Item 7B Attachment DM E M O R A N D U M
April 15, 2008
To: Shana Yelverton, City Manager
From: Robert H. Price, P.E., Director of Public Works
Subject: Proposed Road Damage Remediation Agreement
Action
Requested:
Provide comments on Road Damage Remediation
Agreement, if any.
Background
Information:
The current ordinance regulating Oil and Gas Drilling in the
City of Southlake was approved on second reading on
October 5, 2004. A Master Roadway Repair Agreement was
required to be submitted in conjunction with the application
for a specific use permit.
As a result of the review of city’s current drilling ordinance, a
review of the Master Road Repair Agreement was in order.
The City contracted with Kimley-Horn and Associates, Inc.
(KHA) to study anticipated damages that may be expected to
occur to roadways within the City of Southlake as a result of
heavy trucks associated with gas well drilling and production
activities. The goal of this study was to determine if
damages can be expected on the various pavement
structures within the City and if damages are anticipated,
what will be the cost to remediate damages.
Based upon the aforementioned study and current
construction cost estimates, a Road Damage fee will be
calculated based upon a recommended cost per lane mile to
account for anticipated road damage resulting from the use
of city streets designated on the proposed truck route
identified by the applicant.
Replacement costs for asphalt and/or concrete road
segments were determined from current fair market value
cost per square yard of road surface material, including
installation and labor.
The City’s investigation and determination of any and all
aspects of the above referenced methodologies constitute
generally accepted practices of road replacement, repair,
and maintenance professionals undertaking similar project
evaluations at the same time, and in the same geographical
area.
Financial
Considerations:
The Road Damage Remediation agreement requires that a
road repair fee based upon a designated truck route be paid
to the city in advance of the release of a drilling permit.
The following table conveys road damage fees that will be
assessed for gas and oil well drilling and production
activities. The assessment of damages is based on the
analysis of pavement structures using FPS19W pavement
design software and back checking the analysis with the
Texas Triaxial Method. The resultant of the pavement
structure analysis determined that any flexible pavement
structure (combination of asphalt concrete and flexible base)
less than 10.5 inches in total thickness could experience
permanent pavement deformation under the anticipated
wheel loads associated with the drilling and production of a
gas/oil well.
The assessment fees for flexible pavements 7.5 inches or
less of total thickness are equal to the replacement costs of
the roadway section. The assessment fees for flexible
pavements 8 inches to 9 inches of total thickness are the
cost of correcting pavement deformation with an asphalt
concrete pavement overlay to a 10.5 inch total pavement
thickness. Assessment fees for flexible pavements 9.5
inches of total pavement thickness or greater are equal to a
1.0 inch asphalt concrete pavement overlay.
It was determined from a pavement analysis that concrete
pavements 6 inches or greater are adequate for the
anticipated truck loadings. The assessment fees for
concrete pavements are for routine full depth spot repairs of
concrete pavements that are anticipated to be the direct
result of gas/oil truck loadings.
-
Per Lane Mile
Roadway Section Fee
Assessment
2-Course Surface Treatment + 6” to 7” Flex Base$166,000
7” Flexible Pavement Structure (Total Inches ACP + Flex Base) $173,000
7.5” Flexible Pavement Structure (Total Inches ACP + Flex $188,000
Base)
8” Flexible Pavement Structure (Total Inches ACP + Flex Base) $115,000
8.5” Flexible Pavement Structure (Total Inches ACP + Flex $100,000
Base)
9” Flexible Pavement Structure (Total Inches ACP + Flex Base) $85,000
9.5” or More Flexible Pavement Structure (Total Inches ACP + $70,000
Flex Base)
Concrete Pavement$73,000
Citizen Input/
Board Review:
Oil and Gas Task Force
Legal Review:
This document has been reviewed by the City Attorney
Alternatives:
The Council may choose to approve, deny or edit this
proposed document.
