HomeMy WebLinkAbout6.p. Encroachment Agreement for Mid-America Pipeline Company Rosemount Business Park Phase 2, City Project #308CITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: June 6, 2000
AGENDA ITEM: Encroachment Agreement - Mid - America
AGENDA SECTION:
Pipeline Co., Rosemount Business Park Phase 2, City Project
Consent
#308
PREPARED BY: Dave Simons, Consulting Engineer -SEH, Inc.
AGENM 06 P
ATTACHMENTS: Location Map, Letter from City Attorney and
APPROVED BY.
the MAPCO Encroachment Agreement
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Attached is an agreement between Mid - America Pipeline Company (MAPCO) and the City of
Rosemount allowing the City to construct streets and utilities across or under the MAPCO
Pipeline in the Rosemount Business Park, Phase 2 Street and Utility Improvements, City Project
#308. The enclosed location map shows the location of the pipeline with respect to the
project.
Williams Energy is also involved in this agreement because Williams Energy owns MAPCO, but
the Encroachment Agreement itself is between MAPCO and the City of Rosemount. William's
Energy is acting on MAPCO's behalf to negotiate the Encroachment Agreement. On May 2,
2000, the Council approved a Reimbursement Agreement with Williams Energy for this project,
which required that the City reimburse Williams Energy for all expenses and charges related to
their engineering review, inspection, and negotiation of this Encroachment Agreement.
Williams Energy's engineers are currently reviewing the construction plans for the streets and
utilities. If Williams Energy determines that pipeline reinforcing will be necessary due to the
City's construction of the streets and utilities, a separate Reimbursement Agreement will be
prepared, and the costs of reinforcing will be applied to City Project #308.
The City Attorney has reviewed the Encroachment Agreement, and his comments are included
in the attached letter. Staff recommends that the Agreement be approved.
RECOMMENDED ACTION: MOJ40N TO ENTER INTO AN ENCROACHMENT AGREEMENT
WITH MID - AMERICA PIPELINE -COMPANY (MAPCO) IN THE ROSEMOUNT BUSINESS PARK,
PHASE 2 STREET AND UTILITY IMPROVEMENTS, CITY PROJECT #308, AND TO
AUTHORIZE THE NECESSARY SIGNATURES.
COUNCIL ACTION:
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DATE: ROSEMOUNT BUSINESS PARK, PHASE 2
6-1-99 CITY PROJECT NO. 308
470 Pillsbury Center
200 South Sixth Street
Minneapolis MN 55402
1- (612) 337 -9300 telephone
(612) 337 -9310 fax
C H A R T E R E D http: / /www.kennedy- graven.com
CHARLES L. LEFEVERE
Attorney at Law
Direct Dial (612) 337 -9215
email: clefevere @kennedy- graven.com
May 15, 2000
Mr. Tom Burt
City Administrator
City of Rosemount
2875 145"' St. W.
Rosemount, MN 55068
RE: Pipeline Easement Encroachment Agreements
Dear Tom:
Development of the Business Park will involve crossing two pipeline easements. In the case of
the Northern Natural Gas Company pipeline, at least one of the pipes is a high pressure pipeline
for natural gas transmission. The existing easements of the pipeline companies do not allow
changes of grade;' construction -of improvements or roads in the easement area, or various other
activities. Therefore it will be necessary to negotiate with the pipeline companies to allow the
City to encroach into the easement area or to condemn the right to construct a public right of way
over the pipelines.
We have been provided with easement encroachment agreements from the two pipeline
companies. Some of the terms of the Northern Natural Gas Company encroachment agreement
are probably-not too significant. For example, the City is not allowed to plant trees that will have
an eventual size over six feet; certain soil coverage over the pipes and separation between City
utilities and Northern's pipeline must be maintained; a-no' the City is required to relocate and
protect its own systems at its own expense if Northern relocates or repairs its pipelines.
However, the encroachment agreement is also directed toward avoidance of risks of liability by
the pipeline company and imposition of those risks on the City. For example, the contract
requires the City to indemnify and hold Northern harmless from all claims arising from, or as a
result of, any act of the City or its invitees in connection with the use of the roadway.
Therefore, for example, the City could be required to pay clean-up costs for a spill or damages
for an explosion if the accident occurred in connection with the use of the roadway.
CLL- 180440v 1
RS230 -1
Mr. Tom Burt
May 15, 2000
Page 2 of 2
If the City were negligent, it could be required to pay damages up to the statutory limits for
damages caused by such negligence (currently $1,000,000) even without the encroachment
agreement. However, the obligation imposed by the encroachment agreement would require the
City to protect the pipeline company as well for its liability associated with the incident; and the
liability of the pipeline company is not limited by law.
