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Home My WebLink AboutPR 24758: LICENSE AGREEMENT WITH KINDER MORGAN TEJAS PIPELINE 044 Ctny off `"�. ort rtitur T INTEROFFICE MEMORANDUM Date: February 10, 2026 To: The Honorable Mayor and City Council Through: Ronald Burton, CPM, City Manager - From: Suhail Kanwar, P.E., Director of Public Services RE: P.R.No. 24758—License Agreement With Kinder Morgan Tejas Pipeline For Use of Public (Old Canal) Right of Way. Introduction: The intent of this Agenda Item is to seek City Council's approval to authorize the City Manager to execute a five-year License Agreement with Kinder Morgan Tejas Pipeline, LLC for the operation and maintenance of a four-inch(4")natural gas line within the Old Canal Right-of-Way for the 2026-2031 term. Background: Pursuant to Resolution No. 99-68, the City of Port Arthur entered into a five-year License Agreement with Kinder Morgan Tejas Pipeline,LLC(formerly known as Tejas South Pipeline Partnership)to permit the operation and maintenance of a four-inch(4")natural gas pipeline within a public right-of-way known as the Old Canal Right-of-Way, consistingof approximately 2 780 linear feet. The original license fee g Y, PP Y was established in accordance with the Texas Parks and Wildlife Department(TPWD)Damage and Fee Schedule at an annual rate of$1,601.82. The License Agreement was subsequently renewed for three additional five-year terms pursuant to Resolutions No. 05-076(2005-2010),No. 10-059(2010-2015),and No. 15-396(2015-2020). Due to operational disruptions associated with the COVID-19 pandemic, as well as changes in administrative personnel and recordkeeping practices by both the City and Kinder Morgan,the License Agreement was inadvertently not renewed for the 2020-2025 term. Kinder Morgan Tejas Pipeline,LLC has agreed to compensate the City in the amount of$17,690.40 for the 2020-2025 period, calculated at$3,538.08 per year in accordance with the TPWD Damage and Fee Schedule effective 2014, which includes a five percent (5%) Consumer Price Index (CPI) adjustment. This payment is intended to cure the lapse and allow for proper execution of a new agreement. It is now proposed that the City enter into a new five-year License Agreement for the period 2026 through 2031 at the current TPWD Damage and Fee Schedule effective 2024, with an annual license fee of $3,714.98,which also reflects an additional five percent(5%)CPI adjustment. Budget Impact: Funds will be deposited into the General Fund- Revenue, Public Works Right of Way Account No. 001-21-000-4305-00-00-000 Recommendation: It is recommended that the City Council approve this proposed resolution authorizing the City Manager to execute a new five-year License Agreement with Kinder Morgan Tejas Pipeline,LLC for the operation and maintenance of a four-inch natural gas line within the Old Canal Right-of-Way,including acceptance of back payment for the 2020-2025 period and establishment of the new license fee for the 2026-2031 term. P.R. No. 24758 01/26/26 ht RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A FIVE (5) YEAR LICENSE AGREEMENT WITH KINDER MORGAN TEJAS PIPELINE,LLC FOR THE OPERATION AND MAINTENANCE OF A FOUR-INCH (4") NATURAL GAS PIPELINE LOCATED WITHIN A PUBLIC RIGHT-OF-WAY,AT AN ANNUAL FEE OF $3,714.98 FOR THE TOTAL AMOUNT OF $18,574.90 FOR THE 2026-2031 TERM, AND ACCEPTING BACK PAYMENT IN THE TOTAL AMOUNT OF$17,690.40 FOR THE 2020-2025 PERIOD.FUNDS SHALL BE DEPOSITED INTO THE GENERAL FUND — REVENUE, PUBLIC WORKS — RIGHT OF WAY ACCOUNT NO. 001-21-000-4305-00-00-000 WHEREAS,pursuant to Resolution 99-68,the City of Port Arthur entered into a five-year License Agreement with Kinder Morgan Tejas Pipeline, LLC (formerly known as Tejas South Pipeline Partnership)to permit the operation and maintenance of a four-inch(4")natural gas line on a public right-of-way(Old