KCAL9 CBS Story "Oil Drilling Proposal in Hermosa Beach"

Stacey Armato, Michael Collins from StopHermosaBeachOil.com
No Comment From E&B Natural Resources

Thank You Serene Branson from KCAL 9 

E&B did not comment on this story because news publicity is last they want in the Los Angeles area. E&B is attempting to take advantage of a vulnerable town and quietly drill into the Santa Monica Bay without waking up the powerful media groups that will make this a huge National story. The oil drilling proposal is not a story about 18,000 Hermosa Beach residents but more about maintaining the lifestyle of 11 million people that enjoy the cool breezes from Santa Monica Bay.  Its about jeapardizing the integrity of thousands of plugged oil wells under homes in Redondo Beach, Hermosa Beach and Manhattan Beach that could leak and explode if they are come under pressure from new hydraulic drilling nearby.

This illegal settlement agreement was constructed by Hermosa Beach City Council Member Kit Bobko and he is obviously nervous in this video above doing his first TV interview on the topic.  He will be forced to defend the illegal Hermosa Beach oil settlement it in order to save his political career.  Look at Kit Bobko's horrendous environmental voting record.  Watch these videos below which show Hermosa Beach City Council hypocrisy, lies, deception & intimidation.

Where is the Leadership on the Hermosa Beach City Council?

Where Do You Stand City Council?

1. Allowing an oil company to drill for the next 30 to 40 years?
2. 3500 trucks rolling into town? 
3. 8,000 barrels of oil refined on site
4. 250,000 cubic feet of gas refined on site?
5. Injection wells underneath the ocean?

Hands Across The Sand Hermosa Beach - Saturday, May 18, 2013

Hands Across The Sand Hermosa Beach

Saturday, May 18, 2013 at 11 am

Here is video from 2010 celebrating an "oil free" town.  

Please take notice that Hermosa City Councilman Jeff Duclos is in this video.  

Jeff Duclos is also an alternate on the Coastal Commission.  

10 Reasons to Vote Yes for Measure A

10 Reasons to Oppose AES Redondo Beach Power Plant Rebuild 

1. Emissions from the new power plant would increase 700%. 
2. 6,850 students go to school within 1.5 miles of it. 
3. AES management has a horrendous track record and has been involved in several law suits and financial crisis issues including Enron.  Read this "AES Corporation: Rewriting the Rules of Management". 
4. AES's largest customer is J.P. Morgan according to the AES company fact sheet on the web site.  A bank as your largest customer?  Sounds a bit like Enron to me.  This Redondo Beach power from this plant is not needed per the CAISO and CEC reports.
5. Power plant lines bring down property values at least 25% in the Redondo Beach & South Hermosa Beach areas and block ocean views.  The power lines may go as well. This has not been studied. 
6. AES hurts the fiscal health of the Redondo King Harbor area surrounding businesses.  New waterfront developments have been put on hold because of the power plant rebuild issue.  Many new restaurants would likely follow the new Shade Hotel being built on King Harbor more money would flow to the City if the power plant was gone.  
7. Opposing it costs nothing & AES only needs the Council and others to do nothing and we all lose.  Doing nothing plays right into their hands. This is not about the future zoning of the site.  We definitely don't want a new power plant.  See map below of what this area could be. 
8. AES pays little in taxes only $385,000 / year in tax revenue to the city. 
9. AES plant borders on South Hermosa Beach and most HB residents will be affected. 
10. The loud steam blasts in the middle of the night are simply ridiculous and this beautiful park rendering (see picture below)  done by the California Coast Commission would be incredible the area. 

In a 3-2 vote, the Redondo Beach City Council decided to continue its discussion on a resolution opposing the repowering of AES Redondo Beach at the July 10 meeting. After a meeting that lasted more than seven hours until 1 am, the Redondo Beach City Council decided to delay its discussion on whether to pass a resolution opposing the repowering of the AES Redondo Beach power plant on Harbor Drive until the July 10. This will allow city staff time to hire an independent consultant to perform an amortization report on the current structure. Councilmen Matt Kilroy and Pat Aust both said they wanted to read such a report before making a final decision.  Is this just a delay tactic?  Read more on Redondo Patch and Easy Reader. 

