Resolution No. 8695
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RESOLUTION NO. 8695
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE EXECUTION OF AN
INDEMNITY AGREEMENT BY AND BETWEEN THE CITY OF
VERNON AND SOUTHERN CALIFORNIA GAS COMPANY
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WHEREAS, the City of Vernon ("City") is constructing a 134
MW Combined Cycle Power Plant, the Malburg Generating Station for the
purpose of installing additional generating capacity that will yield
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an efficient, cost-effective, and reliable source of electric
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generation to the City's inhabitants; and
WHEREAS, the City has constructed a natural gas distribution
system served at two locations (Bandini/Downey and Fruitland/Downey)
from SoCalGas Transmission Line 756 and two regulator stations are
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located at the two locations to distribute gas from the transmission
system into the distribution system located in the City (the "Vernon
Gas System"); and
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WHEREAS, in anticipation of the upcoming start-up of the
Malburg Generating Station, the City has requested that the Southern
California Gas Company ("SoCalGas") provide wholesale natural gas
service to Vernon's Gas System pursuant to Tariff Schedule GW-VRN; and
WHEREAS, SoCalGas is requiring that the City enter into an
Indemnity Agreement setting forth the terms and conditions under which
it can provide the natural gas service to the City; and
WHEREAS, in order to meet the urgent need to obtain the
natural gas service to Vernon's Gas System, the City Administrator
executed an Indemnity Agreement (the "Agreement") with SoCalGas dated
February 16, 2005, as revised, subject to ratification by the City
1 Council; and
2 WHEREAS, on March 16, 2005, the Finance Committee considered
3 the recommendation of Bruce V. Malkenhorst, the Director of Finance,
4 dated March 10, 2005, that the actions of the City Administrator in
5 executing the Agreement, as revised, with SoCalGas be ratified; and
6 WHEREAS, the City Council desires to approve and ratify the
7 Agreement and the revised Exhibit 1 to the Agreement, as executed by
8 the City Administrator; and
9 WHEREAS, the City Council of the City of Vernon has
10 determined that, pursuant to the provisions of subsection (a) of
11 Section 2.27 of the Vernon City Code, it is in the public interest and
12 necessity to ratify entering into the Agreement, as revised, with
13 SoCalGas.
14 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
15 CITY OF VERNON AS FOLLOWS:
16 SECTION 1: The City Council of the City of Vernon hereby
17 finds and determines that the recitals contained hereinabove are true
18 and correct.
19 SECTION 2: The City Council of the City of Vernon hereby
20 ratifies the execution of the Indemnity Agreement with SoCalGas dated
21 February 16, 2005, as revised, a copy of which is attached hereto as
22 Exhibit A and incorporated by reference.
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SECTION 3:
The City Clerk of the City of Vernon shall
2 certify to the passage of this resolution, and thereupon and
3 thereafter the same shall be in full force and effect.
4 APPROVED AND ADOPTED this 16th day of March, 2005.
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ATTEST: ~.....
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BRUCE V. MALKENHORST, City Clerk
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1 STATE OF CALIFORNIA )
2 ) ss
COUNTY OF LOS ANGELES )
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4 I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
5 hereby certify that the foregoing Resolution, being Resolution No.
8695,
6 9.W4, was duly adopted by the City Council of the City of Vernon at a
7 regular meeting of the City Council duly held on Wednesday, March 16,
8 2005, and thereafter was duly signed by the Mayor of the City of
9 Vernon.
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12 BRUCE V. MALKENHORST, City Clerk
13 (SEAL)
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EXHIBIT
A
F; ,
Indemnity Agreement Between City of Vernon and Southern California Gas Company
February 16,2005
This agreement ("Agreement") is entered into and effective as of February 16, 2005 ("Effective
Date"), by and between Vemon, a California municipal corporation ("Vemon" or "City") and
Southern California Gas Company, a California corporation ("SoCalGas" or "Company"),
collectively, the "Parties" or, individually, the "Party".
1.0 General
1.1 The City of Vernon has requested the.Southem California Gas Company to provide
wholesale gas service pursuant to SoCalGas' published tariff Schedule GW-VRN,
Wholesale Natural Gas Service to Vernon's newly constructed natural gas distribution
system, described in detail in Exhibit I attached hereto, ("Vernon's Gas System")
1.2 In furtherance of such request, Vernon has provided SoCalGas with certain data,
including but not limited to testing records (pressure tests, welding, CP, etc.),
installation procedures, mapping documents, and material specifications, etc. upon
which SoCalGas mayor will rely to satisfy itself under appropriate DOT and
SoCalGas' rules, regulations, and procedures, published or unpublished that it can
turn the gas on to Vernon's Gas System. As a normal course of business, SoCalGas
reviews available information to determine if it can operate a new interconnection
with an end-user in accordance with applicable safety requirements and ordinances
prior to initiation of service. Vernon warrants without exception that these materials
Vernon has provided to SoCalGas are true, complete and accurate and that SoCalGas
can rely on such truth, completeness and accuracy. in deciding to begin and continue
the provision of the above referenced gas service to Vernon.