Likewise, the Mapco encroachment agreement requires the .City to indemnify Mapco for all
damages arising out of the existence of the roadway except where damage is caused solely by the
gross negligence of Mapco employees. Therefore, if the damage resulted from the ordinary
negligence of Mapco, the City would be obligated to pay for the damages. And if Mapco
employees were grossly negligent, but some other party's negligence contributed to the damages,
the City would likewise be required to indemnify Mapco. Again, the liability of Mapco is not
limited by law; so the City would not be protected by the statutory limitations on its liability.
The Mapco agreement would also require the City to pay all costs of cleanup resulting from
spills if the spill or the cost of clean up would not have occurred without the existence of the
City's streets and utilities.
The City purchases its insurance at least in part in reliance on the statutory limits of the City's
liability. The policy limits are the same as the City's maximum potential liability under the
statutes. Therefore, indemnifying another party which has no such limits on . its liability could
expose the City to claims for which it had no insurance.
I do not believe that accepting the terms of the pipeline companies' proposed agreements is
unlawful. Therefore, it is a matter of business judgment whether to accept the terms offered by
the pipeline companies. If the City does accept such terms — and it has done so in the past — it
may wish to consider the purchase of insurance with higher limits.
The alternative to accepting the terms is to condemn a public roadway easement over the
pipeline. This would, of course, be more expensive than accepting the terms offered by the
pipeline companies. However, it would result in a situation in which the City would be liable
only for the consequences of its own negligence and in which it would be required to pay only
for its own liability.
Please give me a call when you have had a chance to review this letter so we can discuss how to
proceed.
Very truly yours,
Charles L. LeFevere
CLL:lh
cc: David F. Simons, P.E.
CLL- 180440vl
RS230 -1
ENCROACH LENT AGREEMENT
This instrument made and entered into this day of , 2000,
by and between MID - AMERICA PIPE LINE COMPANY, a Delaware corporation (hereinafter
referred to as "Mapco "), with principal offices at P.O. Box 3448, Tulsa, Oklahoma 74101, and
The Rosemount Port Authority an Entity of the City of Rosemount (hereinafter referred to as
"Owner ").
WITNESSETH:
WHEREAS, Mapco is the holder of a Right of Way Agreement granted by Florence May
Elliot, a single person, on September 15` 1960 covering the following described premises in
Dakota County, Minnesota:
The North Half of the Northeast Quarter of Section 32, Township 115 North,
Range 19 West.
which Right of Way Agreement was recorded September 21', 1960 in Book 268 of
Deeds at Page 615, in the Office of the Register of Deeds for Dakota County, Minnesota
(hereinafter referred to as "Easement'); and
WHEREAS, pursuant to the authority contained in said Easement, Mapco has constructed
and currently operates and maintains its West Red 8 inch pipeline (hereinafter referred to as
"Pipeline Facilities "), across and through the above described premises; and
WHEREAS, The Rosemount Port Authority is the present owner of the following
described real property, with Pipeline Facilities situated thereon in Dakota County, Minnesota
(hereinafter referred to as the "Owned Premises"):
encragree.doc 1 20:124 Rosemount Bus. Park Dakota Co. MN.
Line Sec. # West Red Tract No. 4- MN -DA -28 AFE
Parcel 1: Lot 3, Block 1; and Outlots A and B, Rosemount Business Park First
Addition, according to the recorded plat thereof, and situate in Dakota County,
Minnesota.
WHEREAS, Owner has desires to reconstruct a certain road known as Biscayne Avenue,
build a new road known as Boulder Trail and install utilities, (hereinafter collectively referred to
as "Encroachments ") upon and within a portion of the confines of Mapco's 60 -foot right -of -way
width (hereinafter referred to as "Easement Area "), with this written consent; and
WHEREAS, Owner has requested permission from Mapco to maintain, use, and enjoy the
Encroachments upon a portion of Mapco's Easement and in close proximity to Mapco's Pipeline
Facilities; and
WHEREAS, Mapco is willing to grant such permission upon the terms and conditions set
forth as follows.
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions
hereinafter set forth, the parties hereto agree as follows:
1. A Mapco representative has inspected and Mapco hereby grants permission to Owner to
maintain, operate and use upon the Owned Premises and in close proximity to Mapco's Pipeline
Facilities, the said Encroachments, subject to the following conditions:
A. That Owner assumes all risks for damages, injuries, or loss to either property or
persons, which may be incurred by Owner or its respective agents, invitees, or licensees present
on or in the vicinity of the Easement Area and in any way associated with said Encroachments.
