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HomeMy WebLinkAboutHuntington Beach Oil Code - Oil Drilling - Code Amendment 72 Affidavit ®f P Jlieation State-of California Ii V County of Orange l ss Cbi=; ,„4: G City of Huntington Beach George Farquhar, being duly sworn on oath, says: That he is a citizen of the United States, over the age of twenty-one years. That he is the printer and publisher of the Huntington BeacY� News, a weekly newspaper of general circulation printed and pub- a lished in Huntington Beach, California and circulated in the said CLJ__ County of Orange and elsewhere and published for the dissemination of local and other news of a general character, and has a bona fide subscription list of paying subscribers, and said paper has been established, printed and published in the State of California, and County of Orange, for at least one year next before the publication of the first insertion of this notice; and the said newspaper is not devoted to the interest of, or published for the entertainment of any particular class, profession, trade, calling, race or denomination, or Published,Huntington Beach News June any number. thereof. 22, 1972. The Huntington Beach New was adjudicated a legal newspaper NOTICE OF PUBLIC HEARING of general circulation by Judge G. K. Scovel in the Superior Court CODE AMENDMENT 72-9 of Orange County, California August 27th, 1937 by order No. A-5931. NOTICE IS HEREBY.,GIVEN that.a pub- lic.-hearing will be held by the City CODE AMENDMENT 72-9 Council at Council ity of Chamber of Cich, That the in. the Council Chamber of the Civic, Ce'nter, Huntington Beach, at the, hour. of 7:00 'P.M., or as soon thereafter'as possible, om Monday ,the 3rd day of July, 1972, for the purpose•.pf,'consider of which the..annexed is a printed copy, was published in said news- ing' a .proposed code amendment, ?�m— tiated by the City Planning Commission, as,follows: paper at least Qne issue S. 96852 Drilling and Re-ariihng 'al- AiiNl tl on Oif ;©petatibq;l5 a Only: No person-or persons' shall drill or 're-drill Commencing from the 2 na day of June or cause,.to_be drilled,or re;drilled,any, oil well except on an 'oil operation site: S. 9686.3 Drilling and;Re-drilling AI- 1912—, and ending on the 22nd day of June lowed on .oil, operation Site only: No person or persons shall drill or, re-drill or cause to be drilled or re-drilled any, oil well ekcept'on an'oil operation site. 192_, both days inclusive, and as often during said period and All interested persons are invited to times of publication_as said.paper_wa's 'regularly issued, and in the attend said bearing and express their regular and entire issue of said pewspaper proper, and not in a opinions for or against said Code Amend- supplement, and said notice was published therein on the following ment. dates, to-wit: Further information may be obtained From the"Office of the City Clerk. 'DATED: 6/19/72 June 22, 1972 CITY uF HUNTINGTON BEACH By: Paul.C. Jones City Clerk — Publisher Subscribed and sworn to before me this 23 rd day of June , 19122 . Notary Public Orange County, California EP4 Op / a THOMAS D. WYLLIE Notary Public-California ® Orange Counfy My Commission Expires September 12,'1974 of Huntington }Beach County of Orange , State of California J f f idavitof Publication of GEORGE FARQUHAR Publisher Huntington Beach News Filed Clerk By Deputy Clerk 1a Huntington Beach Planning Commission P.O. BOX 190 'CALIFORNIA 92648 June 19, 1972 TO: HONORABLE MAYOR AND CITY COUNCIL l FROM: Planning Commission- RE: Code Amendment No. 72-9 ATTN: David D. Rowlands , City Administrator Paul Jones , City Clerk Gentlemen: Transmitted herewith is a copy of Code Amendment No. 72-9. Said amendment was initiated by the Planning Commission to allow redrilling within an oil operation site. The code presently specifies that drilling new wells is permitted. The proposed code amendment is as follows : S.9685. 2 - Drilling and Re-drilling allowed on Oil Operation Site Only: No person or persons shall drill or re-drill or cause to be drilled or re-drilled any oil well except on an oil operation site. S.9686.3 - Drilling and Re-drilling Allowed on Oil Operation Site Only: No person or persons shall drill or re-drill or cause to be drilled or re-drilled any oil well except on an oil operation site. The Planning Commission at its June 6, 1972 meeting unanimously approved Code Amendment No. 72-9 and recommends approval by your Honorable Body. The State Planning Act requires that a public hearing be held after the Code Amendment may be adopted by ordinance. Respectfully submitted, K.A. Reynold Secretary Encl: Code Amendment No. 72-9 KAR:vm d We �,�-9 STAFF REPORT Code Amendment No. 72-9 Date: June 6, 1972 n v Code Amendment No. 72-9 is a proposal to allow redrilling to take place on an oil operation site. The code presently specifies that drilling new wells is permitted. The staff feels that drilling and redrilling are permitted upon any operation site; however, there was misinterpretation as to the difference between drilling a new well and redrilling an existing well. The staff; therefore, felt that- some housekeeping was in order and the code should be amended to specifically permit redrilling within the provisions allowing drilling upon the oil operation sites. �G WHITE-CITY ATTORNEY BLUE-CITY CLERK j � CITY OF'HUNTINGTON BEACH No. BLUE GREEN-CITY ADMINISTRATOR t:CANARY-DEPARTMENTAL REQUEST for ORDINANCE or RESOLUTION Date Request made by Department June 19, 1972 K.A. Reynolds Planning INSTRUCTIONS: File request in the City Administrator's Office quickly as possible but not later than noon, one week prior to the Council Meeting at which it is to be introduced. Print or type facts necessary for City Attorney's use in preparation of ordinance. In a separate paragraph outline briefly reasons for the request of Council Action.Attach all papers pertinent to the subject.All appropriation requests must be cleared and approved by the Director of Finance before submitting to City Administrator's Office. Preparation of an Ordinance or Resolution is hereby requested: Code Amendment No 72-9 (Attached herewith) v 1. Letter of transmittal 2. Copy of Code Amendment No 72-9 3. Staff Report Desired effective date .Signed: Approved as to availability of funds July 3, 1972 Director of Finance City Attorney—Please prepare and submit printed copies to this office by: City Administrator Publish 6/22/72 PUBLIC HEARING SET � , FOR:.. ....,., _„�.l-_�.:_----Y---------- Postcards 0 _....._.... _w.._ .�. :........... NOTICE OF PUBLIC HEARING CODE AMENDMENT 72-9 NOTICE IS HEREBY GIVEN that a public hearing will be held by the City Council of the City of Huntington Beach, in the Council Chamber of the Civic Center, Huntington Beach, at the hour of 7: ,00-- P.M. , or as soon thereafter as possible, on Mandav the 3rd day of July 199L1, for the purpose of considering a proposed code amendment, 'initiated by the City Planning Commission, as follows: S. . 9685-.2 Drillin and Re-drilling allowed on Oil Operation Site Onl o,. person or persons s a r or re-drill or cause to be drilled or re-drilled any oil well except on an oil operation site. S. 96B6.3 Drilling and Re-drilling Allowed on Oil Opgration Site Only: o person or persons small drill or re-drill or cause to be drilled or re-drilled any oil well except on an oil pperation site. All interested persons are invited to attend said hearing and express their opinions for or against said Code Amendment Further information may be obtained from the Office of the City Clerk. DATED: 6/19/72 CITY OF- HUNTINGTON BEACH By: Paul C . Jones City Clerk City Clerk City of Huntington Beach The Huntingto each Planning Commission, at their regular/�n meeting held G Z , recommended of If approval has been recommended, the City Council will be required to hold a public hearing on this matter. Although there is a 10 day appeal period, we suggest that the matter be set for the earliest possible City Council meeting, because the purpose of any appeal is to have a hearing before the City Council and this is already being accomplished. We further suggest that you not accept any appeal, as it will serve no purpose. If approval has been recommended other than as requested, the City Council will be required to hold a public hearing on this matter. However, there is a possibility that the Planning Commission's decision will be appealed; therefore, we suggest that publication be held off until the 10 day appeal period has expired. If denial has been recommended, the City Council may summarily deny the request. However, we suggest that the matter not be scheduled on the City Council agenda until the 10 day appeal period has expired. A copy of the Planning Department legal notice, -� —a-�1�• �F ^�^�-� ^f . saa-.�_�a ti- ����+ ��►^ F^�� •+f th a �h�nrt arras will be submitted upon your request. The applicant in this mat er is (Address) (Telephone) Kenneth R. Reynolds, Planning Director .By 04 ram `• � Number of E-ccerpts None • ' Publish Once ;L,E GAL 'NOT!CE NOTICE OF PUBLIC HEARING CODE AMENDMENT NO 72-9 ITOTICE IS HEREBY GIVEN that a public hearing will be held by the City Planning Commission of the City of Huntington T3each for the purpose of considering a proposed code amendment Said amendment is as follows: S. 968 .2 Dr ng an e- r ng allowed on Oil Operation Site Only: No person or persons shall drill or re-drill or cause to be drilled or re-drilled any oil well except on an oil operation site. S. 9686.3 Drilling and Re-drilling Allowed on Oil Operation Site Only: No person or persons shall drill or re-drill or cause to be drilled or re-drilled any oil well except on an oil operation site. SaigJune hi6fing will be held at the hour of 7:00 P.M. , , r)ri , in the Council- : Chamber of the Civic Center, u.tington r;ach, California, on 5th Street between Main Street nd Orange :4venue. All int,2rested persons ally- invited to attend saic; hearing nd exnre s their opinions for. or against the proposed de APnendment Further information may bo obtained from the City Planning Department. N"ZS5t14-5271 May, 1972 y, DATED t�•hi:; tir►v of CITY PLANNING COMMISSION By HeynTEGS Secretary I ' ;�H� \ - l G=5 3 :. 1 s;.f 4=. i 1 �' ��� g� t w►� CITY OF HUNT-IkGTON BEACH INTER-DEPARTMENT COM NICATION HUNTINGTON 6EAC11 To Department Heads & o James W. Palin, Director Planning Commissioners p, Development Services Subject "FISCAL IMPACT OF OIL OPERA- De July 27 , 1981 TIONS IN HUNTINGTON BEACH Attached is a report prepared by Development Services entitled "Fiscal Impact of Oil Operations in Huntington Beach" , which discusses municipal expenditures and revenues associated with oil production facilities in the City. . The report analyzes cur- rent fiscal impacts as well as future ones under four different "scenarios" . if you have any questions about this report, please contact Mike Multari (Extension 5279) . MM: j lm Attachment i 1 Huntington Beach Energy Series Report +2 Fiscal Impact of Oil Operations a in Huntington Beach a C�` v V b. City of Huntington Beach Department of Development Services Planning Division .March, 1981 r CITY OF HUNTINGTON BEACH CITY COUNCIL Ruth S. Bailey, Mayor Ruth Finley, Mayor Pro Tem Jack Kelly Don MacAllister Bob Mandic Ron Pattinson John Thomas PLANNING COMMISSION Mark Porter, Chairman Grace H.Winchell, Vice-Chairman Wesley Bannister Ralph Bauer Beverly J. Kenefick Jean Schumacher Charles W.Thompson City Administrator 7 Z e CITY OF HUNTINGTON BEACH. INTER-DEPARTMENT COMMUNICATION HuNTINGTON Bb1CH To Charles W. Thompson F James W. Palin, Director City Administrator Development Services 0 Subject ADDENDUM TO ENERGY REPORT #2 , Date . FISCAL IMPACT OF OIL OPERATIONS August 27 , 1981 .IN HUNTINGTON BEACH d Enclosed are copies of an addendum to the recently published report, "Fiscal Impact of Oil Operations in Huntington Beach. ".' This addendum discusses ."multiplier effects" and "utility taxes, " two topics which were not included in the original report, but which we feel are helpful additions to the fiscal analysis of oil operations. Please forward to the City Council members this addendum f_or inclusion. in their copies of the original report. JWP:MML :df D Q P P c, 1981 CITY OF HUNTINGTON BEACH ADMINISTRATIVE OFFICE l-, ADDENDUM Report #2: Fiscal Impact of Oil Operations in Huntington Beach August, 1981 Fiscal impact modeling is a rapidly developing field; modeling techniques and methods for measuring complex fiscal effects are continuously being improved. The methodology used in Report #2 was developed as part of an ongoing effort to increase the accuracy and usefulness of the fiscal models available to the City. The purpose of this addendum, then, is to identify areas where further improvements can be made in the methodology, and to update the analysis with new information that has become available. MULTIPLIER EFFECTS The methodology used in Report #2 does not take into account secondary costs and benefits or "multiplier effects." Multiplier effects are the indirect benefits (or costs) to the City caused by an activity. For example, a company generates direct revenues for the City, but also supports the City indirectly by providing jobs and making purchases from other local businesses, who in turn, pay taxes and buy still other goods and services. In this way, each business (or household) may generate revenues for the community beyond the taxes and fees it pays directly to the City. In the case of some uses, such as oil production, these secondary effects may be significant. The City is currently working on a fiscal model which will include multiplier effects: As this methodology is refined, more accurate analyses of the overall impacts of different land uses on the City's budget and local economy will be possible. It should also be stressed that, based on direct fiscal impacts, oil operations have a very ;favorable revenue/cost ratio, particularly in comparison to other uses. If secondary or .multiplier effects are integrated into the analysis, the additional benefit oil activities bring the City could be quantified. Then a more accurate comparison of the overall impacts of all uses could be made. NEW INFORMATION: UTILITY TAXES A significant direct revenue generated by oil activities, which was not included in the earlier publication of Report #2, is the electric utility tax paid by oil companies. This is a tax on all electricity-using customers in Huntington Beach, equal to five percent of the customer's electric bill, that goes directly to the City. Therefore, it is correct to attribute the revenue generated by this tax to the electricity user, not to the utility. In 1979-80, the oil companies paid approximately $500,000 to the City in electic utility taxes. Accordingly, the total revenues in Table I (page 5) should read $2,172,477; net revenues should read $1,301,484. The revenue/cost ratio for oil uses -- already considered favorable -- is better than previously shown (from about 2:1 to about 2..5:1). i. HUNTINGTON BEACH ENERGY SERIES REPORT #2 FISCAL IMPACTS OF OIL OPERATIONS IN HUNTINGTON BEACH CITY OF HUNTINGTON BEACH DEPARTMENT OF DEVELOPMENT SERVICES JAMES W. PALIN, DIRECTOR MARCH, 1981 r. TABLE OF CONTENTS PAGE FORWARD 1 DEFINITIONS 2 1.0 INTRODUCTION 3 2.0 CURRENT CITY REVENUES AN EXPENDITURES RELATED TO OIL OPERATIONS IN HUNTINGTON BEACH 5 2.1 Expenditures 6 2.2 Revenues 8 2.3 Conclusion 12 3.0 FISCAL IMPACTS OF CONTINUING OIL OPERATIONS 13 3.1 Predicting Future Oil Operations 13 3.2 Assumptions about Variables Affecting Future Revenues and Expenditures 14 3.3 Analysis of Scenarios 15 3.4 Summary 19 3.5 Garfield/Goldenwest and Townlot/Downtown Areas 20 ` 4.0 BEYOND FISCAL IMPACTS 25 4.1 Non-fiscal Costs 25 4.2 Non-fiscal Benefits 26 4.3 Federal and Local Perspectives on Non-fiscal Costs and Benefits 26 5.0 CONCLUSION 27 APPENDICES Appendix A: City Expenditure Models 29 Appendix B: Revenues from Other Energy Facilities 35 NOTES 38 BIBLIOGRAPHY 40 Foreword This is another in a series of discussion papers on energy-related issues prepared by the Planning Division of. the City. of Huntington Beach. Huntington Beach is a center for many energy-related activities including onshore and offshore oil production, an electricity-generating power plant, and increasingly, solar and conservation technologies. The purpose of these reports is to help the City to accommodate the continued production of so vital a resource as energy while at the some time mitigating as much as possible any adverse impacts on the community that such activities might incur. Other reports in this series include the following: #1 Preserving Surface Access to Underground Oil Reserves in Developed Areas #3. Oil Spill Contingency Planning in Huntington Beach #4 Enhanced Oil Recovery Technology #5 Solar and Conservation Policies at the Local Level. a This publication was prepared with financial assistance from the U.S. Office of Coastal Zone Management, National Oceanic and Atmospheric Administration, under the provisions of the Federal Coastal Zone Management Act of 1972, as amended, and from the California Coastal Commission under the provisions of the Coastal Act of 1976. 1 Definitions This report necessarily discusses some technical aspects of the oil industry and of fiscal impact analysis. Consequently, some terms are used which may not be familiar to the reader. The following definitions section was prepared to help clarify the meaning of some of these terms. To ease reference, all words defined in this section are italicized the first time they appear in the report's text. Enhanced Recovery: Any production method which is used to recover more oil from a petroleum reservoir than could be obtained by natural reservoir energy or simple pumping. Includes water flood, steam flood and other techniques involving injection of fluids into the reservoir to recover additional oil. Expenditures: Monies spent by the City to provide goods and services to the landowners, residents, workers and visitors of the City. Fiscal Impacts: In this report refers to revenues received and expenditures incurred by the City as a result of particular land uses or activities occurring in Huntington Beach. Net Revenues: The revenues remaining and available to the City after total expenditures are subtracted from total revenues. Opportunity Cost: Costs associated with choosing one option over other ones when that choice precludes the alternatives. By making that choice, benefits that might have resulted from the precluded alternatives are lost. Primary Production: Oil driven up through wells by natural pressure in the formation or by pumping units, without injecting water or other fluids to help force the oil to the surface. Recycling: In this context, refers to the redevelopment of the surface area of an oil field for uses such as housing or commerce. Revenues: The monies or income the City receives; sources include taxes, fees, rents and franchises. Scenarios: In this report, refers to a set of events or conditions possible in the future; a future Possibility. Unitization: The process of forming a "unit"; a unit is an entity composed of several oil operators which work a common oil pool in order to share equipment and mineral interests to produce the reservoir as a single party. When the interests in the pool are fragmented, units are essential for the use of most enhanced recovery methods which can best be applied on a coordinated, non-competitive basis. Water food: An enhanced recovery program through which water is injected into a reservoir in order to force more oil from the pores in the rock. Water Injection: Another term for "waterflood". 2 1.0 Introduction' Numerous energy-related facilities occupy in Huntington Beach. In addition, the City significant land area in the City of faces important' decisions regarding land Huntington Beach, especially in and near use as the oil in the field continues to be the coastal zone. These facilities include depleted and pressure increases to abandon onshore and offshore oil production parts of the field and to redevelop the operations, a tanker unloading terminal, a surface. Fiscal impacts are important • power plant, pipelines, and electricity and factors in determining the best use of the natural gas distribution systems. All of land and the City's policy toward continued these have fiscal impacts on the City. oil operations. In this report, fiscal impacts refer to the The City's other major energy revenues the City receives and the facilities--the power plant and marine expenditures it incurs as a result of terminal--are, practically speaking, particular land uses. Revenues are the permanent facilities which will continue to funds generated for the City through serve regional and state interests. City various taxes and fees (for example, actions are not likely to significantly property taxes, production taxes and encourage or discourage continued license fees) paid by the owners and users operations of these facilities. Thus, they of land in the City. Expenditures are the do not present significant land use options monies spent by the City to provide to the City at this time. services for these land uses (for example, fire and police protection). This study has been carried out in conjunction with the development of a The principal purpose of this study is to City-wide computer model which assesses estimate the fiscal impacts of the fiscal impacts of various land uses. energy-related facilities and especially of While the City-wide model may be useful oil production operations. The report for analyzing most activities, it does not focuses on oil operations because they take into account certain peculiarities of occupy a great deal of very valuable land oil operations. 3 For example, oil revenues are more closely Section 3.0 projects the fiscal impacts of related to -the amount of oil produced by continuing oil operations through 1990 the wells than the acreage they occupy. under four different scenarios.. Special The City-wide model, however, is largely attention is given to the Townlot/ based on developed acres, and generally Downtown and Garfield/ Goldenwest areas does not relate changing revenues to where the status of oil operations is likely changing production levels. Thus, a better to change. way of computing the impacts of oil operations has been developed as part of Finally, Section 4.0 discusses issues besides this study. (See Appendix A). fiscal impacts which are also important for making decisions about land uses in the The following section discusses the City. revenues and expenditures related to oil operations in Huntington Beach for fiscal year 1979-80. 4 2.0 Current City. Revenues and Expenditures Related to Oil Operations in Huntington Beach Table 2.1 summarizes the revenues and 1979-80. Oil activities generated net expenditures attributable to oil production revenues (revenues exceeded costs) of in Huntington Beach for fiscal, year approximately $800,000 for the year. TABLE 2.1 City Revenues and Expenditures Related to Oil Operations or Fiscal Year 9 9-8 Revenues Expenditures roperty axes $ 382,068 General Government and Oil Production and Administration $203,340 Business License Fees 1,076,996 Public Works 135,465 Royalties and Easements 120,000 Police Department Inspection Fees 73,000 Directly Assignable 14,360 Wastewater Permits 9,660 Not Directly Assignable 150,903 Drilling/Redrilling Fire Department Permits 6,500 Directly Assignable 28,309 Pipeline Franchises 49253 Oil Inspector 45,800 Special Equipment TOTAL REVENUES $1,672,477 and Personnel 2109000 Not Directly Assignable 82,816 TOTAL EXPENDITURES $ 870,993 $1,672,477 (Total Revenues) - $870,933 (Total Expenditures) = +$801,484 (Net Revenue). Refer to Section 2.2 and 2.3 for discussionand calculation of these figures. 5 The following sections explain how these expenditures and revenues were estimated. TABLE 2.2 2.1 Expenditures Distribution of Fire Department.Calls by Type of Land Calendar Year 1978). Local governments provide a wide range of vital public goods and services. In 1979-80, Type of for example, the City of Huntington Beach Land Use # of Calls (1) % of Total spent over $30 million to provide businesses, industry, residents and visitors Residential 2,937 34.5 of Huntington Beach with fire and police protection, streets, sewers, garbage Streets & Highways 537 6.3 disposal, animal control, building inspections, consumer protection, and Industrial 269 3.2 many other important services. This section discusses the City's expenditures City Beach & Pier 257 3.0 related to oil operations. Commercial 240 2.8 Directly Assignable Expenditures: A key problem in this kind of fiscal analysis is Oil 51 .6 determining what portion of the total City budget should be attributed to different City Parks 126 1.5 land uses. In only a few cases is it relatively easy to measure the amount of Miscellaneous 520 6.1 public services provided directly to certain kinds of land uses. The principal examples Other of these directly assignable costs are those Unassigned (2) 3,588 42.0 related to police and fire calls. The City keeps records of the number of such calls TOTALS 8,525 100.0% and also notes, among other data, the land uses located on the site of each call. We then assume that the proportion of calls generated by each land use category is a reasonable estimate of the proportion of the City's costs in responding to all calls (1) Includes all fire, emergency/ medical that should be attributed to each land use assistance, and non-fire and type. non-emergency/medical incidents. Table 2.2 shows the distribution of Fire (2) These are . emergency/medical Department calls by land use type. It incidents that could not be assigned to indicates that only .6 percent of all calls a particular land use. were related to oil operations. The total City expenditures on the budget items Source: City of Huntington Beach Fire related to Fire Department emergency Department and Planning Staff. calls were $4,718,248 in 1979. Those items are Fire Control (account number 302)* and Medical Aid Paramedic (304). Considering the discussion above, oil uses then should be assigned .6 percent of the * Paranthesis indicates the account total, or $28,309. numbers in the City budget for these items. 6 Table 2.3 shows the distribution of Police The following budget items 'were Department calls among land uses in the considered related to the costs of City. Note that oil operations are not responding to criminal activity: Crime broken out into a separate category; they Analysis (330), Vice and Organized Crime are included in the "industrial" group. All (328), Investigative (329), Scientific industries accounted for only .2 percent of Investigation (331), Patrol (332), Traffic police calls. Because there are other (335) and Aero (337). The City expended industries in Huntington Beach besides oil, $7,190,105 to provide these services in the share of the expense of these services 1979-80. Oil's share, .2 percent of the attributed to oil facilities must be some total, is $14,360. fraction of .2 percent. For the purposes of this analysis, however, the full .2 percent A very large proportion of fire and police is assigned to oil activities to ensure that calls are included under "streets and their share is not underestimated. highways," "miscellaneous" or "unassigned" categories. Expenditures in these TABLE 2.3 categories cannot be assigned to specific land uses directly. This is true for most Distribution of Police Department other City expenditures as well. These will Calls by Te o and Use (calendar be discussed again below. Year . Another group of City expenditures which # of Calls % of Total can be reasonably assumed to be directly related to oil operations are the costs of Streets & Highways 29,386 40.2 the City's oil inspection and regulation activities. The City Oil Inspector, who Residential 23,917 32.7 works in the Fire Department, enforces the City Oil Code, inspects every well Commercial 13,457 18.4 annually, responds to oil-related emergencies and performs other duties City Beach & Pier 908 1.2 related to oil operations. The Fire Department estimates that oil inspection City Parks 446 .5 costs (including inspector's salary and overtime, benefits, car, uniforms and State Beach 129 .3 office support) were approximately $45,800 in 1979-80. Industrial 125 .2 (including oil) Finally, because there is a potential petroleum fire hazard associated with the Miscellaneous 4,717 6.5 oil production facilities, pipelines and tank farms in Huntington Beach, the Fire TOTALS 73,085 100.0 Department has an engine company that is specially trained and equipped to handle oil fires. If not for its oil field responsibility, the Fire Department would not maintain this company. Therefore, the cost of this Source: City of Huntington Beach Police protection, estimated at $210,000 for Department and Planning Staff 1979-80, 'is added to City expenditures on oil activities.) 