15 Ways The HB City Council Is NOT Being Impartial To Oil Drilling

Hermosa Beach City Council is Warned You Are Not Acting Impartial

In case you missed the meeting last night here is a summary of Stacey Armato, Barbara Ellman & Chris Prenter warning the Hermosa Beach City Council & City Attorney Michael Jenkins about the lack of impartiality with oil drilling.  Here are 15 excellent points they bring up that the City has not address and has simply ignored.  Are they acting impartial by not including our due diligence?  

1)  "Oil Drilling" is the proper term not "Oil Production" which makes it sound like you siding with oil.  Lets not "sugar coat" it because it makes it sound like you are siding with oil.

2)  Hermosa Beach web site discussing oil landing page is not properly updated.  It says you are waiting on the project application but also says you are reviewing it?   The project application is not properly displayed on the page.  No current information is posted and no way to notify what has changed.

3)  The illegal settlement agreement is buried in the site.  How about a quick click?  Its important component that needs more attention to detail and FAQs.

4)  City is encouraging the timeliness of the EIR encouraging a quick and efficient process and the project timeline is of critical importance.  Lets encourage the accuracy of the report not the timeliness.  Lets not speed up the process unnecessarily 

5)  As the City Attorney, Michael Jenkins should be going through the settlement agreement that is not properly reflected in the FAQs.

6) Web and FAQs do not say anything about giving the City Yard up which could be valued at $8-10M dollars.

7)  Web and FAQs do not not talk about a 35 year lease of the City Yard.

8)  If the ballot measure passes and there is no significant oil royalties we are obligated to pay $3.5M within 90 days.  How will the City pay for $17.5M if it does not pass?  City says on their web site "they will undoubtedly need to issue municipal debt to pay E&B."  How do we pay for it and you are scaring the residents by not explaining your plan.  What you are implying is that we will need to issue municipal debt and that scares the residents.  This is an overstatement because we have $30M in the bank and a $100M in real estate assets.

9)  Web site talks about gross percentage sales goes to the City and schools without discussing the Tidelands trust?  This is not true and illegal.

10)  We would like to see a much more impartial analysis of on the web site because you sit there and have no opinion on the oil project.

11)  E&B's propaganda machine has been advertising in the paper before a public hearing has been done is ridiculous?

12)  The community of Hermosa Beach does not own the oil.  Its out in the ocean and the resources of the City are not oil.  Our resources are the beach, ocean, parks, people and health and safety.

13)  Steve Layton has a poor environmental track record and no where does the City web site disclose his horrible track record.

14)  Oil drilling is banned in Hermosa Beach and does not say this on the web site.

15)  The planning application is hundreds of pages and hard to read.  Its not easy to read and has not been discussed in public.  You have to hire an attorney to understand it.

Here is the public information sharing slide in the video.

This is Tom Bakaly's slide on the public input process.  Michael Divirgilio is looking into a tracking document to inform folks about the changes they are making to the web site.  There is no way for anyone to know that they are adding any items.  Track document changes, adds and edits.  The web site is the minimum require to stay up to speed.

Kit Bobko of Hermosa Beach City Council Violated The Brown Act

Watch Kit Bobko Blatantly Violate The Brown Act in a Public Meeting

This meeting above was the first City Council's first attempt at a public meeting that did not go so well for them.  They tried sneak it onto the agenda of a School Board Meeting that was supposed to be about public safety and it back fired on them.  Preventing discussion of certain issues on the agenda is a Violation of the Brown Act.

Will one of the 5 City Council members crack and break the code of silence by November?  Or will the Citizens revolt and elect 3 responsible Hermosa Beach citizens who work for the Communities best interest not their own. We need to make sure that our elected officials loyalty is not divided by serving on board(s) or organizations where there can be conflicting interest.  We need to make sure that our elected officials are disclosing information, signing legal agreements, hiring reputable companies and City Attorneys that we can trust.

A lawsuit was filed in the town Sanford / Broome County, N.Y., whose town board has blocked discussion of fracking at public meetings.  This is very similar to what is going on in Hermosa Beach and the City Council trying to deflect responsibility to a regulatory process.  This video of Sanford, New York are what future meetings in Hermosa Beach are going to look like if the City Council continue to stand behind their illegal code of silence and not commenting the agreement or oil drilling.

