TO: Committee of the Whole - Planning and Public Works
FROM: Mayor Angela Birney
DEPARTMENT DIRECTOR CONTACT(S):
|
Public Works |
Aaron Bert |
425-556-2786 |
DEPARTMENT STAFF:
|
Public Works |
Brandon Buehler |
Acting Deputy Director |
|
Public Works |
Paul Cho |
TOSE Manager and Traffic Eng. |
|
Public Works |
Patty S. Criddle |
Transp. Engineering Supervisor |
TITLE:
title
Approval of an Ordinance Executing the Olympic Pipeline Franchise Agreement
OVERVIEW STATEMENT:
recommendation
Public Works recommends Council approve the subject Ordinance to execute a new 10-year franchise with Olympic Pipe Line Company (OPL). The City of Redmond has an existing franchise with OPL that authorizes operation of petroleum pipeline facilities within the City’s rights-of-way. The franchise was originally adopted under Ordinance No. 2289 (2006) and has continued on a year-to-year basis since its expiration in 2016.
The proposed ordinance establishes a new ten-year franchise, effective January 1, 2026, with provisions for renewal for an additional ten-years. Continuing under the expired agreement exposes to the City to outdated insurance, environmental, and cost recovery provisions.
Differences between the 2006 agreement and the new agreement include that the updated franchise:
• Increases the fee the franchisee pays to the City. The fee originally started out at $12,000 plus annual CPI increases since 2006 and increases to a $23,000 annual fee in 2026 plus annual CIP increases starting in 2027.
• Strengthens environmental indemnification and increases insurance amounts incurred by franchisee.
o Franchisee is required to have $50M in pollution liability and a $5M umbrella insurance.
Attachment B highlights differences between the 2006 and 2026 Franchise Agreements.
Council is being asked to approve updated terms governing an existing pipeline in City right of way-not to approve new infrastructure.
Similar to the updated Puget Sound Energy franchise agreement, the ordinance itself serves as both the granting instrument and the agreement - no separate contract document will be executed.
body
☐ Additional Background Information/Description of Proposal Attached
REQUESTED ACTION:
☐ Receive Information ☒ Provide Direction ☐ Approve
REQUEST RATIONALE:
• Relevant Plans/Policies:
N/A
• Required:
Council approval is required for passage of an ordinance.
• Council Request:
N/A
• Other Key Facts:
N/A
OUTCOMES:
Adoption of the updated franchise ordinance will:
• Replace the expired 2006 ordinance with a current, legally robust franchise framework;
• Ensure clear operational, indemnity, and environmental protections for the City;
• Clarify renewal and termination provisions to prevent future lapses.
COMMUNITY/STAKEHOLDER OUTREACH AND INVOLVEMENT:
• Timeline (previous or planned):
N/A
• Outreach Methods and Results:
N/A
• Feedback Summary:
N/A
Note: The franchise governs continued use of existing underground facilities. No new pipeline; no expansion of capacity or footprint; no construction or community impacts anticipated.
BUDGET IMPACT:
Total Cost:
N/A
Approved in current biennial budget: ☐ Yes ☐ No ☒ N/A
Budget Offer Number:
N/A
Budget Priority:
N/A
Other budget impacts or additional costs: ☐ Yes ☒ No ☐ N/A
If yes, explain:
N/A
Funding source(s):
N/A
Budget/Funding Constraints:
N/A
☐ Additional budget details attached
COUNCIL REVIEW:
Previous Contact(s)
|
Date |
Meeting |
Requested Action |
|
N/A |
Item has not been presented to Council |
N/A |
Proposed Upcoming Contact(s)
|
Date |
Meeting |
Requested Action |
|
4/21/2026 |
Business Meeting |
Approve |
Time Constraints:
The current franchise agreement is expired and continues on a year-to-year basis. Continuing under the expired agreement, the City to outdated insurance, environmental, and cost recovery provisions.
ANTICIPATED RESULT IF NOT APPROVED:
If the City does not adopt a new franchise ordinance, OPL will continue operating under the expired 2006 ordinance, which lacks current legal, insurance, and environmental safeguards.
ATTACHMENTS:
Attachment A: Ordinance - Olympic Pipeline Franchise Agreement
Attachment B: 2006 vs 2026 Franchise Comparison