2.0 Safety
Vernon further warrants that its gas system is safe and meets appropriate DOT rules,
regulations, and procedures. Vernon warrants it will provide information to SoCalGas
for any purpose as reasonably required in accordance with good utility practice.
3.0 Tax Responsibility
In furtherance of our understanding and agreement, neither Vemon nor its employees nor
its agents shall be deemed employees of SoCalGas or its affiliates for any
purpose whatsoever by virtue of any services provided by SoCalGas. Vernon is
responsible for the construction, operation and maintenance of its gas system and neither
Vernon nor its employees, contractors' agents or representatives shall be on the payroll or
deemed to be on, the payroll of SoCalGas or entitled to any benefits extended
to SoCalGas' employees or employees of its affiliates. Vernon shall be solely liable for
withholding and remitting payment of all taxes relating to the operation of its gas system
including, but not limited to state and federal income taxes, Social Security tax, self.
employment tax, unemployment insurance premiums, and disability insurance
contributions.
4.0 Indemnification
4.1 As between SoCalGas and Vemon, Vemon shall be solely responsible for and shall
indemnify, defend and hold SoCalGas, its current.and future parent and affiliates and
their respective directors, officers, shareholders, employees, agents, representatives,
successors and assigns, harmless from and against any and all claims, actions, suits,
proceedings, losses, liabilities, penalties, fines, damages, costs or expenses including
without limitation, attorneys' fees (including costs, fees and disbursements of in...
house and outside counsel) of any kind whatsoever resulting from: (a) injuries to or
death of any and all individuals, including, without limitation, members of the general
public, or any employee, agent, independent contractor or consultant or affiliate of
either Party, arising out of or connected in any manner with the construction,
operation and maintenance of Vernon's gas system and/or SoCalGas' services
thereto; (b) damage to, loss of, and/or destruction of property, including, without
limitation, to, property of SoCalGas, Vernon or others arising out of or connected in
any manner with the construction, operation and maintenance of Vernon's Gas
System and/or SoCalGas' services thereto; (c) any unauthorized release of
a hazardous material by Vernon or its agents or any party acting on behalf or under
the direction of Vernon; (d) any enforcement or compliance proceeding commenced
by or in the name of any governmental agency because of an alleged, threatened or
actual violation of any safety or environmental law , rule or regulation by Vernon;
(e) any action reasonably necess~y to abate, remediate or prevent a violation or
threatened violation of any safety or environmental law rule or
regulation by Vernon or its agents or any party acting on behalf or under the
direction of Vernon ; (f) claims, suits, damages, loss, liability, or actions for
indemnity by the County of Los Angeles or any city adjacent to Vernon which is
affected by the construction, operation and maintenance of Vernon's Gas System; (g)
claims, suits, damages, loss, liability, or actions for indemnity by governmental
agencies issuing permits in connection with the the construction, operation and
maintenance of Vernon's Gas System arising out of actions or inactions of Vernon;
(h) claims, suits, damages, loss, liability, or actions for indemnity by the owner or
tenants of the property in the vicinity of, adjacent to, or on which any part of
the construction, operation and maintenance of Vernon's Gas System is or has
been performed arising out of actions or inactions by Vemon; or (i) third party
claims of any kind, including but not limited to contractual indemnity obligations
which SoCalGas may have assumed in connection with the construction, operation
and maintenance of Vernon's Gas System or SoCalGas' service thereto, whether
based upon negligence, strict liability or otherwise, arising out of or connected in any
manner to Vernon's or its agents or any party acting on behalf or under the direction
of Vemon actsor omissions in construction, operating or maintaining Vemon's Gas
System. This indemnification obligation shall not apply to the extent that injuries,
death, loss, damage or destruction is caused by either the willful misconduct
of SoCalGas or SoCalGas' sole negligence.
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4.2 If any claim or action is brought against SoCalGas arising out of or related to this
Agreement or the construction, operation or maintenance of Vernon's Gas System and
SoCalGas' service thereto, then Vemon shall be entitled to participate in and, unless
in the opinion of counsel for SoCalGas a conflict of interest
between SoCalGas and Vernon may exist with respect to such claim or action,
assume the defense of such claim or action, with counsel reasonably acceptable
to SoCalGas. If Vernon does not assume the defense ofSoCalGas, or if a conflict
precludes SoCalGas :from assuming the defense, then Vernon shall
reimburse SoCalGas on a monthly basis for SoCalGas' reasonable defense costs
through separate counsel ofSoCalGas' choice. Even if Vernon assumes the defense
of SoCalGas with acceptable counsel, SoCalGas, at its sole option and expense, may
participate in the defense with counsel ofSoCalGas' own choice withol,lt
relieving Vernon of any of its obligations hereunder.
4.3 'Vernon shall indemnify, defend and hold SoCalGas hannless from and against any
and all claims, losses, damages, costs and expenses (including incidental costs
incurred) of any kind whatsoever related to the filing of any mechanics' lien or any
claim by a subcontractor of Vernon related to the construction, operation or
maintenance of Vernon's Gas System or SoCalGas' service thereto.
