Broward County Commission Regular Meeting
Director's Name: Glenn Wiltshire (Acting Director)
Department: Port Everglades Division: Director’s Office
Information
Requested Action
title
MOTION TO APPROVE First Amendment to License Agreement between Broward County and TransMontaigne Terminals L.L.C. for Bulk Petroleum Product Pipelines at Port Everglades, extending the term by ten years, approving reimbursement of certain expenses associated with the relocation of pipelines, and updating the premises to account for additional pipelines previously installed pursuant to two separate agreements with TransMontaigne Terminals L.L.C., both agreements of which are terminated upon execution of this First Amendment; and authorize the Mayor and Clerk to execute same.
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Why Action is Necessary
Amendments to License Agreements with a term that exceed one year require approval by the Broward County Board of County Commissioners.
What Action Accomplishes
Amends the existing ten-year License Agreement between Broward County and TransMontaigne Terminals L.L.C. for Bulk Petroleum Product Pipelines at Port Everglades, extending the term by ten years, approving reimbursement of certain expenses associated with the relocation of pipelines, and updating the premises to account for additional pipelines previously installed pursuant to two separate agreements with TransMontaigne Terminals L.L.C., both agreements of which are terminated upon execution of this First Amendment.
Goal Related Icon(s)
☒County Commission
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Previous Action Taken
None
Summary Explanation/Background
THE PORT EVERGLADES DEPARTMENT RECOMMENDS APPROVAL.
This action supports the Broward County Board of County Commissioners’ (“Board”) Value of “Building Partnerships and working collaboratively with others to meet shared objectives,” and the Goal of “Ensuring economic opportunities and a sustainable economy, with an emphasis on Broward's lower and middle class.”
TransMontaigne Terminals L.L.C. ("TTL") and its predecessor companies have operated underground pipelines on Port property over the past 80 years subject to a series of agreements with Port Everglades, which provide licensed areas for the installation, maintenance, and operation of bulk petroleum pipelines.
On June 16, 1994 (Item No. 16), the Port Everglades Authority, predecessor to Broward County, approved a 30-year pipeline easement agreement for pipelines at TTL’s North Terminal in Port Everglades with a term expiring on June 15, 2024 (“Expiring Agreement”). On May 19, 2019 (Item No. 11), the Board approved a ten-year Bulk Petroleum Product Pipelines License Agreement with TTL for a fueling pit and associated pipelines at Cruise Berth 4 at Port Everglades (“Pit Agreement”). On August 24, 2021 (Item No. 14), the Board approved a ten-year Bulk Petroleum Product Pipelines License Agreement with TTL for pipelines crossing under Spangler Boulevard (“Current Agreement”).
As the Expiring Agreement is expiring on June 14, 2024, after discussions between the County and TTL, it was mutually agreed to combine the three agreements (the Expiring Agreement, Pit Agreement, and Current Agreement) by amending the Current Agreement to incorporate applicable provisions from the other agreements. Under the Expiring Agreement, the County is responsible for reimbursing TTL for the full cost of relocation of any of TTL’s pipelines, including dockside infrastructure used for ship fueling (“Bunker System”) required by the County. Recognizing that TTL has made significant investments in this infrastructure that provides substantial benefits for vessels calling on Port Everglades, the First Amendment retains a reimbursement provision but eliminates TTL’s eligibility for reimbursement for pipelines used to offload petroleum cargoes from ships and reduces the County’s responsibility for reimbursement for removal and/or relocation of the Bunker System directed by the County to one-third of any actual costs or expenses incurred up to a maximum of $1,000,000. It also incorporates a separate provision to reimburse TTL for the full cost of pipeline relocations required for the Port’s Slip 1 Expansion Project, but limits that reimbursement to a maximum of $3,000,000. The First Amendment also extends the term of the Current Agreement by ten years to August 24, 2041.
The Port generates revenues from dockage and other fees applicable to oceangoing vessels using Port berths, as well as from wharfage fees paid by TTL on all petroleum products moving through the pipelines as outlined in the Port Everglades Tariff. An additional annual license fee is charged for the use of right-of-way on Port property where wharfage charges are not applicable, including strips of land planned to be used to interconnect non-contiguous TTL tankage.
The Expiring Agreement and Pit Agreement are terminated as of the effective date of this First Amendment.
The License Agreement has been reviewed by the Port Everglades Risk Manager and approved as to form by the Office of the County Attorney.
Source of Additional Information
Neil J. Kutchera, Assistant Port Director, Energy, Port Everglades Department (954) 468-3520
Fiscal Impact
Fiscal Impact/Cost Summary
Income from the amended agreement is anticipated to generate approximately $83.9 million in revenue over the 20-year term of the Current Agreement.