7 Not DirectI4 Assignable Expenditures: TABLE 2.4 ost expenditures cannot be directly assigned to particular land uses. Many of Distribution of Costs these represent the City's "overhead" or Using Weighted Average Model the cost of having services available, should they be needed. Economist George % of Total Patterson helps clarify this point: Expenditures % of Acreage Assigned by if . .the basic purpose of a fire in City Model department is protection, which is available to all whether or not they Residential 65% 87.3% actually have a fire. It is not logical to assume that a fire department is Commercial 9% 5.2% paid only when it is fighting a fire:'2 Industrial 6% 2.3% Thus, while expenditures on fighting fires can be reasonably attributed to different Oil 3% 2.3% users, the costs of having the equipment and personnel ready to fight any fire are Vacant 17% 2.9% not, but are borne by all members of the community. Total 100% 100.0% The City has developed an expenditure model as part of the preparation of this report for estimating the "fair share" of these costs that can be reasonably In 1979-80, expenditures on budget items attributed to different kinds of land uses. which cannot be directly traced to specific A detailed discussion of this model and of land uses totaled $24,982,308.* Oil's share alternatives that were examined by the of this, 2.3 percent, equals $572,523. City for this study is included in Appendix Table 2.5 lists all the budget items A. A brief summary of the model and its included in this analysis. assumptions follows: 2.2 Revenues The model takes into account several factors in assigning the appropriate share Oil operations generate significant of City expenditures to different land uses, revenues for the City from a number of including the amount of acreage in the sources, including the following: City each land use type occupies and the intensity of use on that acreage (that is, the number of residences, businesses or oil facilities per acre). The assumption * Library, Parks & Recreation, and utilized in the model is that more Harbors and Beaches are not included intensively developed areas tend to require in the analysis because these three more services (and, thus, more groups of services are attributed expenditures) per acre then less densely primarily to residential uses and are developed areas. This approach, called the not considered in the calculations of "Weighted.Average Model" estimates that expenditures attributable to oil oil operations can accounf for about 2.3 operations. Water Department percent of the City's budget (for items expenditures and revenues from water which cannot be directly traced to specific sales are also excluded, because oil land uses). See Table 2.4. activities consume relatively small quantities of water and the estimated revenues are not important to this analysis. 8 BUDGET ITEMS FOR "UNASSIGNED" EXPENDURES General Government and Administration Police Department (100) City Council (230) Development Services Adm. (320) Administration (101) Non-departmental (231) Current Planning (321) General Support (102) Civic Promotions (232) Advance Planning (322) Personnel (109) City Administrator (233) Land Use (323) Public Affairs (110) Internal Auditor (234) Plan Reveiw (324) Records (111) Budget and Research (325) Training (112) Council Support (326) Research (113) Public Information Pubilc Works (333) Communication (114 Economic Development (115) Civil Defense (410) Administration Fire Department (116) Data Processing (412) Surveying (117) Purchasing (415) Traffic Engineering (300) Administration (118) Central Services (420) Maintenance Administration (301) Fire Prevention (119) Word Processing (430) Mechanical Maintenance (304) Joint Powers (120) Chashier (462) vehicle Repair (485) Fire Station (121) Risk Management (560) Sewer Maintenance (122) Animal License (561) (591) Sewer Pump Station (130) City Attorney (431) Mechanical Fabrication Also dudes t of assignable" itmw tens attri- (140) City Clerk (433) Pool Car Maintenance buted to "streets and high- (141) Elections (453) Special Repairs (160) Personnel (450, ways", "Miscellaneous" and „ass « (17 ) Finance 40, Refer to�7ftbles 2.2 and 2.3. (171) Accounting 470, (172) Business License 480, Building Maintenance 482, — 487, 489, 490) Summary for 1979-80 Unassigned Expenditures General Government $8,840,880 Public Works 5,899,762 Police 6,560,"0 Fire 3.600.8 . Total $24,892,309 Aft TABLE 2.5 huntington beach planning division 1) property taxes (including tax on surface of an oil field or oil parcel is considered in areas, mineral rights and improvements), 2) use for oil production, and how_ much could business license and o i I production license reasonably be considered vacant and fees, 3) inspection fees, 4) pipeline available for other uses. In many cases, a franchises, S) wastewater permit fees, 6) parcel is so densely populated with wells drilling/redrilling permit fees and 7) and tanks that the entire area can be royalties and easements.3 considered oil production land. In other instances, however, open spaces between Property Tax_: The City's property tax wells are large enough to permit revenues are primarily dependent on three development of other uses. For example, key variables, 1) the assessment or it would be unreasonable to think of a valuation of property in the City, 2) the ten-acre parcel with three oil wells on it as tax rate applied to those valuations or devoted entirely to oil. Vacant portions of assessments, and 3) the percentage of the such a parcel could be developed for other total property taxes collected in uses. This has happened in areas Huntington Beach which actually go to the throughout the City. City. In order to accurately estimate the surface Proposition 13 "rolled-back" property area of the City used for oil activities, the valuations to 1975 levels and limits characteristics of the oil fields and parcels re-assessment to two percent per year. in the City were analyzed to determine if However, if a property is sold, it is the land around the wells and tanks could re-assessed at that time at its selling be developed for other uses. Those areas price. Generally, because of the two which could be considered available for percent annual limit, valuations do not other uses were counted as vacant land. keep pace with inflation. The frequency at The remaining portions of oil fields and which properties "turn-over" (are sold), and parcels were counted as oil areas. Through thus are re-assessed, greatly affects how this process, staff estimated that about closely the overall valuation for properties 472 acres are actually used for oil can keep pace with inflation.4 production in Huntington Beach. The estimated assessed value of this surface Proposition 13 generally limits property area for 1979-80 is $4,901,666 (See Table tax rates to one percent of market value. 2.6). Voters in any tax rate area can approve additional taxes beyond this base rate. Besides the surface land, property taxes Table 2.6 below shows the distribution of are also assessed on mineral rights, secured oil holdings among tax rate areas, the rates improvements, and unsecured for each area and the tax collected by the improvements. The assessments on each of county. these in 1979-80 were the following: $23,788,080 for mineral rights; $9 227,480 Many jurisdictions other than the City for secured improvements; and �701,160 (such as the school districts) are also for unsecured improvements. funded by property taxes. Thus, only a fraction of the total property taxes The City receives a 20.7 percent share of collected in Huntington Beach actually go the total property taxes on oil operations to the City. The share of the property in Huntington Beach collected by the taxes which went to the City was 20.7 County, which amounted to $382,068 for percent in 1979-80. 1979-80.5 The most difficult problem in estimating Business License and Oil Production the City's property tax revenues related to LicenseFees: The oil product i o—n ee is a oil is determining how much surface area Tee­charged for each barrel of oil produced. It is linked to the 10 Assessed Value of Oil Properties in Huntington Beach, 1979-80 Tax Rate Mineral Secured Unsecured Tax Tax Area Land * Rights Improvements Improvements Total Rate Collected 001 4,255,667 20,653,010 8,974,280 457,970 34,340,927 4.7767% 1,640,363 007 13,742 66,690 1,940 207,360 289,732 4.8309% 13,997 O10 47,053 228,350 13,270 9,450 298,123 4.8426% 14,437 013 & 014 585,204 2,840,030 237,990 26,380 3,689,604 4.7884% 176,673 Totals 4,901,666 23,788,080 9,227,480 701,160 38,618,386 1,845,740 * Land surface was distributed among tax rate areas in the same proportions as mineral rights. Source: Orange County Assessor's Office. TABLE 2.6 N huntington beach planning division consumer price index, and, thus, increases (Some pipelines are not related to oil as the cost of living rises. The oil production here - that is, even if there production license fee rates for 1979-80 were no oil production in Huntington Beach were 11.05�/barrel for "non-stripper" wells these pipelines would continue to be used. (wells that produce more than ten barrels They are used for transporting crude oil per day) and 8.840/barrel for "stripper" delivered by tanker or for carrying gas or wells (wells that produce less than 10 refined products.) barrels per day). Each oil operator also pays an annual $100 business license fee Royalties and Easements: As a result of per well. legislation in the 9 's, the City receives royalty payments from the sale of oil The oil production fee is paid quarterly, produced on offshore lease Public and the operator may deduct up to $25 per Resources Code 392. The royalty is quarter as reimbursement for the license approximately .25 percent of those sales, fee. In other words, the first $25 of the and therefore, contingent on oil prices and quarterly oil production fee is paid in the amount produced - two variables that advance, in the form of a business license are very difficult to predict. In 1979-80, fee. The total revenue collected from this the Cit received120,000 from this source was.$1,076,996 for 1979-80.6 source.l� Oil Well Inspection Fee: Each oil well is 2.3 Conclusion inspected annually for compliance with the Huntington Beach Oil Code. The oil The analysis for 1979-80 indicates that oil inspector must approve each well before a production contributes significant revenues business license is issued. There is a $50 to the City, totaling approximately $1.67 inspection fee per well. Total revenue million. Approximately two-thirds of these from oil well inspections was $73,000 for revenues come from the oil production fee 1979-80. (per barrel) which is tied directly to production. This fee also increases Wastewater Permits: Every well that uses annually with an index of the inflation the City's wastewater system must pay an rate; thus, this revenue source can keep annual $30 wastewater fee. There are 322 pace to a significant degree with rising wells using the system. Total revenues expenditure levels. were $9,660 for 1979-80.7 The estimated City expenditures related to Drillin /Redril ling Permits: In order to oil production for 1979-80 were rill or re drill an oil well, an operator must approximately $.87 million. Three secure a permit from the oil inspector. departments--fire, police and public There is a $500 fee for each permit works--account for about two-thirds of approved. In 1979-80, 13 dril ling/redril ling these; expenditures by all other permits were issued, generating a revenue departments combined for the remaining of $6,500.8 one third of the total. Pipeline Franchises: Oil companies that Clearly, oil production activities currently ave pipelines in Huntington Beach pay generate net revenues to the City. The franchise taxes whose rates are established next section analyzes how this fiscal by contracts with the City. The term of situation might change in the future, the contracts vary from franchise to considering variables such as changing franchise. Revenues from this source were production levels, inflation, and pressures $4,253 for 1979-80 for pipelines directly to redevelop the oil fields to new uses. related to oil production in Huntington Beach.9 12 3.0 Fiscal Impacts of Continuing Oil Operations Estimates of the fiscal impacts of In light of these changing variables and continued oil activities in Huntington different possibilities, several "scenarios" Beach depend largely on the predicted of oil operations over the next decade have future of those activities.. This can be a been analyzed. The first assumes, overall, problem because many variables important that the number of wells, acreage and to a fiscal analysis, such as the number of production levels remain relatively barrels produced, .the number .of wells, the unchanged. This could come about if the actual .acreage devoted to oil facilities and decline of production in some parts of the the inflation rate, are difficult to foresee. field are balanced by new waterflood projects and other enhanced recovery 3.1 Predicting Future Oil Operations programs. Production among small independents is assumed to continue The lack of available open space in this dropping, but the "recycling" of their area and the growing housing shortage parcels to new uses would proceed very create pressure to abandon oil fields and to slowly, largely due to the increasing price redevelop them for housing. At the same of oil. Thus, the number of wells, acreage, time, rising oil prices and the relaxation of and overall oil production would remain price controls on domestic oil make relatively constant for the next ten years. continued oil production; even at low levels, increasingly attractive. . Higher prices may also - make more expensive production. techniques (such as water * Two other reports in this series are injection) profitable in parts of the field highly relevant to the discussion of where • they have not yet been applied. new technologies: Report #1 Further, while production in the "Preserving Surface Access to Huntington Beach field has been declining, Underground Oil Reserves in new technologies are being tested here Developed Areas", and Report 414, which might rejuvenate the field.* "Enhanced Oil Recovery Technologies". 13 The second scenario envisions a gradual Underground Oil Reserves in Developed phase-out of oil operations in the Townlot Areas," analyzes this possibility in detail. and Downtown during the 1980's, but operations elsewhere in the City continue Before discussing each of these scenarios, relatively unchanged. This was analyzed some assumptions about how revenues and because the Townlot and Downtown areas expenditures will change over time should are especially valuable parts of the City, be reviewed. and pressures for redevelopment there will be stronger than elsewhere. Also, with the 3.2 Assumptions about Variables Affecting completion of the Local Coastal Plan Future Revenues and Expen2itures during the early part of the decade, now dormant efforts to develop and redevelop Several assumptions about some key that area should intensify. variables affecting future revenues and expenditures have been made in this The third scenario sees a phase-out of the analysis. small-scale independent operations during the next decade, while the major oil First of all, Proposition 13's limits on the companies continue operating near their property tax rate and property value present levels. In many ways, this scenario assessment are assumed to remain in may best approximate what will actually effect. We. also assume that most oil happen. Discussions with the major oil properties that remain productive will not companies in Huntington Beach indicate change owners, thus limiting re-assessment that they expect to continue operating at of the surface areas to annual increases of least another 20 years, and that the two percent per year. (See Section 2.3 application of enhanced recovery above.) The City's share of overall technologies may not dramatically increase property tax revenues collected in production, but will offset recent declines Huntington Beach was assumed to remain and keep production levels up for several approximately 20.7 percent. years. At the same time, the production of the independents has continued to decline. Changes in the amounts charged for Generally speaking, they cannot apply the drilling, inspection and waste water enhanced recovery technologies available permits were not incorporated into the to the larger companies. As their analysis because these fees account for production drops. and the value of the only a small percentage of total annual surface for housing continues to rise, these revenues. parcels would gradually recycle. On the expenditure side, the costs to the The last scenario considers the possibility City for providing services to'.future oil that, rather than abandoning their operations will be a function of how much operations, the small independent oil of the land remains in oil production, the companies in the Townlot, along with one number of wells and related facilities to be or more of the majors, join together and served, the level of service to be provided, form a "unit." By combining the resources and the inflation rate. In the following of all the participants, the unit has the analysis, the level of service is assumed to capital and the surface acreage to apply remain constant; consequently, total City waterflood and other enhanced recovery expenditures are assumed to increase techniques. Thus, production increases and according to the inflation rate and the the operations continue throughout the City's overall growth pattern. In the 19801s. Report #1 in this series, following analysis, total' City expenditures "Preserving Surface Access to over the next ten years were projected 14 using the City-wide Fiscal Impact Model Weighted Average Model's expenditure line and the City's General Plan, which helps as our best estimate of what City define the future growth pattern and mix expenditures will actually be, and the of uses in the City. These total annual City-wide Model's expenditure line as an expenditure estimates were used to estimate of the probable maximum or calculate oil's share of City expenditures upper limit of actual expenditures. which are not directly assignable. Scenario I - Oil Revenues and A ten percent inflation. rate is also xpen itures, 9 - i Operations assumed.l l Remain Relatively Unchanged. In summary, the following assumptions In this scenario, the current number of have been made for the analysis in Sections wells (1460) remains through 1990. The 3.2 - 3.5: area devoted to oil stays at 472 acres and overall production is constant. - Proposition 13 controls on tax rates and property assessments will apply. Revenues derived from the oil production fees and royalties rise 10 percent per year - The City's share of the property tax which is the assumed inflation rate. will remain 20.7 percent. Property tax revenues rise at only two percent per year due to Proposition 13 - Rates on drilling permits and other fees limitations. All other revenues remain the will not change. same, assuming that the same number of permits is issued each year, and that fee - Total City expenditures are estimated rates do not change. Overall, revenues using the City-wide Fiscal Model and increase, but not as fast as expenditures. the General Plan. Figure 3.1a shows oil revenues and - Level of City services stays constant. expenditures for 1980-90. Under Scenario 1, oil operations are a net revenue - Inflation will average ten percent per generator for the City under the assumed year. conditions primarily because the oil production fee, which makes up two-thirds 3.3 Analysis of Scenarios of the revenue, is tied to the Consumer Price Index; therefore, this portion of the In all of the following scenarios, revenues keeps pace with inflation. expenditures are calculated two ways. The first method uses the "Weighted Average Figure 3.Ib shows the same scenario in Model" developed in Appendix A because it "constant (1979) dollars," that is, the is probably the most accurate and revenues and expenditures are adjusted for reasonable of the available models for inflation. This figure shows more clearly calculating oil-related expenditures. that net revenues (reflected in the distance Expenditures are also predicted based on between the revenue line and the the City-wide Model because it is the expenditure lines) decrease over time. technique used in many previous analyses This is because one-third of the revenues and it gives the highest cost estimates of generated by oil are not indexed to the all the models analyzed in Appendix A. inflation rate. In other words, total Both models were used to plot expenditure revenues simply do not keep up with curves in all of the figures in this section; inflation. Despite this decline, oil thus, each figure shows two expenditure operations would continue to contribute lines. Perhaps the best way to interpret net revenues throughout the decade. these graphs is to view the 15 $10.000, Figure 3.1(e) 50 Scenario 2 - Phase Out Oil Operations from the Town at. 300 .0 The Townlot and Downtown areas include some of the most valuable real estate in Huntington Beach. Currently, they are 25° also among the poorest sections of the oil �. field in terms of production. A feasible°° ' scenario, then, is one where the value of �••..• the surface for other uses (e.g. housing) 150 outweighs the value of the oil being .•• •..•••'' recovered. In such a situation, it is •..•••''•• reasonable to assume that the oil producers 100 will gradually abandon their wells in this area and sell the land for development. 50 There are 13.8 acres of oil land in the Townlot. Aminoil owns approximately .8 acres for wells that are directionally 1980 8, 82 83 84 85 86 87 88 89 90 dr i I I ed under the e ocean. Since these wells do not derive their oil from the field under City-wide oil Revenues and Expenditures, 1980-1990: Constant Conditions. the Townlot, they are assumed to remain. The other 13 acres are presumed to phase out as follows: one acre per year, the first $10,000'. Figure 3.1(b) 10 years, and three acres in the last year. The 95 wells are assumed to phase out as follows: Nine wells per year the first 10 years, and five wells in the last year. Conditions in the rest of the City remain 1.0 - unchanged. 120 As the wells and acreage decrease, oil ,........... ..................................„.......•,,,,,,,,,,,,,••,�,,, revenues from oil production fees, property taxes, and permit fees decrease 100 accordingly. It is assumed that every well in this area is paying wastewater fees, but s0 that no drilling or redrilling is done here. ••••••••••••••••••••••••••••••••••••••••••••••••••••••••• The overall City revenues from oil decline only slightly. Very little revenue is 60 currently derived from this part of the field due to its low productivity (see Figure .0 3.2a). Expenditures also decrease slightly as the 70 number of oil acres and oil wells in the 1980 81 81 83 84 85 86 87 88 89 90 Townlot decrease. Figure 3.2b shows revenues and City-wide Oil Revenues and Ezperclitures, 1980-1990: Constant Conditions expenditures for this scenario in 1979 (1979 Dollars,. dollars (adjusted for inflation). key s� Revenues see Expenditures, Weighted Average Model sees Expenditures, city-Wide mael 16 1110,000" Figure 3.2(a) Note that although both revenues and 350 expenditures decline, net revenues (total revenue minus total costs) are slightly less than under Scenario I. 300 �,••••' From a fiscal standpoint, although net 750 revenues are slightly less in this scenario • than in Scenario I, the City continues to net a high level of revenue from oil. At °° ••„,.••• ••..•N the same time, valuable land is made ••..••'' available for other uses. ISO N• •..•••'' Scenario 3 - All Independents Phase Out; N too. Only y ajors amain. There are 95 acres containing 268 wells so that belong to oil producers other than the three major companies. Scenario 3 could be realized ,if the value of all real estate in Huntington Beach . increases such that oil 1980 81 82 83 84 85 86 87 Be 89 90 production by the independents is less profitable than other land uses. Figure - City-aide Oil Revenues ard P.xpelditures, 1980-1990: TOW10t Phaseout. 3.3o shows what happens to oil revenues - - and expenditures if the independents phase s10,000'. Figure 3.2(b) out as follows: nine acres phase out per year for the first 10 years, then five in the last year; 24 wells phase out per year for the first 10 years, then 28 in the last year. "° Oil revenues from the oil production fees, property tax, and permit fees decline as 110 wells and acreage decrease. All independents are assumed to need wastewater permits, and revenues derived 100 from them are reduced along with the wells. The number of drilling and redrilling s0 permits is not affected. The amount of revenue lost related to total revenue is ••••••••••••••••••••••••••••"""""'••••••••••••••.... small because these wells do not, on the A0 average, produce large quantities of oil. .0 Costs, however, are borne according to number of wells and/or acreage. A well that produces large quantities of oil 20 requires approximately the some City services as a well that produces very 1990 81 97 93 80 as 86 87 Be 89 90 little. However, the better producing well generates greater revenues to the City. City-wide Oil Revenues and Expenditures, 1980-1990: lbwnlot Phaseout Thus, the ratio of revenues to costs is .11979 Dollars,. - greater for highly productive wells. key Revenues eass Expenditures, Weighted Average Model r Expenditures, City-Wide Model 17 $10,000. Figure 3.3(a) Because the independent wells generally J50 produce less oil per well than those of the majors, phasing them out removes most of 300 the wells with the worst revenue to cost ratios. This means that although total 750 ••+,,, '' revenues overall are lower because- there are fewer active wells, total costs are reduced even more, thus improving the 700 overall revenue-cost ratio. Therefore, net 00000 revenues in real dollars decline less in •r.• Scenario 3 than in either previous scenario. 'S0 ••''' (See Figure 3.3b). 1°0 ••••.••••...•• Scenario 4 - Unitization of the Townlot Area; Other Oil Areas Do Not Change. 50 Unitization is a method by which several independents can legally join together to act as if they were a single company. This 1980 81 82 83 84 85 86 87 88 89 90 allows them to apply enhanced recovery technologies and increase their City-wide Oil Revenues and Expenditures, 1980-1990: Independents Phase- t..' production.* Enhanced recovery often involves pumping water into an oil pool in $10,000'.- which primary production is nearly Figure 3.3(b) completed. By injecting water at certain points in the field, oil production in all wells can be dramatically improved. To do this in an area with several owners, all 140 operators must cooperate and help finance the venture. Unitization is often the only way additional oil can be recovered in significant quantities. 170 ....11.11.1. IIIIIIIIIIIIIII ""111j•11.1. In this scenario, unitization takes place in 10o 111111111111j"........IIIIINNIIIII the Townlot area. The number of wells IN remains the same because while some new '0 wells are drilled, some existing, inefficient wells are abandoned. In the first two 60 — ••••"""•••••••....••••••• ••• years, drilling and redrilling activity increases. Overall acreage drops by five acres because of the abandonment of some 4 0 old facilities and the consolidation of most new ones. Production levels are unchanged. 70 I 1 i 1 I I 1 1 I I 1 1900 81 87 83 84 85 86 87 88 89 90 City-wide Oil Revenues and Expenditures, 1980-1990: independents Phase-out See Report #1 in the series, 11Preserving U979 Dollars). Surface Access to Underground Oil Reserves in Developed Areas:' key Revenue■ see Expenditures, Weighted Average Nodal ww Expenditures, City-Wide Nodal 18 $10.000', Figure 3.4(a) Begi nnni ng in the third year, acreage is stable at 8.8, and all other factors are the 230 same except annual- production, which increases by one million barrels. 200 Figure 3.4a shows the jump in revenues caused by the increase in oil production fee 250 revenue from . a million extra taxable barrels of oil. Because the number of wells 200 .•••,,.••' is the same, and total acreage stabilizes at an only slightly lower level than before, costs over the 10 year period are nearly 1S0 ..•••'' ..the same as in Scenario I. '"'N �,..