Compton Municipal Code § 2-26 Procedure for Acquisition by the City of Land Owned by Public Utilities

[Added by Ord. #1153, § 2900]

Unless otherwise specifically provided in any grant of franchise made by the City of Compton, all Public Utility Franchises granted by the City pursuant to the provisions of Article XV of the Charter of the City shall be subject to and governed by the following provisions of this section.

[Added by Ord. #1153, § 2901]

Whenever the City exercises its reserved right to purchase the property of a public utility pursuant to Section 1505 of the Charter of the City in the absence of an agreement as to the price of such acquisition, such price shall be determined within the provisions of said Section 1505 as follows:

a. The City may purchase any utility at any time after one year from the date that such franchise becomes effective, by delivering a notice in writing of such intention to purchase, at least six months prior to the date upon which the City proposes to exercise its right to purchase said utility; together with a notice in writing of the intention of the City to purchase and take over the property of such utility at the date fixed for the purchase of the utility, upon the payment by the City, to grantee owning such property under said franchise of the fair value of the property of such utility as hereinafter provided.

b. That in the event the City shall elect to purchase the utility and shall notify the grantee in writing of its intention to purchase and take over the property of such utility, as herein provided, the grantee, at the period fixed in the notice for the termination of the franchise and upon payment or tender of payment by the City, to the grantee of the purchase price of the property of such utility, as hereinafter provided, shall transfer the title to the property by good and sufficient written instrument to the City, and the payment or tender of payment by the City to the grantee of the purchase price of the property of such utility shall, ipso facto, operate to transfer the title of the property to said City, and the grantee shall forthwith surrender to said City, and the City may forthwith take and hold possession of the property of such utility.

c. That in the event the franchise shall expire by operation of law, the City shall have the right, at its option, declared not more than one year before the expiration of the franchise term as herein fixed, which right and option is hereby reserved to the City, to purchase and take over the property of such utility, and in the event that the City shall so exercise its right under such option the City shall pay to the grantee the fair value of the property of such utility as herein provided.

d. The term "fair value" as used herein shall be construed to mean the reasonable value of the property of such utility having regard to its condition of repair and its adaptability and capacity for the use for which it shall have been originally intended. The price to be paid by the City for any utility shall be on the basis of actual cost to the utility for the property taken, less depreciation accrued, as of the date of purchase, with due allowance for obsolescence, if any, and the efficiency of its units to perform the duties imposed on them; no allowance shall be made for franchise value (other than the actual amount paid to the City at the time of the franchise acquisition), good will, going concern, earning power, increased cost of reproduction or increased value of right-of-way or allowance for damages by reason of severance.

e. That the valuation of the property of such utility proposed to be purchased upon the termination of the franchise as herein provided, or otherwise, shall be determined by a board of three arbitrators of whom one shall be appointed by the City, one by the grantee, and the third by the two arbitrators so appointed. The arbitrators shall be appointed within 30 days after the declaration by the City of its option to purchase the property of such utility. In case the arbitrators fail to make and file an award within the time hereinafter limited, a new board of three arbitrators shall be appointed as hereinbefore prescribed. The Board of Arbitrators shall immediately upon the appointment of its members enter upon the discharge of its duties. Any vacancy in the Board of Arbitrators shall be filled by the party who made the original appointment to the vacant place.

f. In the event the grantee shall fail to appoint an arbitrator within 30 days after the declaration by the City of its option to purchase the property of such utility, or in the event of the death or resignation of such arbitrator so appointed and such grantee, its successors or assigns, shall fail to appoint an arbitrator to fill such vacancy within 10 days thereafter, or in the event the two arbitrators appointed by the City and grantee, as hereinbefore provided, shall fail to appoint a third arbitrator within 60 days after the declaration of the City of its option to purchase the property of such utility, then upon application made either by the City or by the grantee after five days' notice in writing to the other party, such arbitrator shall be appointed by the presiding Judge of the Superior Court of the State of California, in and for the County of Los Angeles, and the arbitrators so appointed shall have the same powers and duties as though he had been appointed in the manner hereinabove prescribed.

g. The award of the arbitrators shall be made and filed with the City Clerk of said City within three months after their appointment, and a majority of the arbitrators who agree hereto may make such award. The amount of the valuation of the property of such utility to be paid to the grantee, as herein provided, in lawful money of the United States, less an amount equivalent to or sufficient to offset or pay any outstanding, unsettled, unpaid or disputed debts, suits or uncompleted or unsettled contracts or pending damage suits or judgments against or affecting said grantee, or any encumbrances or defects in title which may constitute a charge or lien upon the property of such utility. The amount so deducted or reserved shall be placed by the City, if the property of such utility be purchased by the City, in a special fund in the City Treasury for the purpose of liquidating or satisfying unpaid debts, claims, contracts, suits, judgments, encumbrances, charges or liens; and after the same have been liquidated and settled, the City shall pay the grantee the balance of the amount in the fund remaining.

h. Whenever the City shall have paid the grantee, as above provided, the value of the property of such utility, less such amount to be placed in the fund, as above provided, then the grantee shall, by good and sufficient written instrument, transfer to the City all of the property of such utility, together with all franchise rights, appurtenances, renewals, additions, extensions, connections, and repairs thereto, including all and every part of the property constituting the property of such utility, together with all claims and rights held, owned, operated and claimed, under and by virtue of the franchise herein granted, free and clear of all encumbrances, claims or liens, whatsoever, excepting such as have not been liquidated, as hereinbefore provided.

i. Acceptance of a franchise shall constitute an agreement on the part of the grantee thereof to sell said property upon the terms and conditions hereinabove provided.