AGENDA ITEM
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: CARLO TOMAINO
CITY MANAGER
BY: GABINO LUNA
PUBLIC WORKS DIRECTOR
SUBJECT:
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SECOND READING AND ADOPTION OF ORDINANCE NO. 2026-05-1557 GRANTING A FRANCHISE TO ZENITH ENERGY WEST COAST TERMINALS LLC
summary
Summary:
Franchise agreements are agreements in which a local jurisdiction provides a utility with the right to serve customers within its jurisdiction. Zenith Energy West Coast Terminals, a Limited Liability Company (Zenith) has requested the renewal of an existing pipeline franchise to operate its facilities within the City’s right-of-way. Staff has reviewed Zenith’s emergency response plan, insurance coverage, and financial statements, and has consulted with the City Attorney’s Office. On April 14, 2026, the City Council adopted a resolution declaring its intent to grant a 15-year franchise to Zenith and set a public hearing for May 12, 2026. On May 12, 2026, the City Council introduced Ordinance No. 2026-05-1557, granting a franchise to Zenith. Staff are now presenting Ordinance 2026-05-1557 for Second Reading and adoption. The Ordinance would become effective 30 days after the Second Reading.
Strategic Plan Goal(s):
Goal No. 1: Financial Stability: Ensure the City’s long-term financial stability and resilience.
Goal No. 2: Community Safety: Maintain community safety by supporting public safety services and increasing emergency preparedness.
recommendation
Recommendation:
Adopt Ordinance No. 2026-05-1557, entitled:
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA, GRANTING A FRANCHISE TO ZENITH ENERGY WEST COAST TERMINALS LLC AND THE INTERESTS, RIGHTS, PRIVILEGES, AND DUTIES TO LAY AND USE PIPES AND APPURTENANCES FOR TRANSMITTING AND DISTRIBUTING OIL AND PETROLEUM PRODUCTS FOR ANY AND ALL LAWFUL PURPOSES UNDER AND ALONG THE PUBLIC STREETS, WAYS, ALLEYS, AND PLACES, AS THE SAME NOW OR MAY HEREAFTER EXIST, WITHIN THIS CITY.
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Fiscal Impact:
The recommended action would have minimal fiscal impact. Renewal of the existing franchise would authorize the continued collection of annual franchise fees. In 2025, the City received $3,644.94 in franchise fees from Zenith Energy West Coast Terminals LLC (Zenith) under Ordinance No. 2004-02-1326. The franchise fee is calculated based on the total amount and size of the pipeline. The City updates the franchise fee annually in January based on inflation data, and the Finance Department utilizes current fees evaluated against change in the Consumer Price Index (CPI) to prepare annual invoices. In addition, Zenith submitted a deposit of $5,000 to the City for staff review costs and media publication costs associated with processing the pipeline franchise.
Background and Analysis:
On May 12, 2026, the City Council introduced Ordinance No. 2026-05-1557 granting a franchise to Zenith Energy West Coast Terminals, a Limited Liability Company. The City posted a summary of the Public Hearing notice in advance of the introduction of the Ordinance in accordance with Signal Hill Municipal Code (SHMC) Section 1.08.010. Staff is now presenting Ordinance No. 2026-05-1557 for second reading and adoption. The Ordinance would become effective 30 days after the second reading.
A summary of the proposed Ordinance will be published in the Signal Hill Tribune newspaper, per Government Code §36933(a), within 15 days after its passage and a copy of the full text was made available in the office of the City Clerk five (5) days before adoption in accordance with §36933 (c)(1).
After thirty (30) days, Ordinance No. 2026-05-1557 will be published in its entirety on the City website.
Reviewed for Fiscal Impact:
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Siamlu Cox
Attachment(s):
A. Zenith Franchise Ordinance No. 2026-05-1557
B. Exhibit A - Map of Pipelines
C. Exhibit B - Schedule of Charges