••' 100 �,N••••~ - , Figure 3.4b shows that in real dollars, net • revenue is greater in Scenario 4 than in any of the previous scenarios, while costs S0 actually decline. Clearly, unitization could increase revenues while reducing costs by increasing productivity without increasing 1980 81 82 83 84 8s 66 67 Be 89 90 the overall number of wells or acreage.12 3.4 Summary City-wide Oil Revenues and Expenditures, 1980-1990: 1U.nlat Unitization. These scenarios represent four possible 610,000" Figure 3.4(b) futures for oil operations in Huntington Beach. It is not known which, if any, of them will take place. Most likely, none of them will occur exactly as portrayed in this analysis. However, some conclusions 1.0 can be drawn from these scenarios. 120 First, in any of these cases or combination ......................................................... of them, it is clear that continued oil operations will generate significant net 100 revenues for the City. Second, if unitization and enhanced 80 N....................................................... recovery projects do occur and are successful, they can. help increase the revenues to the City without significantly increasing service costs. In some cases, 40 City expenditures associated with oil operations could even decline slightly, while revenues would dramatically increase. 20 Third, the independent operators do not 1980 BI 82 83 81 85 86 87 Be 89 90 contribute a large portion of the revenues generated by oil operations, and unless Citywide Oil Revenues and E>q,erditures, 1980-1990: lxs lot lln1t1' unitization takes place, they will not in the (19791»ilars). future. The three major oil companies in key Revenues w Expenditures, Weighted Avers Model er r Expenditures, City-Wide Model 19 Huntington Beach -- Aminoil USA, Chevron USA and Union Oil -- are chiefly 3.5 Garfield/Goldenwest and responsible for the significant net revenues Town lot owntown Areas afforded the City by current and continued oil operations. (See Figure 3.5. .) The Garfield/Goldenwest and the Town lot/Downtown parts of the City were analyzed specifically because they are examples of areas where the existing oil operations may be changing (See Figure Figure 3.5 3.5a). Both of these areas are of great interest for future development other than oil. Union 9% Chevron 12% Downtown/Townlot: As mentioned above, the own of/Downtown area is especially interesting in light of the possiblity of it recycling to new uses and its potential for unitization and enhanced recovery. These ,i possibilities were analyzed in Scenarios 3 11% and 4. This section simply separates out the Townlot/Downtown from the rest of de endent . the City to help highlight the fiscal impacts specific to that area. Figures 3.6a to 3.6c illustrate the following possibilities: 1) the existing oil operations %� remain active during the next decade, 2) 1 " the oil operations gradually phase out r during the 1980's and 3) a unitization and enhanced recovery program is undertaken. Aminoil 68% The analysis indicates that oil operations in this. part of the City currently generate net revenues. However, rising service costs, and the fact that total revenues Oil Revenues, 1979-80; cannot keep up with inflation, will make these smaller operations net "losers!' Majors vs. Independents. sometime during the 19801s, even if production remains at today's level. However, if a unitization program is undertaken and is successful, the oil operations wou I d become significant net "winners" throughout the decade. Garfield/Goldenwest: The future use of the Garfield/Golenwest area has been the subject .of considerable debate in the City. One factor which could be considered in any decision about the best use of this land is the fiscal impact of continued use as 20 ....... Townlot/Downtown w Garfield/Goldenwest Q � � / uws wrs CITY OF HUNTINGTON BEACH ORANGE COUNTY CALIFORNIA HUNTINGTON BEACH, C4LIFORNIA Figure 3.5(a) PLANNING DIVISION g" 21 11.000" $1,000', - Figure 3.6(a) Figure 3.6(c) cp 140 40 120 �OM_ .... ...............................N N........•H. 30 100 uu,mn.nunnn..... .ux ,n,..... unnuuuuu 20 80 10 60 40 1980 BI 82 BJ 84 85 86 87 BB 89 90 ••••...•.• •••••••........•.•••••••••••••••••••••••••••••• i 20 •p• ••ianm••un•nuuuumnuuuumnuumunuuummuumnm.. 1980 81 82 83 84 85 66 67 88 89 90 Tc—lot-Area Oil Revenues and Expenditures, 1980-1990: Constant Conditions Toenlot Area Oil Revenues and Expenditures, 1980-1990: Unitization (1979 Dollars). - (1979 Dollars). $1,000" Figure 3.6(b) key � Rewaues 50 ese txnenditures, Weighted Average Model BwB. Expenditures, city-Wide Model 40 30 an oil production area. Figures 3.7a and 3.7b indicate the probable impacts of 1) oil •••..,,,,,.••. ..tiN•• operations . continuing unchanged in this 20 area for the next 10 years and 2) the •••..;;;;•• operations gradually phasing out. At this 10 ^�•••.• ; time, the oil pool under this area does not ,• .M.2 appear to be a likely candidate for f unitization, so such a project was not analyzed. 1980 81 82 83 84 85 86 87 88 89 90 The figures indicate that current fiscal impacts are quite insignificant -- the operations demand few costs but contribute little revenue. During the decade, even if production could be lkmnlot Area Oil Revenues and Exprn,litures, maintained at current levels, the 1980-1990: Oil Ol,erati�— ^hase-rnxt operations tend to become net losers; but 11979 Dollars). again, the impacts are so small that they are essentially inconsequential. 22 $1,000'. - $1.000'. - - Figure 3.7(a) Figure 3.7(b) so 50 40 40 30 30 20 20 • ..NN................N....N......................... ........ II.1111111111111111111111111111111111111,,II1111111111111 I ••�NNN 10 •NNE. 10 _ 111111111111I11111111111.1111 . I,I•I,1',1•I t1�1I11111111„ N.N.N���• 1980 el 82 83 84 85 86 87 Ra 89 90 1980 81 82 83 84 85 86 87 88 89 90 Garfielu/C;oldenrvcst.lrea Oil Revenues and Em¢enditures, Garfield/Goldenwest Area Oil Revenues and Expenditures, 1980-1990: Constait Conditions 1980-1.990: Oil Operations Phase out (1979 Dollars). (1979 Dollars). key :1,000'1 . - - WWW� Revenues Figure 3.8 ens, Expenditures, Weighted Average WWodel ssr Expenditures, City-Wide Model so Alternative Development in the Townlot/ Downtown Area: Another aspect of the 40 question of whether oil production should be encouraged to continue centers around the development that should replace oil 30 operations. This section compares the fiscal impacts of oil operations in the 20 Townlot/ Downtown to those of likely 1.11.111.11.1111..11111111.111.111.I.11.1..... alternate uses there.* 10 The Townlot/Downtown area is predominantly medium-density residential, and oil lands are zoned to recycle into the 1980 81 82 83 84 85 86 87 88 89 90 same kind of use. This, combined with an acute housing shortage, make it very probable that any oil land in this area that recycles will become medium density residential. Townlot Medium-density Residential Revenues and Expenditures, 1980-1990: Phase-in Thirteen Acres (1979 Dollars). * The Garfield/Goldenwest area is a special case. A study is now being conducted to determine the best future use of the land in that area. 23 Using the City-wide Fiscal Impact Model, in the Townlot (Figure 3.5a) follow a revenues and expenditures resulting from similar trend at a similar magnitude (after` recycling of the 13 oil acres in the Townlot 1988) as the revenues and expenditures area to medium density residential can be from medium density residential in that approximated. This is illustrated in Figure area (Figure 3.8). Further, it should be 3.8, with half of the acreage recycling in noted that neither of these development 1980, and the other half in 1982. types has a very large negative fiscal impact -- in the range of five to 10 The numbers shown are rough estimates, thousand dollars per year. but the trends and general magnitudes are clear. As time goes on, revenues decrease The conclusion is that fiscal impacts, while and expenditures increase slightly. It is important, do not provide a criterion for apparent that this type of development choosing one of these development types generates net revenues in the year it is over the other. This underscores the built, but because of rising costs, inflation limitations of fiscal analysis -- it is a very and limits on property tax rates and important input into the decision-making assessments, it tends to become 'a net loser process -- but there are other shortly afterward. (See Section 2.3) considerations of great importance that are involved. Section 4.0 discusses these The most revealing aspect of this issues more fully. projection is that the revenues and expenditures from oil operations remaining 24 4.0 Beyond Fiscal Impacts Previous sections have discussed the 4.1 Non-Fiscal Costs importance of fiscal impact analysis in land use decisions. Although knowledge of Aesthetics: Oil wells impose adverse fiscal impacts is important, that visuaF,'noise and odor impacts. Pumping information alone is, not sufficient for the units and tanks impose the negative visual decision-maker. The effects of a land use impacts associated, with onshore oil on the City's budget must be balanced with production. They are large, unattractive other possible impacts brought about by facilities that give an "industrial" look to choosing one land use over another. This any area in which they are located. section, while not intended to discount the value of fiscal analysis, underlines its Occasionally, oil wells emit gases that limitations by briefly presenting some have a sulphurous odor. Although the odors major "non-fiscal" costs and benefits. may not occur daily (and depend, of course, on the direction of the wind), when they Certain aspects of oil ' production are are present, the smell can be offensive. . known to have impacts on the quality of life that are difficult to express in terms Finally, the . pumping units, injectors, of dollars. Market forces alone do not compressors and drilling rigs can. be noisy. usually recognize these effects and fiscal The severity of noise impact varies with analysis is not intended to account for one's proximity to the equipment and the them. They must be . recognized and type of equipment. introduced into the discussion through some other mechanism (e.g. the political The costs associated with these kinds of process). adverse impacts include the diminished enjoyment of recreation areas, . lowered Some of these "unpriced" costs and property values and reduced visitors to benefits associated with oil production are nearby commercial areas.13 discussed briefly below. 25 Some extreme odor and noise impacts can Im roved Balance Of Payments: When the also impose adverse health effects on United States spends more money on persons near the offending site. imports than other countries spend on American exports, there is a net flow of Opportunity Costs: An opportunity cost is dollars out of the country. This is called inevitably imposed in any situation where a an unfavorable balance of payments. The choice is made between two or more undesirable ramifications of this situation alternatives. By choosing any of the are well known -- it aggravates inflation alternatives, the opportunity to have one and weakens the dollar. Because imported of the others is necessarily foregone. In oil is our single largest import, substituting the case of oil production in Huntington domestic oil for imported oil is a Beach, an opportunity cost is incurred by significant step to help reduce inflation using land for oil production rather than and strengthen the dollar. some other kind of development. Employment: A third benefit the City All land in Southern California is becoming derives f rom oil operations. is the increasingly valuable. Housing is in employment the industry brings to the particularly short supply. In light of this area. About 600 persons are directly situation, the opportunity cost of oil employed in oil operations in Huntington production may be too high in some parts Beach.14 In addition, oil operators of the City. On the other hand, developing support local businesses by purchasing the surface precludes the opportunity for goods and services in the City. (This is oil production. Unless it is clear that oil sometimes called a "multiplier effect".) production is less valuable than another use of the land, preserving access to the oil 4.3 Federal and Local Perspectives on from the surface is quite important. For Non-fiscal osts and Benetits example, if all oil .surface in the Townlot were recycled to other uses, unitization Interestingly, two of the major benefits of (and recovery of millions of barrels of oil) oil production (reduced dependence on would no longer be possible. (See Report imported oil and improved balance - of - #I, entitled "Preserving Surface Access to payments) are greater - than - local - in Underground Oil Reserves in Developed scope. This means that the City's oil Areas", for a detailed discussion of this production protects the national interest problem.) by helping to improve the economy and contributing to national security. 4.2 Non-f iscal Benefits However, many of the costs, such as offensive odors, visual impacts and reduced Reduced Dependence On Foreign Oil: A property values, are local in nature. widely acknowledged problei:�_f acing the nation is the uncertainty of our energy The fact that the positive and negative supply in an emergency. Every barrel of impacts of oil operations are primarily felt oil produced in the United States is at different levels of government, potentially a substitute for an imported increases the difficulty in assessing them. one, and the importance of small fields in Coastal Energy Impact grants, such as the contributing to the domestic oil supply one funding this study, provide funding should not be understated. For example, from the federal government, which the Huntington Beach field is the seventh benefits from increasing energy largest oil producer in California and production, to local governments to help produces three percent of the state's oil. them analyze and mitigate the adverse Thirty-five percent of California's oil effects of increased energy production production comes from fields even smaller which tend to impact the local community. than Huntington Beach. 26 5.0 Conclusion Before concluding this report, two This trend should continue through the important qualifications to the analysis 1980's — oil activities will generate must be stressed. The first is to reiterate revenues of similar magnitude for the next the simplifying assumptions made decade. However, even if production throughout the report. The second is to levels stay the same, these revenues tend emphasize the limitations of fiscal analysis to decline slightly over the next ten years, — it is only one important input to the because property tax revenues fall behind decision-making process. the inflation rate. . This report set out to answer the general An important finding in this analysis is that question, what are the fiscal impacts most of the oil-related revenues are tied to resulting from oil operations on the City of production levels. Thus, the three major Huntington Beach? This question was oil companies with operations in the City addressed for 1979-80, as well as for the (Aminoil, Chevron, Union), which account next decade under four different for over 90 percent of total field-wide scenarios. Further, specific attention was production, contribute most of these given to the Townlot/Downtown and revenues to the City. Even if all the Garfield/ Goldenwest areas, including how independent oil operators were to oil operations might compare to other land phase-out of production by 1990, net uses. revenues would remain about the same through the 1980's (see Section 3.3). As emphasized by the first qualificaton above, the exact numerical figures may be Other noteworthy findings are the subject to discussion, but the general consequences of unitization in the trends and magnitudes are clear. Oil Townlot. Such a project would activities are a net revenue generator for dramatically increase the production of the City. In 1979-80, the City received many of the less efficient wells and, about $800,000 in net revenues from oil although net revenues would be declining operations (see Section 2.0). by the late 1980's, total net revenues 27 generated for the decade are greatest in in those areas are likely to involve revenue this scenario (see Section 3.3). losses as well. On the basis of fiscal impact, neither land use option is The study of oil revenues and expenditures necessarily preferred. Although the fiscal in the Garfield/ Goldenwest and Townlot/ impacts of both uses are important, a Downtown areas are quite revealing. With decision to encourage one over the other the exception of a future where unitization will depend on other considerations beyond of the Townlot takes place, oil operations fiscal analysis (See Section 4.0). in these two areas will be net revenue losers for the City. However, the oil This is not true, however, if the Townlot is activities in these areas cannot be unitized and enhanced recovery is considered a major financial burden to the successful. In that case, the City may gain City. The magnitude of funds gained or significant revenues from oil activities in lost by the City in these two cases is in the the area (See Figure 3.5c). range of $5,000-$10,000 (see Figures 3.5a, b, c, and Figures 3.6a, b). Further, based As a result of Proposition 13, property tax on the City-wide model's estimate of revenues, which have been the traditional expenditures and revenues generated by financial base of local governments, will medium-density residential development, not easily keep pace with inflation. it, too, is a net revenue loser of similar Consequently, for some land uses,the costs magnitude (See Figure 3.7). to the City in providing services will tend to exceed the revenues generated by those Here again, the limitations of fiscal uses. This study indicates, however, that analysis are confronted. Oil activities in at least for the next decade, City-wide oil the Garfield/ Goldenwest and Townlot/ operations will not fall into this category Downtown areas will probably result in and will continue to generate significant revenue losses for the City. net revenues to the City of Huntington Medium-density residential developments Beach. 28 APPENDIX A Models for Distributing City Expenditures to Different Land Use Types An important part of fiscal impact analysis is trying to determine what proportion of City expenditures can reasonably be attributed to the different land uses and related activities in the City. As discussed in the text (Section 2.2), a few types of expenditures can be traced more or less directly to different land uses. Examples were expenditures on police and fire calls where the City keeps records of the locations of the calls. We assumed that the percentage of total calls generated by each land use category was a reasonable measure of the percentage of total expenditures on those calls that each land use category generated. Another example was the expenditures for the salary and benefits of the City oil inspector. We assumed that his duties were tied directly to oil production activities in the City and that those expenditures could be "assigned" to oil production uses. The great majority of expenditures, however, cannot be traced to particular uses. Consequently, a model for estimating the proportions of expenditures, among different land uses, which are not otherwise directly assignable to those land uses, was developed. EXPENDITURE MODEL A Word on Models Models are approximations of reality. They are tools for making complex problems comprehensible. This necessarily means that simplifying assumptions must be made about the problem to be modeled. It is very important, therefore, to make reasonable, defensible assumptions. The key to building a good model is to maximize its accuracy without making it too complex. A good model is accurate enough to be useful, and simple enough to be clearly understood. The expenditure model used in the analysis was designed with this as a goal. Some important issues were considered in constructing the model. The first is the information required by the model, because the available data limit the range of models possible. The model sought is the most sensitive possible with information that is readily available. Secondly, the expenditure model must distribute costs among the various types of land uses in a way consistent with expectations formed by reasonable assumptions and informed,opinion. Although the purpose of this model is to estimate unassignable expenditures attributable to oil activities, it cannot be used for that purpose unless it distributes costs among all land use types in a way that is reasonable. Finally, the model and analysis should be reproducible.15 Any reader should be able to understand "where the numbers came from," and another analyst should be able to accumulate the data and use the model at some time in the future. If this is not possible, the usefulness of the study is questionable. 29 The Expenditure Model for Distributin Unassi nable Costs Two major assumptions were made in designing a model to distribute unassignable costs. First, unassignable costs should be borne by all members of the City, according to some determination of each member's "fair share." Services whose costs are unassignable are treated as "public goods".16 A public good makes the community as a whole better off, no matter how much of the good each member of the community actually "consumes". Benefits from these goods accrue to all as members of the community, and not solely on the basis of consumption. Therefore, all who live, do business, or own property in the City should contribute their share to the community. To determine each segment's "fair share", we next assumed that two key factors can be used to estimate the share of City expenditures for each land use type. These are 1) the area of the City a particular land use type occupies, and 2) the number of units of that land use type located in the City. Area is simply the acreage a particular land use type occupies. It can be argued that as more area in the City develops, expenditures increase, and that the acreage devoted to different uses reflects their share of community expenses. "Units" are measures of the degree of development of a particular land use. For residential uses, a "unit" is a dwelling unit. For commercial and industrial uses, the number of "units" is assumed to equal the number of business permits issued to that particular use; for oil, it is the number of wells; (obviously, vacant land has no "units"). The logic for this is that each "unit" is an entity that does business with the City, and each unit generates costs to the City. As units increase (i.e., as development increases), costs increase. The relationship between acreage and units is called "density" and refers to the ratio of units to acreage (e.g.: dwelling units per acre, oil wells per acre, etc.). We assume that as density increases, total City expenditures increased (although the average expenditure per unit may decline). The models analyzed use acreage or units or both (density) as measures of the share of total unassigned costs that can be attributed to different land uses. Analyzing Historic Data The first approach for estimating unassigned costs for different land uses was to use a computer to analyze historic data. By using a statistical technique called "stepwise regression", we tried to see how the City's total budget has changed over time and to relate those changes to changes in the units and/or developed acreage of different land use types. Unfortunately, accurate information is available for only the last few years, and despite adjustments for time and inflation, the variables were so similar to one another (highly correlated), that no inference could be made from the results with any degree of confidence. Therefore, efforts to design a model based strictly on past data trends and regression analysis were abandoned. * Residuals and Pearson correlation coefficients were analyzed. The consumer price index was used to adjust for inflation and an attempt to "detrend" the data by using "dummy" variables was made. The variables were too highly correlated to give meaningful results. 30 Four other models were tried. The first uses only the proportions in total developed acreage to estimate the share of unassignable costs for different land use. The second uses only units. The last two use both acreage and units (density) to estimate the proportion of expenditures for different land uses, one simply averaging acreage and units, and the other relating the two factors by a "weighted average" technique. These are discussed below. I. Developed Acreage or City-wide Model Model I determines the fair share of unassigned expenditures by the acreage of each land use type; each land use receives a share of unassigned costs equal to the portion of total developed acreage occupied. This is the approach used in the Ultrasystems or "City-wide" Fiscal Impact Model.11 For example, since residential,use occupy 78 percent of developed acreage in Huntington Beach, 78 percent of unassigned expenditures are attributed to residences. By the same method, 10 percent of unassigned costs are attributed to commercial uses, 8 percent to industrial uses, and 4 percent to oil. Note that vacant land receives no share of costs. This model is considered one extreme, taking only area into account. Advantages: This model is simple, easy to understand, and reproducible. The data requirements can be readily fulfilled. Disadvantages: It. accounts for only one of the key determinants; it assumes that degree of development is not an important factor in distributing unassigned costs. It also implies that every acre generates costs equally. Further, since it is only concerned with developed acreage, it does not account for vacant land. II. Units Model Model II relies solely on degree of development to apportion unassigned costs among different land uses. Recall that "units" are a measure of degree of development, and that residential "units" refer to.dwelling units, commercial, and industrial "units" are equated with business licenses, and an oil "unit" is an oil well.12 Note, again, vacant land is assumed_ to be costless. This model is considered the other extreme, taking only degree of development into account. Advantages: This model is also simple, easy to understand, reproducible, and has minimal data requirements. Disadvantages: It completely discounts area as a cost factor, and assumes each unit generates costs equally, regardless of density. Since there are no units on vacant land (by definition), it is left out of the analysis. Most importantly, the distribution of costs among the uses seems skewed - residential is assigned nearly all costs, while industrial gets almost none. The next two models try to account for both area and units. 31 III. Simple Averaging Model Model III simply averages the first two. For example, residential uses are allocated 78 percent and 92 percent shares by the first and second models, respectively. This averages to 85 percent. By the same process, commercial receives 7.3 percent, industrial 4.7 percent and oil 3.0 percent. Advantages: This model does not severely ' increase complexity, data requirements, or effect reproducibility. It is still comprehensible, and more sensitive to factors that actually affect costs. Disadvantages: Area and degree of development are given equal importance in determining the share of unassigned costs attributable to each use. This means that costs do not vary according to the density of use and assumes the same average density for all uses. Further, vacant land is unaccounted for. IV. Weighted Average Model Model IV accounts for area and degree of development in a different way. It weighs the two factors so that it is more sensitive to density. This is done by adding the number of units assigned to a particular use to the number of acres assigned to that use. This sum is divided by the total of all units plus all acres in the City. This "weighted average" gives slightly more importance to degree of development as a factor than acreage. This means that more. densely developed acres are more costly than those less densely developed. (This is true even if average cost per unit is less in more densely developed areas; overall costs tend to be higher in higher density areas.) This model attributes 87.3 percent of unassignable costs to residential, 5.2 percent to commercial, 2.3 percent to industrial, 2.3 percent to oil, and 2.9 to vacant land. See Table A.I below. Advantages: This model has the same data requirements and reproducibility as the previous models. It is slightly more complex, but its increased complexity can be justified by gains in sensitivity and accuracy. It is superior to the third model for two reasons. First, it can account for vacant land in a reasonable way. Second, by giving slightly more weight to the degree of development factor, the model is more sensitive to density of use - i.e., higher densities are considered more costly. This is a more realistic treatment of how the type of land use is likely to effect costs. . 