Did Hermosa Beach City Council Members Get Paid Off?
Hermosa Beach City Council oil drilling silence looks just like the movies Erin Brockovich & Promised Land. Your silence doesn't allow us to have a proper dialog or debate as leaders of our City. Your silence makes us suspicious and looks like you have been paid off. If someone wanted to set up a house of prostitution in Hermosa Beach would you be impartial to that?
1) Request for clarification regard the present and future ownership of the oil and gas mineral rights that were own by the City prior to the original agreement(s) with Macpherson.
1-a) Who owns / controls the City's original oil and gas mineral rights at the present time?
1-b) Who will own/control the subject mineral rights if oil drilling IS NOT APPROVED by the voters, and for how long?
1-c) Who will own/control the subject mineral rights if oil drilling is approved by the voters and for how long?
2) Request for clarification regard the Oil Lease expiration data.
2-a) How many years remain on that oil lease?
2-b) Is the clock presently ticketing on that oil lease or has it been suspended due to the prior oil litigation, and if so is it still suspended and to when?
2-c) If oil drilling is NOT APPROVED by the voters what happens to the oil lease, ie. does it expire immediately, will it ever expire, will the clock continue to tick?
2-d) If oil drilling is approved by the voters what happens to the oil lease, ie. when does it expire, will it ever expire and if so when?
I don't think people who have actually lived and own homes in Hermosa Beach, California have any intention of moving backwards to permit a century long ban of drilling in Santa Monica Bay. E&B is simply wasting our value time and City resources which could be better spent elsewhere.
E&B still has the opportunity to pack up their bags and go home to save face. 2014 is a long way away.
During the Oct. 9 Hermosa Beach City Council meeting, all concerned had to again endure the self-righteous, condescending, bullying insults and obstruction from Councilmen Michael DiVirgilio and Patrick Bobko regarding a revised banking relationship with the Bank of America.
These two sneaky councilmen owning no property, home, or business in Hermosa Beach, having no historical roots in the South Bay, having both moved and rented units here after briefly renting in Redondo (obviously to use Hermosa Beach for their political self-aggrandizement) have both, more than worn out their welcome.
DiVirgilio and Bobko's badgering questions and ridicule on Oct. 9, nauseously mocked a well-researched revision to the long-neglected banking contract. Hermosa Beach will now see its present $24,000 yearly banking charges completely eliminated. And additionally with new cash credits to be received into Hermosa's account; a net savings to Hermosa's treasury of over $140,000 during the next five years, and without a necessity of expending $75,000 to change banks.
DiVirgilio and Bobko insulted virtually everyone with their pre-planned, disgusting and despicable attacks. They seemingly even elicited an Executive Director of the Hermosa Beach Chamber of Commerce (conveniently a local officer of a banking corporation appropriately rejected from consideration) to complain at the meeting.
DiVirgilio and Bobko's attempt to deceive and manipulate the minds of the public and press with their disingenuous drivel regarding "transparency" and process, was just more illustration of their increasingly offensive and self-serving behavior that wastes and disrupts council meetings costing several thousand dollars per hour.
Much appreciation for this successful new banking contract belongs to Mayor Jeff Duclos, Councilman Peter Tucker, Councilman Howard Fishman, Interim City Manager John Jalili, City Manager Tom Bakaly, the city's finance department staff including the deputy city treasurer, and especially City Treasurer and the financial officials of neighboring cities and agencies who freely gave of their expertise and wisdom.
Howard Longacre
Bobko and Divirgilio are the same two guys that negotiated (without a public hearing) a deal that is not legal and they have conflicts of interest along with other City officials. The hypocrisy of Hermosa Beach City Councilmen Kit Bobko and Michael Divirgilio is appalling. Only 1 only company bid on the deal and they made the city borrow $17.5M with no public forum or RFP. A grand jury needs to investigate what is behind their confidentiality agreement. This video is from the Octorber 9, 2012. Read more on the top reason this is a bad oil deal for Hermosa Beach.
The City Treasurer was anything but nontransparent taking bids from 19 banks and shared it with the public? You took a bid on the oil deal from a friend Gary Brutcsh who sourced the deal to you? Transparency? Your untrustworthy voting record also speaks for itself.