4.4 Vernon's obligation to indemnify SoCalGas shall not be limited in any way by any
limitation on the amount or type of damages, compensation, penalty or benefits
payable by or for Vemon under any statutory scheme, including without limitation,
any Workers Compensation Acts, Disability Benefit Acts or other Employee Benefit
Acts.
IN WITNESS WHEREOF, the authorized representative(s) of the parties have executed both
duplicate originals as of the date written above.
VERNON
By: /.
SOUTHERN CALIFORNIA GAS COMPANY
'/~BY:
Name: Bruce V. Mal kenhorst
Name:
Title: City Administrator
Date: February 16, 2005
Title:
Date:
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EXHIBITl
Vernon's Gas System
The City of Vernon gas $ystem comprises approximately 36,000 ft. of 10-inch transmission system
operating with an MAOP of650psig that is served at two locations (Bandini/Downey and
FruitlandlDowney) from SoCalGas Transmission Line 765. Two regulator stations are located along
the lO-inch transmission system at BandiniIDowney and FruitlandlDowney. These regulator stations
distribute gas from the transmission system into the distribution system operating at 60 psig MAOP.
The distribution system ,consists of approximately 215,000 ft. of ~inch PE piping located in the
majority of the city; Pleased see attached Exhibit 1.1 map ofVemon's nafural gas distribution
system.
VERNON
By:
~
Name:
Bruce V. MaJkenhorst
Title:
, City Administrato,r
3/f'~5
Date:
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EXHIBIT 1.1
CITY COUNCIL C' JOHN KARNS
LEONIS C.MALBURG Karns&Karabian
Mayor General Counsel
THOMAS A.YBARRA KEVIN WILSON
Mayor Pro-Tem Director of Community Services&Water
WM. 'BILL"DAVIS
Councilman STEVEN E.PARKER
H."LARRY" GONZALES Fire Chief
Councilman
W.MICHAEL McCORMICK SOL BENUDIZ
Councilman Police Chief
BRUCE V.MALKENHORST LEWIS J.POZZEBON
City Administrator/City Clerk Director of Environmental Health
Chief Executive Officer of CITY HALL
Light&Power RORY BURNETT
ERIC T.FRESCH 4305 SANTA FE AVENUE,VERNON,CALIFORNIA 90058 coney,Schneider&Co.LLP
City Attorney TELEPHONE(323)587-8811 City Accountant
March 10, 2005
Finance Committee
City of Vernon
Honorable Members: i
In anticipation of the upcoming start-up of the Malburg Generating
Station, an Indemnity Agreement with Southern California Gas Company
(SoCalGas) , dated February 16, 2005, was executed. SoCalGas submitted
a revised Exhibit 1 for said agreement that has been accepted by the
City. This has been reviewed by the City Attorney and it is hereby
recommended that the execution of the Indemnity Agreement with
SoCalGas and the acceptance of the revised Exhibit 1 be ratified.
Very truly yours,
Bruce V. Malkenhorst
Director of Finance
BVM/ng
"Exclusively Industrial"
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Indemnity Agreement Between City of Vernon and Southern California Gas Company
February 16,2005
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This agreement ("Agreement")is entered into and effective as of February 16, 2005 ("Effective
Date"),by and between Vernon, a California municipal corporation("Vernon"or"City")and
Southern California Gas Company, a California corporation("SoCalGas"or"Company"),
collectively,the"Parties" or, individually,the "Party". en
1.0 General
1.1 The City of Vernon has requested the Southern California Gas Company to provide
wholesale gas service pursuant to SoCalGas'published tariff Schedule GW-VRN,
Wholesale Natural Gas Service to Vernon's newly constructed natural gas distribution
system, described in detail in Exhibit 1 attached hereto, ("Vernon's Gas System") /
1.2 In furtherance of such request, Vernon has provided SoCalGas with certain data,
including but not limited to testing records (pressure tests, welding, CP, etc.),
installation procedures, mapping documents, and material specifications, etc. upon
which SoCalGas may or will rely to satisfy itself under appropriate DOT and
SoCalGas' rules, regulations, and procedures, published or unpublished that it can
turn the gas on to Vernon's Gas System. As a normal course of business, SoCalGas
reviews available information to determine if it can operate a new interconnection
with an end-user in accordance with applicable safety requirements and ordinances
prior to initiation of service. Vernon warrants without exception that these materials
Vernon has provided to SoCalGas are true, complete and accurate and that SoCalGas
can rely on such truth, completeness and accuracy in deciding to begin and continue
the provision of the above referenced gas service to Vernon.
2.0 Safety
Vernon further warrants that its gas system is safe and meets appropriate DOT rules,
regulations, and procedures. Vernon warrants it will provide information to SoCalGas
for any purpose as reasonably required in accordance with good utility practice.
3.0 Tax Responsibility
In furtherance of our understanding and agreement, neither Vernon nor its employees nor
its agents shall be deemed employees of SoCalGas or its affiliates for any
purpose whatsoever by virtue of any services provided by SoCalGas. Vernon is
responsible for the construction, operation and maintenance of its gas system and neither
Vernon nor its employees, contractors' agents or representatives shall be on the payroll or
deemed to be on the payroll of SoCalGas or entitled to any benefits extended
to SoCalGas' employees or employees of its affiliates. Vernon shall be solely liable for
withholding and remitting payment of all taxes relating to the operation of its gas system
including, but not limited to state and federal income taxes, Social Security tax, self-
employment tax, unemployment insurance premiums, and disability insurance
contributions.
