To: Board of Supervisors
From: Brian M. Balbas, Public Works Director/Chief Engineer
Report Title: Granting of a Pipeline Franchise to Crimson Pipeline, LLC .
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
ADOPT Resolution No 24-__ granting a pipeline franchise to Crimson Pipeline, LLC pursuant to the terms and conditions of County Ordinance No. 2013-19 and County Resolution No. 2013/305 for pipelines located in the unincorporated area of the County near Pacheco, Clayton, and Byron as recommended by the Public Works Director.
FISCAL IMPACT:
The pipeline franchise will generate approximately $14,500 per year commencing with calendar year 2023. The annual franchise payment will be calculated at the rate of $1.77 per cubic foot of pipeline within the County right-of-way. The number of cubic feet of pipeline subject to the franchise fee rate will be calculated by taking the area of the inside diameter of the pipeline plus 1” and multiplying it by the length of the pipeline within the County right-of-way. The annual franchise fee rate of $1.77 per cubic foot is increased annually by the change in the Consumer Price Index, all Urban Consumers for the San Francisco-Oakland-San Jose Area (1982-84 = 100), with December 2012 (239.53) as the base CPI month.
BACKGROUND:
On August 13, 2013, this Board adopted Ordinance No. 2013-19 (establishing regulations for granting pipeline franchises in County rights-of-way) and Resolution No. 2013/305 (establishing pipeline franchise fee amounts).
The 10” Vine Hill Crude pipeline described in the table below was previously covered under an existing County pipeline franchise granted to Equilon Enterprises LLC through the adoption of Resolution No. 2016/619. The 20” Coalinga Avon pipeline described in the table below was previously covered under an existing County pipeline franchise granted to San Pablo Bay Pipeline Company LLC through the adoption of Resolution No. 2016/623. Effective March 1, 2020, Crimson Pipeline, LLC has acquired these two pipelines.
Crimson Pipeline, LLC has filed written documentation with the County, wherein it has requested the granting of the new pipeline franchise for the transportation of crude oil pursuant to the terms and conditions of County Ordinance No. 2013-19 and County Resolution No. 2013/305. Crimson Pipeline, LLC also provided a $5,000 deposit to cover all administrative costs associated with the granting of this pipeline franchise as required by Ordinance No. 2013-19 and Resolution No. 2013/305. Approval of Resolution No. 2024-___ will grant a pipeline franchise to Crimson Pipeline, LLC for the pipelines shown in the table below for an initial term of 10 years.
|
Pipeline Name |
Type |
Diameter |
Length |
|
Vine Hill Crude |
Nitrogen |
10" |
3,439 ft |
|
Coalinga Avon |
Crude Oil |
20" |
1,409 ft |
CONSEQUENCE OF NEGATIVE ACTION:
Crimson Pipeline, LLC will not obtain the required authorization to operate and maintain their pipelines within the County right-of-way under the Pipeline Franchise Ordinance. The Pipeline Franchise Ordinance includes provisions to protect the County from risks associated with pipelines.
THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
and for Special Districts, Agencies and Authorities Governed by the Board
body
IN THE MATTER OF a resolution of the Board of Supervisors of the County of Contra Costa authorizing the granting of a Pipeline Franchise to Crimson Pipeline, LLC. The Board of Supervisors of the County of Contra Costa finds and declares:
WHEREAS, on August 13, 2013, this Board adopted: Ordinance No. 2013-19 (establishing regulations for granting pipeline franchises in County rights-of-way), which became effective September 12, 2013; and Resolution No. 2013/305 (establishing pipeline franchise fee amounts).
WHEREAS, Crimson Pipeline, LLC has filed a written application with the County, wherein it has requested the granting of a pipeline franchise pursuant to the terms and conditions of County Ordinance No. 2013-19 and County Resolution No. 2013/305.
WHEREAS, Crimson Pipeline, LLC has identified the following two pipelines, which it owns and will be covered under the proposed pipeline franchise as:
1. Vine Hill Pipeline - 10-inch diameter, 3,439 feet nitrogen.
2. Coalinga Avon Pipeline - 20-inch diameter, 1,409 feet crude oil.
WHEREAS, the crude oil pipelines to be covered under the pipeline franchise were covered under existing County pipeline franchises.
WHEREAS, the County has reviewed the application as well as relevant documents, staff reports, and recommendation and it is the intent of the Board to grant a pipeline franchise to Crimson Pipeline LLC pursuant to Ordinance 2013-19 and Resolution 2013/305.
NOW, THEREFORE, BE IT RESOLVED
end
1. The Board of Supervisors of Contra Costa County finds and declares that the foregoing recitals are true and correct.
2. Pursuant to Ordinance No. 2013-19, a franchise to operate a 10-inch diameter nitrogen pipeline bisecting the County from east to west and crossing various County rights of way for a lineal distance of approximately 3,439 feet (Vine Hill Pipeline) is hereby granted to Crimson Pipeline, LLC, for a term of 10 years.
3. Pursuant to Ordinance No. 2013-19, a franchise to operate a 20-inch diameter crude oil pipeline bisecting the County from north to south and crossing various County rights of way for a lineal distance of approximately 1,409 feet (Coalinga Avon Pipeline) is hereby granted to Crimson Pipeline, LLC, for a term of 10 years.
4. The general location of the pipelines is depicted on the maps attached hereto as Exhibit 1.
5. The annual franchise payment to be paid pursuant to County Resolution 2013/305 shall be calculated at the rate of $1.77 per cubic foot of pipeline within the County right-of-way. The number of cubic feet of pipeline subject to the franchise fee rate will be calculated by taking the area of the inside diameter of the pipeline plus 1” and multiplying it by the length of the pipeline within the County right-of-way. The annual franchise fee rate of $1.77 per cubic foot is increased annually by the change in the Consumer Price Index, all Urban Consumers for the San Francisco-Oakland-San Jose Area (1982-84 = 100), with December 2012 (239.53) as the base CPI month.
6. The Director of Public Works, or his designee, is authorized to administer the pipeline franchise granted pursuant to this resolution.
7. The Resolution shall take effect upon the following:
Within 30 days of the date of this Resolution, Crimson Pipeline, LLC must file with the Public Works Department the following: (1) a written acceptance of the terms and conditions of the franchise granted pursuant to this Resolution, Ordinance No. 2013-19, and Resolution No. 2013/305; (2) a performance bond in the form approved by the Board; and, (3) insurance coverage as required by Ordinance 2013-19.