Santa Clara County Municipal Code Ch. IV Water Transportation and Distribution Franchise

(a) San Jose Water Company ("Grantee"), a California corporation, is hereby granted the nonexclusive right, privilege, and franchise to lay, construct, maintain, repair, expand, and operate a system of water pipelines and other apparatus in, over, along, across, under, through, and upon the public streets, roads, alleys, and highways of the unincorporated area of Santa Clara County (the "unincorporated county") for the transportation and distribution of water for sale and distribution for domestic, agricultural, industrial, commercial, and other lawful uses and purposes.

(b) California-American Water Company ("Grantee") is hereby granted the nonexclusive right, privilege, and franchise to lay, construct, maintain, repair, expand, and operate a system of water pipelines and other apparatus in, over, along, across, under, through, and upon the public streets, roads, alleys, and highways of the unincorporated area of the Santa Clara County (the "unincorporated county") for the transportation and distribution of water for sale and distribution for domestic, agricultural, industrial, commercial, and other lawful uses and purposes.

(c) Unless otherwise specified herein, San Jose Water Company and California-American Water Company are subject to all the requirements applicable to the Grantee established herein.

(Ord. No. NS-908, 5-5-20; NS-909, § 1, 4-22-25

The rights reserved to the County under this Chapter IV are in addition to all other rights of the County of Santa Clara ("County") whether reserved by this Chapter IV or authorized by other applicable law, and no action, proceeding, or exercise of a right shall affect any other rights which may be held by the County.

(Ord. No. NS-908, 5-5-20)

Nothing contained in this Chapter IV exempts a state franchise holder from compliance with all ordinances, rules, or regulations of the County now in effect or which may be hereafter adopted which are not inconsistent with this Chapter or California Public Utilities Code, Division 3, Chapter 2, or obligations under any franchise previously issued by the County, insofar as those may be enforced under California Public Utilities Code, Division 3, Chapter 2.

(Ord. No. NS-908, 5-5-20)

All pipes and necessary appliance and fixtures used in connection with said system shall be laid, constructed, enlarged, maintained, and removed in conformity with law, and applicable ordinances and regulations of the County including, but not limited to: the County Zoning Ordinance; all other ordinances, regulations, and policies to preserve or protect the public safety; construction standards; regulations for providing notice to persons that may be affected by system construction; and directives governing the time, place, and manner in which facilities may be installed in the public rights-of-way. Said ordinances, standards, regulations, directives, and policies are preempted by the Public Utilities Code only where they are in conflict with the Public Utilities Code, and ordinances, standards, regulations, directives, and policies shall remain in effect insofar as other provisions therein are not preempted.

(Ord. No. NS-908, 5-5-20)

Whenever it is proposed by the Grantee to open the public highways, streets, alleys, and places of unincorporated county, the Grantee shall serve notice upon the Director, County Department of Roads and Airports, a reasonable length of time prior to commencing said operation. Grantee shall obtain all necessary permits and comply with all reasonable regulations that may be imposed by the Director to protect the County and its residents. Where emergency operations are indicated by circumstances beyond the control of the Grantee, notice need not be delivered to the Director prior to remedial action being taken. Grantee shall notify the Director as soon as possible of the emergency action taken. The franchise issued and the franchise fee paid hereunder are not in lieu of any other required permit, authorization, fee, charge, or tax required by the County, State, or Federal Government, or any other district or municipality with appropriate jurisdiction.

(Ord. No. NS-908, 5-5-20; NS-909, § 2, 4-22-25)

Any and all public rights-of-way, other public property, or private property that is disturbed or damaged in connection with or as a result of the construction, operation, or repair of Grantee's system shall be repaired by Grantee to a condition that complies with all applicable laws and standards, including the County Ordinance Code, and that is as good as its prior condition, in a manner and within a time approved or specified by the Director, County Department of Roads and Airports. Without limiting the foregoing, Grantee shall compensate any entity whose property is damaged in the course of construction, operation, or repair of the system where the property is not restored by the Grantee to a condition as good as existed before the damage caused by the Grantee. Because such repairs cannot adequately compensate the County for the inherent damage to the public roads caused by such construction or maintenance upon the public roads, the County may also impose a reasonable fee upon Grantee to cover all costs that may be incurred by the County that are reasonably attributable to Grantee's construction, use or maintenance upon public roads, whether such costs are known or unknown by Grantee and the County at the time a franchise becomes effective.

(Ord. No. NS-908, 5-5-20)

(a) The term of the San Jose Water Company franchise shall be the franchise effective date of June 4, 2020, to June 4, 2035, and the franchise shall remain in full force and effect unless terminated pursuant to the terms of the franchise ordinance and applicable law.

(b) The term of the California-American Water Company franchise shall commence on the effective date of May 22, 2025, to May 22, 2040, and shall remain in full force and effect unless terminated pursuant to the terms of the franchise ordinance and applicable law.