4.0 Indemnification
4.1 As between SoCalGas and Vernon, Vernon shall be solely responsible for and shall
indemnify, defend and hold SoCalGas, its current and future parent and affiliates and
their respective directors, officers, shareholders, employees, agents, representatives,
successors and assigns, harmless from and against any and all claims, actions, suits,
proceedings, losses, liabilities,penalties, fines, damages, costs or expenses including
Without limitation, attorneys' fees(including costs, fees and disbursements of in-
house and outside counsel) of any kind whatsoever resulting from: (a) injuries to or
death of any and all individuals, including, without limitation, members of the general
public, or any employee, agent, independent contractor or consultant or affiliate of
either Party, arising out of or connected in any manner with the construction,
operation and maintenance of Vernon's gas system and/or SoCalGas' services
thereto; (b)damage to, loss of, and/or destruction of property, including, without
limitation, to,property of SoCalGas,Vernon or others arising out of or connected in
any manner with the construction, operation and maintenance of Vernon's Gas
System and/or SoCalGas' services thereto; (c) any unauthorized release of
a hazardous material by Vernon or its agents or any party acting on behalf or under
the direction of Vernon; (d) any enforcement or compliance proceeding commenced
by or in the name of any governmental agency because of an alleged, threatened or
actual violation of any safety or environmental law, rule or regulation by Vernon ;
(e)any action reasonably necessary to abate, remediate or prevent a violation or
threatened violation of any safety or environmental law rule or
regulation by Vernon or its agents or any party acting on behalf or under the
direction of Vernon ; (f) claims, suits,damages, loss, liability, or actions for
indemnity by the County of Los Angeles or any city adjacent to Vernon which is
affected by the construction, operation and maintenance of Vernon's Gas System; (g)
claims, suits, damages, loss, liability, or actions for indemnity by governmental
agencies issuing permits in connection with the the construction, operation and
maintenance of Vernon's Gas System arising out of actions or inactions of Vernon ;
(h) claims, suits, damages, loss, liability, or actions for indemnity by the owner or
tenants of the property in the vicinity of, adjacent to, or on which any part of
the construction, operation and maintenance of Vernon's Gas System is or has
been performed arising out of actions or inactions by Vernon ; or(i) third party
claims of any kind, including but not limited to contractual indemnity obligations
which SoCalGas may have assumed in connection with the construction, operation
and maintenance of Vernon's Gas System or SoCalGas' service thereto,whether
based upon negligence, strict liability or otherwise,arising out of or connected in any
manner to Vernon's or its agents or any party acting on behalf or under the direction
of Vernon acts or omissions in construction, operating or maintaining Vernon's Gas
System . This indemnification obligation shall not apply to the extent that injuries,
death, loss, damage or destruction is caused by either the willful misconduct
of SoCalGas or SoCalGas' sole negligence.
2
4.2 If any claim or action is brought against SoCalGas arising out of or related to this
Agreement or the construction, operation or maintenance of Vernon's Gas System and
SoCalGas' service thereto, then Vernon shall be entitled to participate in and,unless
in the opinion of counsel for SoCalGas a conflict of interest
between SoCalGas and Vernon may exist with respect to such claim or action,
assume the defense of such claim or action, with counsel reasonably acceptable
to SoCalGas. If Vernon does not assume the defense of SoCalGas, or if a conflict
precludes SoCalGas from assuming the defense,then Vernon shall
reimburse SoCalGas on a monthly basis for SoCalGas' reasonable defense costs
through separate counsel of SoCalGas' choice. Even if Vernon assumes the defense
of SoCalGas with acceptable counsel, SoCalGas, at its sole option and expense, may
participate in the defense with counsel of SoCalGas' own choice without
relieving Vernon of any of its obligations hereunder.
4.3 Vernon shall indemnify, defend and hold SoCalGas harmless from and against any
and all claims, losses, damages, costs and expenses (including incidental costs
incurred) of any kind whatsoever related to the filing of any mechanics' lien or any
claim by a subcontractor of Vernon related to the construction, operation or
maintenance of Vernon's Gas System or SoCalGas' service thereto.
4.4 Vernon's obligation to indemnify SoCalGas shall not be limited in any way by any
limitation on the amount or type of damages;compensation, penalty or benefits
payable by or for Vernon under any statutory scheme, including without limitation,
any Workers Compensation Acts, Disability Benefit Acts or other Employee Benefit
Acts. .
IN WITNESS WHEREOF,the authorized representative(s) of the parties have executed both
duplicate originals as of the date written above.
VERNON J SOUTHERN CALIFORNIA GAS COMPANY
By: �
Name: Bruce V. Mal kenhorst Name:
Title:_ City Administrator Title:
Date: February 16, 2005 Date:
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EXHIBIT 1
Vernon's Gas System
The City of Vernon gas system comprises approximately 36,000 ft. of 10-inch
transmission system operating with an MAOP of 650 psig that is served at two locations
(Bandini/Downey and Fruitland/Downey) from SoCalGas Transmission Line 765. Two
regulator stations are located along the 10-inch transmission system at Bandini/Downey and
Fruitland/Downey. These regulator stations distribute gas from the transmission system into the
distribution system operating at 60 psig MAOP. The distribution system consists of
approximately 215,000 ft of 6-inch PE piping located in the majority of the city.
