Crashing waves, a light breeze and the Hermosa Beach Pier served as the backdrop last Friday morning as Assemblyman Al Muratsuchi introduced Assembly Bill 2711 – the Hermosa Beach Tideland Oil Revenue Loan – and announced his opposition to oil drilling in Hermosa.
“I’m proud of this community for being such a strong leader in the fight to protect our environment,” Muratsuchi said. “That is why I am here today to join all of you, my friends in Hermosa Beach, to announce my opposition to oil drilling in Hermosa Beach.”
He then outlined his plan to provide financial relief to the voters of Hermosa Beach.
AB 2711, which Muratsuchi hopes to pass in the state house and senate prior to the November election, would allow the city of Hermosa Beach to borrow $17.5 million from the state tideland oil revenues. If voters elect to maintain the citywide ban on oil drilling, that sum of money would be used to pay off E&B Natural Resources as part of the $30 million settlement agreement it had when the company bought the rights from Macpherson Oil. If voters lift the ban, they’ll owe E&B $3.5 million.
Under Muratsuchi’s bill, monies would be paid back at a rate of $500,000 per year at a low or no interest rate. Details are pending in the legislature, but Muratsuchi said the goal is a no interest loan.
“We are very pleased to be able to offer this solution to support the city of Hermosa Beach so that the voters of Hermosa Beach can vote their conscience without fear of the financial penalty,” Muratsuchi said.
The proposed bill’s payback is lower than estimates provided in the draft Cost Benefit Analysis. In the CBA, Kosmont Companies estimated annual costs of between $825,000 to $1.1 million for 20 to 30 years to repay an $11.5 million tax levy or commercial loan. The remaining $6 million to pay off the settlement would come from city funds already set aside for the oil issue.
Muratsuchi was joined at the podium by Sen. Ted Lieu and Hermosa Beach City Councilwoman Nanette Barragan, speaking not on behalf of the city, but as a concerned citizen and environmentalist.
“While the city takes no position on the bill, I support this bill ... (It) would provide Hermosa residents an alternative financing option to consider when they think about voting on this critical issue facing our city – of whether to approve or reject the idea of drilling along our coastline,” Barragan said. “This is a great opportunity for the residents to see that they can afford to say no.”
Flanking the three elected officials were representatives from Stop Hermosa Beach Oil, Los Angeles Waterkeeper, Surfriders, Heal the Bay and Earthworks.
Several elected leaders from cities along the bay, from Santa Monica to Redondo Beach, also attended, as well as a sea of several dozen green capped Keep Hermosa hermosa supporters. As Muratsuchi frequently called on residents to “Keep Hermosa hermosa,” cheers erupted among the speakers and attendees.
“I think the presence of representatives and citizens from other communities … throughout the Santa Monica Bay shows that this issue has much larger implications than Hermosa Beach,” Muratsuchi said. “It potentially can affect all of the Santa Monica Bay.”
Lieu expressed his support of Muratsuchi’s bill, and said that he would work hard to get it through the state senate.
“I’ve always opposed oil drilling along our coast,” Lieu said. “I oppose oil drilling here. I can’t really think of anything more stupid than to do oil drilling here.”
Following the press conference, Lieu said, “if the voters in the city of Hermosa (opposed drilling) too, then we should do everything in our power to prevent drilling and future litigation.” He felt there was a good deal of support throughout the California legislature for the bill.
According to Muratsuchi, the idea for the bill came out of brainstorming sessions with city staff and his staff about how to address the financial burden.
E&B Natural Resources spokesman Eric Rose issued a statement questioning the necessity of the bill.
“It is unclear to us why AB 2711 is necessary. During the past two years, city officials and community activists have consistently and forcefully stated that the city has the financial capacity necessary to repay the $17.5 million loan E&B provided,” said Rose, calling on voters to “decide if the city should become one of the safest and most fiscally sound cities in the state.”
According to the CBA, Hermosa Beach would take in net revenues of $118 to $270 million throughout the lifespan of the 35-year project.
Residents and political leaders who attended the press conferences argued that the bill, if passed, would be integral in limiting the city’s annual expense related to the project. Several residents also felt that Muratsuchi’s opposition upped the ante for neighboring cities along the bay to study the oil-drilling proposal and evaluate the consequences for themselves.
Muratsuchi is running for re-election in the California state legislature. Lieu is running for United States Congress this fall, seeking to fill the seat that will be vacated by Congressman Henry Waxman. Among Lieu’s fellow candidates, Democrat Wendy Gruel has also taken a public stand against the E&B proposal in Hermosa Beach.
Muratsuchi and Lieu welcomed voters to contact their offices and request updates on the proposed legislation.