32 Distribution of Unassignable Costs Using Weighted Average Model Acres Units Sum % of Total Residential 65 9,207 62,251 71,458 87.3% Commercial 9 1,197 3,027 4,224 5.2 Industrial 6 925 965 1,890 2.3 Oil 3 472 1,460 1,932 2.3 Vacant 17 2,410 0 2,410 2.9 TOTALS 14,211 67,703 81,914 100.0% Source: City of Huntington Beach Planning Division. TABLE A.1 huntington beach planning division 33 Disadvantages: Model IV is the least burdened by the disadvantages discussed above. Arguments of a more general nature about the assumptions and level of sophistication of all these models are discussed elsewhere in this section. For the purposes of this analysis, the last model meets the criteria for a good model laid out at the beginning of this section better than the others considered. Among the models developed, this "Weighted Average Model" is the most accurate, with least confusion and with minimal data requirements. It generates reasonable results. This is the model used to carry on the analysis (although cost calculations using the "City-wide Model" are also presented for comparison). 34 APPENDIX B Revenues From Other Energy Facilities Although this report focuses on oil operations, there are other energy facilities in the City and coastal zone. These include a Gulf Oil Company tank farm and affiliated pipeline franchises; a Chevron USA tank farm; a Southern California Edison Company power plant, tank farm and pipeline and utility franchises; and other pipeline and utility franchises. These facilities are likely to remain in Huntington Beach for some time. Because of their permanent nature, a fiscal analysis of these operations is much less relevant than a similar analysis of the "less permanent" oil operations. It is important to note, however, that the City derives significant revenues from these facilities. These revenues figures are presented below. The revenues for 1979-80 are as follows. Gulf Tank Farm: Property Tax $ 6,690 Pipeline Franchise 6,047 TOTAL $T,-7-37 Chevron Tank Farm: Property Tax $ 4,281 TOTAL $- FIM Edison Plant and Tank Farm: Property Tax $364,263 Pipeline Franchise 4,362 Utility Franchise 198 131 TOTAL $56d,75� Southern California Gas: Utility Franchise $529 642 TOTAL $� Other Pipeline Franchises: Pacific Lighting $ 12,540 Standard Gas $ 108 TOTAL $ T 1W Total revenues to the City from these facilities is $1,126,064 for 1979-80. Pipeline and utility franchise tax rates are set by contracts between the City and the various companies. The major factors that affect pipeline rates are size and length of pipe, and the yearly flow through the pipe. Utility rates are based on gross sales of the product carried by the franchise (e.g. gas, electricity). 35 Many of the contracts are old, and iset rates that are quite low. One strategy for increasing revenues from these sources is renegotiation of the contracts when they expire. A City ordinance passed in 1978 established pipeline franchise rates to be applied in future contracts. The base rates are higher than those set in the past, but more importantly, they are adjusted annually according to the "Wholesale 'Producer' Price" index - a measure of the inflation rate. As the old franchise agreements are renegotiated in accordance with this ordinance, the City can expect increased revenues that will keep pace with inflation. Finally, some of the contracts are "indeterminate", i.e. they have no termination date. It may be possible for the City to renegotiate these by mutual agreement. Table B.1 shows more explicitly the terms of each franchise. 36 HUVTINGTON BEACH PIPELINE AND UTILITY FRANCHISES Length of Monies to City Classification Franchise Term FY 79-80 Commentary Regarding Franchise/Terms Utility So Cal Gas 40 yre ending $ 529,642 Agreement contains provision that requires a 2007 rate of return no less than the highest percentile received by any other city being served by So Cal Gas. Utility So Cal Edison Indeterminate 198,131 The aggregate affect of the fixed minimal rate (adopted In of return, indeterminate length of term,and the 1949) geometrically increasing costs to the City for street lighting has resulted in perhaps the poorest ratio.of franchise revenue to energy casts of any city dealing with So Cal Edison. Pipeline Union Oil* 25 yrs ending 422 Virtual fixed return to City—unchanged since 1989 1964-- based on 1/2 cent per Inch of pipeline diameter/pr lineal foot, or 2% of the gross annual receipts arising per use of franchise, whichever is greater. Pipeline Atlantic 25 yrs ending 1,249 Same terms as above. 'Richfield* 1988 Pipeline Texaco* 25 yrs ending 2,882 Same terms as above. 1988 Pipeline Gulf 50 yrs ending Present rate of return--fixed since 1933--has 1983 3,647 been $.04 per barrel X 2%. (Combined) Pipeline Gulf 50 yrs ending Present rate of return--fixed since 1956--has 2006 been $.04 per barrel X 2%. Pipeline Gulf 25 yre ending 2,400 Present rate of return Is fixed at $2,400 per (tank form) 1980 annum. Pipeline Standard Gas 50 yrs ending 108 Present rate of return--fixed since 1956--has 2006 been 2% of the revenue derived from use of Franchise. Pipeline So Cal Edison Indeterminate 4,362 Current rate of return is derived from 2% of (1958) the gross annual receipts arising from use of franchise. Pipeline Pacific 40 yrs ending 12,540 Current rate of return is derived from 2% of Lighting 2010 the gross annual receipts, and/or 1% of the Service Co. revenues from the sale of gas within limits of City under Franchise. * These franchises are related to all production in the City, and were included in oil revenues. Source: Memorandum from Internal Auditor to City Administrator, July 8, 1977, updated with figures from the City Finance Department, August, 1%0. TABLE B.1 huntington beach planning division 37 NOTES 1) Although this engine company has a special petroleum fire capability, it is frequently used to fight structural fires, thereby providing extra service to the City as a whole. Further, the tank farms and pipelines that are not directly related to oil production in the City (see Appendix B) require the protection provided by the company. The expenditure figure shown above is a staff estimate of the oil production share of total costs for this company. 2) Patterson, George M., "Allocating Expenditures to Land Use Categories", p. 137, Municipal Finance 36, May 1964, p.p. 136-9. Also see Patterson, George M., "Where Does the City Spend its Money?" Western City, September, 1963, p.p. 46-47. 3) The City receives additional annual revenue from the State of California Lands Commission equal to one percent of state royalties-on tideland oil leases. This fund is revenue budget (604) "State Oil and Gas Lease", and was equal to approximately $100,000 in 1979-80. However, these monies are not general fund revenues - i.e. they are to be used for purposes specified by the State. Therefore, they were not included in calculations of oil revenues. 4. The State Board of Equalization rule 468 allows County assessors to reassess mineral rights valuations as oil prices rise. Since Proposition 13 permits assessments of new construction, the rule argues that an increase in the price of oil changes the value of an oil deposit such that it is treated as "new construction". This ruling is currently under litigation and, for the purpose of this report, it is assumed that the two percent limit on reassessment applies to mineral rights. Should the courts rule in favor of the Board of Equalization, City Revenues from property taxes on mineral rights would be higher than those shown. 5) This figure was obtained from Mr. Chuck Kruger at the Orange County Assessor's office. 6) This figure was obtained from Mr. Dan Brennan in the City Finance Department. 7) The number of wells connected to the wastewater system was provided by Mr. Ric_ k Grunbaum, the City Oil Inspector. 8) This figure was obtained from the oil inspector, Mr. Rick Grunbaum. 9) The specific franchises responsible for these revenues are shown in Table 8.1, of this report. The figures were obtained from Mr. Dan Brennan at the City Finance Department. 10) In 1933, Southwest Exploration Company began to produce oil from wells in the townlot directionally drilled to deposits under the ocean. When the State discovered (later that year) that Southwest was depleting an oil pool in State tidelands, it obtained a court order restraining Southwest from operating these wells. The 1938 State Lands Commission Act specified terms under which production of tidelands deposits could resume. However, to reach the oil field from the townlot, the wells were drilled under land owned by the City. The City granted Southwest Exploration rights of way under City land in an "Agreement and Easement for Right of Ways" in late 1938. This agreement provides the City a monthly royalty "equal to two percent of total royalties paid to the State of California" for oil production on Public Resources Code 392. The State's royalty is approximately 13 percent of total sales; two percent of this (the City's royalty) is .2642 percent. Aminoil, USA now 38 operates the wells and pays the royalty as specified in the agreement. 11) It should be noted that other analysts may use different inflation figures. However, it is unlikely that a different inflation rate would significantly affect the general conclusions drawn from the analysis. 12) The City owns mineral rights to 125 parcels in the Townlot/Downtown area. If an enhanced recovery project is undertaken there (and is successful), the City will receive additional revenue from royalties earned by its mineral rights interest. The amount of the royalty will depend on the quantity of oil produced, the profit on that production, the portion of the total interest in the project owned by the City and the terms of the unitization agreement. Because these factors are not yet known, the estimate of City revenues shown in. this scenario do not include receipts from royalties paid by the unit. 13) Edwin S. Mills, in The Economics of Environmental Quality, W. W. Norton Co., N.Y., 1973, p.p. 141-14 , describes a met o estimating the health and property damages from air pollution by using property values. The theory is that rents and sale value of homes will be lower in heavily polluted areas, and that this reflects the value people place on cleaner air. This theory could be applied to the aesthetic impacts. of oil operations in Huntington Beach. If it were, one would expect rents and property values of dwellings adjacent to oil wells to be lower than similar dwellings elsewhere. This is a reasonable expectation for which we have some preliminary evidence, and a study of actual property values in Huntington Beach would be most interesting. 14) See "Coastal Energy Impact Program" Report, February, 1980, City of Huntington Beach, Section B.4.0. 15) See Burchell, Robert W., and David Listokin, The Fiscal Impact Handbook, Center for Urban Policy Research, New Brunswich, NJ, 1978, p.p. 1-10. 16) In this particular case, the term "public good" is defined by Charles M. Tiebout in "A Pure Theory of Local Expenditures", Journal of Political Econom4 64, 19569 416-249 as follows. ". . . a public good is one which should be produced, but for which there is no feasible method of charging the consumers." (p. 417). This definition makes sense in terms of the previous discussion on "assignable" vs. "unassignable" costs, if one reads it as "...a public good is one which should be produced, but for which there is no feasible method of measuring each user's demand." Since "assignable" costs are those which can be measured according g to each user's demand, then those which cannot be measured are "unassignable". Hence, by the above definition, unassignable costs can be thought of as expenditures for "public goods". 17) See "Final Report on the Development and Application of a Land Use Fiscal Impact Methodology for the City of Huntington Beach" Vol. I, November, 1979, prepared by Ultrasystems, Inc. Irvine, CA. 18) The wells that are located on the platforms offshore are included in the total counted as oil "units". This is done, because offshore oil operations require onshore support facilities that should be accounted for in the analysis. One example is a separation facility onshore that is used for Union's offshore production. Another example is the helipad located onshore that the oil companies use to carry on their offshore operations. The extent of these onshore support activities is assumed to be reflected in the number of wells offshore. For this reason, the offshore wells are counted as expenditure generating oil "units". 39 BIBLIOGRAPHY "Allocating Expenditures to Land Use Categories", George M. Patterson, Municipal Finance 36, May 1964, p.p. 136-9. "Coastal Energy Impact Program" Report, City of Huntington Beach, February, 1980. The Economics of Environmental Quality, Edwin S. Mills, W.W. Norton Co., NY, 1973. "Final Report on the Development and Application of a Land Use Fiscal Impact Methodology for the City of Huntington Beach", Vol. I, Ultrasystems, Inc., November, 1979. The Fiscal Impact Handbook, Robert W. Burchell and David Listokin, Center for Urban Policy Research, New runswic , J, 1978. "A Pure Theory of Local Expenditures", Charles M. Tiebout, Journal of Political Economy 64, p.p. 416-24, 1956. "Where Does the City Spend Its Money?" George M. Patterson, Western City, September, 1963, p•p. 46-47. 40 Other Sources "Annual Budget, Fisal Year 1979-80", City of Huntington Beach. "Garfield-Goldenwest Study", Huntington Beach Planning Department, March, 1978. "Growth Policy Study, General Plan Background Report", Huntington Beach Planning Department, October, 1973. "Draft Housing Element, Huntington Beach General Plan", Department of Development Services, September, 1979. "Housing Element Background Report", Huntington Beach Planning Department, August, 1976. "Land Use Element Amendment 80-11', Huntington Beach Department of Development Services, January, 1980. "Revenue/Expenditures Analysis of Land Uses", Huntington Beach Planning Department, October, 1973. "1976 Revenue/Expenditure Analysis of Land Uses", Huntington Beach Planning Department, August, 1976. "Urban Land Institute Panel Advance Kit 211, City of Huntington Beach, November, 1965. 41 DEPARTMENT OF DEVELOPMENT SERVICES Planning Division June W. Catalano, Deputy Director Project Director Michael Multari,Planner Principal Author Paul Multari, Planning Intern Other Contributors Jeanine Frank, Planner Michael Multari, Planner Special Assistance Dan Brennan, License Supervisor Charles Clark, Associate Planner Rick Grunbaum,Fire Prevention Specialist Word Processing Patti Schwartz,Word Processing Coordinator Sharon Hojo,Word Processing Specialist Deborah Pledger,Word Processing Senior Caren Winant,Word Processing Senior Deborah Espinoza,Word Processing Graphics Paul Multari, Planning Intern Robert Sigmon,Planning Draftsman ;,"aff CITY OF HUNTINGTON BEACH r ' P.O. BOX 190 DEPARTMENT OF DEVELOPMENT SERVICES CALIFORNIA92648 BUILDING DIVISION(714)536.6241 PLANNING DIVISION(714)536-5271 CITY OF HUNTINGTON BEACH •� INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH To 'All Department heaas James W. Palin. Director , Development Services Subject LOW TEMPERATURE GEOThERMAL Date January 28 , 1985 RESOURCES IN HUNTINGTON BEACH GENERAL INFORMATION : The California Energy Commission issued .a grant to the City of Huntington Beach to study the feasibility of utilizing geothermal potential in waters produced by local oil facilities. The final report has been completed, as required by the agreement, and is attached for your info.rination. The report contains general information about various applications of geothermal heat as well as specific project analysis to 'demonstrate its economic viability in Huntington Beach . . Two possible resource providers were studied; Chevron and Aminoil . The water temperature at the Chevron facility was too low for effective space heating. However , the possibility of utilizing heat from the water produced with the oil at the Aminoil facility looks very promising . Further investigation will be conducted when the staff reorganization, resulting from the recent acquisition of Aminoil by .Phillips Petroleum, is complete . JWP:LC : lcp ( 16U.7d) LOW TEMPERATURE GEOTHERMAL RESOURCES IN HUNTINGTON BEACH V RNAL REPORT September 1984 a I i i i CITY OF HUNTINGTON BEACH =ITY COUNCIL RUTH S. BAILEY, Mayor ROBERT P. MANDIC JR., Mayor Pro Tem j RUTH FINLEY ?ETER GREEN, Phd. JACK KELLY )ON MacALLISTER JOHN THOMAS :HARLES THOMPSON, City Administrator 'LANNING COMMISSION 4ARCUS PORTER, Chairman POM LIVENGOOD, Chairman Pro Tem 1OHN ERSKINE 'RANK P. HIGGINS RANK MIRJAHANGIR LEAN SCHUMACHER ;RACE H. WINCHELL o TABLE OF CONTENTS Page 1.0 ABSTRACT 1-1 2.0 EXECUTIVE SUMMARY 2-1 3.0 SUMMARY OF THE OBJECTIVES 3-1 4.0 FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 4-1 5.0 REQUEST FOR PAYMENT AND FINANCIAL STATUS REPORT 5-1 6.0 LIST OF ALL REPORTS, MAPS, PLANS, DESIGNS, 6-1 DRAWINGS OR DOCUMENTS • 7.0 CONSOLIDATED LIST OF CONSULTANTS 7-1 8.0 APPENDICES 8-1 Appendix A: Huntington Beach Energy Series - Report #6 Appendix B: Huntington Beach High School Design Analysis . • Appendix C: Sea Cliff "B" Design Analysis Appendix D: Downtown Redevelopment Projects Design Analysis Appendix E: Typical PRIVITIZATION Letter of Intent Appendix F: Miscellaneous -• • SECTION.1.0 • ABSTRACT This-report was:prepared by the Planning_Division:of..the City-of-Huntington Beach with financial -assistance from "the .California'Energy .Commission, :Geothermal -Development Grant Program. • An important product of-this report is a "Methodology-Transfer Document" which can be used by other communities with low-temperature "geothermal resources. While Energy Series Report #6 - Low Temperature -Geothermal -Resources -in Huntington Beach will function as the -primary "Methodology Transfer_Document (reference Appendix -A of this • report), this final report ,also contains some site-specific examples of-potentially-feasible designs and appli cations".in--Huntington Beach. Report :#6 - ..Low `Temperature 'Geothermal Resources in 'Huntington -Beach can be .an important source .of information for--other "communities possessing low .temperature geothermal resources, particularly oil-related -geothermal. `Report #6 .is -designed to enable other jurisdictions to evaluate :the _technical, leconomic, -and institutional ; feasibility of initiating-a geothermal project. • The site:specific-projects evaluated in-this-final report .were selected to demonstrate-the engineering-and_.economic viability to.private sector developers. i • 1-1 SECTION 2.0. EXECUTIVE SUMMARY i i The City of Huntington Beach believes that the objectives of this geothermal grant program were met. Appendix A of this report contains Energy Series Report #6 which will function as a primary "Methodology Transfer Document." This document can be used i by other communities with low-temperature geothermal resources. i Significant progress has also been made toward the development of one or more • geothermal demonstration projects. The site-specific analysis of Huntington Beach High School indicated that it is not a good candidate for geothermal heating because of the low-grade heat available and because of the cost associated with the modification of their existing steam heating system. However, geothermal heating of the Sea Cliff "B" Development and/or the downtown redevelopment area seem to be expecially promising. j Progress toward developing a demonstration project has been temporarily halted.due to the purchase of the Aminoil facility (source of geothermal water) by Phillips Petroleum. i The City is fully committed to the benefits which can be derived from a geothermal project in Huntington Beach. In that regard, the City will continue to contact Phillips Petroleum until a policy with regard to geothermal development at the Aminoil facility is established. i The City is also committed to using private enterprise to fully develop. the significant geothermal resource contained within its borders. 1 It is hoped that the California Energy Commission will continue to support the City in the many activities required to make geothermal projects a reality. i f i 2-1 SECTION 3.0 SUMMARY OF THE OBJECTIVES . The City's present Geothermal Development Grant was awarded in September, 1982, for the purpose of funding a systematic analysis of the potential of oil-related hot water in • Huntington Beach, and to make progress toward development of one or more geothermal demonstration projects here. Significant progress-in this regard has been made. The grant tasks are discussed below; they primarily consist of pursuing the opportunities for low-temperature geothermal development that have_ been identified to date. • GRANT TASKS TASK 1: ANALYSIS OF A-DEMONSTRATION PROJECT UTILIZING CHEVRON'S CO- PRODUCED WATER TO HEAT HUNTINGTON BEACH HIGH SCHOOL. Chevron has indicated that it plans to upgrade its existing separation facility near Garfield Avenue and Goldenwest Street within the next six months. This new facility may present enhanced opportunities for geothermal use of the co-produced water. A possible application is .use of this water to heat Huntington Beach High School via the still-existent boiler system in the main buildings of the school. Additional work and analysis is necessary'to follow,up on the interest in such a project expressed by Chevron. Activities include: a. Analyze existing Huntington Beach High School boiler system and deter- mine potential geothermal system design and-heating applications. b. Investigate implementation costs, economic feasibility and financing ' alternatives. c. If feasible, negotiate. with Chevron and high school district regarding contractual obligations, terms of agreement, financing; produce model contract for this.project. 3-1 • TASK 2: ANALYSIS OF USES FOR HOT WATER FROM AMINOIL'S OPERATIONS FOR SEA CLIFF IV AND DOWNTOWN REDEVELOPMENT PROJECTS. Additional analysis and evaluation of the geothermal opportunities for Aminoil's co-produced water is necessary. To date, the potential uses that have been identified include product B of the Sea Cliff IV Development. • Preliminary analysis has been done, but a good deal of further work is necessary to explore options, refine assessements, and continue more detailed discussion with Aminoil and the developers on the actual mechanics of project implementation. Activities within this grant include: S a. Continue work with Aminoil and the Huntington Beach Company toward implementation of a geothermal forced air system in Sea Cliff IV, product B. Upon completion of the feasibility study for this project, the , results will be presented to Aminoil, and the Huntington Beach Company as background for further negotiations. b. Prepare reports on project's costs, necessary equipment, costs; develop model agreements and contracts, as necessary, for a portion of the Sea' Cliff IV project. TASK 3: PREPARE A FINAL REPORT FOR OTHER COMMUNITIES WITH LOW- TEMPERATURE GEOTHERMAL RESOURCES. Information about the work done in Huntington Beach is important to the systematic development of geothermal resources in Southern California. In many ways, Huntington Beach can be a model for future geothermal work, f particularly oil-related geothermal, in other jurisdictions. An important task of the City's present grant is the preparation of a "Methodology Transfer Document." Energy Series Report #6 - Low Temperature Geothermal Resources in Huntington Beach will function as a primary "Methodology Transfer Document" and is included in Appendix A of this report. The final report will also document the City's experience with the exploration of the geothermal potential and the development of demon- stration projects. 3-2 1 ACCOMPLISHMENT METHODS • Task 1 was accomplished by the following: a. Visits.to the Chevron separation facility and Huntington Beach High School by City and KVB, Inc. personnel. b. Driving/walking the distance between the two facilities to determine the optimum pipe routing. • C. Meetings and telephone conversations with: Mr. V. C. (Vince) Noble Environmental Coodinator Chevron U.S.A. Inc. (714) 536-2561 Mr. Clif Harvey i Maintenance Supervisor Huntington Beach High School (714) 536-2514. i i Mr. Frank Flacks Chief of Maintenance Huntington Beach High School District (714) 536-9356 d. Site survey at Huntington Beach High School including: boiler plant equipment identification, steam distribution tracing, building steam-to-hot water exchangers verification, energy use summaries and school operating cycles. e. Publications and other. data taken from the KVB, .Inc. files or acquired during the course of the work. 3-3 • Task 2 was accomplished by: • a. Visits to the Aminoil separation facility, Sea Cliff IV Development, and Mansion Properties, Inc., office by City and KVB, Inc. personnel. b. Driving/walking the distance between Aminoil and the Sea Cliff IV Development and between Aminoil and the downtown redevelopment areas to determine the optimum pipe routing. C. Meetings and telephone conversations with: • V Mr. Dave Eadie Mansion Properties, Inc. (Sea Cliff IV Development) (714) 536-8917 j Mr. Spencer C. Sheldon Manager, Public Affairs Aminoil USA, Inc. (714)- 536-652.1 Mr. A. H. Bascope Manager, Construction Engineering Aminoil USA ' i (714) 536-6521 i Ms. Adele Chang Architect i (714) 549-2207 ' Mr. Richard Faber I� Project Designer (714) 549-2207 Carl McLarand Associates, Inc. ;• (Downtown Redevelopment Projects) i . 3-4 d. Information, pricing and load estimating figures obtained from equipment suppliers, Huntington Beach -Water Service Department, Southern California Gas Company, Huntington Beach Series Report #6 and development brochures. • e. Publications and other data taken from the KVB, Inc. files or acquired during the course of the work. Task 3 was accomplished by developing the above information to arrive at the conclusions and recommendations which are covered in the pertinent areas of this report. j GRANTEE'S EVALUATION ; It is the City's opinion that the project's goals, and_objectives were met.