HomeMy WebLinkAboutItem 2g: Resolution 67694 - Franchise to Golden State Water Company for Water Distribution oFARc9'r
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4'°°'`Y°`/�� STAFF REPORT
Public Works Services Department
DATE: September 6, 2011
TO: Mayor and City Council
FROM: Tom Tait, Public Works Services Director E)
Prepared by: Maria A. Taylor, Senior Management Analyst
SUBJECT: RESOLUTION 6794 DECLARING THE CITY'S INTENTION TO GRANT
A FRANCHISE TO THE GOLDEN STATE WATER COMPANY TO USE
OR TO LAY AND USE PIPES, CONDUITS AND APPURTENANCES
FOR TRANSMITTING AND DISTRIBUTING WATER FOR ANY AND
ALL PURPOSES IN, ALONG, ACROSS, UPON AND UNDER THE
PUBLIC STREETS, WAYS, ALLEYS AND PLACES WITHIN THE CITY
OF ARCADIA AND SETTING A PUBLIC HEARING FOR OCTOBER 4,
2011
Recommendation: Adopt
SUMMARY
It is recommended that the City Council adopt Resolution No. 6794 declaring the City's
intention to grant the Golden State Water Company (GSWC) a franchise to use or to lay
and use pipes, conduits, and appurtenances for transmitting and distributing water for
any and all purposes, in, along, across, upon and under public streets, ways, alleys and
places within the areas served by GSWC within the City of Arcadia. A map of the areas
in Arcadia served by GSWC is attached. Staff is also recommending that the City
Council set the date of October 4, 2011 as a date for the public hearing and introduction
of an ordinance granting a franchise to the Golden State Water Company. This is
required by City Charter Section 1303 and the state of CA Public Utilities Code Section
6231.
DISCUSSION
On November 22, 2011, the franchise Agreement with the Golden State Water
Company or GSWC (formerly known as the Southern California Water Company)
expires after a ten-year term approved by the City Council in 2001. GSWC would like to
renew the franchise Agreement and has requested a 20-year term (see attached letter
and application for franchise). However, it is staff's opinion that 20 years is a long time
for an Agreement and that a ten (10) year Agreement is more prudent and appropriate.
Also, the previous agreement was for ten (10) years and this seems like a reasonable
time frame for a franchise agreement. The Golden State Water Company has 237
Page 1 of 2
Mayor and City Council
September 6, 2011
active service connections in the southeastern and eastern portion of Arcadia and is
currently paying a franchise fee to the City of Arcadia. The franchise Agreement
requires GSWC to pay the City the sum equivalent to 2% of the gross annual receipts
from GSWC that arise from the use, operation or possession of the franchisee in the
City of Arcadia. The franchise Agreement has been in effect since 1961.
The consequence of not granting the franchise Agreement with GSWC would be for the
City Council to initiate a formal condemnation process and pay for the infrastructure that
GSWC already has in place. Considering the small number of services and averaging
approximately $2,450 in franchise fees to the City during the past two (2) years, the
legal costs of the condemnation process and payment for the existing infrastructure,
staff does not consider this as a fiscally prudent option.
FISCAL IMPACT
According to the Administrative Services Department, the City of Arcadia received
approximately $2,220 in revenues from the Golden State Water Company in 2010. The
California Public Utilities Code Section 6231(c) adopted a franchise fee of up to 2%, but
not less than 1%, of a utility's gross annual revenue to be paid to municipalities where
those utilities use or lay pipes, conduits and appurtenances in the public right-of-way.
RECOMMENDATION
1. Adopt Resolution No. 6794 declaring the City's intention to grant to the
Golden State Water Company a franchise to use or to lay and use pipes,
conduits and appurtenances for transmitting and distributing water for
any and all purposes in, along, across, upon and under the public
streets, ways, alleys and places within the City of Arcadia (per Article
XIII of the Arcadia City Chapter)
2. Set the date of October 4, 2011 for a public hearing to receive any
comments or objections to the City's intention to grant a franchise
Agreement to the Golden State Water Company and for the introduction
of an ordinance granting such franchise.
3. Determine whether the length of the franchise Agreement will be 20
years as requested by the applicant, Golden State Water Company, or
ten (10) years as suggested by staff.
Approved by: D9Apcn .�•
Donald Penman, City Manager
TT:MT
Attachments
Page 2 of 2
RESOLUTION NO. 6794
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DECLARING ITS INTENTION TO GRANT TO GOLDEN
STATE WATER COMPANY A FRANCHISE TO USE OR LAY AND USE
PIPES, CONDUITS AND APPURTENANCES FOR TRANSMITTING AND
DISTRIBUTING WATER FOR ANY AND ALL PURPOSES IN, ALONG,
ACROSS, UPON AND UNDER THE PUBLIC STREETS, WAYS, ALLEYS
AND PLACES WITHIN THE CITY OF ARCADIA (PER ARTICLE XIII OF
THE ARCADIA CITY CHARTER)
WHEREAS, Golden State water Company, a California corporation (formerly
known as Southern California Water Company), has filed with the City Council of the
City of Arcadia an application requesting that a franchise be granted to it of the
character and for the purpose mentioned in the form of notice hereinafter set forth; and
WHEREAS, City Charter Section 1303 requires a hearing to consider the
proposed franchise.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. That said City Council intends to grant said franchise, that hearing
of objections to the granting thereof will be held at the time and place specified in the
form of notice hereinafter set forth, which the City Clerk of said City is hereby directed to
publish at least once in a newspaper of general circulation in said City, within fifteen
(15) days after the passage of this Resolution, and that said notice be substantially in
the following words and figures:
"NOTICE OF INTENTION TO GRANT FRANCHISE"
"NOTICE IS HEREBY GIVEN that Golden State Water Company, a California
corporation, has filed its application with the City Council of the City of Arcadia
requesting that said City Council grant to it a franchise from November 23, 2011 to
November 22, 2021 pursuant to Article XIII of the Arcadia City Charter, to use or to lay
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and use pipes, ditches, flumes, conduits and appurtenances for purposed in, along,
across, upon, and under the public streets, ways, alleys and places as the now exist or
may here-after exist within the City of Arcadia.