Redondo Beach City Council 

Matt Kilory, Steve Aspel, Bill Brand, Pat Aust, Steve Diels

Hermosa Beach, Torrance, Manhattan Beach and Palos Verdes should participate as well in support of removing the power plant. NIMBY thinking and waiting is just plain lazy and stupid.  All surrounding City Council members need to work together because this is such a big issue.  Lets set politics aside and be proactive about finding a solution to do the right thing.  This is not just about Redondo Beach and we all stand to benefit with cleaner air and potentially new development that we all can use. The King Harbor area has so much potential. Its a developers "wet dream" and huge private money would follow the opportunity to create something amazing.  

It Redondo Beach City Council's job to find an alternative solution for the power plant land.  However, we all know political people are lazy and always need LOTS of "hand holding" so they feel safe. Why would City Council members be reluctant to oppose the new power plant remodel that produces a minuscule $200,000 in tax revenue per year which is less money than the city makes from its parking garage at the pier. 

Is AES threatening Redondo Beach City Council members with a law suit?  Any initiative by the city residents is not likely to provide AES with any basis to sue the city. Finally, there is an amortization process through which a city, or a citizen's initiative, can allow businesses adequate time to get a return on their investment in a property before a specific use is banned. The proposed citizen initiative would eliminate industrial uses by 2020, which I think is plenty of time (8 years) for AES to get adequate return on their investment in the property, especially considering the majority of the equipment is old and obsolete, and esentially worthless at this point.  

AES is no stranger to crisis and law suits.  In 1992, AES flirted with disaster when its Shady Point generating facility in Oklahoma was discovered to have been discharging polluted water and to have falsified the samples it provided to the Environmental Protection Agency. In the same year, AES was forced to abandon its rebuilding of a power plant at Cedar Bay, Florida following a dispute with state officials and the local community. These events caused AES’s share price to fall by half.  AES has multiple law suits against the company (see AES Law Suits) search results.  

AES is a $9 billion public company (NYSE: AES) planning to make a $500M+ investment on a power plant that might be worth an estimated $135M (comps based on AES Huntington Beach valuation performed in 2011). AES is looking to repower the plant in 2018. They are currently using the plant only 5% of the time right now, and with an investment of $630 million for a new plant, the amount of energy needed to pay back the investment will mean lots of particulate matter in the atmosphere in Redondo, Hermosa, and surrounding communities. While the footprint will be smaller (12 acres vs the current 50 acres, 4 stacks instead of 5), any chance for revitalizing the waterfront will be lost for 50+ years as no one will want to invest in the area. Here are some points and a link to FAQs Tear Down Redondo Beach Power Plant Blog:

California Coastal Commission's study for AES power plant area

The Hermosa Beach Oil Settlement Agreement is Not Legal

Why has no one on the City Council read the Macpherson mock jury trial documents or transcript?  The threat of bankruptcy was the basis for was for a $17.5M settlement and extortion vote and no one has read the documents?

Before you read this you should review the contract agreement comments. In a properly negotiated & compromised settlement agreement, "neither party should be happy"with the outcome.  In this settlement agreement Hermosa Beach tax paying residents lost while the lawyers, City Council and oil won regardless of the outcome of the vote.  Here are some very important questions for our proud elected officials: Council Member Patrick (Kit) Bobko, Hermosa Beach City Attorney Michael Jenkins and Michael Divirgilio.

Drilling Down Article 

1)  If there was such a real likelihood that Macpherson Oil would win a court award for HUNDREDS OF MILLIONS OF DOLLARS ($750 million,), then why did Macpherson Oil settle for a mere $30 Million or 4% of his asking price?   Did Macpherson believe that, even if they won the jury trial, they would likely receive substantially less than $30M, or probably even NOTHING (see below)?  