- The Energy Series Report #6 (included in Appendix A) will be an important source bf information for other communities possessing low temperature geothermal resources. The site specific examples of potential demonstration projects within Huntington Beach illustrate the importance of using practical designs, current_ costs, realistic energy use patterns- and private enterprise involvement. It is also becoming increasingly clear that community government must be involved as the catalyst and .the focal point for geothermal projects. Who better is equipped to coordinate and, if necessary, direct the activities of such divergent organizations as oil companies, homeowners, developers, financial institutions, A & E firms, legal and accounting and other governmental bodies toward a common project goal? • 3-5 • SECTION 4.0 FINDINGS, CONCLUSIONS AND RECOMMENDATIONS • Three site-specific opportunities were evaluated as the best potential geothermal opportunities in Huntington Beach. While there are numerous other geothermal areas which could be developed (reference Appendix A), these three appeared to have • sufficient need and a dependable source of low-temperature oil-related hot water. They are: HUNTINGTON BEACH HIGH SCHOOL • The Chevron facility is approximately 3300 feet from the high school. Chevron is constructing a new water separation facility which is due to be completed by June of 1985. Hot water from this process is estimated to be 120OF by the Chevron contact. • The high school has a centralized boiler plant which produces low pressure steam (10 PSIG) through an underground distribution system. This steam is used for the campus i heating of hot water and domestic hot water needs. The fuel used is natural gas with #2 fuel oil as the alternate fuel. Based on 12 months of billings, the average hourly fuel consumption is 18.9 therms. Make-up water to the boiler is 10% (90% condensate return). Two economic analyses were calculated (reference Appendix B) for the high school. The first with Chevron hot water displacing the boiler make-up water needs. The second approach assumes that the existing steam system is converted to a hot water system (including a new underground distribution system). In both approaches, while sufficient quantities of water are available, the low temperatures of this delivered water (1160F) is not sufficient to produce an economically viable investment. It would be our recommendation that because of the Chevron water temperatures, the pumping and distribution costs plus the steam system modification costs, this project not be considered for development. i i i 4-1 • SEA CLIFF "B • The Aminoil water separation facility is approximately 2000 feet from the farthermost dwelling in Product B of the Sea Cliff Development. Products A and C also considered in Energy Series Report #6 (reference Appendix A) are now being developed. While it would be possible to retrofit these dwellings to accept geothermal hot water, some of the • incentives would be lacking. The Title 24, energy conservation standards have been i applied to these structures. With geothermal heating, it is not necessary to apply these standards, with a resultant possible savings in excess of $6,000 per unit. With occupied ' dwellings, it would also be necessary to negotiate with each occupant, whereas, with a • planning stage development, it is only necessary to negotiate with the owner/developer. I Product B of the Sea Cliff Development is presently zoned for 194 attached single-family .homes. Depending upon how well sales continue for Products A and C, the developer is , considering the possibility of increasing the density to 450 units. For this report, Product B was evaluated as having 194 units. The Aminoil water separation facility is described in Report #6 (reference Appendix A). This facility processes approximately 360,000 barrels of water per day at an average temperature of 1400F. Of this total, 50,000 barrels (2,100,000 gallons), are presently discharged into the ocean through an outfall line. For the analyses presented in this report, this ocean discharged water is the geothermal heating- source. However, if • Aminoil would allow a geothermal development to lower the water temperatures of their ' _reinjected water (310,000 barrels per day)' from 140OF" to 1380F, it would essentially double the 50,000 barrels per day now available. • From Report #6, the average heating and hot water requirements of Sea Cliff Product B y is 1,384,589 BTU/Hr. At present natural gas rates, this is equivalent to $102,827 per- year. An installation (oil company skid) of heat exchangers and pumping-equipment sized to provide the Product B needs is estimated to cost $167,110 and the distribution piping $207,567. Each dwelling unit would require $5,131 of additional costs to accept and use the geothermal hot water. This cost would be more than offset if the 'contractor chose not include the Title 24 (Residential Energy Conservation Standards) requirements for • i i 4-2 the dwellings. The net result would be a potential simple payback of investment of 3.64 years (27.4% ROI). This economic analysis does not include any land or maintenance costs nor does it include any tax or depreciation benefits. It is also believed that for a geothermal demonstration project the value of the fuel offset may have to be discounted by up to 30% to attract users. • A summary of the above economic analysis along with the investment costs and schematics are contained in Appendix C of this report. Based on the above analysis, geothermal heating of Sea Cliff Product B would appear to • be economically feasible. If the density of Product B were increased to 450 dwellings, the economics would tend to improve due to lower investment cost per unit served. It was not possible to develop this project further towards implementation.._ While the listed contacts at Aminoil were curteous and willing to answer technical questions, when discussions began in July, 1984, they were aware that a possible buy-out of Aminoil was in process. Due to the uncertainty of their positions, they were unable to make any commitments in regard to geothermal development at their site. In September, 1984, it • was made public .that Phillips Petroleum had purchased Aminoil. As of this.writing, the Aminoil contacts are still uncertain as to the disposition of the present site or as to Phillips' policies in regard to geothermal development. • Because this project offers potential for economic feasibility, a typical privitization letter of intent was developed for this project. A copy of this document is contained in Appendix E of this report. • L It would be our recommendation that the City continue to inquire about the Phillips policy in regard to geothermal development at the Aminoil site. • 4-3 • DOWNTOWN REDEVELOPMENT • Although there is some degree of uncertainty about the availability of geothermal hot water from the Aminoil site, it was decided that the full potential (50,000 barrels per day of 140OF water) be evaluated. .For this site-specific test case, planned downtown ; redevelopment projects were reviewed for sizable heat load concentrations.- While there • are many residential and some commercial developments planned or in progress, one project named Palm Court seems ideal as the target or focal point of a large district heating system.. • The Palm Court Development (reference Appendix F) is approximately 8000 feet from I the Aminoil site and would require 10-inch supply and return lines to transmit the full potential of the Aminoil ocean outfall water (1400F). The routing could be varied to pick-up some of the other developments planned for the downtown area. Palm Court is a • mixed-use development on 6.62 acres. It is proposed to contain a health,care center, a multi-purpose building, dining and administration areas, retail and residential_ areas. The health care facility will be conditioned (heating and cooling) on a continuous basis. I • The analysis of a district heating project (reference Appendix D) indicates that the investment could be ammortized in 2.64 years (37.9% ROI). This is based upon supplying heating and domestic hot water only. A use factor of 40% (of the total heat available) i was applied to represent the actual.benefit that could be expected for the climate and • types of developments expected. Because cooling (air-conditioning) is a-substantial portion of the energy .costs associated with health care facilities and retail establishments, some research was conducted to { • find a device (an absorption chiller) which could operate using geothermal hot water. . The Eshel Absorption Chiller is.the most promising. This chiller (reference Appendix F) is manufactured in Israel and. is represented by the C. H. Bull Company. Present plans include the possibility of opening a Los Angeles office and perhaps a U.S. manufacturing • facility. The unit can operate with 140OF hot water as a minimum. The activity of this and other manufacturers should be followed for potential geothermal ' applications. It is believed that a chiller of- this type purchased for a geothermal • application would qualify for tax credits. i i 4-4 • i i By adding cooling loads to a district heating system, the potential for use (use factor) is greatly increased without additional pumping and transmission costs. It is the recommendation of. the City that Phillips Petroleum be monitored for some indication that they would be cooperative towards a development of a geothermal facility at their Aminoil facility. st r; I 1 i • i • 1 i 4-5 • SECT.IC" 5-.,0 i �REC�IEST FCR =PAYMENT :ADD F INCIAL :STATUSREP(�tT i I • It i I i i i " 4 1 i i • 5. 1 I. Recipient Organization (Name and Complete Address) 2. Grant No. 14. '.•:-ro:• .: (-rant Period: Su:Tit This Report To: County of Orange/City of Huntington Beach 912-81017 Pr.,., 1 ur h:.;.,y/y�.r► To fr?ontn/day;year, California Energy Cor..mission Ml HOve Ave. MS-51 TO Huntington Beach Civic Center, Dept. F 09/01/82 i Sacramento, CA 95625 Development Services, 2000 Maul St. J. Nu ipient :.D. ;, i•cr.r_) �,,v,•r.V by This Report: �° Attn: kcQ,;,-,tirg Office r06 non 0lthld,yGy�•:.r) 0� �V h-tnlQuy/Year) Huntington Beach, Calif. 92648 { 8'3 jj4 _ E)q)enrittures Unliquidated Unencumbered Budget This r-rro-1 -�To Date Obligations Balance 6. STA.E SHARE Personnel Services 588 — 88 D:er•,rir•, E>;:•enses 2,270 0 132 2,138 Cor.3ulr--cr r Pra:<321on.l service. 5,000 3,800 3,800 - { 10200 Construction Erienses 0 0 0 0 -AL 22,870 3,800 18,944 3,926 Indirect Ch3rnes 0 0 0 n,11%L 22,870 3,800 18,944 3,926 7, 1'l,Y'! Sze:AE Per :'.nc•1 services 7,960 643 6,501 1 1,459 C:-eratun: Ex-•anses 0 0 0 .0 Coneii!ant Profes:;:unal Services 2,000 0 1,393 - 607 CcnctruCtton Expenses 0 0 0 0 9,960 643 7,894 2,066 Indirect Char,:es 1,122 - 5,611 3,059 MrML 18 630 I 1,765 13,505 5,125 e. c7V,ND :VT:.1. 41 500 5 565 32,449 9,051. 9• Rr•,CEST CCR PA-01IF.:T I(). Funds Requested to Date: 22.870 11.. Ccr ti fic3tion: 18 944 I certify to the best of my knc+ledge 11. Disbucsemcnes to Dater and belief that this report is correct 3 926 Signature of Aatnorixvd Cettbfytn9 12. Funds on Hand: y anci con..plete and that all outlays and �c�.ff'c unliquidated obligations are for the Jags§ W. Palm., Director 13. Ar' — of this Request" purposes Befit forth in the gtani Develounent for Payment O a cment. SP7'•vl cE?S 9 e of Print Naas arw Title 714-536-5271 —� Advwice to co•.,r es_:=.ted :�ni reads iiatu Report S.•uutE.d - vnun+ No. for the time period fro° (diiy/-/%-) to (day/-D/n') - ----- --------------- ------- ------ i SECT ION 6-.0 LIST OF ALL REPORTS, MAPS, PLANS, DESIGNS, DRAWINGS OR DOC VENTS i 1 : Low Temperature Geothermal Resources in Huntington Beach - Final' Report. 2. Low Temperature Geothermal Resources in Huntington Beach - Report . No. 6. i 3. Geot*hermal Dat.a Base for ' Oil-Related Hot Water Resources in Huntington Beach. ' 4. Working Paper No. 1 - Direct Use Geothermal Development : • Financ.ial Incentives and Tax Credits. i 5. Work:i-ng Pap.e:r No. 2 - Direct Use Geothermal Development : Systems and Applications. 6. Geothermal Deve'lopmen,t Project i • i 6. 1 • i SECTION 7.0 r CONSOLIDATED LIST OF CONSULTANTS i i The City of Huntington Beach performed the majority of the work funded by this grant (Number 912-81-017) using in-house capability. Only one outside consultant was i employed. This consultant was: t . i KVB, Inc. 18006 Skypark Blvd. Irvine, CA 92714 i During the period of June 4, 1984 to October 31, 1984, the above-named consultant was engaged for a fee of $7,600 to assist the City in the performance of the following tasks: 1 A. Analyze the existing Huntington Beach High School boiler system and evaluate the technical and economic feasibility of providing some or all of the heating needs utilizing Chevron's co-produced water. B. Analyze the projected Sea Cliff IV, Product B, Development and selected i downtown revelopment drawing-board projects for technical and economic feasibility of providing some or all of the heating needs utilizing Aminoii's co- produced water. I C. Prepare selected sections of this Final Report. • r V i I I i i I 7-1 SECTION 8.0 •. APPENDICES • Contained within are: • Appendix A: Huntington Beach Energy Series - Report #6 Appendix B: Huntington Beach High School Design Analysis Appendix C: Sea Cliff "B" Design Analysis Appendix D: Downtown Redevelopment Projects Design Analysis • Appendix E: Typical PRIVITIZATION Letter of Intent Appendix F: Miscellaneous • i • 8-1 Kca- �..:w��.r�-.. �,��., Q x r� ¢W LPL Q r Huntington Beach Energy Series i • Report +6 • Low Temperature Geothermal Resources • in Huntington Beach 4 j 7 0000 00 0 !!!!!r!!+!lrlr+!!l++rrrr 00 0 00 !l 00 00 0000 0Ooo 0 000000 oouou o00 00000000 0000000 O000 OOoO 00000O00 000Oo !!!!!!wlr+!!l+rrr uo 00000 uo .00 uo 00000000 0 '0 00 0000000000000 0000 „nn c�or)OOO� 000 00000000000 00000 0oo00 00 oOoeoOoOo 0000000000 OOO:)OOOO OOO 0000 0000 0000 000 O 0000 000 ,00000��JOOOOOOOOO 00000 �� )0 ,.,"ro 1,1000OOOOO 000 0OOOOOOO 000 G0, ",i:�,'OUO00OOOOOOpp 000 00000 ' 0000 ,)0000OOOOOOO OOO OO 0000000 000 00000 000 OC OC.00OOO nOCO COOOO City of Huntington Beach • Department of Development Services Planning Division • July, 1983 • • • • • • CITY OF HUNTINGTON BEACH CITY COUNCIL Don MacAllister, Mayor i Jack Kelly, Mayor Pro Tern Ruth S. Bailey Ruth Finley Bob Mandic Ron Pattinson John Thomas • PLANNING COMMISSION Marcus Porter, Chairman Tom Livengood, Chairman Pro Tern John Erskine Frank Higgins Frank Mirjahangir Jean Schumacher Grace Winchell Charles W. Thompson City Administrator • • HUNTINGTON BEACH ENERGY SERIES REPORT #6 • 1 I i LOW-TEMPERATURE GEOTHERMAL RESOURCES IN HUNTINGTON BEACH • i CITY OF HUNTINGTON BEACH ; DEPARTMENT OF DEVELOPMENT SERVICES • JAMES W. PALIN, DIRECTOR JULY, 1983 • • TABLE OF CONTENTS PAGE FOREWORD 1 DEFINITIONS 2 .1.0 INTRODUCTION S 2.0 THE NATURE OF OIL-RELATED GEOTHERMAL RESOURCES IN HUNTINGTON BEACH 7 ' 2.1 Oil Production and Separation Facilities in Huntington Beach 10 2.2 Temperature and Volume of Co-produced Water 13 ,0 2.3 Chemical Characteristics of Co-produced Water 13 2.4 Conclusions 14 3.0 DIRECT-USE APPLICATIONS FOR LOW-TEMPERATURE GEOTHERMAL RESOURCES 17 3.1 Types of Applications 17 3.2 Direct-Use Systems and Equipment 18 3.3 Potential Direct-Use Projects in Huntington Beach 22 4.0 IMPLEMENTING PROJECTS UTILIZING OIL-RELATED GEOTHERMAL RESOURCES 2 S 4.1 Direct-Use Economics 2 S 4.2 Financing Direct-Use Projects 28 4.3 Other Considerations 30 5.0 THE CITY'S ROLE IN PROMOTING GEOTHERMAL UTILIZATION 33 5.1 Public/Private Partnership 33 5.2 Preserving Access to Oil-Related Hot Water Resources 34 5.3 Identification and Implementation of Applications 34 6.0 CONCLUSIONS/RECOMMENDATIONS 3 S APPENDICES Appendix A: Hot Oil Wells in Huntington Beach 37 • Appendix B: Aminoil Wastewater Treatment System 39 Appendix C: Chevron Wastewater Treatment System 41 NOTES 43 BIBLIOGRAPHY 44 i Foreword This is another in' a series of discussion papers on energy-relaters issues prepared by the Planning Division of the City of Huntington leach. Huntington Beach is a renter for many energy-related activities including onshore and offshore oil production, an • c�lc�e.tricity-gc�nerr�ting power plant, and inr_reasinclly, solar and conservation technologies. The purpose of these reports is to help the City accommodate the continued production of •so vital a resource as energy while at the same time mitigating as much as possible any b adverse impacts on the community that such activities might create. Other reports in this series include the following: #1 Preserving Surface Access to Underground Oil Resources in . Developed Areas #2 Fiscal Impact of Oil Operations in Huntington Beach #3 Oil Spill Contingency Planning in Huntington Beach #4 Enhanced Oil Recovery in Huntington Beach #5 Solar and Conservation Policies at the Local Level • i • This publication was prepared with financial assistance from the California Energy Commission, Geothermal Development Grant Program. • • Definitions • This report necessarily discusses some technical aspects of the oil industry and geothermal development. Consequently, some terms are used which may not be familiar to the reader. The following definitions section was prepared to help clarify the meaning , of some of these terms. To ease reference, all words defined in this section are italicized • the first time they appear in the text. Co-produced Resource: Refers to one type of resource recovered in connection with another. In this case, geothermally heated water which is extracted with crude oil by ,�• conventional oil operations. Direct-use: Applications for geothermal hot water where the resource is piped directly to the user for heating purposes, as opposed to using the heat for electricity generation. Directional Drilling: The drilling of oil wells at an angle to tap a subsurface area not • directly beneath the surface location of the well. Also known as "slant drilling" or "whipstocking". District Heating: The use of one geothermal source and distribution system to supply energy to entire blocks of buildings or groups of users. Enhanced Recovery: Any production method which is used to recover more oil frorn a petroleum reservoir than could be obtained by natural reservoir energy or simple pumping. This includes waterflood, steam injection, and other techniques involving injection of fluids or chemicals into the reservoir to recover additional oil. Geothermal Gradient: The increase in ambient earth temperature with increasing depth. beat Load: The annual heat energy demand for a given use. Heat load is determined based on the climate of the area and the insulation of the structure to be heated. Independents: Independent oil operators are defined as those companies not owning refineries or operating retail service stations. In Huntington Beach, the independents are • generally smaller operators who sell their crude oil to larger companies for refining. Magma: Hot molten rock beneath the earth's surface. Oil Island: A relatively small, intensively used surface area into which oil facilities are concentrated. Wells are often directionally drilled from such locations, and oil islands are • usually walled and landscaped. Primary Pum iFormation : Oil operations extracting oil driven up through wells by natural pressure in the or by pumping units, without injecting water or other fluids to help force the oil to the surface. Retrofit: Adaptation of an existing system or condition to a different one. In this case, the adaptation of conventional, existing heating systems in a structure to geothermal heating. • Separation Facilities: Centralized facilities in an oil operation where the produced crude oil/water mixture rom a number of wells is separated. Typical separation methods • include gravity, heat, filtration, or a combination of these. Steam Injection: An enhanced recovery technique whereby steam is either soaked into or driven through a reservoir to lower the viscosity of the oil and increase its ability to flow. Unitization: The process of forming a "unit", an entity composed of several oil operators • who work a common pool in order to share equipment and mineral interests to produce the oil reservoir as a single party. Units are essential for the application of most enhanced recovery methods, which must be performed on pool-wide, rather than on a well-by-well basis. Water flood: An enhanced recovery program through which pressurized water is injected into a reservoir in order to push more oil from the pores in the oil-bearing rock. i • f i • i i f 1 .0 Introduction Geothermal energy is . the natural heat geothermal power plants at the Geysers in from the earth. Hot molten rock, called northern ' California require magma, close to the earth's surface heats high-temperature steam of at least waterbearing zones and produces hot water 300OF - 400OF to efficiently drive or steam. This heat has been utilized by large . turbine-generators that produce humans in a variety of ways for centuries. electricity. Low- to Although developed extensively in other moderate-temperature resources of less countries (see Figure . 1.1), geothermal than 300oF are not hot enough for use in resources were not considered a modern large-scale power plants. Instead, these energy source in the United States until resources can be used for direct, the late 19601s. Since then, dwindling non-electric applications such as space and domestic reserves of oil and environmental water heating, district heating projects, and safety concerns associated with coal and some industrial applications. i and the development .of nuclear energy ; have resulted in greater use of geothermal Until recently, most .of the interest in resources in this country and a heightened geothermal resources in the United States awareness of their potential .applications, was focused on high-temperature, steam-dominated systems capable of Geothermal resources most commonly electricity generation. The lower nccur at temperatures below boiling, in the temperature hot water resources were form of hot water. Less common forms of often not utilized. Yet, the co,rimercial the resource are high temperature water -- viability of tow-temperature, direct-use above boiling -- and dry steam. Higher applications has been demonstrated, ano temperature resources are suitable for this type of resource underlies vast parts electricity generation and industrial of California. In many cases, low- to process heat. For example, the large-scale moderate-temperature resources can provide energy for direct=use applications • at a cost lower than natural gas, oil, or Huntington Beach overlies one of the electricity. Further, the technology to use largest oil fields in California, and is the these resources is commercially available: . site of intensive onshore and offshore oil standard heating, ventilation, and air operations. For this reason, the , conditioning equipment, water pumps, low-temperature geothermal resources in controls, and piping material. Huntington Beach .are uniquely accessible. More importantly, oil operations here The greater interest in direct-use occur in an urban setting, making a variety geothermal has generated increasing of potential applications for the interest in oil fields as a source of this hot co-produced water worthy of consideration. water. Typically, large volumes of geothermally heated water are extracted The purpose of this report is to facilitate in the course of normal oil operations, and low-temperature geothermal development must be separated from the crude oil in Huntington Beach. The following before it is piped to refineries. Because section analyzes the nature and extent of this hot water exists as a co-produced oil-related geothermal resources here. resource, the costs and risks associated Section 3.0 identifies applications for with exploration, resource confirmation low-temperature resources in Huntington and evaluation, as well as with geothermal Beach. Section 4.0 analyzes factors that production well drilling and reservoir must be considered in utilizing oil-related management, are eliminated. The nature hot water, including economic and and extent of the geothermal resource is financing considerations. Section.5..0 , thus.a good deal more verifiable. discusses the City's role in promoting geothermal development. Finally, Section 6.0 presents some.conclusions and recommendations for future action. 's Figure 1. 1 WORLDWIDE DIRECT USE OF GEOTHERMAL ENERGY (MWt) • Space Heating/ Agriculture/ Industrial Country Cooling Aquaculture Processes ICELAND 680 40 50 JAPAN 10 30 5 NEW ZEALAND 50 10 150' ... USSR 120 5100 --- HUNGARY 300 370 --- ITALY 50 5 20 FRANCE 10 --- --- USA 75 5 5 ! Others 10 5 ' 5. i TOTAL 1245 5570 235 Source: Geothermal Resources Council i I i { . 1 • 1 + { { 2.0 The Nature of Oil-Related Geothermal Resources in Huntington Beach . The City of Huntington Beach overlies one Huntington Beach is one of the largest of the most valuable oil fields in the State cities in Orange County, and its oil ' (See Figure 2.1). In 1981, cumulative operations are. close to urban development, production from the Huntington Beach thereby creating the possibility for a field passed the one billion barrel mark, number of geothermal users in the making it the .third most productive oil immediate area. f; field in California.. In 1981 alone, production totaled over 10 million barrels. For geothermal use of the co-produced hot Of significance, however, is the fact that water, attention should be focused on the large volumes of hot water ranging central separation facilities of the larger between 110OF and 1750E are oil operators in Huntington Beach. extracted with the oil. The largest oil Because oil refineries only accept crude oil • company in the City estimates , that it with a maximum three per cent water extracts approximately 11 barrels of water content, processing is necessary to for -every barrel of oil. From this separate the co-produced water from the perspective, there exists a unique crude oil before it is piped to refineries. opportunity for the development and This separation process occurs at utilization of low-ternperature geothermal centralized -facilities. Because large • resources in Huntington Beach. First, volumes of fluid from a number of wells because great amounts of hot water are are, processed at these facilities, they are produced in the course of normal oil logical points at which to tap the heat operations, the necessity of drilling from co-produced water. Separation j expensive geothermal wells. solely to tap facilities present advantages of scale and this resource is eliminated. Secondly, efficiency not to be found at'the individual • I Fiqure 2 .1 AREAL EXTENT OF THE HUNTINGTON BEACH OIL FIELD \ r • Lill illir arr i rM i • I ru 11 B i ..wr ;J tiource: California Division of Oil and Gas, 44th Annual RepoY-t , 1958 wellhead level. For this reason, too, the it is estimated that the geothermal operations of the numerous small, gradient in Huntington Beach is independent oil operators in the City are of approximately 1.70F per 100 feet, and it j questionable utility for geothermal is likely that most of the hot water tapped applications. These operators typically by oil operations here is consistent with own a few wells engaged in relatively this gradient. Historically, there have unproductive primary pumping . The small been a few oil wells drilled that evidently volume and fragmented nature of these hit unusually hot fluids (See Appendix A). operations make them unlikely candidates Apparently these "hot spots" are isolated fc,r hot water suppliers. phenomena associated with geologic Figure 2. 2 LOCATION OF SEPARATION PLANTS OF PRINCIPAL OIL COMPANIES IN THE CITY i :..L: ' - f UNION ¢ O d K)N O AMINOIL Ot}icr S al.ler Chevron Sites. y S Source: Huntington Beach Planning Division anomalies related to the These facts re-emphasize the rationale for . Newport-Inglewood fault, which trends analyzing central oil processing facilities northwest-southeast through Huntington rather than "hot spots" or individual wells . Beach. If areas of unusually hot subsurface for geothermal utilization. With no temperatures existed to a great or exploration being necessary, a known and significant degree here, they should surely verifiable hot water resource is being have been encountered in the course of the produced in volume by present oil intensive oi! exploration and drilling operations and stands the best chance of activities that have occurred in Huntington being economically developed in Beach for decades. coordination with these operations. . 9 • 2.1 Oil Production and Separation as part of Aminoil's waterflood programs Facilities in Huntington Beach or discharged into the ocean.via a 24-inch Currently, the principal oil companies in outf all line. The wastewater handling facility removes additional impurities from Huntington Beach are Aminoil, Chevron, the co-produced water after it has been and Union. Aminoil and Chevron each separated from crude oil at the separation. operate several hundred wells, while Union facilities. There are two reasons this operates wells only on Platform Eva, off additional processing is done: 1) Aminoil the shore of Huntington Beach in State waters. Each of these companies has must meet the requiremehts of its permit from the Regional . . Water Quality separation facilities in the City where crude oil is separated in volume from Control Board that allows disposal of • wastewater into the ocean via the outfall co-produced water (See Figure 2.2). line; and 2) the cleaner the water that is Aminoil reinjected into oil-bearing zones, the more efficient are Aminoil's waterflood Most of Aminoil's wells are concentrated programs. on its "Main Lease", an onshore strip 600 feet wide and two miles long just northeast Chevron of Pacific Coast Highway between Goldenwest Street and the Balsa Chica Chevron is the second largest oil producer wetlands. Aminoil also operates a number in Huntington Beach. Like Aminoil, it too of wells in the Balsa Chica which are not employs waterflood techniques to extract within City limits, as well as several wells oil from some zones. _,While most of in a half-block consolidated oil island that Aminoil's wells tap offshore pools, fronts Pacific Coast Highway between 18th Chevron's wells extract oil from onshore and 19th Streets in the City's townlot area zones. Chevron's largest, production area (See Figure 2.3). Aminoil's onshore wells lies east of Aminoil's Main Lease. Here, are directionally drilled under the beach to wells are scattered in a band from oil zones beneath the ocean. Aminoil Goldenwest Street to the bluffline above employs. a number of enhanced recovery the Balsa Chica wetlands. Other wells and techniques in its operations to more related facilities are located on both sides effectively extract oil. These include of Garfield Avenue west .of Goldenwest waterflood programs, steam injection , and Street. Between these main production other injection projects on a pilot basis. areas lies the Seacliff development, which Thus, oil from a large underground area is consists of homes and a shopping center, a .