Request for Open Forum to Discuss Illegal Deal Denied
Hermosa Beach is about to begin the Environmental Impact Report (EIR) process and its important that you know what it is, the timing, costs, players, politics & process. An EIR is the planning document which describes the environmental impacts associated with a oil drilling project.
17 Environmental Impacts
The EIR will analyze 17 different environmental impacts and will determine which ones are significant. Aesthetics, Agricultural resources, Air Quality, Biological resources, Geology and Soils, Greenhouse Gases, Hazards, Hazardous Materials, Hydrology and Water Quality, Land use and Planning, Mineral Resources, Noise, Population, Real Estate, Public Services, Recreation, Transportation and Traffic, Utilities, Mandatory Findings. It also describes mitigation measures to reduce the impacts to an appropriate or acceptable level.
Planning Commission & City Council
The information within an EIR allows the decision-makers (the Planning Commission and/or the City Council) to make an informed decision when considering whether or not to approve a project. The report also assists with deciding if approval conditions (entitlements) are necessary. The ultimate decision to approve a project, however, remains with the decision-makers. When the Planning Commmission or City Council approves an EIR, it is simply an acknowledgement that the EIR is true and accurate. It is only a step towards project approval, not a guarantee. The Planning Commmission or City Council may decide to instead decide to approve or deny the project based on overriding considerations. For example, the Planning Commission may find that a proposed project may provide monetary benefits to a community that don't outweigh a problems identified in the EIR, such as unsafe air quality, heavy truck traffic & real estate price decline that will negatively impact property tax revenue.
Public Review
There may also be one or more meetings about the report, either as a separate meeting or as an item in a Planning Commission agenda.
Note that approval of the environmental impact report does not mean that the project is approved. Once the report is approved, decision-makers review the project, taking into account the information in the report and other considerations. The public has an opportunity to review and provide comments on a draft of an EIR by contacting, in writing, the planner listed on the EIR. Public input is then included in the EIR, and considered by the decision-makers along with other aspects of the report.
EIR Project Managers
The Hermoa Beach City Council approved a contract with Ed Almanza & Associates, a Laguna Beach firm, to serve as the project manager. However, there is no public information on this firm available on the internet as of today which is concerning. The firm will oversee the city’s review of the proposed project at large. The Council also approved a consulting contract with former City Manager Stephen R. Burrell.
Opinion: "Can Voters Rely on an EIR to Make a Voting Decision?"
It is important for the entire South Bay to understand this will be the 4th time in 80 years that Hermosa Beach has been faced with an oil drilling ballot measure. Hermosa Beach overwhelmingly banned oil drilling in public votes in 1932, 1958 and 1995. An Environmental Impact Report (EIR) will address many aspects of this process, but it will never fully disclose all the damage that oil drilling will bring about in a town 1.3 miles square. Our position as a great area to live will be severely tarnished. These safety and environmental damage resulting from oil drilling will effect generations to come.
An EIR is supposed to be a thorough analysis of: Air quality, Biological resources, Geology and soils, Greenhouse gases, Hazards and hazardous materials, Hydrology and water quality, Land use and planning, Mineral resources, Noise impact, Population and housing, Public services, Recreation, Transportation and traffic, Utilities & any other Mandatory findings of significance like real estate values. Upon the completion of the EIR, a thorough examination of the safety risks will be necessary as it was in the previous MacPhearson oil drilling project. A report like Bircher Report (safety study), which was done in relation to the MacPhearson project, will need to be done.
Its too complicated for the voters to rely on an EIR alone. Its too complicated and does not address safety to the residents. An EIR is meant to simply figure out how a project could get approved. Don't be surprised to see this EIR analyzed and separated by parts to make the environmental impacts appear smaller and insignificant to residents. It’s very important that the City Council get a report similar to the Bircher Report to fully
understand the risks these kind of project present.
Hermosa Beach has been down this road before and completed an Environmental Impact Report for Macpherson Oil in the 1990's at this exact location. The City Council elected at that time showed great care and diligence in their decision
making. They commissioned the Bircher Report and reviewed the EIR and concluded that it was unsafe and the air quality impact would have been too harmful on residents. Three City Council members Sam Edgerton, Julie Oakes and John Bowler unanimously agreed that to not proceed with oil drilling after reviewing all the findings. They felt that the safety risks were too great to allow the oil drilling project to proceed.
