MINUTES OF THE ADJOURNED REGULAR MEETING OF THE CITY COUNCIL of the City of Hermosa Beach, California, held on Thursday, September 17, 1998, at the hour of 7:30 P.M.

PLEDGE OF ALLEGIANCE - City Clerk Elaine Doerfling

ROLL CALL:

Present: Bowler, Edgerton, Mayor Pro Tempore Oakes

Absent: Reviczky, Mayor Benz

REVIEW AND CONSIDERATION OF ASPEN REPORT RELATIVE TO MACPHERSON OIL PROJECT. Supplemental letter in opposition to the oil project received September 17, 1998 from Carlyn Montes De Oca, 2037 Manhattan Avenue, Hermosa Beach; and supplemental letter with attached information received September 17, 1998 from Jan Chatten-Brown, attorney representing Stop Oil Coalition.

City Manager Burrell reviewed the meeting format, saying it would begin with the Aspen report presentation by Dr. Bercha, then move on to comments from representatives of Macpherson Oil Company and Stop Oil Coalition, as well as public comments from supporters of both sides of the issue, then to rebuttals, and finally to Council deliberations and direction to staff. He provided a brief history of the oil issue, noting that it preceded nearly everyone on the dais. He said after receiving the first report in April 1998, the Council expanded the scope of the report for a more in-depth study and said tonight's meeting would focus on the Aspen Bercha Group's draft final report--an integrated risk analysis of the proposed oil project.

City Attorney Jenkins said the oil project had been subjected to three law suits during the course of its history, two of which had been resolved, and one that was still pending. He said the pending law suit alleged that Proposition E (passed by voters in 1995) applied to this project, and that the judge had not yet ruled on that issue. He said this was an entitled project, not a new proposal or application. He said the City years ago had entered into a lease agreement--a binding contract, and that the applicant had obtained all the necessary discretionary approvals to proceed, not only from the City but from the California Coastal Commission, the California Department of Oil and Gas, and the State Lands Commission. He said a binding contract may be breached only under extraordinary circumstances, and that one excuse articulated by the judge hearing the pending law suit would be if the subject of the contract presented too great a risk of hazard for the community. He said the purpose of the Aspen report was to ascertain whether the proposed oil project presented an unacceptable level of risk to the community.

Dr. Frank Bercha, author of the report, made his presentation with the aid of an overhead projector. He reviewed the risk summary for the total project; then the annual and cumulative risks associated with the project's test phase, the project's production phase (which he called the most significant component), and the existing facility, as well as the voluntary risks associated with off-site commonplace activities, such as driving a car which carried the risk of a traffic accident. He referred to the oil project's mitigated and unmitigated risk profiles, then reviewed his recommendations to the City, to the residents, and to Macpherson Oil. He said, as assigned, he had identified risks and quantified them, comparing them to risk thresholds that were based on those developed for Santa Barbara.

In response to Council questions, Dr. Bercha said the major risk associated with the project would result from the ignition of methane gas vapor clouds and discussed how a wall would affect the hazards associated with those clouds. Noting that the methane vapor cloud risk was in the gray zone, he said whether or not a gray area represented a substantial amount of risk depended on a person's perception. Then, in response to further questions, he said from his experience any risks in the gray region were substantial.

Mayor Pro Tempore Oakes announced a five-minute time limit for comments from one Macpherson Oil Company representative and one Stop Oil Coalition representative, and said all other public comments would be limited to two minutes, noting that there would be an opportunity later for rebuttals.

Coming forward to comment on the oil report were:

Don Macpherson - president of Macpherson Oil Company, expressed satisfaction with the report, said the results showed no substantial risk from hydrogen sulphide gas and confirmed his position that the project was acceptable for the community; said this was a state-of-the-art project, that his company had worked with the City through the lease, environmental review, and conditional use permit process, and had done what it was asked to do over the past 12 years; said the project was not a refinery or a chemical plant and cited numerous similar projects throughout Los Angeles County, including in Beverly Hills;