� tapped from a relatively small surface country club, and a golf course. Chevron location. About 3,000 offshore acres have has consolidated its operations within this been developed from Aminoil's 130 acre development into one and one-half to two Main Lease. acre oil islands from . which wells are directionally drilled to reach a much larger Aminoil also operates Platform Emmy, underground area (See Figure 2.3'). which is located about 1.3 miles offshore in Chevron also has other smaller areas State waters. It has 52 well slots and taps devoted to oil wells throughout the City. shallow oil zones inaccessible from. onshore Like Aminoil, Chevron anticipates a long locations. Platform Emmy is connected to future for its oil extraction activities, but Aminoil's onshore facilities by pipeline, and plans continued consolidation programs the oil it produces is processed onshore at which will allow other land uses to occur the Main Lease. around its walled and landscaped oil islands. I Aminoil employs a sophisticated separation Chevron's primary operations and the site and wastewater handling system in its of its largest separation facility is the operations. On the Main Lease, there are Goldenwest lease east of Aminoil's five individual separation facilities and one production area. The separation facility.at central wastewater handling facility that this location employs a- gravity-flow further treats all water from the system that presently incorporates open separation facilities (See Appendix B). separation pits, outdated components that Water leaving the wastewater facility is are scheduled to be replaced with a more either reinjected into subsurface oil zones sophisticated system within the next year. i Fig. 2 . 3 CHEVRON ONSHORE PRODUCTION AREAS IN HUNTINGTON BEACH La.T a .......... S I i • • • • • "Oil Islands" i I Source: Huntington Beach Planning Division Presently, Chevron does not process its discharge. When the separation system is -wastewater to the same degree that updated, however, Chevron's wastewater Aminoil does (See Appendix C). This is will receive-more thorough cleaning. because the nature of the existing separation facility precludes sophisticated Union wastewater treatment, and also because Chevron disposes of almost all its Union is the third largest oil producer in wastewater via the County sewer and is, Huntington Beach, but all of : the oil it therefore, not subject to the stringent. processes onshore is piped from Platform treatment requirements of ocean Eva, which is about two and one-half miles 11 j Fig. 2.4 LOCATION OF AMINOIL ONSHORE FACILITIES AND OFFSHORE PLATFORM AND 1 UNION OFFSHORE PLATFORM r_j all L_. 5 rt f"r, PLATFORM EMMY PLATFORM EVA (AMINOIL) (UNION) Source: Huntington Beach Planning I.ivision offshore in State waters (See Figure 2.4). typically engaged in primary pumping, l.Jnion has no other oil operations in which is relatively unproductive, and of a Huntington Beach. LJnion's onshore much smaller scale than Aminoil or ! separation facility is significantly smaller Chevron. The water that is produced by than Aminoil's or Chevron's. these operations is separated from the crude oil at smaller separation facilities Independents and dumped into the City sewer. The size of these operations and the relatively small Approximately 80 independent oil volume of water they produce likely • producers operate on scattered sites preclude economic use of. - the water for throughout the City. These operations are geothermal applications. Total Dissolved Solids: 23,500 parts The tremendous volume of water that per million (ppm) Aminoil processess --'over 11,000 gallons (Note: Total dissolved solids per minute -- is of a.useable temperature consist mostly of salts.) (1400-1450F) for geothermal Average Suspended Solids: 20-50 ppm direct-use applications.. The heat in this total volume of water amounts to . Sedible Solids: 0 ppm .275,000,000 Btu per hour. A large single family house will likely use under 100,000 Oil: 10-17 ppm Btu for an entire year, so even if only a (Note: New equipment is being fraction of the heat in ,this water were installed in Aminoil's separation tapped, it would be a significant resource process that will decrease the in terms of both energy and revenues. As average oil • content of the is discussed in the next chapters, the wastewater to 4-17 ppm.) proximity of Aminoil's separation plant to, t potential geothermal users is good. Chevron Additional longer range opportunities may The chemical characteristics of Chevron's be afforded by two other oil companies water when it leaves the primary basin, the presently developing .projects in Huntington first of the separation pits, are as follows: Beach. Both American Petrofina and Xtra Energy are in initial phases of unitization Total Filterable Solids: 198 ppm projects. Unitization involves (Note: This figure includes consolidation of equipment and subsurface suspended solids, sedible solids, mineral interests to _ enable the oil and oil. Information from reservoir to be produced . by a single Chevron regarding dissolved operator. Particularly ,when the interests solids has not yet been received.) in an oil pool are fragmented, as they are in the City's downtown.area, unitization is The Orange County Sanitation District essential for the use of most enhanced oil reports that when it is. discharged into the recovery methods which can only be sewer, this water averages 92 ppm applied on a coordinated, pool-wide basis.* suspended solids and.41-100 ppm oil. Figure 2.5 depicts the unitization project boundaries of American .Petrofina and Xtra Union Energy. Oil production is expected to increase dramatically after these two Due to its temperature, the utility of this companies complete their, unitization Water is marginal, and chemical data on it projects and begin implementation of has not been gathered at this point. enhanced recovery techniques. 2.4 . Conclusions American Petrofina. is now finishing acquisition of the necessary mineral rights Based on examination of temperature, in its project area, which is bounded by volume, and chemical information for the Lake and Goldenwest Streets on the east co-produced water of the three principal and west and by Palm Avenue and Pacific oil operators in Huntington Beach, Aminoil Coast Highway on the north and south. It presently exhibits the best potential for is anticipated that oil operations will be providing useable hot water for geothermal consolidated into two sites on the periphery direct-use applications. Although of the project area. Although the exact Chevron's primary separation facility temperature of the water that will be currently employs a system that does not co-produced is unknown at this time, a tend itself to heat use, the planned volume of about 100,000 barrels (4,200,000 improvements to this facility should be gallons) per day is projected. monitored closely. It may well be that Chevron could become a viable supplier of hot water when the existing separation. * See Huntington Beach Energy Series system is updated. The low temperature of Report #1, "Preserving Surface the Union water likely precludes its Access to Underground Oil Resources econornic use. in Developed.Areas". i s 2.2 Temperature and Volume of lease. As described in Appendix C, the Co-produced Mater Chevron separation system presently includes processing through a series of Having determined that separation three open pits. Due to this fact, as the facilities present the most effective way co-produced water goes through the to tap large volumes of co-produced _water. separation process, significant heat is lost from a number of wells, the next before it reaches the County sewer line consideration must be the temperature and into which most of it is finally disposed. volurne of the water processed at these When the. wastewater enters the first of facilities. These factors are important the open pits, the primary basin, its determinants of the feasibility with which temperature is roughly 1280F. At this the water can be used for geothermal point, however-, it still contains so much oil applications, and its suitability for specific that it is unlikely to be suitable for types of uses. The following discussion l geothermal applications. When the water kites separation facility water temperature . :Y and volume information for the three leaves the primary basin, its temperature major oil operators in the City. is about 1100F and it contains less oil. Processing time is about an hour until the Aminoil water flows into the last of the separation pits, the main basin. - At.. this point, its Approximately 380,000 barrels. (15,960,000 temperature is about 100oF and it is gallons) of water per day are processed pumped into sewer tanks for eventual. through Aminoil's central wastewater disposal into the ten-inch County sewer. handling facility. This includes the water trunk line at Goldenwest Street. that is reinjected, as well as that which is disposed of into the ocean. The average Union temperature of water leaving this facility is 140oF-1450F. Each day, Because the wastewater treated at Union's approximately 50,000 barrels (2,100,000 onshore separation facility has been piped gallons) of this. water are discharged into a considerable distance-from Platform Eva, i the ocean via the outfall line. Dilution its temperature going into .the separation nozzles at the end of the outfall line plant averages only 870F.. Roughly 3,300 ensure that the wastewater- is quickly barrels (138,600 gallons) of. water per day diluted with cold sea water so that thermal are processed at this facility..and disposed pollution is mitigated. The remaining hot of into the City sewer system. wastewater, about 330,000 barrels (13,860,000 gallons), is reinjected into 2.3 Chemical Characteristics of oil-bearing zones for the purpose of Co-produced Water. . waterflooding. Aminoil reports that although the flushing action achieved by An additional important consideration in reinjection is of primary importance, the analyzing co-produced water for direct-use temperature of the reinjected water is a utilization is its chemical composition. As consideration because heat lowers the is discussed further in the next chapter, viscosity of oil, thereby making it easier to chemical contaminants and. impurities in extract. Thus, changes in the temperature the circulating water can cause scaling and of reinjection water caused by extracting precipitation in geothermal distribution heat for geothermal use must be carefully piping. The chemical quality of the water analyzed in light of Aminoil's waterflood can determine whether a heat exchanger is programs. It should also be noted that necessary and can have ' a significant roughly 85% of the total volume of hot bearing on - the- design of and equipment wastewater is reinjected, and that this required for-a direct-use system. percentage is not subject to great variation at present. Aminoil s Chevron Aside from salts, Aminoil's wastewater is virtually free of sedible- solids, suspended Last year, approximately 49,700 barrels solids and oil. Although Aminoil's ocean (2,089,000 gallons) of water per day were outfall permit stipulates effluent limits, processed through Chevron's primary the following figures reflect actual separation facility on its Goldenwest average discharge from the central wastewater handling facility: Fig. 2. 5 Xtra Energy's project area is roughly LOCATION OF UNITIZATION bounded by Yorktown Avenue .on the north, PROJECTS IN THE DOWNTOWN Beach Boulevard on the_ east, Indianapolis Avenue on the south and 17th Street on the ;vest. Xtra anticipates the consolidation of oil operations in this area into one or two locations, as yet undetermined. Xtra i:: currently .in pre-enqineering stages and, like American Petrofina, has expressed interest in considering supplying hot water f a�� from planned separation facilities fnr- geothermal uses. p°P These potential opportunities from future oil operations in the City should be PQ monitored and evaluated so that provisions for co-produced water utilization, if feasible, can be incorporated into development plans for new separation e facilities. For the near. term, however, �f efforts should 'be focused on Aminoil's operations and Chevron's facility improvements. PALM ep XTRA ENERGY AMERICAN PETROFINA ti Petrofina, Xtra 1 i a i • 3.0 Direct-use Applications for Low-Temperature Geothermal Resources i Traditionally, direct utilization of 3. Use of off-the-shelf equipment. geothermal energy has been on a. small scale by individuals, but most modern 4. Short development time as compared developments are economic on a larger to electrical energy development. scale. Heat exchange technology has become more efficient and better adapted 5. Efficient transportation of hot water for geothermal use, allowing economic use for significant distances with of lower temperature water and highly minimal energy losses. saline fluids. Implementation of direct-use applications utilizes known technology, The following. sections discuss general straightforward engineering processes, and types of direct-use applications and ! off-the-shelf equipment. Typical systems, as well as specific potential uses direct-use applications include space in Huntington Beach. heating, water heating, district heating projects, agricultural uses, and some 3.1 . Types of Applications industrial processes. Space heating is a common application for The applications with the greatest low-temperature resources in both new and potential in Huntington Beach are space retrofit projects. Space heating generally and water heating and, in particular, utilizes temperatures in the range of district heating projects. In general, the 120OF to 2120F. Temperatures as low advantages of direct-use projects are as as 100oF have been used in some follows: marginal cases. Hot water piped to a • structure can be used for space heating via 1. High conversion efficiency. a conventional forced air system in which it heats air transported through 2. Readily available resources. distribution ductwork to outlet fixtures, or (Low-temperature resources underlie by circulating through baseboard much of Orange county, and . in convectors or radiant panels,.which radiate Huntington Beach oil-related hot heat through the structure. • water is uniquely accessible.) 1 % • Geothermal water heating systems can restrict liquid flow through system piping. serve domestic or commercial hot water These problems can be minimized by using needs, and can also be used for pool or spa a two-loop system, which isolates the ' heating. In new or retrofit projects, hot geothermal source water.from most of the water heating capability can be added to a piping and equipment through use of a heat space heating system with the simple exchanger. The chemical characteristics addition of a secondary water-to-water of the co-produced hot water in Huntington heat exchanger at the residence or end Beach, as cited in the previous chapter, are user. Similarly, capability for pool or spa such that heat exchangers will be required . heating can be achieved. in direct-use systems. Geothermal district heating is the direct Heat exchangers transfer .heat from one use of geothermal energy to heat and/or medium to another, such as from provide hot water for entire blocks of geothermal fluid (primary) to potable City, buildings using one geothermal source and or "make-up", water (secondary). distribution system. It is the most Generally, direct-use systems requiring efficient use of geothermal energy, and an heat exchangers are designed to transfer increasing number of cities in this country heat to a secondary fluid so that the actual are developing district heating projects. geothermal water never enters the main The cities of Susanville, California, piping system. The clean secondary water Klamath Falls, Oregon, and Boise, Idaho circulates through the system. This , .have all developed successful large-scale minimizes possible corrosion, scaling or geothermal district heating systems to precipitation in pipes, valves, and other serve residential and commercial fittings. developments and are realizing significant energy savings. Fuel economy is an Heat loss with modern heat exchangers can important incentive for district heating. be as low as 20-30F between the An individual home heating system, for primary source fluid and the secondary example, operates at 50% to 70% transfer fluid. There are two principal efficiency as compared to 80% in the case types of commercially available heat of district heating. The most economical exchangers: shell-and-tube. and plate (See district heating projects serve higher Figure 3.1). The shell-.and-tube heat density development (i.e., multi-family exchanger consists of U-shaped tubes , dwellings, hotels, multi-story commercial inside a cylindrical shell, with .the primary structures).1 fluid flowing inside the. tubes. The plate heat exchanger consists of a series of Most industrial applications require high stainless steel plates held in a rack by rods, temperature geothermal fluids or steam. allowing the primary and secondary fluids However, low temperature resources can to counterflow across ..the plates. The be effectively used to pre-heat boiler and plate heat exchanger is. more efficient, other process-feed water in a wide range requires less space, and has the advantage Of industries. Conversely, of being easily expandable. In addition, the agriculture-related uses can utilize very plates can be quickly disassembled for low temperatures for greenhouse heating cleaning and crop drying. For oil-related hot water, the heat 3.2 Direct-Use Systems and Equipment exchanger would be placed above ground at the central separation facility. The Heat Exchangers co-produced water would have to be disposed of after it had passed through the Geothermal water, particularly higher primary side of the heat exchanger. This temperature water, is often corrosive would likely pose little problem, as the and/or prone to precipitate salts. Salt water is presently either reinjected or deposits decrease the effectiveness of heat discharged into the ocean or the sewer transfer equipment and can ultimately 1R pipes are inert to the common chemical Fiq. 3 . 1 constituents in geothermal fluids. SCHEMATIC DIAGRAM OF However, temperature may be a limiting HEAT EXCHANGERS factor in the use of non-metallic piping. Figure 3.2 depicts the - temperature limitations of various piping materials. It is likely that a polyvinyl chloride (PVC) HuC Liquid In material would be suitable for transporting the type of geothermal hot water found in Huntington Beach. . An additional Co Id advantage to use of non-metallic piping is i,iyuid out ..• � 9 P P 9 a that installation costs .tend to be lower. 6: cold Plastic pipes are light to. handle, and can -Liquid In usually be welded with solvents.3 Hot Liquid out For short piping distances to the end user, Plate Heat Exchanger insulation of distribution piping may not be g necessary. Depending upon the temperature of the fluid, the flow in the 101 pipe, and the tolerable loss of temperature, longer transmission distances may require Cold Liquid In insulation. Considerable insulation is achieved simply by burial of the S tiot distribution piping, but additional Liquid In insulation can be -accomplished with icola polyurethane foam and fiberglass. These Liquid nut materials can effectively reduce . Hot Liquid out transportation temperature losses to as little as loF per 1,000 feet, but cost • Tube-and Shell Heat Exchanger becomes a significant factor. Source: Oregon Institute Dwelling Piping of Technology Once the water has been delivered to the end user via the - distribution piping, • system by oil operators, and could continue dwelling piping is necessary, depending on i to be so handled if some of its heat were the type of application. Space heating is extracted for geothermal use. one of the most common applications for geothermal resources, and there are Piping various methods available for removing the heat from water and introducing it into the • Distribution piping is . the next critical space that is to be heated. Necessary component of a direct-use system. The dwelling piping is determined by the space distance the secondary fluid must be piped heating method used. to a user and the constraints on tolerable temperature losses during transportation Space Heating Systems are two major factors that will determine • the cost of the distribution piping system. There .are three principal types of heat ! In general, the greater the temperature convectors used for space heating -- forced limitation, the more expensive the piping air, baseboard convectors, and radiant material necessary. panels (See Figure 3.3). All three can be adapted directly to geothermal or 'Both metallic and nonmetallic piping converted by retrofitting existing materials can be used for geothermal conventional systems. The most widely transmission lines. Carbon steel is the used residential space lieating system is most widely used metallic pipe. Other forced air. Forced air systems transport types of metal pipes are of limited utility heated air through distribution ductwork in `• due to prohibitive cost or unacceptable. the dwelling to outlet fixtures. Currently, corrosion characteristics. Non-metallic furnaces fueled with natural gas, propane, • . lU , • or fuel oil are the most common in Finally, radiant panels can be located in residential dwellings. In a geothermal floors, walls, or ceilings to radiate heat to system, however, the incoming cold air is the room. The hot water is circulated in run past hot water coils and then coils of plastic or copper which are distributed throughout the structure via imbedded in concrete or' plaster slabs. conventional ductwork. Generally, forced Radiant panels can provide a uniform space i air units can use fluids of 120OF and higher. In considering new geothermal Fig. 3. 3 heating installations or the ease of retrofit, the forced air system is PRINCIPAL TYPES OF undoubtedly the most adaptable. HEAT CONVECTORS A baseboard convector system utilizes hot Hot Water Coil � water as the heat transfer medium and distributes it to convector units located at ' Cool Air i worm Air the base of interior walls. Baseboard units 1 I rely on natural convection currents to Fe. FORCED 41A circulate the warm air throughout the ____---/.—�� --- _ room. Due to their low initial installation Neal / .—ti Circulating Not wets, costs, baseboard convectors can be economical for residential and small commercial applications. They can, however, necessitate certain building . - CONVECTION design considerations and restrictions on Radiated Neal -�-_I_ 1_l_l_l _I ' " Ciraaotlrq Not water furniture placement within rooms because �Fo, =�_=_-__-_freeair circulation is required. I D Baseboard convectors can economically Use I RADIANT FLOOR OR CEILING PANEL water of 130OF and higher. The Source: Geothermal: Resources efficiency of the convector unit can be Council increased to use lower temperature water by placing a fan behind it to help circulate the air. Fig. 3. 2 MAXIMUM FLUID TEMPERATURES OF VARIOUS PIPING MATERIALS • °F) 100 200 300 400 5CO 600 'IaJ e3CC - -� POLYETilYLENE . - i HIGH IMPACT POLYVINYL CHLORIDE � — _ NORMAL iNIPACT POLY'VIN'rL ----� &—L:?RINATED POLYV:".YL -Y3UT"l �tiE I i — —_----J F'BERGL.a'�S QE'.NFC FIBERGLASS aE;N=(1'dCED EPDXY CAR60N STEEL (aC) O 50 100 150 260 250 3:0 j5J -60 Source : Oregon Institute of Technology a i temperature without drafts, and can use 3. Distribution System water at lower temperatures than most - distribution pumping station other systems. Use of fluid temperatures - street mains as low as 100oF is possible. The - service branches principal disadvantage is that leaks in the - consumer connections plastic or copper coils, while uncommon, can be very difficult to repair. In Huntington Beach, oil operations comprise the heat production component. The oil-related geothermal source fluids In addition to these three principal heating 9 systems, the water-to-air heat pump for would be processed through a central heat residential and commercial space heating exchanger, and. transportation of the hot. has received increasing use. Put simply, a transfer water to the end users would be heat pump uses the refrigeration principle via insulated pipelines. Individual users to boost temperature to a useable level. would be served by distribution loop lines Heat pumps allow economical utilization of which could provide heat for space heating, very low temperature resources (down to hot water heating, pool_ or .spa heating. At 6010F) and adapt well to the forced air present prices, a geothermal district system. Large capacity water-to-water heating system will cost about the same or i heat pumps that can raise the temperature less than the corresponding annual fossil of an inadequate or unsuitable geothermal fuel cost. Most geothermal district resource to an acceptable range for heating systems will pay for themselves in economic use are also available. five to 10 years from savings in conventional fuels. Further, geothermal Hot Water Heating Systems users will be unaffected by any future price- variations in conventional fuels. Geothermal water heating systems can These and other economic considerations serve domestic or commercial hot water are discussed in more . detail in the next . needs. Hot water is typically required on a chapter. year-round basis. Because space heating is General System Design Considerations not needed all year in this part of the country, hot water capability can be a New Installations vs. Retrofit: Hot water' valuable component of a geothermal space systems of any type are not usually i heating system. Due to year-round demand difficult to . retrofit. Forced air space_ and the prevalence of pools and spas in heating systems are the most difficult and Southern California, a geothermal water have the greatest- number .of variables. heating system may also be economical in This .makes possible more manipulation of and of itself. the variables to attain the desired end result, but it also requires more care in As noted earlier, hot water heating c design. In many cases, the greatest_ capability can be achieved with the addition of a small, secondary heat impediment to implementing geothermal exchanger at the residence or end user. applications on a retrofit' basis will ' be � is necessary because installation of the necessary supply and This heat exchanger i distribution pipelines. Because these the circulating "make up" water is usually c Pipelines are usually placed under streets chemically treated to inhibit scaling and with other utility lines, retrofit projects precipitation. Thus, the secondary heat exchanger is necessary to transfer- heat to can involve disruption of existing streets. potable tap water. Generally, it is easier and .more economic to install new geothermal systems in District Heating Systems buildings or developments designed with geothermal utilization in mind _rather than It is practical to divide geothermal district to attempt to retrofit an existing building. heating systems into three main Heat Load: There. are "a number of "rules components:4 of thumb„ for estimating the heat load, or 1. Heat Production heat demand, for a given use. Because geothermal source Huntington Beach has -a temperate climate, - collecting mains space heating demand _is limited and not i year-round. The demand for domestic hot 2. Transportation water and pool or spa heating is i - pumping station year-round though, and it may be that supply mains inclusion of water heating capability in geothermal space or district heating 1 systems will be an important factor in redevelopment y p p projects will include higher their economic viability. Heat loads for a density residential units, restaurants, other specific potential application are best visitor-serving commercial establishments determined by a heating. contractor or and, possibly, a major hotel. Ideally, a architect. Conventional furnaces or water geothermal utility . district would be heaters can be provided to meet peak created, a central heat exchanger installed demand, if necessary, or to function as at Aminoil's separation facility, and a back-up systems. Both heat loads and distribution pipeline constructed. As back-up systems are discussed further in buildings within the utility district are the.next chapter. constructed, hot water for geothermal applications would be provided by the 3.3 Potential Direct-Use Projects in distribution pipeline. In this way, both the i Huntington Beach lowest cost per user and the most. efficient use of the resource can be obtained. .The separation facilities analyzed in this Further analysis of a geothermal heating study are in proximity to a number of district using heat from Aminoil's existing residential and commercial uses operations to serve new development is that are likely potential users of hot definitely warranted. water. The cost of retrofitting buildings for direct-use applications is, however, an Chevron's primary separation facility is important consideration that will require adjacent to the largest parcel of further analysis on a case by case basis. undeveloped land in the City, a 240-acre Of perhaps more significance is the fact site presently the location of scattered oil that these separation facilities are close to operations. Increasing pressure for areas that are developing now, or are very residential development - on this site may likely to develop in the forseeable future, well result in opportunities for application thus allowing provisions for direct use of of heat from Chevron's facilities. Before hot. water to be incorporated into this could be feasible, Chevron's separation development plans ahead of time, rather facilities would have to be upgraded to than as a retrofit. improve the temperature and chemical characteristics of the co-produced water. Of the existing oil operations in the City, Since Chevron anticipates such an upgrade the water processed by Aminoil at its _ within the next year, opportunities in this central water handling facility presently area should be closely monitored and seems to hold the best opportunity for use, options for use of Chevron's heat should due to temperature, volume, and location. begin to be explored now. Immediately northeast of Aminoil's Main Lease, for example, expansion of the Two longer term possibilities for hot water Seacliff residential development is utilization exist with the American occurring. Seacliff-Phase IV will consist of Petrofina and Xtra . Energy unitization single family detached and attached projects, which were discussed in Chapter homes, as well as condominiums. The 2.0. Although neither of- these companies proximity of this development to Aminoil's has yet made a determination as to the facility makes it a logical candidate for location of their separation facilities, geothermal space, water, and/or pool they will both undoubtedly be in proximity heating. Preliminary analysis of the to potential hot water users. Both project is favorable, and Aminoil and the companies have been contacted regarding developer are interested in pursuing this the possibility of selling waste heat from possibility further for the attached homes their operations for direct-use and condominiums. applications. Xtra Energy; in particular, is interested in considering the idea of Another potential use for the heat from designing their separation ' facilities to Aminoil's co-produced water is district accommodate heat exchange equipment. heating in connection with downtown . redevelopment and revitalization. Existing In summary, Huntington Beach's oil-related and proposed redevelopment areas exist hot water resources seem to present a southeast of Aminoil's Main Lease in the variety of opportunities for use, both now front blocks along Pacific Coast Highway and in the future. Preliminary analysis and in the pier area around Main Street suggests that present opportunities for use (See. Figure 3.4). Although it is now of Aminoil's co-produced water are preature for specific development plans, favorable economically. Potential future 2 Fig. 3.4 EXISTING AND PROPOSED REDEVELOPMENT AREAS IN DOWNTOWN HUNTINGTON BEACH Existing Redevelopment Area ••f•r Proposed Redev , ••:+:•P tlopment Area ..