Measure O Defeated 78.9% in Hermosa Beach

There were 3,799 votes against oil drilling and only 1,016 ballots cast in favor despite being outspent about 20/1. 

Can Hermosa Beach Permanently Terminate the 35 Year Oil Drilling Lease After A No Vote?

Is The Oil Lease From 1992 Even Valid? 

Why Are 2 Measures Going to Be on the Ballot?  

1)  Yes or No On Drilling & 2) Where The Oil Money Goes? 

E&B Can Put Oil Drilling On The Ballot Several Times Over The Next 35 Years 

Why Did The Hermosa Beach City Council Not Read the Mock Jury Trial Transcript Before The Settlement?

A former City Council member’s opinion

Councilman Kit Bobko has repeatedly told the public that the results of the “mock jury’s” trials conducted by the city’s attorneys, Bird & Marella, were the basis for his decision to agree to a settlement with Macpherson Oil. He told us the mock juries came back with bad news, finding hundreds of millions of damages for Macpherson Oil. Bobko fails to point out that the city’s attorneys specifically told the City Council that this was an exercise to prepare for trial. It was in no way to be used as the cornerstone of a settlement.

Mr. Bobko distorts the truth to make himself look better. He says the city was going bankrupt. This is not true. The City Council only explored conversations with bankruptcy attorneys to assist in the settlement negotiations; we never retained a bankruptcy law firm in a meaningful way except to inform the City Council on the rules and parameters of such an action. The City Council never reviewed the detailed mock jury information because our trial attorneys told us it was not a tool for settlement, merely an exercise for their preparation for the trial. Mr. Bobko said the city was “locked in the embrace of death” by Macpherson. That was in his mind; this was not ever discussed in open or closed session of the City Council. Residents should remember that Bobko’s settlement agreement will cost the city millions even if the citizens approve oil drilling.

Michael Keegan, Hermosa Beach

  

Don't Re-Elect Kit Bobko For Hermosa Beach City Council

"The idea that oil drilling is some inherently unsafe activity — I question that" 

- Kit Bobko

Here Are List of Reasons Not To Re-Elect Kit Bobko . . .

1)  Lead Negotiator of Illegal Oil Settlement
2)  Disruptive Behavior & Promotion of Personal Political Agendas

3)  Kit Bobko's Horrendous Public Voting Record

4)  Multiple Brown Act Violations

5)  Kit Bobko is Hiding Oil Related Expenses

6)  Kit Bobko Thinks Hermosa Beach Wastes Money Yet Wants $ By Oil Drilling?

7)  Kit Bobko Bulldozed His Colleagues Into Signing Oil Settlement & Silenced Them

8)  E&B Was Illegally Drilling Under Kit Bobko's Watch

9)  Kit Bobko's Hypocrisy About Transparency

10) Kit Bobko's Long History of Wasting Tax Payer Dollars

11) 15 Ways Kit Bobko's Leadership Is Not Impartial To Oil Drilling

Read these letters to the Easy Reader Editor 

Out with Bobko

Hermosa Beach city councilman Kit Bobko’s affection for the limelight has clouded his judgment over and over. His recent press release to the newspapers about the selection of Police chief was wrong. His judgment and his critical thinking process are way out of whack. He seems to be more interested in his name being published in the paper and heard on radio or TV than performing the duties of his city council post. His ego caused the city to retain a public relations firm to the tune of $10,000 a month and the city council has spent over $200,000 on this public relations firm over the last 20 months. Bobko wastes money further by going outside this highly paid public relations group and issues his own personal press release, touting his Mayors position for his pick for new Police Chief.

In doing so he went against city policy, a code of ethics and the established procedure for this city hire. He misleads the public as though his title of mayor was voted upon, which it was not. His need for media attention superseded all common sense. Worse yet, he does not understand that his actions actually cost his favored selection the job. The city manager would have appeared to be a stooge of Bobko’s had he gone with Bobko’s press release candidate for police chief. The reason the city council does not get involved in the selection of department heads is that it would lead to a poor selection process. Bobko knows this. He is currently serving as ceremonial mayor at the pleasure of his four other council colleagues. In addition to a resolution of censure, he should be voted to be removed by his other councilmembers as the ceremonial mayor as soon as possible.

Hermosa Beach has no use for such self-promotion and abuse of the ceremonial title of mayor. In November, the electorate can elect some less publicity oriented persons onto the dais.