2)  Was the 1995 “STOP OIL” ELECTION FLAWED because the “City Attorney (Jenkins) Impartial Analysis” in the election pamphlet failed to advise/warn voters of the real possibility of a Breach of Contract lawsuit to recover POTENTIAL LOST PROFITS? Were Hermosa Beach voters properly informed about the potential consequences, including tremendous financial liability, of the Proposition E vote in 1995? What law firm was providing City Attorney services to Hermosa Beach during this decade/period of time? Weren’t Bobko and Jenkins both employees of this same law firm - Bobko's current employer RWG Municipal Law Firm (of which he is now a Partner)?

3) Until 2001, Hermosa Beach City Attorney services were being provided by (Bobko’s & Jenkin’s) RWG Municipal Law Firm, represented by RWG Employee Michael Jenkins. From 2001 and onward, Michael Jenkins law firm began providing City attorney services to the City, including providing oversight services on the law firms defending the City from the MacPhersson lawsuit.  After the MacPherson lawsuit was filed, why didn’t RWG admit there had been and omission/error, and advise the City to hold a new election? (The 1995 measure passed by a mere 565 votes). Why didn’t Jenkins (after he/his law firm began providing City Attorney services to Hermosa)? Why didn’t Bobko (after being elected to the City Council)? 

4)  Could damages even be awarded to MacPherson by a jury (under directions provided by the presiding judge) due to failure of Macpherson Oil to make reasonable efforts to “mitigate damages” over the past 15+ years, as required under California law, by insisting on a new vote with a new proper City Attorney Impartial Analysis?  Did Macpherson sue because he could NEVER meet the TERMS & CONDITIONS of the LEASE imposed by the Coastal & State Lands Commission?  Did Hermosa Beach trial lawyers including Michael Jenkins purposely ignore evidence that could have won or minimized damages?  

5) Because of Bobko's associations with RWG Municipal Law Firm and Michael Jenkins, did Councilmen Bobko have a “CONFLICT OF INTEREST” in negotiating and voting on the settlement agreement? Shouldn’t Bobko have RECUSED himself, as required under California law from all such activities.  Has Bobko violated the Brown Act?  

6)  Are these the reasons the Settlement Agreement was negotiated by Bobko in secret, and voted upon behind closed doors without public participation? Was Bobko just protecting the reputation of this law firm, and his friend Jenkins, to the detriment of the City? Why was the settlement agreement not discussed in public BEFORE City Officials signed the contract with a new 3rd party E&B before the scheduled jury trial in April of 2012? Don't neighbors heavily impacted deserve "a say" in that their property and lives could be heavily impacted? - That seems to be normal business practice with Tattoo parlors or new bars, etc

7) Is this the reason that this behind the closed doors settlement includes a requirement that the 1995 "Stop Oil  election be held again"?  By wiping out all City reserve funds if not passed. Are there also other implications with regard to attorney "errors and omissions"insurance and possible reimbursement to the City for its approximately $4M in legal defense costs?

Continue to read a list of more questions that need answers.

Cities That Have Banned Oil & Gas Fracking

Elections & City Council Bans

1)  Longmont, Colorado (Denver / Boulder Suburb) slaps drilling in face, Outspent 30-1 by oil and gas hacks, bans fracking within city limits. Not even close. 60%-40%.

2)  Mansfield, Ohio voters adopt Community Charter Amendment That Bans Toxic Injection Wells. Not even close 63%-37% 

3)  Ferguson, Pennsylvania voters approve Clean Air & Water Community Bill of Rights while banning injection wells, fracking & shale gas development.  52%-48%

4)  Not a ban but Carpinteria, California drilling initiative defeated oil drilling in 2010.  Blowout victory 70%-30%.

5)  Wellsburg, West Virginia City Council Banned Fracking

6)  Morgantown, West Virginia banned fracking and forced to zoning by judge ruling 

Read about more State initiatives underway.