Supporting
Documents:
Revised Road Damage Remediation Agreement
Kimley-Horn Road Damage Assessment Study (4/1/08)
Staff
Recommendation:
Robert H. Price, P.E., Director of Public Works
Gordon J. Mayer, Jr., P.E., City Engineer
Road Damage Remediation Agreement
STATE OF TEXAS §
COUNTY OF TARRANT §
This Road Damage Remediation Agreement
, (hereafter the “Agreement”), is made
and entered into on this the ______ day of __________________, 20 , by and
between the City of Southlake, Texas (hereafter the “City”), a municipal corporation and
a home-rule municipality of the State of Texas, located within Tarrant & Denton
Counties, Texas; and ____________________________________ (hereafter the
“Operator;” the term “Operator” as used herein shall collectively include all agents,
servants, employees, contractors, patrons, guests, licensees, invitees and other
representatives of the Operator) for the payment of fees for damage remediation of
certain streets and/or roadways within the City of Southlake, Texas, as more fully
described herein.
WHEREAS
, Operator is in the business of drilling gas and/or oil wells and, in
connection therewith, shall be engaged in drilling and production activities on property
identified on Operator’s gas well permit, which abuts or is adjacent to, and/or is
accessed by roadways within the City of Southlake, and
WHEREAS
,the Operator’s gas well permit from the City of Southlake, dated
________20___, is made a part of this Agreement by reference; and
WHEREAS
, the nature of heavy vehicular traffic during natural gas well development
(“drilling”), post-production well stimulation (“fracing”) and re-working activities will
exceed the normal and anticipated use of the public roadways within the City’s
corporate limits; and
WHEREAS
, according to the study conducted by Kimley-Horn and Associates, Inc.,
dated April 1, 2008 ( hereafter the “Study”) the life expectancy of a roadway decreases
with heavy vehicular traffic traveling upon it, and heavy equipment loads produce
greater amounts of road distress according to the Study; and
WHEREAS,
distress which may either be structural or functional, which in turn,
increases overall maintenance oversight, repair, and replacement costs to the City
respecting the roadways, in connection with the Operator’s gas and/or oil well drilling
and production activities; and
WHEREAS,
structural distress is recognized as the pavement’s ability to carry traffic
and/or cracking or deterioration of the pavement section; and
WHEREAS
, functional distress is recognized as the ride quality and safety of the
pavement; and
WHEREAS
, use of the roadways by the Operator for the purpose of performing the
activities described hereinabove causes distress to the roadways as a result of the
frequency of their specific operations and such distress may be immediate or it may be
gradual and delayed, and also will exceed the design criteria of said roadways, thus
causing greater than ordinary wear and tear and damaging of the roadways; and
WHEREAS
, the City and Operator, for the mutual consideration hereinafter stated,
desire to enter into this Agreement for Operator to compensate City for the maintenance
and damage remediation of such roadways for the duration of the term of this
Agreement in consideration for Operator’s use of such roadways for the purpose of the
activities described hereinabove.
NOW THEREFORE,
in consideration of the mutual promises contained herein, the
parties agree as follows:
ARTICLE 1.
RECITALS
The foregoing recitals are understood and agreed upon by the parties and are
incorporated into the terms of this Agreement.
ARTICLE 2.
DAMAGE REMEDIATION OBLIGATION
1.Fee
: City and Operator understand and agree that use by Operator, its
contractors, subcontractors, employees and agents (all hereafter referred to as
“Operator”) of roadways that abut and lead to the property for which a Well Permit has
been issued to Operator, will decrease the life expectancy of such roadways. Operator
and City agree that it is and will continue to be impracticable and extremely difficult to
determine the actual amount of such damage. Therefore, City and Operator hereby
agree that Operator shall pay to City a road damage remediation fee based upon the
formula set forth in Exhibit “A” to this Agreement, a copy of which is attached hereto and
incorporated herein. Both City and Operator agree that the amount assessed pursuant
to the formula set forth herein is the minimum value of the costs and actual damage and
decreased life expectancy of roadways caused by the normal use of the roadways by
Operator. Such sum of money shall be paid by Operator to the City prior to the
commencement of any activity under the Well Permit. It is expressly understood and
agreed that such formula and fee are not to be considered a penalty, nor a tax, but shall
be deemed taken and treated as a fee that is roughly proportionate and necessary for
City to repair and maintain its roadways based upon normal usage by Operator acting in
the ordinary course of its business.