If said franchise shall be granted to it, Golden State Water Company, its successors and
assigns, hereinafter designated 'Grantee,' for each full or fractional calendar year during
the life of said franchise will pay to said City, in lawful money of the United States, a
sum equivalent to two percent (2%) of the gross annual receipts of said Grantee arising
from the use, operation, or possession of said franchise; provide, however, that such
payment shall in no event be less than a sum equivalent to one percent (1%) of the
gross annual receipts derived by Grantee from the sale of water within the limits of said
City. Such percentage shall be paid annually from the date of the granting of the
franchise applied for, and in the event such payment shall not be made said franchise
shall be forfeited.
The City Council of the City of Arcadia, California, proposes to grant said franchise from
November 23, 2011 to November 22, 2021 or until the consent of the Public Utilities
Commission of the State of California it is voluntarily surrendered or abandoned by the
Grantee, or until the State of some municipal or public corporation thereunto duly
authorized by law shall purchase by voluntary agreement or shall condemn and take
under power of eminent domain all property actually used and useful in the exercise of
such franchise and situate within the territorial limits of the State, municipal, or public
corporation purchasing or condemning such property, or until such franchise is forfeited
for noncompliance with its terns by the Grantee. Any and all persons having objections
to the granting of said franchise may appear before said City Council at Arcadia,
California, beginning at seven o'clock p.m. on the 4th day of October 2011, and be heard
thereon; and at any time not later than the hour set for hearing objections, any person
interested may make written protest stating objections against the granting of said
franchise, which protest must be signed by the protestant and be delivered to the City
Clerk of said City. The City Council at the time set for hearing said objections shall
proceed to hear and pass upon all protests so made.
For further particulars referenced is hereby made to said application which is on file in
the office of said City Clerk, and also to the resolution adopted by said City Council on
the 6th day of September, 2011, declaring its intention to grant said franchise.
Dated this 6th day of September, 2011
By order of the City Council of the City of Arcadia, California."
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
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Passed approved and adopted this day of , 2011.
Mayor of the City of Arcadia
ATTEST:
City Clerk
APPROVED AS TO FORM:
k,d.A,
Stephen P. Deitsch
City Attorney
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Golden State
• • • WATER COMPANY
• • • •
• • • • A Subsidiary of American States Water Company
July 25, 2011
City of Arcadia and its City Council
11800 Goldring Rd.
P.O.Box 60021.
Arcadia, California,91066
Re: Golden State Water Company Franchise Application
Ladies and Gentlemen:
Golden State Water Company, a California corporation (Formerly known as Southern California
Water Company), as Applicant, hereby applies for a franchise (the "Franchise") pursuant to Article XIII
of the Arcadia City Charter:
(1) Name and Address of Applicant. Applicant's name and address is:
Golden State Water Company
630 East Foothill Blvd.
San Dimas,California,91773-9016
(2) Purpose. The purpose of the Franchise is to use or lay and use pipes, ditches, flumes,conduits
and appurtenances for transmitting and distributing water for any and all purposes in, along,
across, upon and under public streets, ways, alleys and places as they now exist or may
hereafter exist within the City of Arcadia.
(3) Term. The term of the Franchise shall be from November 23, 2011 to and including
November 22, 2031. The Franchise shall terminate prior to the end of the term if: (i)
Applicant voluntarily surrenders or abandons the Franchise with the consent of the California
Public Utilities Commission, (ii) the State, municipal or public corporation duly authorized
by law purchases by voluntary agreement or condemns and takes under the power of eminent
domain all property actually used and useful in the exercise of the Franchise and located
within its territorial limits,or(iii)the Franchise is forfeited for noncompliance with its terms
by Applicant.
(4) Franchise Fee. If the Franchise is granted to Applicant, Applicant will pay to the City of
Arcadia for each full or fractional calendar year during the life thereof, in lawful money of
the United States, a sum equivalent to two percent (2%) of the gross annual receipts of
Applicant arising from the use, operation or possession of the Franchise; provided, however,
that such payment shall in no event be less than a sum equivalent to one percent (1%) of the
gross annual receipts derived by Applicant from the sale of water within the limits of the City
of Arcadia.
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District . anager
401 S.San Dimas Canyon Road,San Dimas,CA 91773
Tel:(909)592-4271 Fax:(909)592-6690
CITY OF ARCADIA .
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