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INTEROFFICE MEMORANDUM
Light & Power Department— Bulk Power & Gas Division
Date: 02/16/05
To: Manuel Garcia/Assistant Director of Resource Management
From: Daniel E. Garcia/Bulk Power Manager
Subject: Indemnity Agreement with So Cal Gas
Manuel,
Attached you will find the revised final Indemnity Agreement with So Cal Gas. I
recommend that we sign this agreement as revised and after review by COV legal. Should
you have any questions please call me.
EXHIBIT 1
Vernon's Gas System
The City of Vernon gas system comprises approximately 36,000 ft. of 10-inch
transmission system operating with an MAOP of 650 psig that is served at two locations
(Bandini/Downey and Fruitland/Downey) from SoCalGas Transmission Line 765. Two
regulator stations are located along the 10-inch transmission system at Bandini/Downey
and Fruitland/Downey. These regulator stations distribute gas from the transmission
system into the distribution system operating at 60 psig MAOP. The distribution system
consists of approximately 215,000 ft of 6-inch PE piping located in the majority of the
city. Please see attached Exhibit 1.1 map of Vernon's natural gas distribution system.
EXHIBIT 1
Vernon's Gas System
The City of Vernon gas system comprises approximately 36,000 ft. of 10-inch
transmission system operating with an MAOP of 650 psig that is served at two locations
(Bandini/Downey and Fruitland/Downey) from SoCalGas Transmission Line 765. Two
regulator stations are located along the 10-inch transmission system at Bandini/Downey
and Fruitland/Downey. These regulator stations distribute gas from the transmission
system into the distribution system operating at 60 psig MAOP. The distribution system
consists of approximately 215,000 ft of 6-inch PE-piping located in the majority of the
city. Please see attached Exhibit 1.1 map of Vernon's natural gas distribution system.
FROM THE CITY ATTORNEY'S OFFICE
INTER OFFICE MEMORANDUM
DATE: March 7, 2005 V
TO: Bruce V. Malkenhorst, City Clerk/City Administrator U
FROM: Eric T. Fresch, City Attorney
SUBJECT: Revised Indemnity Agreement with SoCliGas VV
I have reviewed the revision to the Indemnity Agreement with
SoCalGas and recommend your signature of approval on attached
Exhibit 1 to the agreement.
I look forward to discussing this matter with you at your
earliest convenience.
ETF:ah
Attachment
c: Manuel G. Garcia, Generation Operations Manager
INTEROFFICE MEMORANDUM
Light and Power - Operations
DATE: March 7,2005
TO: Bruce V.Malkenhorst, City Administrator/CEO of Light& Power
FROM: Manuel G. Garcia, Generation Operations Manager
SUBJECT: Revised Indemnity Agreement with SoCalGas
I recommend that the attached Revised Indemnity Agreement, Exhibit 1 with SoCalGas be
approved and signed. The revised Exhibit 1 has been reviewed by the City Attorney's office.
If you have any questions, please contact me.
MGG:ah
Attachment
Indemnity Agreement Between City of Vernon and Southern California Gas Company
February 16,2005
This agreement("Agreement") is entered into and effective as of February 16, 2005 ("Effective
Date"), by and between Vernon, a California municipal corporation ("Vernon"or"City") and
Southern California Gas Company, a California corporation("SoCalGas" or"Company"),
collectively, the "Parties" or, individually, the"Party".
1.0 General
1.1 The City of Vernon has requested the Southern California Gas Company to provide
wholesale gas service pursuant to SoCalGas'published tariff Schedule GW-VRN,
Wholesale Natural Gas Service to Vernon's newly constructed natural gas distribution
system, described in detail in Exhibit 1 attached hereto, ("Vernon's Gas System")
1.2 In furtherance of such request, Vernon has provided SoCalGas with certain data,
including but not limited to testing records (pressure tests, welding, CP, etc.),
installation procedures,mapping documents, and material specifications, etc. upon
which SoCalGas may or will rely to satisfy itself under appropriate DOT and
SoCalGas' rules,regulations, and procedures,published or unpublished that it can
turn the gas on to Vernon's Gas System. As a normal course of business, SoCalGas
reviews available information to determine if it can operate a new interconnection
with an end-user in accordance with applicable safety requirements and ordinances
prior to initiation of service. Vernon warrants without exception that these materials
Vernon has provided to SoCalGas are true, complete and accurate and that SoCalGas
can rely on such truth, completeness and accuracy.in deciding to begin and continue
the provision of the above referenced gas service to Vernon.
2.0 Safety
Vemon further warrants that its gas system is safe and meets appropriate DOT rules,
regulations, and procedures. Vernon warrants it will provide information to SoCalGas
for any purpose as reasonably required in accordance with good utility practice.