Michael Keegan

Pure poppycock 

Hermosa Beach Councilmember Kit Bobko’s self promotional letter about how he was instrumental in ensuring “that our City was not overrun on the 4th of July” is pure poppycock. First of all, he alone cannot authorize spending hundreds of thousands of dollars for 50-LA County Sheriff’s Deputies, a “35 foot ‘jail bus,’ and mounted horse patrol.” Secondly, the real reason such significant resources are required is because Bobko and his council colleagues have tolerated a party atmosphere with rampant drunkenness and out of control people for years. Moreover, when the city allows July Fourth to begin with the “Iron Man” event that violates Hermosa Beach’s prohibition of alcohol on the beach, it sets the “agenda” for a day of out of control partying and drunkenness. Residents should ask themselves if a more reasonable solution would be to close all our alcohol serving establishments at 6:00 PM on July Fourth and also cancel the illegal “Iron Man.” That would probably stop the city from being “overrun” on July and cost a whole lot less than the city is currently spending on public safety for July Fourth

Fred Huebscher

Here are the people endorsing Kit From His Web Site  . . . 

• South Bay Chapter of the LA County Lincoln Clubs
• Former Congressman Steve Kuykendall
• Don Knabe, Los County Supervisor
• Michael DiVirgilio, Hermosa Beach Mayor Pro Tempore
• Jack Burns, Hermosa Beach School District Board Member
• George Barks, Former City Council Board Member
• Richard Montgomery, Former Manhattan Beach Mayor
• Bob Holmes, Former Manhattan Beach City Council Member
• Art Yoon, Former Hermosa Beach City Council Member
• Greg Breen, Former Board Member, Hermosa Beach School District
• Bill Sigler, Former Parks and Recreation Commission 
• Steve and Susan Blaco
• Danay DiVirgilio
• Doug Gneiser
• Bruce Greenspon
• Dorothy Harley
• Ken Hartley
• Manny Serrano
• Corinne Ybarra

Los Angeles Democratic Party Opposes Proposed Hermosa Beach Oil Drilling Project

Resolution Opposing Proposed Hermosa Beach Oil Drilling Project

WHEREAS, the City of Hermosa Beach is considering a proposal to slant drill from its City Yard up to 35 wells underneath the city’s homes, streets and businesses and into the Torrance Oil Field underneath Santa Monica Bay; and

WHEREAS, it is probable there will be negative effects on the health and safety of the citizens of Hermosa Beach and its neighboring communities due to this proposed drilling, and that this project is inconsistent with the city’s pledge to become carbon neutral,

THEREFORE BE IT RESOLVED, the Los Angeles County Democratic Party opposes the proposed Hermosa Beach Oil Drilling Project and any future oil drilling in Hermosa Beach; and strongly supports the City of Hermosa Beach’s pledge to become a “carbon neutral” city and to promote an alternative“carbon neutral” economy for the city; and

THERFORE BE IT FURTHER RESOLVED that the Los Angeles County Democratic Party send a copy of this resolution to the Hermosa Beach City Council and to Assemblymember Al Murastuchi and Senator Ted Lieu.

Author: Dency Nelson, 66AD

Passed By LACDP 8/13/13

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.

Why I Don't Trust E&B Natural Resources or The Hermosa Beach City Council

Watch This Incredible Speech from Patti Sousa
"Why I Don't Trust E&B Natural Resources or the Hermosa Beach City Council" 

There Is No Way An Oil Drilling Vote Will Ever Pass in Hermosa Beach

Lou Morris of Hermosa Beach says, ""There is no way an oil drilling vote will ever pass in Hermosa Beach.
"So many people have commented on the stupidity of our City Government. Parents give lots of money to the schools each year and there is no way they will sacrifice the safety for oil drilling. Newspapers write at an 8th grade level and we are making this way too complicated."  

Have The Rights of City Council Members To Speak On Their Own Been Muzzled By An Agreement?

Letter From Howard Longacre Letter to City Council May 20, 2013 (Item 4)

(Please excuse my typos below)

4)  Request for clarification as to any other ongoing confidential agreements (other than the March 2, 2013 settlement agreement itself) which have also been made by the City's staff and/or the City Council, and/or with any other entity regarding the oil issue.  

The March 2012 settlement agreement between the parties states that the City will take the necessary actions to have an election for the voters to vote Yes or No on lifting the ban on oil drilling in Hermosa Beach.  However, as long as an election does take place and is facilitated by the Council, is there anything that precludes any individual council members from stating to the press or to the public, inside or outside of a public forum, and on the record, of being for or against lifting the ban on oil drilling? 