2.Truck Route:
An exhibit identifying the proposed truck shall be submitted
as part of the well drilling permit application. The road damage remediation fee
identified in Exhibit A of this agreement will be based on the truck route submitted and
the fees established by City Council. Operator shall be liable for and shall pay
additional road damage assessments should Operator deviate from the truck route that
is designated in the Well Permit.
3.Timely Payment:
In the event that Operator does not timely and adequately
make payment under this Agreement upon written demand of the City, the City has the
authority to prohibit further use of its roadways by Operator’s vehicles, to suspend any
and all Well Permits issued to Operator, and to make a claim on Operator’s bond or
other security instrument.
ARTICLE 3.
ROAD DAMAGE REMEDIATION FEE
1.Methodology:
The Road Damage Remediation Fee shall be calculated using
the method outlined in Exhibit “A.” Replacement costs for asphalt and/or concrete road
segments shall be determined from current fair market value cost per square yard of
road surface material, including installation and labor. The City shall provide as an
attachment to this Agreement, a copy of the calculations directly related to the
methodology used to determine the fee paid by Operator; such attachment is identified
as Exhibit “A”, a copy of which is attached hereto and incorporated herein.
The City’s investigation and determination of any and all aspects of the above
referenced methodologies constitute generally accepted practices of road replacement,
repair, and maintenance professionals undertaking similar project evaluations at the
same time, and in the same geographical area. The City observes the same degree of
care and skill generally exercised by professionals under similar circumstances and
conditions.
2. Road Damage Remediation Fee Calculation: The Road Damage Remediation
Fee, hereafter stated, and in compliance with all applicable methodologies hereinabove
enumerated, shall be an amount as determined by the Road Damage Remediation
Calculation, Exhibit “A”.
RoadwayPer Lane Mile
TypeExisting Roadway Section Fee Assessment
I2-Course Surface Treatment plus 6” – 7” Flex Base $ 166,000
II7” Flexible Pavement Structure (Total ACP + Flex Base) $ 173,000
III7.5” Flexible Pavement Structure (Total ACP + Flex Base) $ 188,000
IV8” Flexible Pavement Structure (Total ACP + Flex Base) $ 115,000
V8.5” Flexible Pavement Structure (Total ACP + Flex Base) $ 100,000
VI9” Flexible Pavement Structure (Total ACP + Flex Base) $ 85,000
VII9.5” or more Flexible Pavement Structure (Total ACP + Flex $ 70,000
Base)
VIIIConcrete Pavement$ 73,000
3.Payment Due:
The Road Damage Remediation Fee is required to be paid in full
at the time of issuance of a Well Permit by the City. Such permit application shall be
considered administratively incomplete until this Agreement is executed, Road Damage
Remediation Fee payment received, and both are on file with the City.
ARTICLE 4.
TERM OF AGREEMENT
This Agreement shall commence upon the date indicated above and shall continue in
full force and effect until Operator has completed and/or permanently discontinued the
activities upon the roadways, as described hereinabove.
ARTICLE 5.
INSURANCE AND INDEMNITY
1.Insurance:
The Operator shall provide or cause to be provided the insurance and
other security that meet the requirements of Section 9.5-259 of the Code of Ordinances
of the City of Southlake, Texas, as amended. Such insurance shall be maintained in
effect at all times when the Operator is engaged in exploration, development, and
production of gas, oil or other hydrocarbons in the City of Southlake.
