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Hermosa Beach, the lead agency for the stormwater infiltration project, had hoped the city of Redondo Beach would take on the project. Pictured, Herondo Street which borders the towns.

Hermosa Beach has lost more than $3 million in grant funding for a controversial stormwater infiltration project. The withdrawal of funds by the State Water Resources Control Board was announced Tuesday at the Hermosa Beach City Council meeting.

The city put the $3.2 million in jeopardy in March when they voted to dissolve a Memorandum of Understanding with neighboring cities to find a new home for the Greenbelt Infiltration Project, which raised concerns from numerous residents.

As the lead agency, the city of Hermosa Beach had hoped that Redondo Beach would take the lead on the infiltration project. But according to City Manager Suja Lowenthal, who said the city was “disappointed in the loss of funding,” the board had various concerns about the future of the project.

“They were concerned that Hermosa Beach is no longer the designated project site as a lead agency for the grant and that Hermosa Beach may not have jurisdiction authority over the ultimate project location,” Lowenthal said.

Lowenthal said the board encouraged the city to reapply for grant money in the fall.

“They indicated holding up these resources would prevent them from funding projects that were ready to be constructed,” Lowenthal said.

There was concern from the board that negotiations with partner agencies, including Redondo Beach, Torrance, Manhattan Beach and the Los Angeles County Flood Control District, would further delay the project.

“We are in the process of drafting correspondence to our MOU partners to chart a path forward,” said Councilmember Justin Massey, who is also on an infiltration project subcommittee.

In 2013, Hermosa Beach joined Torrance, Redondo Beach, Manhattan Beach and the Los Angeles County Flood Control District to form the Beach Cities Watershed Management Group to comply with the National Pollutant Discharge Elimination System Permit to reduce bacteria in the Santa Monica Bay.

The Herondo Drain Watershed was identified as a “chronic source of elevated bacteria levels” where it drains at the southern border of the city. Hermosa Beach, in partnership with the other cities, was to receive funding for design and construction from the State Water Resources Board.

In April, the council voted to amend the MOU before spending nearly $160,000 from a Storm Drain Fund for a feasibility study.

Hermosa Beach was considering N. Francisca Avenue in Redondo Beach as a possible replacement site for the project.

The project was originally slated for the Greenbelt and then potentially South Park, until numerous residents protested the project.

Contact this reporter at mhixon@tbrnews.com or on Twitter @michaeljhixon.com.

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