B. That the permission granted herein is limited exclusively to the constructed
Encroachments upon the Owned Premises within the Easement Area in the vicinity of Mapco's
Pipeline Facilities. Owner shall not at any time erect, construct, or create any additional
buildings, improvements, structures, pavement, ditches, utility or sewer lines, trees or obstruction
of any kind either above, on or below the surface of the Easement Area, or alter the grade or
cause or permit such alteration anywhere on the land upon which Mapco has reserved its
easement rights without the prior express written consent of Mapco. Owner specifically agrees
not to allow, permit or grant rights for other utility lines, pipelines (other than Mapco's), utility
poles, or paved access roads within the specified road rights -of -way and within the Easement
Area.
C. That Owner shall at all times conduct all its activities on said Easement Area in
such a manner as not to interfere with or impede the operation of Mapco's Pipeline Facilities and
activities in any manner whatsoever.
encragree.doc 2 20:124 Rosemount Bus. Park Dakota Co. MN.
Line Sec. # West Red Tract No. 4- MN -DA -28 AFE
D. That Owner shall construct and will maintain said Encroachments as shown on
Exhibit "A" attached hereto and, by this reference, made a part hereof.
E. At Owner's sole cost and expense, Mapco's representative shall be on site during
any future construction within the easement area to confirm that no damage occurs to the
Pipeline Facilities, other facilities, cathodic protection or pipe coating. All work by Owner within
the Easement Area shall be performed in a workmanlike manner and in compliance with
applicable governmental and industry standards and codes. Mapco's representative shall be
contacted a minimum of 48 hours prior to construction by phoning Mapco's Line Supervisor,
Mr. Gary Robideaux at 651- 633 -1519 or such representative that Mapco may from time -to -time
appoint. The presence of Mapco's representative or any given by such representative shall
not relieve Owner of any liability under the R/W Agreement and this Agreement. If Pipeline
Facilities, cathodic protection and/or coating repair is required by Mapco or if the safety of the
Pipeline Facilities is jeopardized, in Mapco's sole judgement, Owner shall stop all construction
activities within the Easement Area until said repairs are complete or until any dangerous
construction practices are resolved to the satisfaction of Mapco's Line Supervisor or on -site
representative.
F. A minimum of four (4) feet of cover shall be provided and maintained between the
top of the concrete and/or asphalt surface and the top of Mapco's Pipeline Facilities.
G. A minimum separation of two (2) feet must be maintained between any utilities and
the Pipeline Facilities.
H. A maximum cover of eight (8) feet is allowable over the Pipeline Facilities in the
low wetland area the City wants to fill.
I. Owner shall require the following language to be conspicuously displayed on all
pages of any construction prints that include Mapco's Pipeline Facilities:
WARNING
HIGH - PRESSURE PETROLEUM PRODUCTS PIPELINES)
Excavation and /or Construction Prohibited Without Written Permission From
THE WILLIAMS COMPANIES, INC.
2728 Patton Road
St. Paul, MN 55113
(612) 633 -1555 or (800) 331 -4020
Fax: (612) 633-5464
2. Owner agrees to indemnify, protect, and hold Mapco, its parent, affiliates, subsidiaries,
and their directors, officers, employees, representatives, and agents harmless and at Mapco's'
option, defend Mapco, its parent, affiliates, subsidiaries, and their directors, officers, employees,
representatives, and agents from and against any and all claims, demands, costs, (including
without limitation, reasonable attorneys' and expert witnesses' fees and court costs), expenses,
losses, causes of action (whether at law or in equity), fines, judgments, civil penalties and
administrative proceedings for injury or death to persons or damage or loss to property,
environmental damages or other business losses, including those made or incurred by Mapco or
encragree.doc 3 20:124 Rosemount Bus. Park Dakota Co. MN.
Line Sec. 9 West Red Tract No. 4- MN -DA -28 AFE
its affiliated companies and their directors, officers, employees, agents, or third parties or
governmental agencies in any way arising from or connected with the construction, existence,
operation, maintenance or removal of the Encroachments, except where such loss, cost, liability,
or expense was proximately caused solely by the gross negligence of Mapco or its employees.