We need the EIR to be interpreted by professionals who will take into account the same safety issues our 1990 City Council had to. Our current council chooses not to heed this previous unanimous vote of their predecessors. It is unknown if they even read the prior EIR and related safety reports before agreeing to this settlement arrangement. The current city council viewed the outcome of a jury trail too risky and unlike our 1998 city council they put the citizens at risk, or in this case obviated the due diligence of a complicated project into a political vote where safety arguments and facts might get lost in the rhetoric..
The amendment to the municipal code bans oil, gas and hydrocarbon extraction from surface rigs, but not wells located beneath Beverly Hills that are connected to sites outside the city. The law also prevents the leasing and construction of new hydrocarbon sites effective immediately.
“The Beverly Hills City Council on Tuesday unanimously approved an interim ordinance banning oil and gas drilling. Council members used the legislative action as an opportunity to reaffirm a united, long-held stance that Beverly Hills is no place for surface oil rigs. Councilwoman, Krasne chose to potentially "err on the side of caution" to protect children when she voted "happily, yes" on the ordinance.
"I'm going to say, right now, as I sit at home with a child who has lymphoma, that if there is just a small instance of cancer caused by an oil well on the school campus, then I'm going to err on the side of caution and put this ordinance in place," Krasne said. "If it can be proved to me that this is not the case, then at that time I will gladly lift the ordinance and have no problem."
In 1972, alarmed that private development was cutting off public access to the shore, Californians rallied to “Save Our Coast.” They declared by voter initiative that “it is the policy of the State to preserve, protect, and where possible, to restore the resources of the coastal zone for the enjoyment of the current and succeeding generations.” The initiative created the California Coastal Commission to make land use decisions in the Coastal Zone while additional planning occurred.
In 1976, the Legislature enacted the California Coastal Act, which established a farreaching coastal protection program and made permanent the California Coastal Commission as it exists today. The Commission plans and regulates development and natural resource use along the coast in partnership with local governments and in keeping with the requirements of the Coastal Act. What does the California Coastal Commission do? The Commission’s authority under the Coastal Act is comprehensive. The Commission makes coastal development permit decisions and reviews local coastal programs Local Coastal Programs (LCPs) prepared by local governments and submitted for Commission approval. It also reviews federal activities that affect the Coastal Zone.
What is Hermosa Beach's Coastal Zone? Our Coastal Zone reaches from three miles our to sea and stretches to an inland boundary. This zone applies to anything above the surface of the ground and below.
Does the Commission have authority over oil and gas development? Yes. The Commission has permitting jurisdiction over all oil and gas development within the State’s three-mile range.
What standards does the Commission use in its permit and land use planning decisions?
The Commission carries out Coastal Act policies, which seek to:
• Provide for environmentally sound expansion of industrial ports and electric power plants and for siting of coastal dependent industries.
• Protect against loss of life and property from coastal hazards
• Protect and expand public shoreline access and recreational opportunities
• Protect scenic landscapes and views of the sea
• Establish stable urban-rural boundaries and guide new development into areas with adequate services
Who are the Coastal Commission members? The California Coastal Commission has 12 voting members and 3 non-voting members. Southern California representatives include: Elected to Coastal Commission in 1997 Brian Brennan (Ventura City Council and former President of Surfrider Foundation) Richard Bloom (Santa Monica City Council). Read here other bios of Coastal Commissioners. Watch this video with Brian Brennan and learn about his history and environmental sustainability priorities.
Local District Offices
South Coast Los Angeles - 200 Oceangate, 10th Floor Long Beach, CA 90802 (562) 590-5071
This picture above precisely why homes are so much cheaper in Huntington Beach, CA. A $1,000,000 home in Hermosa Beach would likely be 25% less if it were based in Huntington Beach. Most speculate its because of the widespread drilling amongst the homes. Do you want our in Hermosa Beach to drop by 25%?
The 1.3 acre City Yard lot was worth an estimated $57,000 back in 1958 according to old news articles. At this time oil was trading at $2 per barrel. This was when the last Shell oil drilling vote was being contested by long timer Hermosa resident and hero Barbara Guild. What is this City Yard lot worth now?