•.. I^ ;;� rr �� •• �< .•. i �:J t_.J �--1w� 4�-•','.-a:f :a : \fie, ✓✓ f a f!ass!e f r r 111�'Lj I ! _1{�` f C : �� C � (��;� rfTt" � ff /%C.� r•afririf•rerra•!f• { ) FI' i {; ••,`♦ a, ••,,• • • �'' •f of•lalir•fr•••f f•Ii•• 1 F;"','7,1IL � I_, ,�•, F,` •♦i♦ RRf�i� • + •f!a•rf f iirafrrff.is.r• � L C.� �� C� •r.f._• •rjj•r i a ! • / G ::• `►`::::•:•:r's•�~i f•:i:f:r:ar:•� e-'-; r—•--r ;-- r-, �-r,r r f ' ir•r a••a1f�r.i.i•rrr!•i•••i• 1 � ' i � � :�? (�', r� oeffa'•ii�j�'�'• • o • •aces• sr•i.!••rw•.•iai•a+!•i♦r i � �, � •� i � C � ,, •��•�i • r {��e i frtr_�1 i::::f':! :'::!•::::•::::•::•:'::i::•r 1 i •i i`a M 11 1 I+}r•a. ! •�}�* •1!++e a r+ ••r a a i f i I i+•a I!r•f•f f•f � rr•er �f o: t .� ��� .f �+ett t !• ••.� • 'r- •:1:•f':::f:'• •::!:•i•:r:•:/':•:•:••r'••:: •• C f_� C:,.t L.,'� �'..���3ff3 :::���111 C•� f a .f • • • ,•}��• -,4-' —` --- _ ..--•--�. ,. �lQr!►��-,•l,�r�.' fa•f1•rrfa flffrrrr•affar!!i• /a ' -� —� (-'- !•f r f+a r►f!• !I f f r r r r•e!a 1 e•!!a i!a ••• t��i � � t-�---i • N • efrer♦fflef aele•!f•♦ a• ir•efo•+iirar i - ` .'•� � I - .. ,�� �."�� �'; [`' •!!fir-+.��•i!!!�°'� •�{• r:r f e•••f r i!a / •!f f f i.,•a a. f•e a r i f!•f!! _ ;i' i •'1 ' 1 !zi ' ; t ! ) '' • `a•°•. � ��a • '• fff Jere•reef fler•e1illar •!!if•••f•f• .e ;E• ! ; f � : t. a• a., •r r!!•1,e o•• •1 1 e 1 i 1 i 1 a i !!•f•f f••►a r f I '/.¢i• 1 • i!!i a••1,1 a•i i • • •!• f a•!r•f f 1 f f r f r i!!r p ��_ �; � '� i; `s• ■■ M i • � , a ! ♦ o f •i•r•i f 1 a a !a! f ►!I f i!f f f !!!1 r!•I i!f•I f {• � � L� �i � �t • l�♦ •••�♦It:• • ! •!• e a!i•f•♦!•i f !! •!• f 1 f•f r r I f a•f 1••!i f•I r •� �� ♦1•♦1 r!f a r a f r f e f r e f• f! f 1!e r 1•e!f f•I•f •� � f a i a•♦a!•f a f f 1!•• !I f•e ! e i • r f!f f!!•1!i•i r i 11 !• a� •+• r, •r • r.s • • •r f f r a!f!i•f i r a e a !a f r e r a!!f a 1 a!a•i!i!a r y • •• i� �e L a 1!f aff�f r f•!e!f ,•e a! a!! !••f♦!4 i!!i!1!r! r ♦-� `� iyf• •� + r "• r 1• • f) •f 1 • !f e r f/!!f • •r f I f a ••!/f f••f f••1• f i i f a• •! !a i _•' - • a•♦f a 1•f i!a f e/• i!•i ! f e 1 f • !i/4••i••• •• • • !r a••;!4• �M +r :•o r':f ':f•�•� f•.•• • "' I i:e'a:•e•et:::::ea • f•!♦ i••• �aG•ilaloarf• 1f f♦f f I f f f 1 ♦ • !!r!♦ !• •!f f!!r f•!i •r!e f'-•�- •i e a• !r r '•!• r r*►•i f'i:f•:f♦f•:r•:e•r:•:r:�:ai i e• i��i. e e i e.a o f f s f!i!,!e e•f r f♦r•1•q.• �` • o r •►f •f f•f a••f i•!a r• a f•i a a e•♦!-• •=•••!•!••a •i� �,• a f!!•a•!• !♦• •1 i••f"i r•f•r♦•♦i•f a!••/••a•�r.•r•r':a:•a•�'' N- +r I f r♦f i♦•1 a� •r,f r • +•e e:!!o a r e i♦! ref•!f•r 1 •• r r f r♦f a r i!o f s r r r• f f 1 ♦•f!•e f!i f!e f!e 1 i 1 f 1 1 f 0+1 e♦f!e i f•f ♦!!/f{!1•f r a•r r 1�•••. -'• •♦f,I f 1 1 i••f•!f f • f f r 1 1 f•f e i i•• f 1 1 a f r e 1 f r 1/e..• afire•♦i i'f: 10*10* ♦arf . Source: Hunt,-­,-t• � c:; ran Beach Planning Division. opportunities by Chevron, Xtra, and project by project basis. The next chapter Petrofina should be monitored and, when outlines some of the fiscal and economic appropriate, analyzed further. The considerations that determine whether a economics of a particular application will, particular direct-use application can be of course, have to be determined on a successfully implemented. 1 • • r { i i 4.0 Implementing Projects Utilizing Oil-Related Geothermal Resources In the two previous chapters, the Therefore, the critical question is whether characteristics of oil-related hot water in a given project is economically feasible. Huntington Beach and applications suitable The system must provide a favorable for this resource were discussed. There cost/benefit ratio, an attractive return on are, however, a number of considerations investment, and energy at a lower cost • beyond simple technical feasibility that than the next best alternative. Direct-use must be evaluated if a geothermal project systems are capital intensive. Once the is to be successfully implemented. These system is constructed, the annual savings factors include economics, financial resulting from use of low-cost geothermal considerations, and regulatory issues. The energy must be large enough to repay the use of oil-related hot water, as opposed to capital investment over the project life. • conventionally produced geothermal Three of the most important determinants resources, requires attention to some of economic feasibility for geothermal additional considerations as well. Because projects are: costs compared to direct-use geothermal projects . are site alternative fuels, heat load factors, and specific, detailed analyses must occur at transportation distances to end users.5 the ,individual project level. The purpose • of this chapter is to give an overview of The major feasibility test of any energy the types of issues that must be addressed system is how economically it can compete for successful project implementation. with its alternatives. Direct-use geothermal is generally less expensive than 4.1 Direct-use Economics conventional fuels (See Figure 4.1), and most successful direct-use systems will pay The technology for direct-use geothermal for themselves in five to ten years. In the systems has. been proven since the turn of case of district heating, costs are made up the century. The ultimate selection largely of capital charges which, after the criteria for implementing geothermal system is built, do not escalate.6 The direct-use systems are economic. value of a geothermal system in isolating • its users from price escalation of One way that load factors could be convFntional fuels should not he maximized for direct-use projects in minimized. Although oil prices have Huntington Beach would be to include a recently dropped, few industry observers variety of applications in the system. For believe they have stabilized. It is likely example, because the demand for space that the prices of natural gas, electricity, heating here is moderated by the and oil will escalate faster than inflation temperate Southern California climate, it ral.ns over the next 20 years. vi likely that including hot water heating or pool and spa heating capability will The annual heat load, or heat demand, increase the year-round load factor, produced by the end users of a potential thereby enhancing the economic geothermal system is also important to the attractiveness of a geothermal system. i ,,economic viability of the project. Annual Even in Southern California, however, the heat load is calculated by evaluating the biggest energy savings from a geothermal percentage of time during the year that system will probably be from space heating. the system will be used, based on peak i capacity. Peak capacity refers to the The proximity of end users to the design maximum of the system. As the geothermal source point will have a annual load factor increases, the economic significant impact on the economic feasibility of the system improves. feasibility of the project because the cost Although the ideal situation would be to of installing distribution piping is usually operate at a 100% load factor, this is the most expensive component of a � possible only through electricity geothermal system. As an example, Figure generation. Most district heating projects 4.2 tabulates piping capabilities and cost as in the United States, for example, have a function of pipe size. These figures are load factors of about 20%.7 based on a pipeline from Aminoil's Fig. 4. 1 LEVELIZED COST OF ENERGY OPTIONS (1981-2000) 00 rn 15 as �1�l�l�1�lt 0 1 �i�ioi�i�i� • llllt E Iltll 5 •;•:•:•:•:•: �t�!!t!!�!� o •°••••• :••':':•:•:• O�I��1 • O • • IL a goal a Direct Use Natural Oil Electricity Geothermal Gas Source: California Energy Commission • 5 i operations to the front block along Pacific In' summary, the best economics for Coast Highway between 12th and 13th geothermal direct-use projects and district Streets, a. distance of 3,500 feet. The cost heating systems exist when the following . of a four-inch pipeline, which could serve circumstances are present: development on that one block only, would be $150,000, and it could deliver 2,750,000 1. High annual load factors. Btu/hour. In contrast, a ten-inch line from Aminoil could supply over ten times as 2. End users as close as possible to the much energy (31,000,000 Btu/hour) at only geothermal source point. twice the cost ($300,000). This example illustrates, first of all, that it is relatively 3. New development or redevelopment, , expensive to transport hot water even rather than retrofit, forming the core t 3,500 feet and also, more importantly, that of a district heating project. it makes ,sense economically to install a pipeline of sufficient capacity that a 4. Costs to users of a geothermal number of users can be served and pipeline system competitive with, or lower costs defrayed accordingly. Creation of a than, costs of conventional geothermal utility district and alternative fuels. implementation of district heating would be the most efficient and economic Use of geothermal resources in most, areas system. The fact that oil operations here requires the drilling of wells solely to are in relatively close proximity to produce the hot water.. When this is potential users has an important and necessary, it is estimated that up to 50 per favorable impact on the development of cent of the total cost of a direct-use direct-use projects in Huntington Beach. project must be spent just for resource development. There is no guarantee that the well will produce the temperature, r • Fig. 4.2 TABULATION OF PIPING CAPABILITIES AND COST AS A FUNCTION OF NOMINAL PIPE SIZE • Pipe Energy Cost of Supply Size Flow Delivered and Returri (inches) ( m) (Btu/hr) Line ($) 4 88.7 2, 750, 000 150, 000 6 260 8, 000, 000 200, 000 8 554 17, 000, 000 250, 000 10 1006 31, 000, 000 300,000 Figures reflect installed costs of pipeline for a distance of 3, 500 feet. Contingency, • permit, engineering and other fees are not included. Source: Oregon Institute of Technology 27 f flow rate, or water quality necessary for - Small businesses may deduct up to the planned application. Thus, resource $10,000 for investments in geothermal confirmation and development is usually equipment and systems under provisions the major expense and greatest risk of of the Economic Recovery Tax Act of geothermal utilization. It is therefore a 1981. Deductions must be taken in the major economic advantage that these risks year of purchase, and are not applicable and expenses need not be incurred to to any equipment for which an develop the geothermal resources in investment tax credit has already been Huntington Beach. claimed. 4.2, Financing Direct-Use Projects - A significant Federal residential energy tax credit is available for the Tax credits, economic incentives, and installation of geothermal systems in il changes in government regulations homes that are principal places of pertaining to geothermal development are residence for the owner. The credit is important considerations to take into applicable to the labor, material, and account when looking at the financing of installation costs of a geothermal direct-use applications. This section system, and amounts to 40 per cent of provides an overview of some State and eligible cost on the first $10,000 (for a Federal financial incentives available for maximum credit of $4,000). This credit geothermal projects. Specific financing is structured to allow the developer of a will, of course, have to be formulated on a residential project that utilizes project-specific basis. geothermal to take the credit for each home constructed or to pass it on to the Tax Credits individual home buyer. The geothermal equipment used must be new, and meet - Federal law allows a taxpayer to claim a certain performance and quality 10 per cent credit for qualified property standards. Further, the system must be . acquired and/or installed during the tax expected to remain in operation for at year. Qualified property includes least five years. tangible property (excluding a building or its components) used as an integral part Tax Incentives of electrical energy, gas, water, or sewage disposal systems. Heat exchange - Both State and Federal laws make • equipment and pipeline systems for use provision for depreciation deductions in a geothermal application would which allow a taxpaYer. to deduct from qualify for this 10 per cent investment gross income an amount reflecting the tax credit. Any unused portion of the depreciation of geothermal property. tax credit may be carried back three The Federal program allows for years or carried forward seven years. accelerated depreciation. The Windfall Profits Tax Act of 1980 - Under the Energy Tax Act of 1978, u provides an additional 15 per cent Federal law permits a taxpayer to claim Federal energy investment tax credit for a depletion allowance on a geothermal certain alternative energy systems, resource. . In order to qualify for the including equipment to produce, allowance, a taxpayer must be the owner distribute, or use geothermal energy. To of an economic interest in the qualify, the geothermal resource must be geothermal resource. Oil companies at least 1220F at the wellhead, and supplying heat from co-produced water the equipment must be designed, in and would qualify for this depletion of itself, to use geothermal energy. allowance. State law also makes (Legislation is pending that would provision for a depletion allowance to be eliminate the minimum temperature deducted from gross income generated stipulation.) This 15 per cent tax credit from geothermal property. will be in effect through December 31, 1985. �g Accelerated amortization for alternative features and devices be used in all new energy equipment is possible under. the residential buildings (excluding hotels and California Revenue and Taxation Code, buildings with four or more habitable which was amended in 1980 to allow all stories). These standards, however, do not • or' part of the cost of such equipment to . apply to buildings in which all energy for be depreciated over a shorter period of space and water heating is provided by time. Any business that has installed nondepletable resources. Thus, homes alternative energy equipment, including served by a geothermal space and water a geothermal system, is eligible to heating system are exempt from Title 24 amortize all or part of the investment regulations. For many .developers, this will 41 over an accelerated period of 12 or 60 likely prove to be a powerful incentive, as' months. the Title 24 regulations are lengthyt C complex, and can affect the design of 'As a further note, the supplier of homes. The developer of the oil-related hot water may realize an Seacliff-Phase IV homes adjacent to additional tax benefit. There does not Aminoil's Main Lease estimates the added • appear to be a State tax on co-produced cost of Title 24 compliance at between hot water, nor are any municipal severance $6,000 and $15,000 per unit. or production taxes on hot water known to be in effect. (The City of Huntington Tax-exempt Revenue Bonds and Beach does levy a per barrel tax on oil Low-Interest Loans produced.) The only taxes that appear to be _ in effect are Federal and State The California Alternative Energy Source corporate and personal income taxes and Financing Authority provides tax-exempt County property taxes. revenue bond financing for projects designed to produce energy from Public Utilities Regulations alternative sources, such as geothermal. The Authority may issue up to $200 million • In 1982, Assembly Bill 2785 (Kapiloff) in bonds, for which interest is exempt from exempted from the definition of "public State taxation. Private. corporations .and utility" corporations or persons engaged companies are eligible. for this program; directly or indirectly in "developing, projects are selected on -the basis of i producing, transmitting, distributing, technical feasibility, economic soundness, delivering or selling heat derived from and the contribution that the project can geothermal resources to any publicly or make to reducing the use of fossil fuels. It privately owned utility or to the public". should be noted, though, that projects Geothermal heat suppliers are specifically financed with tax-exempt bonds are not i excluded from Public Utilities Commission eligible for the tax credits previously noted. (PUC) jurisdiction, and thus exempted from PUC rate regulation, market entry control, A low-interest loan program is also • and securities approval. This exemption administered- by the :Alternative Energy was provided to avoid creating Source Financing Authority. A consortium disincentives for developers or investors in of commercial banks bought tax-exempt geothermal direct-use projects. revenue bonds to create a pool of low-interest (10%-11%) loan money for Title 24 Residential Conservation Standards long term (10-20 year) loans. The only criterion is that the applicant be the The California Energy Commission geothermal project developer. recently formulated new residential building standards, Title 24, to be enforced In general, mitigating risk is of paramount i through the local building permit process. importance in financing direct-use The standards establish "energy budgets" systems. The final costs to the user for space conditioning and water heating reflect the amelioration of risk factors, and stipulate that certain mandatory I • 29 • and the degree to which this can be done Huntington Beach cannot predict the affects the outlook for an economically ultimate life of their operations with viable project. Risk reduction, particularly certainty. Aminoil, for example, employs in district heating projects, is often a number of enhanced recovery techniques ;• accomplished by government in its operations and is testing several pilot participation. State and Federal grant methods.* It estimates at least 25 more funding may be available for this purpose, years of productive operation in and municipal participation is often Huntington Beach. The long term viability attractive. Following additional feasibility of the Huntington Beach , oil field, in studies, the City may well find that using production since the 1920's,_ is indicated by S redevelopment funds, for example, to the fact that there is sufficient remaining finance creation of a geothermal utility oil to attract new operators like American district in the downtown/townlot area Petrofina and Xtra Energy. These would eliminate impediments to companies plan large-scale projects geothermal use and result in an economic utilizing waterflood techniques, steam district heating project. Although there injection, and. possibly carbon dioxide • are many ways for the private sector to injection. It is very likely, therefore, that ` finance a direct-use system, it may be that major oil operators in the City -- the because direct-use technology is still often largest producers of hot . water -- will incorrectly perceived as being less proven, continue their operations past the year a publicly-funded initial "demonstration" 2000. project could pave the way for additional • privately financed geothermal projects in When oil operations do reach the point of Huntington Beach. abandonment due to depleted oil reserves, it may be possible to -retain some of the 4.3 Other Considerations wells for the sole purpose of hot water production. In other words, as production The use of oil-related hot water engenders of oil is phased out, production of hot some unique considerations. These include water would be continued. The success of legal issues and agreements, expected life conversion to hot water .production would of the oil field, supply disruptions, resource depend on economics. The value of the pricing, and mitigation of adverse impacts. heat must outweigh the cost of producing it. This is an option, though, that warrants Generally, ownership of geothermal analysis in the future. resources vests with the owner of the subsurface mineral estate. Before heat is It is desirable to provide back-up systems extracted from an oil field and used for for temperature peaking and protection geothermal applications, however, against hot water supply disruptions, as ownership of the heat should be verified. well as for possible phase-out of oil In some cases, oil operators may possess operations in the future. A conventional only the rights to extraction of petroleum back-up system may also decrease C and hydrocarbon substances. reticence on the part of oil operators or developers to supply heat for or utilize a The life expectancy of direct-use systems direct-use system. For ,example, the likely using co-produced water will be strongly back-up for a geothermal space and hot • tied to the life expectancy of the oil water heating system serving the Seacliff operations. The timeline for phase-out of development would be a conventional oil operations is dependent upon economics. Development of new techniques for extracting oil, as well as the price of oil, can greatly extend the * See Huntington Beach Energy. Series ' • economic life of an oil field. For these Report #4, "Enhanced Oil Recovery in reasons, existing oil operators in Huntington Beach". �1 I I furnace and hot water heater in each gas rates; for profit projects, it is 66% of dwelling. Back-up for a district heating gas rates. Over the life of the project, an project could be a central natural gas fired escalation factor tied to rises in fossil fuel boiler. prices is often used. In some cases, a fixed • price for the geothermal energy is Use of geothermal can bring benefits to determined and contractually agreed upon end users in the form of lower utility bills, by the oil operator and the developer or to developers in the form of tax credits, geothermal utility district. marketing value, and regulatory j advantages, and to oil companies in the Adverse impacts from use of oil-related • form of revenue from the sale of heat. hot water in Huntington Beach will be The tremendous amount of heat in the negligible, and certainly less than they water produced by operators such as impacts of the oil operations themselves. ' Aminoil means that there exists the The necessary heat exchange equipment opportunity for significant revenues. The for direct-use systems will not produce price of delivered geothermal energy for noise, air emmissions, or changes in water • direct-use projects averages between quality. The City has worked toward .38¢-.48¢ per therm. (One therm is mitigating the impacts of oil operations in 100,000 Btu.) This rate reflects the fact many ways, and has. developed planning that most direct-use projects tie strategies for decreasing land use conflicts geothermal prices to a percentage of between oil and urban uses. These efforts natural gas costs, with sufficient discounts will only be enhanced by development of to make geothermal attractive. The direct use applications - for co-produced average discounted rate for non-profit water: geothermal projects is 56% of current • i i I There may well be opportunities for the Once complete urban . development has City to enhance geothermal development occurred, there is often no feasible way to opportunities through capital extract the remaining oil, even if more participation. Particularly if the creation effective techniques for doing so are • of a geothermal utility district in the developed in the future. Careful land use downtown redevelopment area to serve a planning can ensure that surface access district heating project is determined to be will be retained for both oil and feasible, City participation through geothermal resources. The City should commitment of redevelopment funds could continue to pursue strategies and policies be warranted. Grant funding obtained by aimed at access preservation. the City from State or Federal agencies could also be used to finance this or other 5.3 Identification and Implementation of demonstration projects by providing Applications start-up capital and/or favorable financing terms for the developer. The City is also in a prime position to focus implementation efforts on those 5.2 Preserving.Access to Oil-Related Hot direct-use applications that are likely to be Water Resources the most successful. With direction from the City, both public and private resources There are a number of parallels between can be used more effectively, and the City the work done by the City in planning for can coordinate geothermal implementation oil, and the work that is necessary for efforts with other planning goals. oil-related geothermal planning. Many of the studies performed by the City in its Too, the City has certain tools at its work with oil will be directly applicable to disposal that can aid formulation of a oil-related hot water resources. Greater geothermal system. For example, in the opportunities for long-term geothermal use creation of a district heating project, the will exist if the City continues its present pipeline distribution system will likely policy of working to preserve surface require acquisition of rights-of-way over a access to oil resources. The City's efforts number of properties. If the property is to date in this regard are of critical privately owned,. the developer may have importance to oil-related geothermal to make an outright purchase of each strip resources, too. Frequently, the value of of land the pipeline will cross. This is land as a site for oil operations is normally too costly for private or public threatened by the value of that same land investors. However, City involvement in for other uses, particularly residential, the creation of the utility district could commercial, and industrial development. facilitate obtainment. of easements or Oil operations may be either severely allow use of eminent domain, if necessary. diminished or abandoned due to the Redevelopment, as has_ been noted, is a encroachment of urban development,which powerful tool that the City can use to often occurs when only a fraction of the oil encourage geothermal projects. in the field has been extracted. This pressure from urban development could For this reason, further consideration also restrict the potential of oil fields as should be given to funding .the `distribution sites of geothermal heat extraction. piping of potential ' downtown district heating projects with redevelopment • The City has already focused on the need monies, or providing. tax-increment to preserve surface access to oil resources, financing for such'projects. and has investigated various regulatory options that can be used to achieve this goal.