2. Indemnification: Operator hereby agrees to indemnify, defend and save
harmless the City, its departments, agents, officers, servants and employees from
all suits, actions or claims of any character name and description brought for or
on account of any injuries or damages received as sustained by any person,
persons or property, including personal injury or death, on account of the
operations of Operator, its agents, employees, contractors, subcontractors or
representatives, or on account of any negligent act or fault of Operator, its
agents, employees, contractors, subcontractors or representatives in connection
with the obligations of Operator under this Agreement; and Operator shall pay
any judgment, with costs, and if applicable attorney’s fees which are a part of the
judgment, which may be obtained against the City growing out of such injury or
damage. IT IS UNDERSTOOD AND AGREED THAT SUCH INDEMNITY IS AN
INDEMNITY EXTENDED BY THE OPERATOR TO INDEMNIFY AND PROTECT THE
CITY OF SOUTHLAKE AND/OR ITS DEPARTMENTS, AGENTS, OFFICERS,
SERVANTS, OR EMPLOYEES FROM THE CONSEQUENCES OF THE
NEGLIGENCE OF THE CITY OF SOUTHLAKE, TEXAS AND/OR ITS
DEPARTMENTS, AGENTS, OFFICERS, SERVANTS AND EMPLOYEES, WHETHER
THAT NEGLIGENCE IS THE SOLE OR A CONTRIBUTING CAUSE OF THE
RESULTANT INJURY, DEATH, AND/OR DAMAGEOperator specifically agrees
.
that road damage in excess of the road damage remediation fee assessment
provided for in this Agreement shall be paid from Operator’s security required
under Section 9.5-260 of the Code of Ordinances of the City of Southlake, Texas,
as amended.
ARTICLE 6.
INDEPENDENT CONTRACTOR
Operator understands and agrees that Operator, its employees, servants, agents, and
representatives shall at no time represent themselves to be employees, servants,
agents, and/or representatives of the City. The City shall not have any control over the
means or methods by which Operator shall perform its obligations hereunder. Operator
shall furnish all equipment and materials necessary to perform hereunder and shall at
all times be acting as an independent contractor. No action by either party should be
construed to create a partnership, joint venture, or other dual enterprise between the
parties.
ARTICLE 7.
GOVERNMENTAL IMMUNITY
By entering into this Agreement, the City does not waive, nor shall it be deemed to
waive, any immunity or defense that would otherwise be available to it against claims
arising by third parties.
ARTICLE 8.
NO IMPACT FEE
Operator agrees that the Road Damage Remediation Fee provided hereunder is not an
impact fee under Chapter 395 of the Texas Local Government Code, and expressly
agrees that this Road Damage Remediation Fee is not a charge or assessment
imposed by a political subdivision against new development in order to generate
revenue for funding or recouping the costs of capital improvements or facility
expansions necessitated by and attributable to new development. Further, Operator
agrees that the Road Damage Remediation Fee provided hereunder will not be credited
to any subsequent roadway impact fees if the subject property is subdivided or
developed in the future.
The Road Damage Remediation Fee shall not be applied to roadways other than those
maintained by the City and designated as “transportation routes” as part of the Well
Permit application pursuant to section 9.5-256(b)(4) of the Code of Ordinances of the
City of Southlake, Texas, as amended. Funds from these fees shall not be expended on
public roadways or streets, other than those designated as City-maintained gas well
“transportation routes.”
ARTICLE 9.
FORCE MAJEURE
In the event that the performance by either party of any of its obligations or undertakings
hereunder shall be interrupted or delayed by any occurrence and not occasioned by the
conduct of either party hereto, whether such occurrence be an act of God or the
common enemy or the result of war, riot, civil commotion, sovereign conduct, or the act
or conduct of any person or persons not party or privy hereto, then such party shall be
excused from performance for a period of time as is reasonably necessary after such
occurrence to remedy the effects thereof, and each party shall bear the cost of any
expense it may incur due to the occurrence.
ARTICLE 10.
ASSIGNABILITY/CONSENT
Except as otherwise provided herein, or except as may be hereafter determined by the
parties and added as a written amendment or modification hereto, no party to this
Agreement may sell, assign, or transfer its interest in this Agreement, or any of its right,
duties, or obligations hereunder, without the prior written consent of the other party.
ARTICLE 11.
NOTICE
Any notice given by one party to the other in connection with this Agreement shall be in
writing and shall be by personal delivery; sent by registered mail or certified mail; or by
United States Mail, return receipt requested, postage prepaid; to:
CITY: City Manager
City of Southlake, Texas
1400 Main Street, Suite 400
Southlake, Texas 76092
OPERATOR:
Notice shall be deemed to have been received on the date of receipt as shown on the
return receipt or other written evidence of receipt.