3.0 Tax Responsibility
In furtherance of our understanding and agreement, neither Vernon nor its employees nor
its agents shall be deemed employees of SoCalGas or its affiliates for any
purpose whatsoever by virtue of any services provided by SoCalGas. Vernon is
responsible for the construction, operation and maintenance of its gas system and neither
Vernon nor its employees, contractors' agents or representatives shall be on the payroll or
deemed to be on the payroll of SoCalGas or entitled to any benefits extended
to SoCalGas' employees or employees of its affiliates: Vernon shall be solely liable for
withholding and remitting payment of all taxes relating to the operation of its gas system
including, but not limited to state and federal income taxes, Social Security tax, self-
. '
employment tax, unemployment insurance premiums, and disability insurance
contributions.
4.0 Indemnification
4.1 As between SoCalGas and Vernon, Vernon shall be solely responsible for and shall
indemnify,defend and hold SoCalGas, its current and future parent and affiliates and
their respective directors, officers, shareholders, employees, agents,representatives,
successors and assigns,harmless from and against any and all claims, actions, suits,
proceedings, losses, liabilities, penalties, fines, damages, costs or expenses including
without limitation, attorneys' fees (including costs, fees and disbursements of in-
house and outside counsel) of any kind whatsoever resulting from: (a) injuries to or
death of any and all individuals, including, without limitation, members of the general
public, or any employee, agent, independent contractor or consultant or affiliate of
either Party, arising out of or connected in any manner with the construction,
operation and maintenance of Vernon's gas system and/or SoCalGas' services
thereto; (b) damage to, loss of, and/or destruction-of property, including, without
limitation, to,property of SoCalGas,Vernon or others arising out of or connected in
any manner with the construction, operation and maintenance of Vernon's Gas
System and/or SoCalGas' services thereto; (c) any unauthorized release of
a hazardous material by Vernon or its agents or any party acting on behalf or under
the direction of Vernon; (d) any enforcement or compliance proceeding commenced
by or in the name of any governmental agency because of an alleged,.threatened or
actual violation of any safety or environmental law, rule or regulation by Vernon ;
(e) any action reasonably necessary to abate, remediate or prevent a violation or
threatened violation of any safety or environmental law rule or
regulation by Vernon or its agents or any party acting on behalf or under the
direction of Vernon ; (f) claims, suits, damages, loss, liability, or actions for
indemnity by the County of Los Angeles or any city adjacent to Vernon which is
affected by the construction, operation and maintenance of Vernon's Gas System; (g)
claims, suits, damages, loss, liability, or actions for indemnity by governmental
agencies issuing permits in connection with the the construction, operation and
maintenance of Vernon's Gas System arising out of actions or inactions of Vernon ;
(h) claims, suits, damages, loss, liability, or actions for indemnity by the owner or
tenants of the property in the vicinity of, adjacent to, or on which any part of
the construction, operation and maintenance of Vernon's Gas System is or has
been performed arising out of actions or inactions by Vernon ; or(i)third party
claims of any kind, including but not limited to contractual indemnity obligations
which SoCalGas may have assumed in connection with the construction, operation
and maintenance of Vernon's Gas System or SoCalGas' service thereto, whether
based upon negligence, strict liability or otherwise,arising out of or connected in any
manner to Vernon's or its agents or any party acting on behalf or under the direction .
of Vernon acts or omissions in construction, operating or maintaining Vernon's Gas
System . This indemnification obligation shall not apply to the extent that injuries,
death, loss, damage or destruction is caused by either the willful misconduct
of SoCalGas or SoCalGas' sole negligence.
2
4.2 If any claim or action is brought against SoCalGas arising out of or related to this
Agreement or the construction, operation or maintenance of Vernon's Gas System and
SoCalGas' service thereto, then Vernon shall be entitled to participate in and, unless
in the opinion of counsel for SoCalGas a conflict of interest
between SoCalGas and Vernon may exist with respect to such claim or action,
assume the defense of such claim or action,with counsel reasonably acceptable
to SoCalGas. If Vernon does not assume the defense of SOCalGas' or if a conflict
precludes SoCalGas from assuming the defense, then Vernon shall
reimburse SoCalGas on a monthly basis for SoCalGas'reasonable defense costs
through separate counsel of SoCalGas' choice. Even if Vernon assumes the defense
of SoCalGas with acceptable counsel, SoCalGas, at its sole option and expense, may
participate in the defense with counsel of SoCalGas' own choice without
relieving Vernon of any of its obligations hereunder.
4.3 Vernon shall indemnify, defend and hold SoCalGas harmless from and against any
and all claims, losses, damages, costs and expenses (including incidental costs
incurred) of any kind whatsoever related to the filing of any mechanics' lien or any
claim by a subcontractor of Vernon related to the construction, operation or
maintenance of Vernon's Gas System or SOCalGas' service thereto.
4.4 Vernon's obligation to indemnify SoCalGas shall not be limited in any way by any
limitation on the amount or type of damages;compensation, penalty or benefits
payable by or for Vernon under any statutory scheme, including without limitation,
any Workers Compensation Acts; Disability Benefit Acts or other Employee Benefit
Acts.