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.

Please email any others I may have left off to jeff@drillingmaps.com

Carpinteria Oil Drilling Initiative Defeated

Carpinteria Oil Drilling Initiative Defeated, Measure J (June 2010)

Yes: 944 (29.94%)

No: 2,209 (70.06%)

Measure J (Venoco's Oil Drilling Initiative) from Ted Rhodes on Vimeo.

A Carpinteria Oil Drilling Initiative was on the June 8, 2010 ballot in the City of Carpinteria in Santa Barbara County, where it was defeated. The primary effect of Measure J would have been to approve a slant oil and gas drilling project proposed by Venoco Inc. along Carpinteria’s coastline.  Real estate values were projected to decrease 10-15%.  Please read the Carpenteria Environmental Impact Report (EIR) which reveals some scary facts. 

Posing as a so-called "people's" initiative, Measure J was an attempt by Venoco to bypass local city government review and oversight. As the only donor to the pro side of the ballot measure, Venoco spent well over $600,000 – compared to $80,000 spent by Citizens CAP (Committee Against Paredon Initiative) that was raised from hundreds of individuals – trying to convince the voters of our small town as to the benefits and safety of their proposed massive oil drilling Paredon Project and why Venoco should be allowed to bypass all the local rules and regulations everybody else in Carpinteria needs to follow. Read more details here.

	MEASURE J: Shall the General Plan/Local Coastal Land Use Plan of the City of Carpinteria be amended and a Specific Plan adopted to authorize development of the Paredon Project, a private development project to explore, develop, produce and gather offshore and onshore oil and natural gas resources and transmit them to the Carpinteria Oil and Gas Processing Facility operated by Venoco, Inc.?

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 Self Storage Lot & Civic Center Roulette

(Option 1) Drilling for Oil = Relocating City Maintenance Yard Here

(Option 2) Keep Current Hermosa Beach City Maintenance Yard

I was shocked to hear at the planning commission meeting that CITY STAFF and not the Planning Commission know all of the information about future plans of the City Hall.  New Downtown Civic Center? Apparently, Hermosa Beach's long term plan is to develop a downtown Civic Center.  This plan is now in jeopardy because of the proposed oil drilling project?  Why, because the City Maintenance yard would have to be relocated to the City own Storage lot across the street from City Hall.  What would happen to City Employee parking?  City Staff seems to think that the City Yard can be relocated onto the storage lot without disrupting the parking.

The City was planning to expand City Hall across the street to the Storage Lot above which makes a lot of sense.  But what more do they need downtown and hope to understand in the future?  Transparency please?

According to Mike Flaherty, Public Works Director say this.  "The EIR for the oil project has to address the City yard relocation.  Is E&B going to pay for the relocation?"  No.

Former Hermosa Beach City Councilmen Gary Brutsch said, "oil revenue from the Tidelands could pay for a police and fire substation on The Strand. Brutsch, "believes many people who were in favor of oil drilling in 1984 didn’t have the energy to defeat the anti-oil forces. Brutsch said, "he wanted to designate Hermosa Beach the environmental portal to the Santa Monica Bay by using tidelands revenues to install filters on storm drains that empty into the ocean."   See Easy Reader article.

Zoning for the new City Yard location next to homes would have to be reconsidered to light industrial.  Is the planning commission going to be involved oil EIR process?  Lets hope so.  Will the planning commission be involved in the EIR?  Lets hope so because I bet Planning Commission Chairman Ron Pizer has some input.

You might also want to read this. How does Hermosa Beach plan to pay $17.5M?

What Is Horizontal Shale Oil Drilling?

What E&B Natural Resources Doesn't Want You to Know

Here are the safety issues and risks of Slant Oil Drilling in Hermosa Beach that E&B Natural Resources doesn't want you to know.

1)  Chemicals and mud are pumped into the ground
2)  More black tar and oil on our beaches 

3)  Hole is drilled just under the deepest fresh water source from the surface. 