The Natural Resources Defense Council and Catskill Citizens for Safe Energy argue that the board of the town of Sanford violated citizens’ right to free speech (Brown Act) when it voted unanimously to block any further discussion of the controversial natural gas extraction technique during the public comment sections of town board meetings. (See the video above.)

City Council Hypocrisy, Lies, Deception & Intimidation

Video of Hermosa Beach City Council Lies, Deception & Intimidation on Oil Deal

1)  Turn up the volume for City Attorney Michael Jenkins asks for $150,000 from City Manager Steve Burrell appropriation to defend Hermosa Beach for a trial that never happened.  Shouldn't this be investigated and itemized? 

2)  Listen to the entire City Council avoid the public outreach to inform the public of their settlement.  This was held on the day the settlement was announced before the opposition was unleashed.  Michael Divirgilio avoids getting involved with the outreach program because he wants Jeff Duclos to do it.  Listen to Jeff Duclos avoid getting involved with the public forum to discuss the settlement.  There has NOT BEEN ONE PUBLIC to discuss the settlement or ask questions to the City in over a year.  

3)  Listen to the hypocrisy of Michael Divirgilio and Kit Bobko try to intimidate the City Treasurer about doing an RFP when he received 19 proposals.   The oil settlement was the largest deal in the history of the City and the deal was negotiated and personally sourced by Bobko and Divirgilio.  This is hypocrisy at its finest.  

4)  Turn up the volume for George Schmeltzer who rips the City Council a new one for hiding information.  

"E&B Won't Fool Hermosans" - Howard Longacre Letter

The Beach Reporter Letter February 6, 2013

Steve Layton, president of E&B Natural Resources, condescendingly portrayed 12 Hermosa residents who spoke out at a recent meeting as just those “remaining concerned” of E&B’s plan to drill 35 oil wells in city (Jan. 31 Beach Reporter letters).

Those residents and others are again having to give of their own valuable time and expenditures to challenge the insanity of drilling oil wells next to million-dollar homes in tiny Hermosa Beach. Now they’ve received this latest insulting, ignorant, and self-serving Kool-Aid response from Layton.
Why wasn’t Layton personally in attendance at the council/school board meeting when an E&B item was on the agenda? Is The Beach Reporter instead to be printing Layton propaganda responses every time Hermosa residents speak out in a public forum regarding E&B’s less than honorable deal, as made and signed secretly with Hermosa’s City Council?

E&B, with the outrageous secret help of Hermosa Councilman Michael DiVirgilio and Mayor Kit Bobko, and probably a few others behind the woodwork, has slickly weaseled its way into Hermosa Beach, a 21st-century city with stated goals fostering health, being green and carbon-neutral. And now E&B is to be drilling toxic oil wells?

E&B’s pitchman, Layton, has now moved himself into Hermosa Beach to better manipulate its 1.3 square miles of beach, ocean, residents, businesses and home-owners to E&B’s needs. E&B evidently views Hermosa’s electorate as being stupid and easily conned into returning to the 19th-century’s oil-drilling greed and ugliness.

If Layton actually believes Hermosa residents will be fooled into turning backward from a forklift pallet-full of smoke-and-mirrors documents, glossy PR and tempting elixirs to be dumped at their doorsteps and filling their mailboxes, than perhaps he needs to wake up and smell the coffee. Layton’s stuck in a dream and seems to have no clue that what he heard at the Jan. 23 meeting from those residents was merely the tip of the iceberg that E&B has so recklessly navigated into.

Howard Longacre
Beach Reporter Letter

Shame On You Hermosa Beach City Council. 13 Minutes of Shame

Jeff Duclos Promised & Failed To Hold A Public Meeting

What Happened to The Information Campaign You Promised Mayor Jeff Duclos?

Hermosa Beach City Council Promised & Failed To Hold One Public Meeting

Hypocrisy of Councilmen Kit Bobko & Michael Divirgilio

Listen to Hypocrites Bobko & Divirgilio Rant About Transparency

Smart financial move - Beach Reporter Letter From Howard Longacre - October 18, 2012

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

Its a Legal Issue and Not a Voter Issue

Hermosa Beach City Council Voting Record

Hermosa Beach City Council Voting Record

Kit Bobko & Michael Divirgilio are the dissenting votes or absent for all of these City Council Meeting votes?  