Has in any manner the rights of any individual council member to speak on their own, or on their constituents behalf, been muzzled via any agreement by the council in closed session or otherwise?  This question has not been answered clearly in my and others' view and such is not specified in the settlement agreement, nor do I recall a debate on the agenda item in any public meeting where the council specifically voted to maintain a position of unanimous support to muzzle themselves.  Something seems to be missing here and apparently has a lot do with the perception the public has of the Council regarding the entire oil matter? (See article:  Did elected officials in Hermosa Beach violate the Brown Act.)

Complicating the issue is that rumors persist that more than one council member has made it very clear to some residents or business operators that they are either supporting or not supporting lifting the ban on oil drilling in Hermosa Beach.

Unfortunately, that all five council member appear to be stonewalling, on the record, the issue of what agreement they perhaps made behind the scenes indicates to many, if not most, that the Council is being disingenuous and playing politically coy, given that the oil drilling issue is far from new in the city.

Further, it is doubtful that even 1 in 20 of the electorate who actually vote on the oil drilling issue will make up their minds one way or the other, basis reading or understanding anything of the nuts and bolts of the EIR's likely mountain of esoteric data, E&B's application, the flood of mailers and propaganda barrages to be likely put out by E&B and others, or the underlying agreements with Macpherson that have been transferred to E&B or others, nor will they perhaps understand or trust the grandiose claims of revenue one way or the other or the safety or lack of safety claims E&B and others are making.  Thus,

4-a)  Are there any agreements written or verbal other than the settlement agreement as related to the question of lifting the ban on oil drilling, the election, confidential, or otherwise, that the public and press are not distinctly and formally aware, and understanding of?  This could include any issues agreed to by the Council members among themselves, such as that they would not individually take announce a public position on oil drilling until "XYZ" occurs, etc.   If there are any other agreements please disclose and clarify as best possible what purpose they are for, why they are needed, and when they are made.

4-b)  Is each and every council member free at this time to speak his own mind regarding lifting the ban on oil drilling, both inside or outside of a public forum, and/or to the press on the record?  Yes or No?  If No, this due to a specific binding agreement made by the full council among themselves, and if so why such agreement required when the settlement agreement is supposedly the full and complete agreement?

See Hiding Oil Money Point 3  

Poll: Predict The Redondo Beach Measure A Voting Results

Public OpinionPoll Results

For more details on the Redondo Beach Measure A see NoPowerPlant.com.  If you live in Redondo Beach vote on March 5th.  

Oil & Gas Drilling Time Lapse Video

Does Oil & Gas Drilling Belong In Hermosa Beach, California?

Public OpinionPoll Results

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.?

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?

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..

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.  

Macpherson Lawsuit Issues

The Macpherson Lawsuit is probably the most serious and important detrimental issue facing Hermosa Beach. While investigating this issue, Hermosa Residents and attorneys have examined various documents, and discovered what they believe is a serious flaw in the 1995 election PROPOSITION E, the “STOP OIL DRILLING” voter initiative.

The most significant part of the claim for damages by MacPherson in his lawsuit is his claim for “lost profits” in the hundred of Millions of dollars. This claim is based on a fundamental tenet/principal of law that damages for “Breach of Contract” entitles the injured party to claim lost profits.

However, in the Voter pamplet/booklet provided to the voter for this election, the “Impartial Analysis of Proposition E” prepared the City Attorney Michael Jenkins RWG Law Firm made no mention whatsoever of this potential, if not highly probable, consequential detrimental impact on the City should this measure be passed (read below). Had this consequence of the passage of this measure been presented to the voters, there could have been a substantial difference in the number of registered voters voting, as well as the election results.

“Beginning in April 1994 the Hermosa Beach Stop Oil Coalition began a campaign to qualify a ballot initiative to end the Macpherson project and to reinstate the comprehensive prohibition on oil drilling in the City by deleting from the Municipal Code the two exceptions from the ban that had been approved in 1984.  (Hermosa Beach Mun.Code, § 21-10, subds. (a) & (b).)  The measure, Proposition E, appeared on the November 1995 ballot.”  (Stop Oil I, supra, 86 Cal.App.4th at pp. 543-544.) 