4)  Cement sealing always fail and thus why fracking contaminates water underground

5)  Drilling will go completely horizontal only under the Ocean. (1/4 mile)

6)  80 pieces of pipes at 495 pounds each to drill one well (2400 total pipes for 30)

7)  87 tons of pipe per well will be inserted into ground (2,610 tons of pipe for 30)

8)  Perforation gun inserted into ground for an explosions underground

9)  Hydraulic fracturing has huge safety issues under pressure

10)  Pump jacks may not be used so what will they be using?

Steve Layton says, "The best place to find oil is in an old oil field." = Fracking

Francesco Galesi, Chairman & Steve Layton, President of E&B Natural Resources

E&B Chairman, Francesco Galesi 

Francesco Galesi is the Owner & Money Behind E&B Natural Resources.  Mr. Galesi was one of the longest-serving directors of WorldCom Inc. He is one of just four board members on the crippled company's audit committee, which signed off on years' worth of cooked books that the company now says misstated $3.9 billion in costs as revenue. Worldcom is the 2nd largest bankruptcy next to Lehman Brothers in U.S. history. Gallesi is responsible for recruiting Scott D. Sullivan, WorldCom's "whiz-kid" chief financial officer, what has become one of America's biggest corporate scandals.  Read this article "The WorldCom debale, Through one Director's Eyes".

Mr. Galesi purchased he Alma and Equinox assets out of bankruptcy after the Steve Layton's Equinox Oil spill and formed E&B Natural Resources.  In 1969, Mr. Francesco Galesi purchased and transformed surplus military depots in upstate New York and converted them into major Industrial Parks. The conversion of these properties subsequently led Mr. Galesi into the warehousing and distribution business. His visions led to further corporate growth and diversification with the acquisition and development of additional real estate holdings, including residential and commercial sites, the acquisition and restoration of the historic Equinox Resort in Manchester, VT, and ownership in E&B Natural Resource Management Corporation, an oil and gas company.  It has also been reported that Mr. Galesi and his wife recently rented a home in Hermosa Beach to promote their new investment.  

E&B President, Steve Layton

Steve Layton has served as President of E&B since 2000. During his career, Mr. Layton has been actively involved in building and managing several oil and gas companies including two that were acquired by Francesco Galesi in 2000 along with E&B Natural Resources.  In 1983, Mr. Steve Layton co-founded Alma Energy and Equinox Oil with his father and Mike Galesi. He served as President of Alma and Equinox from 1997 to 2000. In November 2000, Francesco Galesi purchased the Alma and Equinox assets out of bankruptcy after a massive Louisiana oil spill and formed E&B Natural Resource Management Corporation. Mr. Layton was retained as President of E&B.  Mr. Layton is a member of the Board of Directors of the Louisiana Independent Oil and Gas Association and the California Independent Producers Association. Mr. Layton has also served as a Director and as Governor of the Houston Region for the Independent Petroleum Association of America and as President of the National Stripper Well Association. Mr. Layton earned a BS and MBA from the University of Tulsa.  Steve Layton reportedly purchased a home on Monterrey Blvd in Hermosa Beach in the Spring of 2012 to promote his oil interests in town.  

Joyce Fahey - Currently a Manhattan Beach resident, brings to bear more than 30 years of conflict resolution experience as a judge, attorney, elected official and, most recently, as Vice President, Governmental Affairs for Blackstone Oil & Gas, Inc. Judge Fahey transitioned to a neutral practice at ARC after her second term as Mayor of Manhattan Beach, CA.  Judge Fahey was appointed to the Los Angeles Superior Court in 1991. After her retirement from the Superior Court in 1997, Judge Fahey continued to preside over cases on an as-needed basis and served on the Retired Judges Mediation Panel.