Jan Chatten-Brown - Stop Oil attorney, said Council had the authority to deny the oil project; said the risks would affect many people, such as users of the Greenbelt, not just nearby residents; said the developer was not an experienced operator and lacked experience in an urban setting; noted that even experienced operators like Chevron in Santa Barbara have had problems; urged denial of the building permit and said there was no lease now, and the delay was not caused by the litigation;

Jim Tarr - president of Stone Lions Environmental Corporation, referred to several sections of the report and said there was sufficient reason for the Council to deny the project;

John Edwards - Hermosa Beach, said he had reviewed the analysis and risk criteria and thought there was enough information to deny the permit to keep Hermosa safe; said the city was not of medium density and did not think the 1/100,000 figure was applicable; said hydrogen sulphide gas was not something that anyone would want in their neighborhood;

Mina Sullivan - Los Angeles, said she lived next door to a project located 75 feet from her apartment building; spoke of an incident she recently experienced when a well exploded and natural gas was released for one full hour; said other impacts included continuous activity, noise, and air pollution; said the project represented money for the oil company and a burden to residents;

Charles Fogg - Hermosa Beach, said anything that increases risk to the residents was unacceptable; noted that the report discussed the probability of deaths, a fact that seemed to be overlooked;

Unidentified man - Hermosa Beach, urged the Council to represent the citizens who overwhelmingly voted against the oil drilling project;

Peter (no last name given) - Hermosa Beach, said he was a surfer, expressed concern about the effect the project would have on the ocean; also concerned about odor and aesthetic issues;

Steven Fleischli - 300 Manhattan Avenue, attorney for Heal the Bay, discussed potential soil and ocean contamination; said the risks for serious injury and death were unacceptable;

Frank Lawrenson - Hermosa Beach, expressed concern about ocean and air pollution; said he would have to move away for health reasons if the project went forward;

Katharine Bergstrom - Hermosa Beach, said she had studied the project for years and, although she lived in the north end of town, it would affect all residents in the 1.2 square mile city; said she was in real estate and expressed concern that some realtors had not been advising buyers;

Scott Alden - 646 Sixth Street, said oil drilling was risky to residents' health and home values; said the price of oil was in a downward spiral and would continue to go down;

Martinique Goldstein - Second Street, said she lived four blocks from the proposed project, and urged the Council to represent the concerned residents;

Sean (last name indistinct) - Hermosa Beach, said he lived two blocks east of the site; expressed concern about the potential fatalities;

Alan Cohen - 801 Bard Street, said Council recently agreed to look at Eighth Street safety concerns; said this project would increase traffic and involve the use of big trucks;

Kathy Sliff - 854 Bard Street, said her biggest concern was the health issue; expressed concerns about odors, smoke, and further congestion in an already congested area; urged Councilmembers to vote the project down, since they now had the legal means to do so;

Alan Davenport - 640 Loma Drive, spoke in opposition to the project; said residents did not need any more risks than they already face;

Eric Zimmerman - Ingleside, said his neighbors in the north end of town were overwhelmingly opposed to the oil project, that the project was not just opposed by people adjacent to the site;

Catherine Stoner - owner of two businesses on Cypress; expressed concern about a possible flash fire and the resulting explosions; said the industrial businesses in that area, including surfboard shops, would be seriously affected;

Phil Downsing - Redondo Beach, asked what density ratio was used and if the cascading effect of immediately adjacent businesses had been taken into consideration; expressed concern about fire and inhalation risks from the mixture of gas with existing chemicals; said the number of tanker truck trips during the initial phase would have a major effect on City streets;

Jim Losina - Hermosa Beach, expressed concern about diesel fumes from the trucks, noting that it had been determined that diesel exhaust caused cancer; said the city would no longer be viewed as an up-scale community;

Jim Olett - 24th Street, said counting injuries was statistically more difficult than counting fatalities; said the project did not belong in the community and urged Council to vote it down;

Max Martinez - said he was not a Hermosa resident but frequently used the Greenbelt; expressed concern about the oil project and its effects;

Robert Depp - Hermosa Beach property owner, said the risk from the oil project was higher than the risk of an American being killed in the Gulf War;

Claudia Davenport - 640 Loma Drive, expressed concerns about the project and the risks involved;