(Ord. No. NS-908, 5-5-20; NS-909, § 3, 4-22-25)

The grant of the franchise shall not become effective unless and until the Grantee has within five days of the effective date of the franchise:

(a) Filed an unconditional acceptance of the grant made by this Chapter with the Clerk of the Board of Supervisors;

(b) Provided satisfactory proof of insurance required by Sections B10-228 through BI0-238 of this Chapter; and

(c) Provided evidence of a bond running to and approved by the County of Santa Clara, in the penal sum of $250,000.00.

If Grantee fails to satisfy these obligations within five days of the effective date of its franchise, County shall give Grantee written notice of the deficiency, and if not cured within five additional days, the grant of the franchise shall be deemed rescinded.

(Ord. No. NS-908, 5-5-20; NS-909, § 4, 4-22-25)

Grantee, its successors and assigns, must during the life of the franchise pay to the County two percent of Grantee's gross annual receipts arising from the use, operation, or possession of the franchise; provided, however, that this payment shall in no event be less than one percent of the gross annual receipts of the Grantee derived from the sale within the limits of unincorporated county of the utility service for which the franchise is awarded. The franchise fee shall be payable annually, on the 15th day of April following the calendar year for which the payment is being made, and delivered to the County Department of Tax and Collections. Should any annual payment not be made within 30 days after the date the payment is due, the Grantee shall further pay interest on the payment at the rate of one percent per month from the date the payment was due.

(Ord. No. NS-908, 5-5-20; NS-909, § 5, 4-22-25)

Grantee shall pay to the County a sum of money sufficient to reimburse it for all publication expenses incurred by it in connection with the granting of the franchise. Such payment shall be made to the County Clerk of the Board of Supervisors within 30 days after the County furnishes the Grantee with a written statement of expenses.

(Ord. No. NS-908, 5-5-20)

If the Grantee abandons the system during the franchise term, or fails to operate the system, or pay the franchise fee in accordance with the terms of the franchise, the County, at its option, may declare the franchise forfeited pursuant to California Public Utilities Code § 6291 or 6300. Grantee shall well and truly observe, fulfill, and perform each term and condition of the franchise, and in case of any breach of those terms or conditions, the bond amount of the penal sum of $250,000.00 shall be recoverable in accordance with Public Utilities Code § 6301.

(Ord. No. NS-908, 5-5-20)

Grantee agrees that the rights granted to it by the County are personal in nature and held in trust. Sale, transfer, or assignment of this franchise or any rights or privileges granted under the franchise shall be in accordance with County Ordinance Code Section B10-6.

(Ord. No. NS-908, 5-5-20)

Grantee shall indemnify the County as required in County Ordinance Code Section B10-8.

(Ord. No. NS-908, 5-5-20)

Without limiting the Grantee's indemnification of the County, the Grantee shall provide and maintain at its own expense, during the term of this franchise ordinance, or as may be further required herein, the following insurance coverages and provisions (which may be met through an excess or umbrella liability tower):

(a) Evidence of Coverage. Within five days of the effective date of Grantee's franchise, the Grantee shall provide a Certificate of Insurance certifying that coverage as required herein has been obtained. Individual endorsements executed by the insurance carrier must accompany the certificate. In addition, a certified copy of the policy or policies shall be provided by the Grantee upon request.

(b) Qualifying Insurers. All coverages, except surety, shall be issued by companies which hold a current policy holder's alphabetic and financial size category rating of not less than A-V, according to the current Best's Key Rating Guide, or a company of equal financial stability that is approved by the County's Insurance Manager.

(c) Notice of Cancellation. All coverage as required herein shall not be canceled or changed so as to no longer meet the specified County insurance requirements without 30 days' prior written notice of such cancellation or change being delivered to the County Executive.

(Ord. No. NS-908, 5-5-20; NS-909, § 6, 4-22-25)

Grantee shall maintain Commercial General Liability Insurance for bodily injury (including death) and property damage which provides limits as follows:

(a) Each Occurrence: $10,000,000.00.

(b) General Aggregate: $10,000,000.00.

(c) Products/Completed Operations Aggregate: $10,000,000.00.

(d) Personal Injury: $10,000,000.00.

(e) A minimum of 50 percent of each of the aggregate limits must remain available at all times.

(Ord. No. NS-908, 5-5-20)

Grantee's general liability coverage shall include all of the following:

(a) Premises and Operations.

(b) Products/Completed Operations with limits of $10,000,000.00 aggregate to be maintained for three years.

(c) Contractual Liability expressly including liability assumed under this franchise ordinance. If the Grantee is working within 50 feet of a railroad or light rail operation, any exclusion as to performance of operations within the vicinity of any railroad bridge, trestle, track, roadbed, tunnel, underpass, or crossway shall be deleted, or a railroad protective policy provided.