In her position as Mayor of Manhattan Beach, Judge Fahey was directly involved in resolving a wide variety of issues, from litigation over public works projects, construction and environmental impact matters, to negotiating employment contracts for city employees. Recently appointed as a Trustee for the Manhattan Beach Unified School District, Judge Fahey has worked with school districts to resolve conflicts and has mediated disputes among neighboring cities. Judge Fahey is a recognized expert in cases involving child sexual abuse. She is also highly skilled in child custody and visitation matters. Judge Fahey is fluent in Spanish and Italian.

South Bay Residents Possibly on E&B's Payroll?
Cheryl Cross - PR C.A. Cross & Associates

An Ex-Hermosa Beach Fire Chief retired in 2007
Tiffany Rau - Consultant 

No Oil Money For Hermosa Beach Schools

Barbara Guild Speaking About Oil Drilling Underground In Ocean Benefits State of California (Tidelands Trust)

- No General Use of Oil $ From Ocean

- Schools Only Have Tiny Mineral Rights Royalty

- .20 Cents Per Barrel of Oil Extracted Under School

- No $ Use East of Strand

- No Police or Fire $
- No Road or Sewers $
- No New Building $
- No School $
- No Parks Money

State Tidelands Doctrine

The United States Supreme Court issued its landmark opinion on the nature of a state’s title to its tide and submerged lands nearly 110 years ago, and although courts have reviewed tidelands trust issues many times since then, the basic premise of the trust remains fundamentally unchanged. The Court said then that a state’s title to its tide and submerged lands is different from that to the lands it holds for sale. “It is a title held in trust for the people of the State that they may enjoy the navigation of the waters, carry on commerce over them, and have liberty of fishing” free from obstruction or interference from private parties. All uses, including those specifically authorized by the Legislature, must take into account the overarching principle of the public trust doctrine that trust lands belong to the public and are to be used to promote public rather than exclusively private purposes.

Evidence of Money Use in Newport Beach

Oil and gas revenue is deposited into the Tidelands Fund because the source of the oil is in the tidelands area which the City holds in trust for the people of California. The Tidelands Fund may be used only for eligible expenditures that support and maintain the tidelands, such as improvements to tidelands property including dredging Lower Newport Bay, lifeguards, beach cleaning, etc. 

The productivity of the oil wells continues to decline due to the age of the wells. New oil extraction techniques are required if the City continues to use the wells. The new techniques may include: reconditioning of existing oil wells, converting existing oil wells to water injection wells, drilling new water injection wells or drilling new oil wells. The City Charter restricted the redrilling of wells until January of 2011.

This is how we raise money for Hermosa Beach Schools through the Ed Foundation.

What is an Environmental Impact Report (EIR)?

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..

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. 

How Can Hermosa Beach Pay For The $17.5M Settlement?

Hermosa Beach Self Storage Worth Approx. $7M ($180K Annual Tax Revenue)

City Yard in Hermosa Beach Worth Approx. $15M ($0 Tax Revenue).  Are we just giving E&B a $15M property? Here is why it might be more expensive to vote yes.  $3.5M loan repayment + $15M Property for voting Yes = $18.5M vs 17.5M for Voting No.  

Noble Park in Hermosa Beach Worth Approx. $20M ($0 Tax Revenue)

Hermosa Beach Breezeway Lot Worth Approx. $1.5M+  ($12K Tax Revenue)

Old Prospect Ave School Building Lot Worth Approx. $800K (No Tax Revenue)

Public Parking Facility Worth Approx. $20M ($360K Annual Revenue)

The biggest question that voters need to understand when going to the polls is how is Hermosa Beach going to pay for the $17.5M upon a "No" vote.  There has been some speculation that the vote might not happen until 2013 or 2014 which doesn't surprise me.  In the contract, it states that E&B can ask the city to put the measure on the ballot at any time and the city has 6 months to do it.  When do you think it will be in the best interest of E&B to put the measure on the ballot?  