1)  Voted 3-2 No on Outsourcing Parking Meters

2)  Voted 3-2 Yes Hiring Tom Bakaly as new City Manager

3)  Voted 3-2 Yes to Ban Polystyrene
4)  Voted 4-1 Yes Banning Smoking on Strand & Pier Plaza
5)  Voted 4-0 Yes (Bobko Absent) Banning Smoking on Beaches
6)  Voted 3-2 Yes Approval of Bank of American Banking contract
6)  Voted 3-2 No Suspend City Treasurer Cohn who was a victim of extortion.

Oil Drilling Settlement Negotiations

The City Council seems to have a clear divide on most voting issues in recent months as described above.  However, I often have to scratch my head to understand the logic behind some of the dissenting votes in recent months.  Bobko and Divirgilio are clearly working as a team and it all seemed to culminate immediately after both launched a PR campaign to promote their oil settlement.  The big question is:  Why were the two of these guys negotiating our oil settlement deal together?  Shouldn't they have had Duclos, Fishman or Tucker in the room negotiating? Neither Bobko or Divirgilio own a home in Hermosa Beach.  It would have been impossible for a third City Councilman to participate in the negotiations because it would have been in violation of the Brown Act.  Were the residents represented properly?  I don't think so.  What business, lobbyists or people are motivating these two individuals to make make their voting decisions or press their unpopular agendas?

Outsourcing Parking Meters vs Replacing With Credit Card Machines

I think many residents who are disappointing about the City not even considering outsourcing are missing the point of Duclos, Fishman and Tucker voting no.  However, the City can always outsourcing at any point in time but lets take some baby steps and install credit card machines that we own first.  Some of the high salary and union problems might naturally go away over time.  90% of the problems can be solve by installing credit card machines and that does not require outsourcing.   The City currently collects $2.5M per year from coins and who knows we might be about to double this to $5M simply by putting in credit card machines and managing the price per spot during peak hours.  What if we charge $5 per hour for parking near the pier during peak hours.  Hint, hint . . .  this might control some of the alcohol related problems of people flooding into our city.  Controlling our own meters with credit cards is not that hard and Manhattan Beach has already demonstrated they can do it profitably.

Kit made faulty parallel assumptions that it works for Newport Beach, why not in Hermosa?  His PR was recognized in the national media blaming $100,000 meter maids as the problem?  Why did Kit conveniently leave out that installing credit card machines would have $0 cost to the city and would be profitable immediately.  This does not require outsourcing.  So, what his suggestion to outsource politically motivated or does he have the best interest of our city at heart?  Does he or his law firm RWG have any political ties to the large outsourcing firms that manage parking meters?  Does Kit once again have a conflict of interest he would like to explain?  Was he motivated to get a "deal" in return for some political donations down the road.

Kit routinely makes statements and negotiates deals that are not backed with any financial analysis.  Kit also does not appear to see the big financial picture or have a cohesive fiscal strategy as it relates to the affect on the community.  Kit is not a property owner and has no skin in the game.  He simply seems to look for revenue opportunities or ways to save money to further his political platform.  I wish Kit would simply more rational decision based on what is right for the community and not based a political ideology.  I am a conservative voter and thinker myself, however, I don't agree with much Kit's thinking or ideas as they pertain to what is best for our community.   

Councilmen Howard Fishman said the city should move immediately on replacing coin-operated meters with credit card parking meters to solve 90% of the problems. City Treasurer wrote a memorandum to the council encouraging the installation of credit card-accepting meters as other municipalities have done in order to increase funds and efficiency.  “With credit card meters, revenue goes up overnight,” Pete Tucker said.   Former Police Chief Greg Savelli, who now runs the parking enforcement department of the Los Angeles Department of Transportation, also spoke against outsourcing, saying the service the officers provide “goes beyond the balance sheet.”

“What we have now is fantastically expensive,” Kit Bobko said who seems adamant about cutting costs and saving money no matter what the outcome.  Outsourcing to save money or outsourcing to generate (oil drilling) is going to be a common platform for Kit to propel himself to a higher political office.  Kit gave no credible financial arguments justifying his outsourcing position.

Hiring Hermosa Beach City Manager Tom Bakaly

"First, let me say that I think without question that Tom was an impressive dude, and I think that he provides a lot of earned and demonstrated skills that meet our needs and that match quite nicely with our uniqueness," said Councilman Michael DiVirgilio.  Council votes 3-2.