Canal Right of Way)approximately 2,780 linear feet(depicted in Exhibit A-1), with the license fee determined in accordance with the Texas Parks and Wildlife (TPWD) Damage and Fee Schedule, at the yearly rate of$1,601.82; and WHEREAS, pursuant to Resolutions 05-076, 10-059, and 15-396, the City approved successive five-year renewals of the License Agreement for the periods 2005-2010,2010-2015,and 2015-2020; and WHEREAS,due to operational disruptions caused by the COVID-19 pandemic,along with changes in administrative personnel and recordkeeping practices by both parties, the License Agreement was inadvertently not renewed for the 2020-2025 term; and WHEREAS, Kinder Morgan Tejas Pipeline, LLC has agreed to compensate the City $17,690.40($3,538.08 per year)for the 2020-2025 period at the TPWD Damage and Fee Schedule rate effective 2014,which includes a five percent(5%)Consumer Price Index(CPI)adjustment,in order to cure the lapse and facilitate execution of a new License Agreement; and WHEREAS,it is now deemed appropriate to enter into a new License Agreement for a five- year term beginning in 2026 and ending in 2031 at the current TPWD Damage and Fee Schedule, effective 2024,for the annual rate of$3,714.98,which reflects an additional five percent(5%)CPI adjustment included. NOW THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: THAT,the facts and recitals in the preamble are true and correct. THAT,the City Manager is hereby authorized to execute a new License Agreement with Kinder Morgan Tejas Pipeline,LLC for the operation and maintenance of the four-inch(4")natural gas pipeline located within the Old Canal Right-of-Way,for a five-year term beginning in 2026 and ending in 2031, at an annual rate of$3,714.98 for the total amount of$18,574.90. THAT, Kinder Morgan Tejas Pipeline, LLC shall remit compensation to the City for the 2020-2025 period in the total amount of$17,690.40, payable upon execution of the new License Agreement. THAT,the funds shall be deposited into General Fund Revenue—Public Works, Right of Way Account No. 001-21-000-4305-00-00-000 THAT,a copy of the caption of this Resolution shall be spread upon the Minutes of the City Council. READ, ADOPTED, AND APPROVED,this day of 2026 AD, at a Regular Meeting of the City Council of the City of Port Arthur,Texas by the following vote:AYES: Mayor: Councilmembers: NOES: CITY OF PORT ARTHUR Charlotte M. Moses, Mayor ATTEST: Sherri Bellard, TRMC City Secretary APPROVED AS TO FORM: Roxann Pais Cotroneo, JD City Attorney APPROVED FOR ADMINISTRATION: ‘f.-4..'6U41---16. Ka-44-'44f Suahil Kanwar,P.E., 2 —/o Director of Public Services Ronald Burt , CP , City M ger APPROVED AS TO NHS: 6- )A,e,e, Lynd Bo well, MA, ICMA-CM Finance Director Exhibit "A" (License to Use Agreement) LICENSE AGREEMENT STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF JEFFERSON § THAT, the City of Port Arthur, a municipal corporation organized and existing under the laws of the State of Texas (hereinafter referred to as the "Licensor"), for and in consideration of the annual sum of three thousand seven hundred fourteen dollars and ninety- eight cents ($3,714.98), paid by Kinder Morgan Tejas Pipeline, LLC (hereinafter referred to as the "Licensee"), and the successive payments due on or March ls` of each successive year for a duration of five (5) years hereby grant unto the Licensee the right, privilege, and license to maintain, operate, and replace an existing four-inch (4") natural gas pipeline, together with all appurtenances thereto, including but not limited to air patrol markers, valves, and corrosion control equipment, for the transportation of liquids, gases, solids, or any mixture thereof, in, under, and across the following described public right-of-way situated in Jefferson County, Texas, to wit: The Said 4- Inch Natural Gas Line Is Located Five (5) Feet From The Westerly Line Of The Canal Right- Of-Way (After Entering From The Northwest Corner Of Lot 12, Block 8) Extending From The Southeasterly Line Of Lot 1, Block 8, Northerly To The Northeasterly Line Of Lot 10, Block 10 Of The Port Acres Subdivision As Recorded In Volume 4, Pages 42- 47, Map Records Of Jefferson County, Texas. Said Alignment To Be As Further Depicted In Exhibit "A-1" Attached Hereto And Made A Part Of Hereof, For All Purposes.