Most speculate it might be worth as much as $10M for commercial zoning and possibly as high as $15M if it was rezoned for residential? That is 175X the value. Oil is now $100 per barrel only 20X more. So you have to ask yourself the question which is more valuable today? Real estate or oil? Are we just giving E&B Oil a $15M piece of property for nothing? Its not factored into the proposed cost of voting for Yes oil drilling.
There are 7,000 parcels in Hermosa Beach. Every 1% decrease or increase in home prices in Hermosa represents a $57M increase or decrease in aggregate wealth. A 15% drop would flush $1B of wealth and and huge property tax base down the drain. The is assuming median home prices are $820,000. This oil drilling deal gambles with $5.7 billion in aggregate real estate wealth based on 7,000 parcels. This is a zero sum game if you if you factor in the amount of property taxes that will be lost as a result with a 15% drop in real estate values. You could also make the argument that real estate in Hermosa has been suppressed because of the ongoing oil and bankruptcy issue. Pay of the $17.5M and real estate may rise by $1 billion in the area and increase the property tax base.
The City "might" make $1M in estimated revenue if they are lucky for a 4% increase on a budget of $25M annual budget? .20 cents per barrel for the schools is going to amount to nothing. Plus they can't spend the money because of the Tidal Lands act which restricts usage of the funds generated from oil.
Property values have risen up 2X since the deal was struck with Macpherson in the 1990's. Median home prices were around $400,000. Property values are up a 100X+ since the 1950's when the last oil crises was upon us with Shell.
Based on my discussion I think the deal the Hermosa Beach City Council struck is a bad one for several reasons. The only good news is we have an actual $ settlement number and its not going to bankrupt the city. Here are my top 10 talking points to be used with anyone you know.
No public forum was held. Only 1 company (E&B) bid on the deal behind closed doors.
The oil site will be within 100 feet of homes and businesses. California recommends a 300 foot setback and Colorado law requires 350 feet setback.
State Lands Commission Staff recommended against this Oil Drilling project because it expected poor results.
Hb cannot use any of the money shared "net revenue" NOT gross for anything that is not on the beach or greenbelt. See Tidelands Act.
City Council “settlement” is a collective punishment for citizens daring to reject their plans for siting an industrial project next to homes.
Schools won’t benefit much if at all from drilling. The .20 cents per barrel for the school system was a horrible deal struck in 1990's. Oil was trading at $20 per barrel in 1990's and now at $110 per barrel.
Experts claim only 2M-9M barrels are possible at this location at best. That is only $400,000 to $1.8M for schools at .20 cents per barrel over the lifetime of the project. Over a 20 year period that is nothing per year for the schools, maybe $20K to $40K per year. Can't even hire one person for that $.
Once E&B is entrenched in Hermosa Beach, say good-bye to local control. E&B will call the shots, influence local elections, etc. Hermosa Beach will be forced to jump when E&B says ‘jump’.
Oil seeping from the ocean naturally will undoubtedly be disturbed by the slant drill. Do you want more oil washing up on the beach similar to Santa Barbara and Huntington Beach?
HB can pay off E&B Oil company and it will not bankrupt the city.
Sell the city storage property next to the fire station for $7.5M
Get a $10M "Judgement Bond" from the State of California at 3% and service loan which will cost the city $300,000 per year. (not much in the grand scheme of things).
Drilling on this lot will destroy a perfectly fine $5M lot.
Drilling is noisy and you want to smell fumes of oil downwind everyday?
The oil tar sands used "if found" would be low grade oil and only used for ships and heavily machinery. It takes more energy to refine the crap than regular oil.
Lethal gases and possible explosions?
Additional ground settling and possible earthquakes.
Its low grade oil, used by crappy machinery and will have an unknown impact on the sea and surrounding environment.
Please share this with you friends and neighbors who might be helpful spreading the world that the oil settlement should be a no vote. It may not be on the ballot for a long time but it is never too early to start campaigning against something this stupid. Please let me know if you have any thoughts or concerns. If you have any neighbors that should be on the list please copy them and lets start building the campaign now.