(d) Personal Injury Liability.

(e) Owner's and Contractor's Protective Liability.

(f) Severability of Interest.

(g) Explosion, Collapse, and Underground Hazards Liability Coverage.

(h) Broad Form Property Damage Liability.

(Ord. No. NS-908, 5-5-20)

Grantee's General Liability Coverage shall include the following coverage or endorsements, copies of which shall be provided to the County:

(a) Additional Insured Endorsement, which shall read: "County of Santa Clara, and members of the Board of Supervisors of the County of Santa Clara, and the officers, agents, and employees of the County of Santa Clara, individually and collectively, as additional insureds."

(b) Insurance afforded by the additional insured endorsement shall apply as primary insurance, and other insurance maintained by the County, its officers, agents, and employees shall be excess only and not contributing with insurance provided under this policy.

(c) Contractual Liability: Insurance afforded by this policy shall apply to liability assumed by the insured under this Chapter.

(Ord. No. NS-908, 5-5-20)

If Grantee's liability coverage is written on a "claims made" basis, the Certificate of Insurance shall clearly state so. In addition to coverage requirements above, such policy shall provide that:

(a) The policy retroactive date coincides with or precedes the effective date of Grantee's franchise.

(b) If insurance is terminated for any reason, Grantee agrees to purchase an extended reporting provision of at least two years to report claims arising from work performed in connection with this Chapter.

(c) The policy allows for reporting of circumstances or incidents that might give rise to future claims.

(Ord. No. NS-908, 5-5-20; NS-909, § 7, 4-22-25)

Grantee's Automobile Liability Insurance must include bodily injury (including death) and property damage which provides total limits of not less than $5,000,000.00 combined single limit per occurrence applicable to all owned, non-owned, and hired vehicles.

(Ord. No. NS-908, 5-5-20)

Grantee must maintain statutory California Workers' Compensation Coverage, including broad form all states coverage, and Employer's Liability coverage for not less than $1,000,000.00 per occurrence.

(Ord. No. NS-908, 5-5-20)

Grantee shall provide Pollution Liability Coverage, including bodily injury, personal injury, and property damage from a pollution event resulting from work, operations, or completed operations under the franchise, with limits not less than $10,000,000.00 per claim or per occurrence and $10,000,000.00 aggregate, including claim expenses and defense, written on a claims made or occurrence basis during the franchise term and a ten-year completed operations period, including coverage for mold. If any work involves the removal of asbestos, the removal/replacement of underground tanks and/or the removal of toxic chemicals and substances, Grantee or its subcontractor(s) performing such work shall provide the appropriate pollution coverage, with limits of no less than $10,000,000.00 per claim or per occurrence.

(Ord. No. NS-908, 5-5-20)

Grantee shall maintain Professional Liability Coverage which includes the following provisions:

(a) Coverage shall apply to any design activity performed by Grantee or its subcontractor and shall specifically include coverage for the work performed under this franchise.

(b) Coverage shall be in an amount of not less than $3,000,000.00 per claim in the aggregate.

(c) If the Professional Liability Insurance policy is written on a claims made basis, it shall be maintained continuously for a period of no less than three years after Final Completion of all Projects designed or agreed to be designed by Grantee or subcontractor under this franchise. If the Grantee or subcontractor ceases to do business during this period, Grantee or subcontractor agrees to purchase an extended reporting option on its last professional liability policy so that the period of coverage for reporting claims extends to at least three years. The "retroactive date" must be shown and must be before the date of the grant of this franchise.

(Ord. No. NS-908, 5-5-20)

The insurance requirements and limits of insurance coverage to be maintained by the Grantee are not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Grantee, including, but not limited to, the provisions concerning indemnification.

(Ord. No. NS-908, 5-5-20)

The insurance requirements of this franchise may be fulfilled by self-insurance on the part of the Grantee. However, this shall not in any way limit liabilities assumed by the Grantee under this Chapter. Any increase to Grantee's self-insured retention shall be approved in writing by the County Executive upon satisfactory evidence of financial capacity.

(Ord. No. NS-908, 5-5-20)

Grantee agrees it will make books and records pertaining to services provided pursuant to the franchise available for inspection, audit, and copying by the County. The records that Grantee will make available shall include, but are not limited to, revenue records and other records related to compliance with this Chapter. Said books and records shall be made available at Grantee's place of business within seven days after receipt of the request by the County.

(Ord. No. NS-908, 5-5-20)

Grantee shall file with the Clerk of the Board of Supervisors, a verified statement showing in detail the total gross receipts of Grantee, its successors, or assigns during the preceding calendar year or fractional calendar year within three months after the expiration of said calendar year or fractional calendar year.

(Ord. No. NS-908, 5-5-20)

References to particular provisions of law in this Chapter are not intended to exclude or limit in any way any other applicable law.

(Ord. No. NS-908, 5-5-20)