ARTICLE 12.
MODIFICATION
No waiver, amendment, or modification of this Agreement or of any covenant, condition,
limitation herein contained shall be valid unless in writing and duly executed by the party
to be charged therewith. No evidence of any waiver or modification shall be offered or
received in evidence in any proceeding arising between the parties hereto out of or
affecting this Agreement, or the rights or obligations of the parties hereunder, unless
such waiver, amendment, or modification is in writing, duly executed by both parties.
The parties further agree that the provisions of this Article will not be waived unless as
herein set forth.
ARTICLE 13.
SAVINGS/SEVERABILITY
In the event that any one or more of the provisions, terms, phrases or clauses of the
provisions contained in this Agreement shall for any reason be held to be invalid, illegal,
or unenforceable in any respect; such invalidity, illegality, or unenforceability shall not
affect the other provisions, terms, phrases or clauses of the provisions contained herein
and the Agreement shall be construed as if such invalid, illegal, or unenforceable
provision, term, phrase, or clause had never been contained in this Agreement.
ARTICLE 14.
GOVERNING LAW AND VENUE
This Agreement shall be construed under and governed by, and in accordance with the
laws of the State of Texas, and venue for any action arising under the terms and
conditions of this Agreement shall lie in the state courts located in Tarrant County
,
Texas.
ARTICLE 15.
ENTIRE AGREEMENT
This Agreement and the exhibits and other documents attached hereto and/or
referenced herein, constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, and supersede any prior understandings or written
or oral agreements between the parties with respect to the subject matter of this
Agreement. No amendment, modification, cancellation or alteration of the terms of this
Agreement shall be binding on any party hereto unless the same is in writing, dated
subsequent to the date hereof, and is duly authorized andexecuted by the parties
hereto. Notwithstanding the foregoing, this Agreement is cumulative of all applicable
City Ordinances, as amended.
ARTICLE 16.
NON-WAIVER
The failure of either party to enforce or insist upon compliance with any of the terms or
conditions of this Agreement shall not constitute a general waiver or relinquishment of
any such terms or conditions, but the same shall be and remain at all times in full force
and effect.
ARTICLE 17.
CAPTIONS
The captions contained in this Agreement are for informational purposes only and shall
not in any way affect the substantive terms or conditions of this Agreement.
ARTICLE 18.
CONSTRUCTION OF AGREEMENT
The parties hereto have negotiated the terms of this Agreement and therefore
agree that as a negotiated document, this contract shall not be more strictly construed
against either party.
ARTICLE 19.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, and constitute one and the same instrument.
IN WITNESS WHEREOF,
the parties do hereby affix their signatures and enter into this
Agreement as of the ______ day of _______________ , 20__.
“CITY”
CITY OF SOUTHLAKE, TEXAS ATTEST:
By:
Shana Yelverton, City Manager Lori Payne, City Secretary
APPROVED AS TO FORM:
By:
City Attorney
“OPERATOR”
By:
(Name)
Title:
Name o
f
Entity:
STATE OF TEXAS §
§
COUNTY OF TARRANT §
Before me, the undersigned authority, a Notary Public in and for the State
of Texas, on this day personally appeared Shana Yelverton, City Manager of the City of
Southlake, Texas, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that the same was the act of the City of
Southlake, Texas and that he executed the same as the act of such City of Southlake,
Texas for the purposes and consideration therein expressed and in the capacity therein
stated.
Given under my hand and seal of office this the _____ day of
__________________, 20___.
[SEAL]
___________________________________
Notary Public in and for the State of Texas
STATE OF TEXAS §
COUNTY OF __________ §
Before me, the undersigned authority, a Notary Public in and for the State
of Texas, on this day personally appeared ___________________________________,
(title) for ___________________________ (Entity Name of Operator), known to me to
be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that the same was the act of
_________________________________ (Entity Name of Operator) and that he
executed the same as the act of such Operator for the purposes and consideration
therein expressed and in the capacity therein stated.
Given under my hand and seal of office this the ____ day of
______________________, 20___.
___________________________________
[SEAL] Notary Public in and for the State of Texas.