3. Should Mapco need to remove any of Owner's Encroachments within its Easement Area
in order to construct, maintain, operate, repair, remove, or resize Mapco's existing Pipeline
Facilities, Owner or its respective heirs, successors, and assigns shall pay the cost of removing
and replacing or reinstalling said Encroachments. In addition, all repair and maintenance work
performed by Mapco, on its existing Pipeline Facilities located on the Owned Premises, shall be
performed in a reasonable workmanlike manner and Mapco shall restore the surface and grade of
Owned Premises where the work is performed, but shall not be liable for loss, damage, or
replacement to Owner's Encroachments or any associated equipment and facilities that exist
within the Easement Area, and in this regard, Owner hereby releases Mapco, its employees,
agents, officers, and directors from any and all liability for any such loss or damage.
4. In the event that the construction, existence, operation, collapse, maintenance, relocation,
or removal of the New Encroachments or Encroachment causes Mapco to incur any excess costs
that in any manner results from Mapco's construction, alteration, replacement, relocation,
removal, changing the size of, installation, operation, maintenance, protection, repair and
inspection of Mapco's Pipeline Facilities, or the clean up or handling of any spills of
commodities being transported by Mapco, Owner, its successors or assigns, agrees to reimburse
Williams for any and all such costs that would not have incurred but for the existence of the New
Encroachments and the Encroachment.
5. Owner agrees that protection of Mapco's Pipeline Facilities will be maintained at all
times. No heavy equipment shall be allowed to operate over Mapco's Pipeline Facilities except
as may be herein provided.
6. The Parties hereto understand that neither this Agreement nor the existence of the
Encroachments in any way constitutes a waiver by Mapco of its express rights under the
Easement or any other rights, which may be implied at law or equity. Mapco hereby reserves
and the Owner hereby grants and confirms all of Mapco's rights, title and estate as set forth in
the Easement including, but not limited to, the rights to access, lay, maintain, operate, repair,
replace, change the size of, protect and remove Mapco's Pipeline Facilities within, under and
across all of the Owned Premises which are subject to Mapco's Easement.
7. In the event that Owner breaches any of the terms, covenants or provisions of this
Agreement, and Mapco commences litigation to enforce any provisions of this Agreement, the
cost of attorney's fees and the attendant expenses will be payable to Mapco by the Owner, its
successors or assigns, upon demand, for all claims upon which Mapco prevails.
8. The provisions of the Easement, and all rights, powers, privileges, and duties,
obligations, and liabilities created thereby, remain in full force and effect and are not affected
hereby except to the extent and in the manner set forth above.
encragree.doc 4 20:124 Rosemount Bus. Park Dakota Co. MN.
Line Sec. 4 West Red Tract No. 4- MN -DA -28 AFE
I
This instrument and the covenants and agreements herein contained shall extend to and be
binding upon the heirs, executors, administrators, successors, and assigns of the parties and the
benefits of this Agreement shall run with the land.
IN WITNESS WHEREOF, the parties have executed this instrument the day and year
first above written.
MID- AMERICA PIPE LINE COMPANY
ROSEMOUNT PORT AUTHORITY
An Entity of The City of Rosemount
By:
Bryan E. Young,
Real Estate Services
Attorney in Fact
Date:
Date:
STATE OF OKLAHOMA )
) SS
COUNTY OF TULSA )
Before me, the undersigned, a Notary Public in and for the county and state aforesaid, on
this day of I personally
appeared Bryan E. Young, Attorney -in -Fact for Mid- America Pipeline Company, a Delaware
corporation, by virtue of an April 1, 1998, Power of Attorney filed for record July 27, 1998, in
the County of Tulsa, State of Oklahoma, in Book 6083 at page 2118, as Document 98081242,
and that said instrument was signed on behalf of said corporation, and said Bryan E. Young
acknowledged said instrument to be the free act and deed of said corporation.
In testimony whereof, I have hereunto set my hand and affixed my official seal at my
office in said county and state the day and year last above written.
Notary Public
My Commission Expires:
By:
Title:
By:_
Title:
encragree.doc 5 20:124 Rosemount Bus. Park Dakota Co. MN.
Line Sec. # West Red Tract No. 4- MN -DA -28 AFE
STATE OF )
) SS
COUNTY OF )
On this day of , 20_, before me appeared
to me personally known, who, being by me duly
sworn, did say that he is the of
, an Entity of the City of Rosemount, and that said
instrument was signed on behalf of said Port Authority by authority of its Board of
Commissioners.
In testimony whereof, I have hereunto set my hand and affixed my official seal at my office in
said county and state the day and year last above written.
My Commission Expires:
This Instrument Drafted By
And To Be Returned To:
Mid- America Pipe Line Company
Real Estate Services
2728 Patton Road
St. Paul, MN 55113
Notary Public
encragree.doc 6 20:124 Rosemount Bus. Paris Dakota Co. MN.
Line Sec. # West Red Tract No. 4- MN -DA -28 AFE