I think Hermosa Beach should be financially prepared for another recession and have the cash in the bank or a bond measure approved to pay for $17.5M NOW!  Current macroeconomic headlines could easily affect our ability to finance a bond offering or sell real estate in the coming years:  1)  inflated bond market, 2) massive U.S. government debt and 3) European Union debt restructuring recession.  Its been over 4 years since the 2008 financial crisis and you never know when the next downward cycle will hit our economy.  

The City of Hermosa Beach has plenty of liquid and semi-liquid assets that it can use to cover the costs.  There is no need to do a parcel tax or an assessment on residents.  There is no need to believe the oil propaganda and rumors about the going bankrupt over the oil settlement.  We can afford to pay it and it won't affect our budgets or our valuable schools.  The City owns a lot of valuable property and the last time I checked we are not in the "property management" business.  The City has a number of assets that do not generate any tax revenue for the city and should be considered for sale.  

The City of Hermosa Beach likely owns over $100+ million in real estate assets and has over $25+ million in working capital in the bank available to pay for the settlement.  The City also has the ability to get a $10M "Judgement Bond" from the State of California at 3% and service loan which will cost the city $300,000 per year which is nothing out of the budget.  Why not also float another bond for $7.5M as well since boring money is so cheap these days.  So there are lots of ways we can solve the problem of paying for the settlement if we have to.   

The Storage facility was purchased by the City years ago for around $4M.  Its likely worth about $7M today if you put 14 multifamily units on the lot and zone if for residential purposes.   It generates $180K per year for a property the city paid $4M.  Is rent revenue worth the annual yield for tax payers?  The City is not in the property management business and thus we should sell it.  See lease agreement. 

The City Public Works Yard on 6th Street has 8-10 employees and unfortunately they would have to relocate if oil drilling came into town.  The city could outsource the public works functions to a private company which would save money on employee salaries and pensions, etc.  This lot is likely worth $10M  zoned as commercial and might be close to $15M as residential.  17-20 multifamily units could likely fit onto this lot if a developer buy it.  Also, has the city has not factored into the E&B Oil drilling deal that the we are practically giving E&B oil a $15M property.  So in reality, it might be cheaper to pay the $17.5M and vote NO vs paying $3M+ giving a $15M property to E&B for voting Yes. 

The City owns 13 parks some of them are more useful than others.  I am not proposing to go around the City to sell parks but if you compare a price per square foot and the lack of tax revenue to the city.  Noble Park is probably the most valuable asset we have that could be sold.  The Beach House next door to this large lot pays Hermosa Beach $800,000 per year in bed tax revenue.  I know there are a lot of people that use the park to walk their dogs but that is a debate for a separate discussion.  However, most people would not let their kids play in the grass because of the amount of dog waste.  You might be able to classify this as one of the most valuable dog walking park in the U.S.  It might be worth $25M depending on the zoning. 

The Fat Face Fenner's breezeway is likely worth $1.5M.  Currently the city leases the above air space for $1K per month for the right to have a restaurant above the walkway space.  $12K per year is not a lot that is worth $1.5.   I don't know many people who currently use the walkway and don't know how much value it has to lower pier any longer.   A full scale Fat Face Fenner's restaurant might make sense here if constructed from the ground up. 

The Old Prospect School is next to the Fort Lots of Fun park might be worth $800K.  It has been a storage facility for old city lights for years and does not serve as a tax generator for the City. 

The City of Hermosa Beach has parking garage which it shares revenue with LA County on a 50/50 split.  What is a property like this worth that generates $300,000 per year?  Could it be worth $20M and is it worth it to sell half of our stake for $10M?  Again we are not in the property management business and it might be in our best interest to divest this property.  See LA County agreement & annual parking structure revenue / expense financial statement. 

As you can see, we have lots of choices of assets that the City can sell.  Its up to the citizens to come up with a plan to sell one or a few smaller parcels because we know our officials wont take the initiative.  Just look at what Redondo Beach City Council is doing to their residents if you need any proof.  Real estate has recovered from the 2008 lows and it looks like another good time to sell some assets.  I hope this makes everyone more comfortable about voting "NO". 