“The ‘Impartial Analysis of Proposition E’ by the Hermosa Beach City Attorney circulated to all voters explained, ‘The effect of this measure, if adopted, would be to amend the Municipal Code to prohibit oil and gas exploration, drilling and production on these two sites [the two sites then excepted from the citywide prohibition], and eliminate from the Code the authority to use these sites as a potential source of oil and gas revenue for the restricted purposes stated in the Code. [¶] The City has leased the City maintenance yard site to a private entity for oil and gas exploration and production activities which have not yet commenced.   All permits necessary for this project have not been issued and have been delayed by pending litigation.   If Proposition E is adopted, the law is not clear exactly how the measure would affect the project proposed by the lease.’   The ballot arguments in favor of and against Proposition E focused on the potential environmental risks and economic benefits of the Macpherson project on the City Yard Site."  

Proposition E passed by a narrow margin of only 565 votes.

1) Why hasn’t MacPherson (or his attorneys) at any time raised these election issues (the basis of the lawsuit) and at least requested (if not insisted) that the election be held again, this time with the requisite information/warning to the voters of the significant detrimental financial impact on the City.

2) Why hasn't City Management, City Attorney, or the various law firms representing the Hermosa Beach raised this issue and least requested (if not insisted) that the City Council rule that the election should be held again?  This time with the requisite information/warning to the voters of the significant detrimental financial impact on the City.

3) Could damages even have been 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 NOTIFYING CITY OFFICIALS THAT THE ELECTION WAS FLAWED AND insisting on a new vote with a new proper City Attorney Impartial Analysis?

With regard to issue 1: 
“A party cannot recover for loss which he could have avoided or mitigated through his reasonable efforts.” Clearly, MacPherson will likely have a difficult time explaining he should be entitled to any damages due the fact that Macpherson made no effort to call for a new election this time with the proper impartial analysis containing warnings of potentially disastrous ramifications for the City.

With regard to issue 2: 
This raises the distinct possibility that the City may well be entitled to damages from the law firms representing the City to recoup its legal costs which have soared in to the Millions of dollars which could have likely been avoided had this issue been raised.

As a general rule, the objective of contract damages is to insure that the aggrieved or injured party should receive what he or she expected from the bargain. To the extent that an award of money can do so, the aggrieved party should be placed in the same position as though the contract had been fully performed. This is what is known as protecting the expectation interest of the parties. (Rest.2d §344(a))

Loss of Profits
Loss of profits, present or future, as an element of special or consequential damages, may be recovered for a breach of contract if; 1) The loss is the direct and natural consequence of the breach, 2) It is reasonably probable that the profits would have been earned except for the breach, and 3) The amount of loss can be shown with reasonable certainty.

An injured party may recover for a breach of contract the amount which will compensate the party "for all the detriment proximately caused by the breach, or which, in the ordinary course of things, would be likely to result from the breach." (Cal.Civ.Code §3300.)

Limitations on Damages
There are several limitations on awarding damages to make the non breaching party whole: A party cannot recover for loss which he could have avoided or mitigated through his reasonable efforts. (Rockingham Cty. v. Luten Bridge Co. 35 F.2d 301 (4th Cir. 1929); Rest.2d §350)
Read more about recovery of damages in lawsuit. 

Did Our Elected Officials Violate The Brown Act?

The Ralph M. Brown Act, was an act of the California State Legislature, authored by Assembly member Ralph M. Brown and passed in 1953, that guaranteed the public’s right to attend and participate in meetings of local legislative bodies.  How many open forum meetings did the Hermosa Beach City Council have on this issue in the last 10 years?  Zero.  In fact, all negotiations and discussions were in a closed session and nothing was disclosed to the public until the deal was done.  Not only that but if you read the Hermosa Beach Macpherson settlement agreement it appears our officials are under a non-disclosure agreement and confidential information is being withheld.

Throughout California’s history, local legislative bodies have played a vital role in bringing participatory democracy to the citizens of the state. Local legislative bodies - such as boards, councils and commissions - are created in recognition of the fact that several minds are better than one, and that through debate and discussion, the best ideas will emerge. The law which guarantees the public’s right to attend and participate in meetings of local legislative bodies is the Ralph M. Brown Act.

While local legislative bodies generally are required to hold meetings in open forum, the Brown Act recognizes the need, under limited circumstances, for these bodies to meet in private in order to carry out their responsibilities in the best interests of the public. For example, the law contains a personnel exception based on notions of personal privacy, and a pending litigation exception based upon the precept that government agencies should not be disadvantaged in planning litigation strategy. Although the principle of open meetings initially seems simple, application of the law to real life situations can prove to be quite complex.

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?