Senior Management Analyst
SUBJECT:Title
Second Reading of Ordinance No. 24-0007, An Ordinance of the City of Manhattan Beach Extending the Term of an Existing Franchise Previously Granted to Zenith Energy West Coast Terminals LLC for an Additional Term of 25 years and Adopt a Finding of Exemption from CEQA under CEQA Guidelines Section 15301 (Public Works Director Lee).
ADOPT ORDINANCE NO. 24-0007
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RECOMMENDATION:
Staff recommends that the City Council waive further reading and adopt Ordinance No. 24-0007, an ordinance of the City of Manhattan Beach extending the term of an existing franchise previously granted to Zenith Energy West Coast Terminals LLC for an additional term of 25 years and adopt a finding of exemption from CEQA under CEQA Guidelines Section 15301.
FISCAL IMPLICATIONS:
Franchise fees for utility pipeline franchises are regulated by the State of California under the Public Utilities Code. In 2023, Zenith Energy West Coast Terminals LLC, as grantee, paid approximately $7,400 in franchise fees under the existing franchise. If Ordinance No. 24-0007 is adopted, it will extend the current franchise agreement for 25 years. Zenith Energy West Coast Terminals LLC, as grantee, shall continue to pay to the City an annual sum of money that shall be equivalent to the base rate per lineal foot as set forth in Public Utilities Code Section 6231.5.
BACKGROUND:
On April 19, 1967, City Council approved a pipeline franchise agreement with Southern California Edison (“SCE”) to operate a pipeline carrying petroleum products between SCE facilities.
On July 20, 1999, the City Council adopted Ordinance No. 2002 which granted SCE, as grantee, a new 25-year franchise (“franchise”) to operate a pipeline within the City. Ordinance No. 2002 granted a franchise to SCE for a pipeline that runs generally along Rosecrans Avenue (El Segundo), then enters the City through the intersection of Elm Avenue and Rosecrans Avenue, then southerly to the intersection of Elm Avenue and Marine Avenue, then easterly along Marine Avenue to the eastern boundary of the City. Under the franchise, SCE was granted the right to conduct, transport, convey or carry gas, oil, petroleum products, water, and wastewater, excepting the carrying of any Class 1 flammable liquids that are not crude oils or flammable gases. The pipeline is approximately 8,333 feet long.
Zenith Energy West Coast Terminals LLC (hereinafter “Zenith” or “Grantee”) is a public utility regulated by the California Public Utilities Commission and is successor in interest to SCE. In August of 2003, SCE notified the City that SCE had assigned all of its right, tittle, interest and obligations in and to that certain Ordinance No. 2002 to Pacific Terminals LLC. In June of 2009, Pacific Terminals LLC notified the City that it had changed its name to Plains West Coast Terminals LLC. In October 2020, Plains West Coast Terminals LLC notified the City that it had changed its name to Zenith Energy West Coast Terminals LLC. Pursuant to Ordinance No. 2002, the existing franchise will expire on August 19, 2024. Zenith has filed an application with the City requesting that the existing franchise be extended for an additional 25 years.
On June 18, 2024, the City Council approved Resolution No. 24-0077 declaring an intention to adopt ordinances granting an extension of an existing franchise to Zenith Energy West Coast Terminals LLC and setting a public hearing on the adoption of the ordinances for July 16, 2024.
On July 16, 2024, the City Council adopted Urgency Ordinance No. 24-0007-U, which became effective immediately, and introduced its counterpart, regular Ordinance No. 24-0007.
DISCUSSION:
On July 16, 2024, the City Council introduced Ordinance No. 24-0007, an Ordinance of the City of Manhattan Beach extending the term of an existing franchise previously granted to Zenith Energy West Coast Terminals LLC, as successor in interest to the original grantee, Southern California Edison (“SCE”), to continue to operate a pipeline carrying petroleum products within the City. At the July 16, 2024 meeting, the City Council also adopted Urgency Ordinance No. 24-0007-U, to extend the franchise for an additional 25-year period, and with all substantive provisions identical to the substantive provisions in Ordinance No. 24-0007. Urgency Ordinance No. 24-0007-U became effective immediately upon its adoption. Adoption of Ordinance No. 24-0007 will supersede Urgency Ordinance No. 24-0007-U. At this time, staff recommends that the City Council adopt Ordinance No. 24-0007.
PUBLIC OUTREACH:
Pursuant to the adoption of Resolution No. 24-0077, the public hearing date was set for July 16, 2024 for consideration of the proposed extension of the franchise. Notice of the public hearing was published in The Beach Reporter Newspaper on June 20, 2024 within 15 days after adoption of the resolution declaring an intention to adopt ordinances. The Public Hearing provided an opportunity for members of the public to comment upon and register any protests to the proposed extension of the franchise. Following the Public Hearing, the City Council had an opportunity to rule upon any protests and consider adoption of the proposed ordinances.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed action for compliance with the California Environmental Quality Act of 1970 (“CEQA”) and the CEQA Guidelines thereunder, and has determined that there is no substantial evidence that the project will have a significant effect on the environment. The City has further determined that the project is exempt from CEQA pursuant to Section 15301 (“Existing Facilities”) of the CEQA Guidelines. A Notice of Exemption shall be filed with the County Clerk of the County of Los Angeles in accordance with the CEQA Guidelines.
LEGAL REVIEW:
The City Attorney has approved the ordinance as to form.
ATTACHMENTS:
1. Ordinance No. 24-0007
2. Urgency Ordinance No. 24-0007-U