This is work in progress and we would like your feedback on our theoretical pricing.  If you have commercial real estate experience please contact us or comment below.  Please check back frequently for changes.  I apologize for any errors.  

What Does the California Coastal Commission Do?

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

Steve Layton's Oil Spill in 1998 as CEO of Equinox Oil

Oil Blowout Covered 2 Square Miles

In 1983, Mr. Steve Layton co-founded Alma Energy and Equinox Oil with his father and Mike Galesi. He served as President of Alma and Equinox from 1997 to 2000. In November 2000, Francesco Galesi purchased the Alma and Equinox assets out of bankruptcy after an Equinox oil spill and formed E&B Natural Resource Management Corporation. Mr. Layton was retained as President of E&B.

Steve Layton was CEO of Equinox Oil when on September 22, 1998, oil blowout occurred from a well owned by Equinox into the waters of Lake Grande Ecaille, in Plaquemines Parish, coastal Louisiana. A blowout is the uncontrolled release of crude oil and/or natural gas from an oil well or gas well after pressure control systems have failed.  This management failure should not be ignored by Hermosa Beach residents because it is not too dissimilar to lack of management oversight in the BP Gulf Oil Spill.   

The exact volume of oil discharged is unknown, but estimates range from less than 450 bbl to 1,500 bbl.  The oil was discharged in a jet that shot straight up approximately 200-300 feet into the air along with natural gas, produced water, and sand.  The blowout continued for approximately 11 hours, at which point the discharge was stopped.  Several thousand acres of surface water in Lake Grande Ecaille, as well as the Gulf of Mexico, were covered by slicks or sheens from the incident, and approximately 1,233 acres (2 square miles) of wetlands (Hermosa Beach is 1.3 square miles) were exposed to oil.  Soon after the massive Hurricane Georges passed near the area four days later on September 26, 1998, causing the response efforts to be suspended effectively letting the company off the "cleanup hook".  However, 33.8 discount acre years of marsh was lost.  Read about the environmental damage from Steve Layton's oil spill.

Mr. Steve Layton received a warning letter on August 13, 1997 from the Department of Public of Health & Human Services of safety violations.  Was this related to the lack of management oversight?

Chapter 11 bankruptcy of Equinox Oil Company Den norske Bank, ASA, individually and as agent for BNP Paribas and Comerica Bank - Texas (the Bank Group) loaned over $106 million to Equinox and Alma.  

Equinox Oil Company Oil Spill Damage Assessment, Restoration Plan & Environmental Assessment Prepared by:
Louisiana Oil Spill Coordinator’s Office/Office of the Governor
Louisiana Department of Environmental Quality
Louisiana Department of Natural Resources
Louisiana Department of Wildlife and Fisheries
National Oceanic and Atmospheric Administration
United States Fish and Wildlife Service

LIST OF PREPARERS
Chris Piehler Louisiana Department of Environmental Quality
John de Mond Louisiana Department of Environmental Quality
Derek Hamilton Louisiana Department of Natural Resources
Dick Stanek  Louisiana Department of Natural Resources
Heather Finley Louisiana Department of Wildlife and Fisheries
Jim Hanifen Louisiana Department of Wildlife and Fisheries
Terry Romaire  Louisiana Department of Wildlife and Fisheries
Gina Muhs Saizan Louisiana Oil Spill Coordinator’s Office, Office of the Governor
Chuck Armbruster Louisiana Oil Spill Coordinator’s Office, Office of the Governor
Cheryl Brodnax National Oceanic and Atmospheric Administration
Linda Burlington National Oceanic and Atmospheric Administration
John Iliff National Oceanic and Atmospheric Administration
John Kern National Oceanic and Atmospheric Administration
Tony Penn National Oceanic and Atmospheric Administration
Christy Poulos National Oceanic and Atmospheric Administration
Buddy Goatcher United States Fish and Wildlife Service
Warren Lorentz United States Fish and Wildlife Service