"In Hermosa Beach, we're whistling past the graveyard because we are not having any financial troubles yet,” Bobko said. “We weren't going to stand firm and ask of our leader, the person who is in charge of our city's staff, to do what we want the staff to do, which is to pay for his own first contribution. That is deeply disappointing and I think a failure of leadership for this council…

I don't think either of these guys have much experience running a business or hiring and firing people.  My philosophy has always been to hire the best CEO you can get and pay him top dollar.  There are a lot of problems in the City right now and we need a strong, competent, financially oriented person to do the job.  I am confident Tom Bakaly was a great hire and will help turn the City around that has been neglected in many areas.

Banning Polystyrene in Hermosa Beach

Bobko and Divirgilio have been routinely voting together.  Bobko is a Registered Republican and Divirgilio seems to be a Democrat having worked for Jane Harmon.  However, the two of them seem to be singing to the same song when it comes to local voting matters.  They also don't seem to be able to sway the other 3 council members very often on their views.  Both Bobko and Divirgilio were dissenting votes (3-2_ as well on Hermosa Beach polystyrene ban.   This was shocking since Michael Divirgilio once led the Green Task Force in Hermosa Beach and pounded the table in his campaign about a City that needs to become "carbon neutral".

Banning Smoking on Strand, Pier Plaza & Beaches

It goes without saying who was the lone voter in the 4-1 vote to ban smoking on the Pier and Stand. Kit Bobko does not support banning smoking on the Pier or Strand.  Kit Bobko was also conveniently absent for the 4-0 that banned smoking on the beaches.  Does he have your health at interest or his political views?

Hermosa Beach Renegotiates Banking Contract First Time Ever Recorded

Bank of America has been the Bank of Hermosa Beach for over 40+ years. It would have cost the City over $100,000 to change banks.  Also, Treasurer Cohn renegotiated the current contract for the first time ever and was not touched by John Workman prior Treasurer.   Hermosa Beach was paying $24,000 per year in banking service fees and a $28,000 rebate?

Bobko and Divirgilio Accuse Treasurer Cohn of Sloppy Non-Transparent Work?

Sloppy?  Transparency?  Do Mr. Divirgilio and Mr. Bobko have a personal issue with Treasurer Cohn?  Aren't they being hypocritical about the City Treasurer lacking transparency in the bank bidding process of 12 banks? Correct me if I am wrong but you are the same to 2 councilmen that negotiated a $17.5M settlement with any transparency and 1 oil company? They seem to think the backroom oil deal is justified because of the ongoing litigation but you did brought in a 3rd party without any bidders. Their lack of due diligence and transparency on this deal is appalling and speaks for itself. We are talking about saving money in a banking relationship of $50,000 per year in banking fees vs a $17.5M check they wrote without any bidders while jeopardizing the health and safety of its citizens. I think the two of them have some explaining to do.  Their hypocritical voting record speaks for itself.   E&B loaned the City of HB $30M to settle the lawsuit with Macpherson. How many companies got to bid on this? Only 1 company sourced by Gary Brutsch and Michael Divirgilo and Kit Bobko. Why doesn't the LA Times investigate this?

Former City Manager Steve Burrell Unretires to Manage Oil EIR

Steve Burrell's Retirement Party Two Months Ago April 5, 2012

At the May 22, 2012 City Council Meeting, City Officials are set to approve a Professional Services Agreements with Ed Almanza & Associates and Stephen R. Burrell for consulting services to augment staff in processing land use entitlements and an Environmental Impact Report in connection with an oil drilling project.

Here is a letter to the City Council regarding this consulting agreement from long time resident Barbara Guild who beat oil drilling in 1957.  Barbara Guild has also done an extensive review on the agreement signed by Hermosa Beach and suggest that you read her oil agreement comments here.

Barbara Guild's Letter to City Council of Hermosa Beach

Dear Mayor Duclos, Councilman Fishman, Councilman Tucker, Councilman DiVirgilio, Councilman Bobko,

STOP and THINK before you go forward tonight and inappropriately approve not one, but two of the following items:  “Agreements for Consulting Services to Augment Staff in processing Land Use Entitlements and an Environmental Impact Report in Connection with an Oil Drilling Project.” DO NOT VOTE FOR THESE TWO AGREEMENTS!!! 

I have lived in Hermosa Beach for 64 years, and I am very interested in maintaining the flavor as well as the environment of our city. I actively defeated the Shell Oil Co. in their proposal to drill for oil in our tidelands in 1957. And I spoke to the Council, March13th, following the signing of the current agreement with E & B, where I stated that we are now starting with a clean slate and must realize this fact. 