(see attached Exhibit A-1) Said License is granted subject to the following provisions: I. Excavations made on Licensor's property shall be promptly refilled by Licensee, the earth well tamped, the ground left in the same condition as before the laying of said pipeline and the locations of the pipeline will be marked with the marker properly maintained and plainly visible. II. It is expressly understood and agreed that Licensee shall have the non-exclusive right of ingress to and egress from the above described tract of land at all times for the aforesaid purposes of this license. III. In consideration of the privileges herein described, Licensee agrees to indemnify and hold harmless Licensor from any and all claims, suits for damages to property or injuries or death to persons arising from the construction, maintenance, use or removal of said pipeline. The Licensee must abide by all safety precautions as mandated by state, local and federal government as well as industry standards. The licensee must also maintain liability insurance in the amount of $3,000,000.00 to protect against spills, environmental damage, explosions and releases. Rights herein granted are personal and not assignable without Licensor's prior written consent; the provisions herein shall be binding upon successors and assigns both parties. IV. Upon termination hereof, as determined by Paragraph VIII below, Licensee shall promptly remove said pipeline from the property of Licensor at Licensee's cost unless the City, at its discretion chooses to permit the line to remain in place. V. This License to Use is subject to all restrictions, covenants, conditions, easements, rights-of-way and prescriptive rights whether recorded or not, and all recorded reservations if any and zoning and other laws affecting the property, including but not limited to all applicable federal, state, and local laws. VI. This Agreement shall be governed by the laws of the State of Texas, and venue for any disputes shall lie exclusively in Jefferson County, Texas VII. At the end of this 5-year term for the License Agreement, the fee for renewal shall be renegotiated with the amount to be adjusted using the State of Texas Parks and Wildlife Damage and Fee Schedule in the effect at that time as a guide. VIII. This Agreement is effective 2026 through 2031. This agreement may be terminated by either party giving ninety (90) days written notice and license payments will be prorated accordingly. SIGNED AND AGREED TO on this day of , 2026. LICENSOR: CITY OF PORT ARTHUR, TEXAS: By: Ronald Burton, CPM, City Manager SIGNED AND AGREED TO on this day of , 2026. LICENSEE: KINDER MORGAN TEJAS PIPELINE, LLC By: Name: Title: .-... A * „. t , . . ,.im 4 **-:1.0 Ui 1....- •,.. i MIA nal, 0 . * en ,,,n ' ' a lit - oi 0- ' ' . ,,,,,„ -,,,v.,v •,"I‘f V .-,...1 V ',-,46.--............,r,,` ‘ - IN ' .ollha 411* U t .ALIV,i • ..„.,,.. , . v.-- +4- a. .0 0 0 R , limp . , ik, * a cp 7--,-m -'• . , n- - . isss 14 . . 5- c'i), Z o ; . . sz; • n.) ,7t, . - 0,N, E . i I _ E ...,j c°n 210110.1hrons a) 0 G-) (D. 44) In -. 0 --c;: •s' A ..-""`" 0 ,,"•—‘ cT) Po *Ass.a.......ri, co .t,.....,__ 40* t ..., * * - r• is ikp .. .. ,r,' , n ) , . n. S , " .n. it --arm ...,..• . ... .....- *. cr. cn i is ik 0 ?' * . _ '.ii 1 " a t ( .1AV 101./.11,,, ; , .0 t, ; '.., ......, LL, anV 1,,,,'0 ',if**, • i i ,.. 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