IN WITNESS WHEREOF,the authorized representative(s) of the.parties have executed both
duplicate originals as of the date written above.
VERNON SOUTHERN CALIFORNIA GAS COMPANY
Name: Bruce V. Malkenhorst Name:
Title: City Administrator Title:
Date: February 16, 2005 Date:
3
EXHIBIT 1
�9
Vernon's Gas System i ,f�
The City of Vernon gas system comprises approximately 36,000 ft. of 10-inch
transmission system operating with an MAOP of 650 psig that is served at two locations
(Bandini/Downey and Fruitland/Downey) from SoCalGas Transmission Line 765. Two
regulator stations are located along the 10-inch transmission system at Bandini/Downey and
Fruitland/Downey. These regulator stations distribute gas from the transmission system into the
distribution system operating at 60 psig MAOP. The distribution system consists of
approximately 215,000 ft of 6-inch PE piping located in the majority of the city.
4
FxiMBrr 1
Vernon's Gas System
The City of Vernon gas system comprises approximately 36,000 ft. of 10-inch transmission system
operating with an MAOP of 650 psig that is served at two locations(Bandini/Downey and
Fruitland/Downey) from SoCalGas Transmission Line 765. Two regulator stations are located along
the 10-inch transmission system at Bandini/Downey and Fruitland/Downey. These regulator stations
distribute gas from the transmission system into the distribution system operating at 60 psig MAOP.
The distribution system consists of approximately 215,000 ft. of 6-inch PE piping located in the
majority of the city: Pleased see attached Exhibit 1.1 map of Vernon's natural gas distribution
system.
VERNON
By:
Name: Bruce V. Malkenhorst
Title: City Administrator
Date:
4
Indemnity Agreement Between City of Vernon and Southern California Gas Company
February 16,2005
This agreement("Agreement") is entered into and effective as of February 16, 2005 ("Effective
Date"), by and between Vernon, a California municipal corporation (."Vernon"or"City") and
Southern California Gas Company, a California corporation("SoCalGas" or"Company"),
collectively, the "Parties" or, individually,the "Party".
1.0 General
1.1 The City of Vernon has requested the Southern California Gas Company to provide
wholesale gas service pursuant to SoCalGas'published tariff Schedule GW-VRN,
Wholesale Natural Gas Service to Vernon's newly constructed natural gas distribution
system, described in detail in Exhibit 1 attached hereto, ("Vernon's Gas System")
1.2 In furtherance of such request, Vernon has provided SoCalGas with certain data,
including but not limited to testing records (pressure tests, welding, CP, etc.),
installation procedures, mapping documents, and material specifications, etc. upon
which SoCalGas may or will rely to satisfy itself under appropriate DOT and
SoCalGas' rules, regulations, and procedures,published or unpublished that it can
turn the gas on to Vernon's Gas System. As a normal course of business, SoCalGas
reviews available information to determine if it can operate a new interconnection
with an end-user in accordance with applicable safety requirements and ordinances
prior to initiation of service. Vernon warrants without exception that these materials
Vernon has provided to SoCalGas are true,complete and accurate and that SoCalGas
can rely on such truth, completeness and accuracy in deciding to begin and continue
the provision of the above referenced gas service to Vernon.
2.0 Safety
Vernon further warrants that its gas system is safe and meets appropriate DOT rules,
regulations, and procedures. Vernon warrants it will provide information to SoCalGas
for any purpose as reasonably required in accordance with good utility practice.
3.0 Tax Responsibility
In furtherance of our understanding and agreement, neither Vernon nor its employees nor
its agents shall be deemed employees of SoCalGas or its affiliates for any
purpose whatsoever by virtue of any services provided by SoCalGas. Vernon is
responsible for the construction, operation and maintenance of its gas system and neither
Vernon nor its employees, contractors' agents or representatives shall be on the payroll or
deemed to be on.the payroll of SoCalGas or entitled to any benefits extended
to SoCalGas' employees or employees of its affiliates: Vernon shall be solely liable for
withholding and remitting payment of all taxes relating to the operation of its gas system
including, but not limited to state and federal income taxes, Social Security tax, self-
employment tax, unemployment insurance premiums, and disability insurance
contributions.
