“I’ve not seen a split in the community as big as this since [the proposed] redevelopment 40 years ago,” former Hermosa Beach councilman George Schmeltzer told the Hermosa Beach city council at the start of last Thursday’s city council meeting.
The council was scheduled to discuss approval of a ballot measure that would ask voters whether or not the city’s ban on oil drilling shall be repealed.
E & B Natural Resources has proposed drilling 34 wells from the Hermosa Beach maintenance yard at Sixth Street and Valley Drive into Hermosa’s tidelands.
The divide Schmeltzer spoke of was reflected five hours later when, shortly before midnight, the council voted 3 to 2 to put the oil measure on the March 3, 2015 ballot.
Councilwoman Carolyn Petty made the motion. Councilman Michael DiVirgilio seconded the motion and Mayor Pete Tucker provided the deciding vote.
“Our job is to allow the people to vote yes or no,” Tucker said.
Councilmembers Hany Fangary and Nanette Barragan voted against the ballot measure.
Fangary objected to language in the development agreement stipulating that one percent of the oil royalties will go to the Hermosa Beach Education Foundation.
“I reached out to three ed foundation board members and they all said the foundation had agreed not to accept the money,” Fangary said. The foundation is concerned that accepting the money will jeopardize its non profit status, Fangary explained.
Both Fangary and Barragan argued that the city should not be negotiating with E & B on behalf of the Education foundation.
Barragan also argued that the one percent assigned to the city in the development agreement was insufficient. The one percent is in addition to a royalty split that the city’s independently prepared cost benefit analysis estimates to be $200 million over 34 years. E & B estimates the city’s royalties to be $500 million.
“One percent is not enough. It should be 10 percent for the first five years, and then step down,” Barragan said.
“I continue to believe this is not a true negotiation….that the city is in a position of duress, feeling we have to do something because of the potential of a lawsuit,” Barragan said.
Attorney Michael Mills, the city’s oil consultant, responded to Barragan’s objection by noting, “There will never be a perfect agreement. I encourage you to try to reach a compromise. The essence of compromise is that no party is happy.” ER