The people of Hermosa Beach should be allowed to know which firms are bidding for the opportunity of preparing the necessary Environmental Impact Report. It should not be given to the first group that comes along. Allow those of us who are most interested in protecting our environment to come up with suggestions of who to engage. We have many environmental issues that need addressing, and a two-man group from Orange County, with no office on record, only a P. O. Box, should not be signed up without further consideration and public input.

The Settlement Agreement you signed, March 2, 2012, limits, to $50,000, the amount of money E & B will provide to reimburse the City for only these THREE items from (Paragraph 4.4 a):

1) The EIR,

2) The CEQA 

3) The Election to rescind the Oil Drilling Ban.

Former City Manager, Steve Burrell could earn $168,000 for each fiscal year (plus expenses), and the preliminary estimate for Almanza & Associates is $138,000. This would leave nothing to pay for the election, if it’s ever called.   Do you really think that E & B is going to pay for the contracts you might sign tonight? Please seriously consider your vote!

Yours sincerely, Barbara Guild

P.S. Here is Paragraph 4.4 of the March 2, 2012 Agreement the City made with E & B:

4.4 a. E & B’s Obligations Following Closing a. Reimburse City for the cost of preparation of an environmental impact report or supplemental environmental impact report (EIR) pursuant to the California Environmental Quality Act (CEQA) based on a Project description provided by E & B, should such an EIR be prepared and the cost of conducting a special election NOT TO EXCEED $50,000 as provided in Paragraph 4.6 (a). (Emphasis added). We are concerned why the city staff would need "assistance with processing the development application and other necessary entitlements" since this is a technical and straightforward procedure that shouldn't require a specialist consultant to accomplish. Unfortunately, Mr. Burrell placed a political cloud over his head by choosing to retire when he did. Had he stayed on longer, this contract would not be necessary. Although the city is not paying for his services, it has the appearance of double-dipping. Those opposing oil development will make hay of this which may very well distract from the serious issues of determining the safety of this project and proposed financial return to the city.

We would like to hear some details on why these people were chosen and what their qualifications and expectations are.  This comes from City Officials like Michael Divirgilio who is sounding the horn on more public transparency which I think is good.  Some questions I have for these individuals:

1) What are the details of this consulting agreement?

2)  How much are they getting paid and by Hermosa Beach?

3)  What is their history with the project, E&B, oil or lawsuit?

4)  What is their professional experience managing processes like this?

5)  Do Steve Burrell or Ed Almanza have any conflicts of interest?

6)  How will this facilitate the promise from City Council about making the EIR process public?

7)  Are any city residents involved in the EIR process?

8) Why are the we, the citizens, paying for this? Why isn't this cost being underwritten by the oil company? Or are we concerned that if they pay for it we won't get legitimate answers?

Please add your comments here. 

A Blessing From The Heavens?

Read These 3 Daily Breeze Article Quotes With A Barf Bag in Hand 

Mayor Howard Fishman said. "We stopped the bleeding. It's the greatest accomplishment this council has done since I've been on it."

Gary Brutsch was a councilman in 1984, when voters approved two Macpherson-backed initiatives allowing drilling. And it was a chance encounter in December with Don Macpherson, his former neighbor, on a flight to Hawaii that paved the way for settlement negotiations to rekindle. Brutsch, a South Bay Realtor, said of the settlement. "At the very least, it has limited the city's liability. I think it was absolutely a blessing from the heavens."

"When you look at technology, and ask, "Is it dangerous?' The answer is not really," Ershaghi said. "People may worry because they are not sure of what the consequences are. The technology is there to make the project safe, it's just a matter of making sure rules and regulations are followed."

Just to be crystal clear, I am NOT questioning Doug Morino the Reporter who did a great job on the article.  Kudos to him for doing a lot of homework.  More to come I am sure.  Read this entire story from the Daily Breeze.

Ask Mayor Howard Fishman Lunch on Tuesday

Networking Lunch at Fritto Misto in Hermosa Beach on Tuesday, March 13 at 11:30 AM.  Lets get some more information out to the public while we eat some tasty garlic bread and bruschetta.  We attended the lunch and was struck be a number of erroneous statements the Mayor made about revenues, timing of the vote and some important legal details.  It is clear that he did not understand the agreement he signed and think this is why large agreements like this should not be negotiated and signed in a backroom without public comment.  Our Hermosa Beach City Council is obviously being told what to say by the oil company and a paid PR agency.  Are they really working for us?  Why are they under a confidentiality agreement?