4.0 Indemnification
4.1 As between SoCalGas and Vernon, Vernon shall be solely responsible for and shall
indemnify, defend and hold SoCalGas, its current.and future parent and affiliates and
their respective directors, officers, shareholders, employees, agents, representatives,
successors and assigns, harmless from and against any and all claims, actions, suits,
proceedings, losses, liabilities,penalties, fines, damages, costs or expenses including
without limitation, attorneys' fees (including costs, fees and disbursements of in-
house and outside counsel) of any kind whatsoever resulting from: (a) injuries to or
death of any and all individuals, including, without limitation, members of the general
public, or any employee, agent, independent contractor or consultant or affiliate of
either Party, arising out of or connected in any manner with the construction,
operation and maintenance of Vernon's gas system and/or SoCalGas'services
thereto; (b) damage to, loss of, and/or destruction.of property, including, without
limitation, to,property of SoCalGas,Vernon or others arising out of or connected in
any manner with the construction, operation and maintenance of Vernon's Gas
System and/or SoCalGas' services thereto; (c)any unauthorized release of
a hazardous material by Vernon or its agents or any party acting on behalf or under
the direction of Vernon; (d)any enforcement or compliance proceeding commenced
by or in the name of any governmental agency because of an alleged,threatened or
actual violation of any safety or environmental law, rule or regulation by Vernon ;
(e) any action reasonably necessary to abate, remediate or prevent a violation or
threatened violation of any safety or environmental law rule or
regulation by Vernon or its agents or any party acting on behalf or under the
direction of Vernon ; (f) claims, suits, damages, loss, liability, or actions for
indemnity by the County of Los Angeles or any city adjacent to Vernon which is
affected by the construction, operation and maintenance of Vernon's Gas System; (g)
claims, suits, damages, loss, liability, or actions for indemnity by governmental
agencies issuing permits in connection with the the construction, operation and
maintenance of Vernon's Gas System arising out of actions or inactions of Vernon ;
(h) claims, suits, damages, loss, liability, or actions for indemnity by the owner or
tenants of the property in the vicinity of, adjacent to, or on which any part of
the construction, operation and maintenance of Vernon's Gas System is or has
been performed arising out of actions or inactions by Vernon; or(i)third party
claims of any kind, including but not limited to contractual indemnity obligations
which SoCalGas may have assumed in connection with the construction, operation
and maintenance of Vernon's Gas System or SoCalGas' service thereto, whether
based upon negligence, strict liability or otherwise, arising out of or connected in any
manner to Vernon's or its agents or any party acting on behalf or under the direction
of Vernon acts or omissions in construction, operating or maintaining Vernon's Gas
System . This indemnification obligation shall not apply to the extent that injuries,
death, loss, damage or destruction is caused by either the willful misconduct
of SoCalGas or SoCalGas' sole negligence.
2
4.2 If any claim or action is brought against SoCalGas arising out of or related to this
Agreement or the construction, operation or maintenance of Vernon's Gas System and
SoCalGas' service thereto, then Vernon shall be entitled to participate in and, unless
in the opinion of counsel for SoCalGas a conflict of interest
between SoCalGas and Vernon may exist with respect to such claim or action,
assume the defense of such claim or action, with counsel reasonably acceptable
to SoCalGas. If Vernon does not assume the defense of SoCalGas, or if a conflict
precludes SoCalGas from assuming the defense,then Vernon shall
reimburse SoCalGas on a monthly basis for SoCalGas'reasonable defense costs
through separate counsel of SoCalGas' choice. Even if Vernon assumes the defense
of SoCalGas with acceptable counsel, SoCalGas, at its.sole option and expense,may
participate in the defense with counsel of SoCalGas' own choice without
relieving Vernon of any of its obligations hereunder.
4.3 Vernon shall indemnify, defend and hold SoCalGas harmless from and against any
and all claims, losses, damages, costs and expenses (including incidental costs
incurred) of any kind whatsoever related to the filing of any mechanics' lien or any
claim by a subcontractor of Vernon related to the construction, operation or
maintenance of Vernon's Gas System or SoCalGas' service thereto.
4.4 Vernon's obligation to indemnify SoCalGas shall not be limited in any way by any
limitation on the amount of type of damages;compensation, penalty or benefits
payable by or for Vernon under any statutory scheme, including without limitation,
any Workers Compensation Acts, Disability Benefit Acts or other Employee Benefit
Acts.
IN WITNESS WHEREOF,the authorized representative(s) of the parties have executed both
duplicate originals as of the date written above.
VERNON SOUTHERN CALIFORNIA GAS COMPANY
By: By:
Name: Bruce V. Malkenhorst Name:
Title: City Administrator Title:
Date: February 16, 2005 Date:
3
EXIMIT 1
Vemon's Gas System
The City of Vernon gas system comprises approximately 36,000 ft. of I0-inch transmission system
operating with an MAOP of 650psig that is served at two locations(Bandini/Downey and
Fruitland/Downey) from SoCalGas Transmission Line 765. Two regulator stations are located along
the 10-inch transmission system at Bandini/Downey and.Fruitland/Downey. These regulator stations
distribute gas from the transmission system into the distribution system operating at 60 psig MAOP.
The distribution system consists of approximately 215,000 ft. of 64nch PE piping located in the
majority of the city: Pleased see attached Exhibit 1.1 map of Vernon's natural gas distribution
system.
VERNON-
By:
Name: Bruce V. Malkenhor t
Title: CityAdministrator
Date: d
4
CITY ADMINISTRATOR/CITY CLERK' S
INTER-OFFICE MEMORANDUM
DATE: March 28, 2005
TO: Manual Garcia, Generation Operations Manager/
MGS Project Manager
FROM� ,w� Nelly Giron, Deputy City Clerk
Re : ( IVY�VI Resolution No. 8695 - Approving and Ratifying the
Execution of a Delegation Agreement
Transmitted herewith is a copy of the above-referenced
resolution for your file that was approved by City Council
on March 16, 2005 .
Please ensure that one fully executed original agreement is
submitted to the City Clerk' s office.
Thank you.
NG:rcm
CC: Resolution No. 8695
Agreement No. 05-041