John (last name indistinct) - 625 Loma Drive, spoke in opposition to the project; asked the acceptable number of dead and injured that would be allowed;

Al Bowman - 615 Seventh Street, spoke in support of the oil project; said more air pollution would be caused from the cars started up after the meeting than from the project; said the opponents simply did not want the project in their neighborhood;

Janet McHugh - Hermosa Beach, spoke in opposition to the project; urged the Council to act to protect Hermosa Beach children;

Eli Gould - 230 24th Street, spoke in opposition to the project; said he lived with his nephew who suffered from severe asthma;

Pat Doherty - Hermosa Beach, spoke in opposition to the oil project;

Stan Haske - Hermosa Beach, spoke in opposition to the oil project;

John McHugh - 718 First Place, expressed concern about the project's health and safety risks to the children and the effect on property values;

Laura Frantz - 642 Seventh Street, asked the Council to decide carefully; said the oil project would not enhance the city;

Steve Horowitz - 2121 Pacific Coast Highway, referred to a recent oil spill and the major impact the clean-up would have on that community; expressed concern about hydrogen sulphide gas;

John Burt - 1152 Seventh Street, spoke in favor of the oil project; said the developer would make the project safe and that it was time to move the project forward;

Wynn Smith - said the City was on an upswing and urged all residents to help stop the project;

Earlene Kerns - Sixth Street, referred to the odors and noise from the previous oil project and how the street had rumbled from the trucks;

George Schmeltzer - 275 Valley Drive, spoke in opposition to the oil project; urged the Council to act to reject it;

Robin Barrett - 720 Third Street, concurred with the comments of previous speakers opposed to the oil project; urged the City to use the property to develop solar energy;

Robert Essertier - Hermosa Beach, former Council member, said he had been elected in part because of his pro-oil stance and had worked hard to get the best lease possible for the City but since then his stance had changed; said the Council must assess the many risks that were brought forward tonight against the one benefit, which was money, estimated it to be about $10 million over 30 years; expressed concern about reduced property values; said the City should not take on the risks for such an insignificant benefit; and

Larry Cole - 501 Herondo Street, said the smaller the benefit, the more intolerable the risk.

The public comment portion of the meeting closed at 9:50 P.M.

The meeting recessed at 9:50 P.M.

The meeting reconvened at 10:05 P.M.

Mayor Pro Tempore Oakes opened the meeting for rebuttals. Coming forward to rebut previous comments were:

Lynn Toucher - consultant for Macpherson Oil Company, said this was the second report done on the project; said there was no way to say whether or not a risk in the gray area was acceptable, that there were no cold, hard numbers in existence; said the possibility of an accident was also true with the existing facility, that the risks from the current facility were the same;

Don Macpherson - said the risks of the project were studied in the environmental impact report (EIR) process; said this study was the same as in the past and that the report presented tonight showed no new risks; and

Jan Chatten-Brown - Stop Oil attorney, said she spent a lot of time litigating the EIR, that there was supposed to be a new one, but there had been no new risk analysis; said the people had voted in favor of oil in order to purchase three parcels; said there was now no need to generate funds since the properties had already been purchased; urged the Council to decline to extend the lease.

Public participation closed at 10:15 P.M.

Action: To direct staff to (1) prepare findings that the project presents an unacceptable risk and (2) return with appropriate findings to stop the oil project, based upon the report of substantial risk brought to light by the testimony this evening and the close proximity of the project to a small, dense community.

Motion Mayor Pro Tempore Oakes, second Edgerton. The motion carried by a unanimous vote, noting the absence of Reviczky and Mayor Benz.

ADJOURNMENT - The Adjourned Regular Meeting of the City Council of the City of Hermosa Beach, California, adjourned on Thursday September 17, 1998, at the hour of 10:30 P.M., to an Adjourned Regular Meeting on Tuesday, September 22, 1998, at 6:30 P.M. for the purpose of conducting interviews of the Parks, Recreation and Community Resources Advisory Commission applicants, to be followed by the Regular Meeting of Tuesday, September 22, 1998, at the hour of 7:10 P.M.

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