* If adequate access can be retained * See Huntington Beach Energy Series in developed areas through creation of Report #1, "Preserving Surface Access • consolidated oil islands, the co-produced to Underground Oil Resources in hot water will also continue to be available. Developed Areas". i • ;4 S 1 I 'I 1 • 1 A • 1 I I - i r I { I I { 6:0 Conclusions and Recommendations The following conclusions and - emphasis should be placed on using recommendations for future action are geothermal energy in new drawn from the studies of the City's development or redevelopment in the oil-related geothermal resources City, although retrofit may be performed to date: worthy of consideration in some { instances; Conclusions wherever possible, the City should - hot water produced as a by-product provide economic and/or regulatory of oil operations in Huntington Beach incentives to-encourage development is a currently unutilized resource of of geothermal resources; great magnitude and significant value; the City should monitor existing and - existing and planned oil operations in planned oil operations in the City and Huntington Beach will produce this continue working with oil companies resource for the forseeable future; and developers to explore potential applications for oil-related hot water the nature of this resource and the and strategies for implementation. number and type of potential uses for To date, Aminoil, Chevron, Xtra it in Huntington Beach warrant Energy, and American Petrofina have further technical and economic been approached and all have feasibility analyses and continued expressed a desire to obtain further City partcipation. information about geothermal possibilities; Recommendations -the City should continue working j the City should take an active role in toward Implementation of a j the promotion of geothermal hot demonstration project using heat water utilization here; from Aminoil's operations for the • I 35 i Seacliff residential development Development and use of geothermal energy and/or for a downtown district in Huntington Beach will not only benefit heating project; the City, energy consumers and oil companies, but will in many ways serve as the City should contemplate financial a model for geothermal planning and involvement in the creation of a development in an urban context, and will geothermal utility district to serve thus benefit other jurisdictions where such the downtown area with heat from resources occur in an urban oil field Aminoil, Xtra Energy, and/or environment. American Petrofina, and should apply for a second Geothermal Development Grant from the California Energy Commission to fund a feasibility study of district heating in this area. i i• i I I i APPENDIX A F HOT OIL WELLS IN HUNTINGTON BEACH • Perhaps the most well known of the superheated oil wells in Huntington Beach is the j Segura No. 1. The well was drilled in the late 1940's near the present intersection of Goldenwest Street and Ernest Avenue. Chevron owns the mineral rights in this area to a depth of 5,000 feet. However, a private .operator drilled this well to a total depth of 9,110 feet, unusually deep for an oil well in the Huntington Beach field: Difficulties were encountered in the drilling of this well: the bit blew out at 8,300 feet-and, according to some accounts, the well logging device melted, making precise determination of the ' ultimate bottomhole temperature of the well problematic. Very hot water -and steam were tapped, however, and most accounts place the bottomhole temperature of the well at 4250-5500F and the temperature of the fluids at the surface between • 2600-3100F. The Segura well was analyzed in a 1976 Orange County study*which concluded that it was not economically exploitable for electricity generation because it would be pumped dry in a few months due to the fact that no field capacity is associated with it. Additional • consultation with the California Division of Oil and Gas,suggests-that the source of the j unusually hot water may have been cracks in the deep basement rock related to the Newport-Inglewood fault zone. Division of Oil and Gas geologists theorize that this I cracking is probably an extremely isolated phenomenon because surrounding wells do not exhibit the same temperature anomaly. This, coupled-with-the fact that-the existing -well bore has .been plugged with cement below 500 feet, makes it doubtful that the Segura No. l "hot .spot" could easily be hit again. Current oil operators have not encountered circumstances similar to those of the Segura well, which was .capped in 1947. A .few less well-documented hot wells are reported to have been found in the;City. The 1 McCasden and Beloil wells in downtown Huntington Beach reportedly produced hotter than normal water. However, these are old wells that have been plugged and abandoned and • are located in what are now residential areas of .the City. Old well records tend to be imprecise, making it difficult to ascertain the reliability with which these •wells were reported as "hot", as .well as the volume of water they actually produced. i 1 • * "Geothermal Survey -of Orange County", .Orange County .Environmental Management Agency, 1976. . 1 I f t 37 • APPENDIX B AMINOIL WASTEWATER TREATMENT SYSTEM The following is a simplified description of Aminoil's separation and wastewater treatment system: The raw product extracted from producing wells is a mixture. of oil, gas and water. These • three products- are separated from each other and piped to their respective treatment systems. Because refineries. will not accept crude oil containing more than three per cent water, the co-produced water must be separated-from- the oil. In, the first step of the separation process, raw products from Aminoil's well&flow.into free water knockout tanks ' and are separated by gravity: water sinks to the- bottom, oil floats on top.of the water and gas rises out of the liquids to the top of the tank. Water separated on the free water- knockout tanks is then held in skim tanks, and any .oil that floats to the surface is- skimmed off and returned to the oil: treatment system. The wastewater then goes to a type of recovery tank known as a flotation cell, in which pressurized gases facilitate further separation of oil from the water. Again, residual oil recovered in this step is. returned to-the.oil treatment system. Up to this point, the. separation processes that have- been- described: occur at five separation facilities on Aminoil's Main Lease. The next filtration and cleaning steps, however, comprise the wastewater treatment process, and wastewater from all five separation plants undergoes this process at one location, the- wastewater handling facility. The filter surge tank "polishes" the water by processing it through an . activated-charcoal,type--.material. The water then goes. to: the_-filter• plant which utilizes,a .� centrifugal filter to--remove sedible solids. When these-.-steps are- completed,.the water is clean enough to- be discharged. into the ocean or reinjected. If it is to, be: reinjected, it goes to an injection surge- tank where it is: pressurized. The injection plant- then actually pumps this pressurized water back into the appropriate oil zones through injection wells used exclusively for. this.purpose. • i s9 • OF AMINC LL'S WhI'ER TREATMENT' PROCESS k O a � • a FILTER SURGE TANK FREE VaTER KNOCKOUT TANK • FILTER PLANT OCEAN OUI'FALL cn a, SKIM TANK w INJECPTON SURGE TANK • FI DENF ION CELL • REI�•;TEL I'IO?� INJECTION PLANT n • APPENDIX C CHEVRON WASTEWATER TREATMENT SYSTEM • The following is a simplified description of the separation system employed at Chevron's main facility near the intersection of Goldenwest Street and Garfield Avenue: The raw products extracted from Chevron's producing wells are transported to the separation facility via a central production line or "loop". These produced fluids are first fed into flow splitters as one of the initial steps in the separation process. Like the free water knockout tanks used by Aminoil, oil, water, and gas are separated by gravity in the flow splitters. The wet oil is then heated.in heater treaters to facilitate more complete oil and water separation, and sent to wash tanks where it is further dehydrated. Water that is separated from oil in these two processes flows into a cement lined, open pit called the primary basin in which the water is held for further handling. This water, flowing by • gravity only, eventually reaches the main basin, which is the final open pit in the separation process. Oil which floats to the surface of the primary basin is skimmed off and sent to the first of two open recycling pits, known as Gun Lake. Water separated from oil at Gun Lake is pumped back to the initial.step in the process, the flow splitters. The remaining oil flows into the second recycling pit, the half-circle. Additional water separated at the half-circle is pumped out to join the major flow of water from the • primary basin to the main basin. From the main basin,water to be reinjected is processed through filter tanks. Water to. be discharged in the County sewer, which-comprises. the bulk of the water processed, is held in sewer tanks and-then pumped to the.County sewer trunk line at Goldenwest Street. It should be noted that Chevron's planned improvements .to. its separation system will eliminate the existing open pits. Filtration of wastewater will occur with a WEMCO filter, after which the water will be piped to the County sewer line or reinjected. • • • • 47 SCI LEMAF l RL,PRESENTATION OF, CIII;VF'•)N'S WATER PREATMENI' PROCESS b H WA.SI I DATER FLOW a' TANKS TREATER SPLIT ERS PRIMARY GIJN LAKE HALF-CIRCLE BASIN } Rl=CLING RECYCLING (OIL) PIT (OIL) PIT MAIN SEWER BASIN 'PANICS DISCHARGE TO S +iER • se FTLTL•:R REINJECTION TANKS NOTES 1. See Lienau, Paul J., "Geothermal Heating Analysis Guide", Oregon Institute of Technology Geo-Heat Center, pp. 6-10. 2. See Ryan, Gene P., "Equipment Used in. Direct Heating Projects", Oregon Institute of Technology Geo-Heat Center. 3. Ibid. 4. See Lienau, op. cit., pp. 1-3; Anderson, David N. and John W. Lund, eds., Direct Utilization of Geothermal Energy, Geothermal Resources Council, Chapter 4. 5. See Higbee, Charles V., "Economics of Direct-Use Project Development", Oregon Institute of Technology Geo-Heat Center, pp. 1-3. 6. See Anderson, et. al., op. cit. chapter 5. 7. See Higbee, op. cit., p. 2. • • • • • r 43 BIBLIOGRAPHY Coastal Energy Impact Program Report, Huntinqton Beach Planning Division, 1980. "A Comparison of Geothermal Direct-Use Pricing Terms in Seven Western States", Alex Sifford and Eliot Allen, Eliot Allen and Associates, 1982. "Direct-Use Geothermal Development: Financial Incentives and Tax Credits", Huntington Beach Planning Division, 1983. "Direct-Use Geothermal . Development: Systems and Applications", Huntington Beach Planning Division, 1983. "Direct Use of Geothermal Resources", John W. Lund, Oregon Institute of Technology Geo-Heat Center. Direct Utilization of Geothermal Energy: A Technical Handbook, David !�l. Anderson and John W. Lund, eds., Geothermal Resources Council, 1979. "Direct Utilization Technology, State of the Art", Gene P. Ryan, Oregon Institute of Technology Geo-Heat Center. "The Economics of Direct-Use Geothermal Energy for Process and Space Heating", Charles V. Higbee, Oregon Institute of Technology Geo-Heat Center. "Economics of Direct-Use Project Development", Charles V. Higbee, Oregon Institute of Technology Geo-Heat Center. Enhanced Oil Recovery in Huntington Beach: Huntington Beach Energy Series Report #4, � Huntington Beach Planning.Division, 1981. "Equipment Used in Direct Heat Projects", Gene P. Ryan, Oregon Institute of Technology Geo-Heat Center. Geothermal Data Base for Oil-Related Hot Water Resources in Huntington Beach, • Huntington Beach Planning Division, 1982. "Geothermal Direct-Use", Paul J. Lienau, Oregon Institute of Technology Geo-Heat Center, 1982. "Geothermal District Heating Analysis Guide", Paul J. Lienau, Oregon Institute of Techology Geo-Heat Center. Geothermal Energy Background Report, County of Los Angeles Department of Regional Planning, 1982. Geothermal Energy: Opportunities for California Business, California Energy , Commission, 1981. "Geothermal Energy: Opportunities for California Commerce", Alfred B. Longyear and Justin H. Tierney, Lahontan Alternative Energy Systems, 1982. '1 44 "Geothermal Energy Utilization for the Homeowner", John W. Lund, Oregon Institute of Technology Geo-Heat Center, 1978. A Guide to Financial Assistance for Geothermal Energy, California Energy Commission, . "Optimization of Geothermal Home Heating Systems", G. Gene Culver, Oregon Institute of Technology Geo-Heat Center, 1976. Preserving Surface Access to Underground Oil Resources in Developed Areas: Huntington 5each Energy Series Report j, Huntington Beach Planning Division, 1981. "Pricing ►7irect-Use Geothermal Energy", Charles V. Higbee, Oregon Institute of Technology Geo-Heat Center, 1980. • Rules of Thumb for Geothermal Direct Applications, U.S. Department of Energy, 1978. • 45 r • DEPARTMENT OF DEVELOPMENT SERVICES Planning Division Glen K. Godfrey, Deputy Director 0 Project Director and Principal Author H. Diane Border, Planner Special Assistance Jeanine Frank, Planner • Michael Smith, California Energy Commission Jeffrey Wiegand, Alternative Energy, Inc. Aminoil USA Chevron USA Word Processing • Patti Schwartz, Word Processing Coordinator Deborah Pledger, Word Processing Senior Deborah Simons, Word Processing Senior Graphics H. Diane Border, Planner CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF DEVELOPMENT SERVICES � BUILDING DIVISION (7141 536-5241 PLANNING DIVISION(714) 536.5271 • • • APPENDIX B • • • • • HUNTINGTON BEACH HIGH SCHOOL (CHEVRON TO HIGH SCHOOL - 3300' DISTRIBUTION) • DESIGN 1: 17 GPM [al 1160F supply (no return) delivers usable heat of 6816 BTU/hr as the 10% makeup water for the low pressure steam boiler. • VALUE: (At Southern California Gas Co. Rate GN-32): Assume steam boiler efficiency = 75% 6816 BTU/Hr. = Fuel in (therms) X .75 • .09 Therms/Hr. = Fuel in [al $0.56776/Therm = $0.05/Hr = $438/Yr NOT SUFFICIENT TO MAKE INVESTMENT DESIGN 2: 91 GPM [ 1160F supply and 850E return (90oF from system and 68OF from makeup) delivers usable heat of 1,414,5000 BTU/Hr. Requires High School conversion from steam to hot water. Boiler at oil company or at High School boosts temperature of water from 1160E to 1500F. • VALUE: (Same Assumptions As Design 1 Above) 1,414,5000 BTU/Hr. = Fuel in (therms) X .75 18.9 Therms/Hr. = Fuel in Qa $0.56776/Therms`= $10.73/Hr. = $93,995/Yr. Less fuel cost to raise 91 GPM from 1160E to 150OF for use on Campus: 91GPM X 8.34#/gal. X 60 min./hr X 1.0 X (150oF-1160F) = 1,547,238 BTU/Hr 1,548,238 divided by 100,000 BTU/Th X $0.56776/Th = $8.79/Hr = $77,000 Yr. Net Value: ($93,995 - 77,000) $16,995 NOT SUFFICIENT TO MAKE INVESTMENT • • Ex/sr. ST��KyE • NEW (rYP. ) CNECK \ VALVE t- - - - - - � - -- - - -- ro SEWE/? HEAr PUMP EXCN. 1 //8 F rr NEAT EKCH. TQ /GH$GHoOL BOILER' FROM PUMP 16H Scbao 200 apm (MAX) 9/ GPM (AVER) C1 Y PUMP NEW /rEms Ex IS r. ITEMS A INiwth-ColttM Cow4wV • • • • APPENDIX C • • i SEA CLIFF "B" (AMINOIL TO SEA CLIFF - 2000' DISTRIBUTION). • DESIGN: 51 GPM [ 1360F" supply and 820F return (870F from system and 68OF from makeup) delivers usable heat of 1,384,5B9 BTU/Hr. VALUE: (At Southern California Gas.Company Rate R-13): Assume furnace and water heater efficiency = 7.5% 1,384,589 BTU/Hr = Fuel in (therms) X .75 18.5 Therms/Hr. = Fuel in Lla$0.6345/Therm= $11.74/Hr. = $102,827/Yr potential revenue i SIMPLE PAYBACK: (Not.Including Maintenance & Operation.Costs): Investment divided by Potential Revenue =Simple Payback (yrs.) $374,677 divided by 102,827/Yr.. = 3.64 yrs.. i • INVESTMENT SEA CLIFF Oil Company Skid (Aminoil) 3 Pumps . . . . . . . . . .. ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,800 2 Heat Exchangers . . . . .. . . . . . .. .. .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 16,700 1 Hot Water Boiler (Stand-by) 5000 M BTU.. . . . . . . . . . . . . . . . . . . . . . . . . 32,000 As Required: Piping, Controls & Valves . . . . . . . . . . . . .. . . . . . . . . . . . . . . 20,500 As Required: Site Preparation (Foundations, City Water, Electricity, Gas, Sewer, Etc. . . . . . . . . . . . . . .. . . . . . . . .. . . . . . 36,400 As Required: Insulation, Cleaning, Painting, Etc. . . . . .. . . . . . . . . . . . . . . . 4,600 1 Electrical Contractor . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 71800 1 Mechanical Contractor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000 SUBTOTAL $131,400 Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .. . 16,000 • Contingency Qa 15% .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 19,710 TOTAL W/O LAND COSTS $167,110 DISTRIBUTION: • 6 inch Asbestos - Cement Pipe (Supply & Return) W/1" insulation (see H.B. Fig.) ... ..... .. . . .. . .. .. . .. .. . . . .. . . .. $ 148,500 Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 34,000 Continency Qa 15% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 25,067 TOTAL W/O HOOKUPS & PERMITS $207,567 f GRAND TOTAL $347,677 i �t I i S:TORACa_E: :.: • rA"K NE_W / (TYP) C.HGK VA--f VET, ro aC A 'T /,f0 F -1-- 4000000, i T � HEAr, -� PUMP EX C fa J 'Oo./ r. rr' ti AIEA,r /36°F EXCH. TO HOME ' SrANDB_ PUMP FROM. . /O E5 150 6RIV (MAX 5/ GPM (A veR) CtrY • WA rER PUMP NEW rEMS" — Ex Sr.� /rEMs O/Z C0141W) INVESTMENT SEA CLIFF 'St- PER DWELLING COST Control Valving .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,067 Heat Exchanger 50,000 BTU/Hr.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .: 252 • Controller with sensor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Street Connection to Dwelling .. . ... . .. . . . . . .. . . . . . . . . . . . . . . . .. . . . . . . . . . 218 Valves, Vents, Drains, Copper union, air purge, pipe. . . . . . . . . . . . . : . . . . . . . . . . $2,067 Duct Coil . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 �e Insulation . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 A. Mechanical (from street) . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912 B. Electrical .. . ... ... . . . . .... . . . . . .... . . . . . . . . ..... .. . .. . . . . . . . .. . . 1.75 • SUBTOTAL $4,431 Engineering (per dwelling allocations) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 Contingency Qa 10% . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 TOTAL W/O METER. . . . . . . $5,131 Meter 3/4" $650/Dwelling (Not.included in estimate) • AIR DUC r y 4 ` ouc T COIL 4 FURNACE CONTROL MODULE P . CITY WATE TO SUPPLY F/XTClRES i NOT WATL� SUPPLY NOT WATER RErIlR�/ CONVENr/ONAL WATER HEATER FOR BACK UP 14EA r • � V A R"Swch-C MH COMPOW i ! . i ! APPENDIX D • i i • 1 i •. • i 2 I , i . i •. i i i • a DOWNTOWN REDEVELOPMENT . (Aminoil To Palm Court 8000' .Distribution) DESIGN: • 1371 GPM 1360F supply and 820E return (870F from system and 68OF from makeup) delivers usuable heat of 36,678,614 BTU/Hr. VALUE: (At Southern-California Gas Co. Rate GN-2): - Assume hot water boiler and water heater efficiency = 75% 36,678, 614 BTU/Hr + Fuel in (therms x .75 489 Therms/Hr = Fuel in @ $0.62156/Therm = $304/Hr. _ $2,663,040/yr. Maximum value x use factor = potential revenue: $2,663,040 x .40 = $1,065,216/Yr. SIMPLE PAYBACK: (Not including maintenance and operation costs) Investment divided by potential revenue = Simple payback (yrs) S $2,801,731 divided by $1,065,216/ Yr = 2.64 Yrs. • • * The delivery system is sized to transport more heat than the project requires. It is estimated that an average of 40% of total available heat will be used by the project. • (1517d) • INVESTMENT DOWNTOWN REDEVELOPMENT • Oil Company Skid (Aminoil): a 9 Pumps (3 systems X 3 each) .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,400 2 Heat Exchangers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,714 1 Hot Water Boiler (Stand-by) 50,000 M BTU .. . . . . . . . . . . . . . . . . . . . . . 320,000 As Required: Piping, Controls, Valves, Tanks, Etc. . . . . . . . . . . . . . . . . . 205,000 As Required: Site Preparation (Grading, Foundations, City Water, Electricity, Gas, Sewer, Etc. . . . . . . .. . . . . . . . . . . . ... . . . 364,000 i As Required: Insulation, Cleaning, Painting, Etc. . . . . . . . . . . . . . . . . . . . 146,000 • 1 Electrical Contractor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137,000 i 1 Mechanical Contractor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201,000 i SUBTOTAL $1,532,114 • Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,000 Contingency (a115% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229,817 TOTAL W/O LAND COSTS $1,914,931 i Distribution: 10 Inch Asbestos - Cement Pipe (Supply & Return) W/2" Insulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . $ 672,000 Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 120,000 Contingency Qa 15% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,800 TOTAL W/O HOOKUPS & PERMITS $ 892,800 GRAND TOTAL $2,807,731 J i i • i • i i • i i - STORA46 • TA`Al NEW C ECK VA 1!E ac- A 140-OF /,000, -� s PUMP: EXCN 1 /3S F :rr NEAT l36°F E�XCH. =-7- N • r SrANoe. . FROAl PUMP .DPWNTOWN. /3-7/ GPM C ,rr WA M PUMP -- NEW- MEW i COOL/N!a IyEAnAtrq COIL COIL 00 FA A! 01 COIL DUCT AIR 0, unlit COAT IROL MODULE PUM s PUMP YSUPPLY F/KTURES !36°F MOT WE NEA r EXCIN Nor wArE REMRN • I 1NSULArEO CONVENTIONAL STORA4E WAMR NEATEN?. TANK FOR 8AC K UP FOSS/8LE"� I 14EA T AD DI noN i i i� CHILLER COOL I NO TOWER p(1MP • PATIENT CARE CENTZR 1WRA1V6Z_ 1FNT V A MiMnch-CottneN Compriy • i • � f i • APPENDIX E i i ' t t i 1 i t SEA CLIFF DWELLING LETTER OF INTENT This letter of Intent between the City of Huntington Beach and ., serves to confirm the commitment both parties are making to proceed with finalizing a project and financial program and eventually enter into an i agreement by which will design, construct, own, operate and maintain a geothermal hot-water facility and distribution system to serve needs of the City. Upon acceptance of this letter and its outside consultants, including , will prepare a detailed final proposal for the City to construct and operate a geothermal hot water plant sufficient in size to service the selected future needs of the City. Using PRIVATIZATION as a means to finance this • project the ownership of the facility and distribution system will be by and/or The final proposal will be based upon the preliminary proposal submitted ' c by , dated , and confirmation and/or resolution of all technical, financial and legal assumptions identified in the preliminary proposal and related issues and concerns not specifically identified in the preliminary proposal. The proposal will.include a-draft agreement between the parties including details of a • service agreement and a provision granting the City an option to purchase after the bonds have been retired. Despite these uncertainties, Huntington Beach agrees to provide the following resources: 1. Designate a project manager to work with i .and represent Huntington Beach in developing the information necessary to complete the proposal. 2. Work with to refine and substantiate_the technical and financial assumptions upon which the proposal will be based. 3. Select legal counsel to assist Huntington Beach in working with to resolve various municipal ordinances, permitting i • procurement and other legal issues. Provided these resources are made available by Huntington Beach agrees to submit a final proposal for a privatization project with an equivalent dwelling unit fee of between $35-$50 per month by In the event the final proposal is not submitted by , this letter of intent shall be of no force nor effect unless both parties extend the due date. • The unit fee range proposal of $35-$50 shall include within it: a) An alternative, whereby any existing water and/or sewer line assessments, that is, any properties currently paying water and/or sewer assessments, or any properties not currently assessed will have those charges assimilated within the maximum $50.00 charge; and b) All costs of the City reasonably incurred in the entire project including, but not limited to, all staff time, attorneys' (including the City Attorney) and consultants' • fees and costs. i Futher, the $50.00 maximum shall be guaranteed for the first three (3) years of operation. Thereafter, an annual increase above the maximum will be permitted in order to reflect actual increases in operation and maintenance. The formula for • determining this will be left to later agreement, but in any event it shall not exceed 8% i per annum under any circumstances for the fourth and fifth years. In the event feasibility studies disclose that the project can be completed within the parameters of this letter, but nonetheless one of the parties elects not to proceed, then the party not electing to proceed shall bear the other's costs and expenses hereinafter incurred in the amount of the actual expenses but not exceeding the sum of $50,000.00. In the event the project is not feasible within the terms of this proposal, then each side shall bear its own costs and expenses. This proposal will be based upon existing or presently proposed tax legislation in the Dole and Pickle bill. l IN WITNESS WHERE OF, the parties have executed this Letter of Intent this day of , 1985. CITY OF HUNTINGTON BEACH i BY: Mayor i ATTEST: 1 BY: City Clerk i i I I • i APPENDIX F I • I i I • I FEATURES & .SPECIFICAT ION THE CLUB SERIES Decorator selected light fixtures. General Electric down-draft hoodless cooktop Central gas forced air heating with cronotherm with convertible grille/griddle and The Grounds and.Exteriors thermostat to minimize energy use.Heater interchangeable cooking surfaces. Two large custom pools and spas. and all ducts fully prepared for air General Electric black glass,self-cleaning oven Fully equipped large clubhouse. conditioning. and General Electric microwave oven Private community with guarded gates for your Laundry/utility rooms can utilize either electric General Electric pot scrubber dishwasher with security and safety, or gas dryers. wood front Lush landscaped community entry,streets and Laundry chutes when washer and dryer located General Electric top of the line trash compactor on first floor. with wood front parks all maintained by the Community Association. Engineered insulation in exterior walls and General Electric continuous-feed waste disposer. Near 18-hole championship golf course with ceilings for maximum sound reduction and Cast iron kitchen sink. newly refurbished and enlarged clubhouse.* energy efficiency,which complies with and/or Water line installed for refrigerator icemaker. Near tennis club with new clubhouse,resurfacedexceeds standards established by the State of Wide choice of elegant vinyl floors from courts,new fencing and lighting.* California in the City of Huntington Beach. Armstrong,Congoleum or Mannington Concrete drives and walks for appearance and All homes are wired for security systems. longevity. All homes are pre-wired for cable T.V. Bedrooms and Baths Oversized two-car garage with automatic door Smoke detectors. Large walk-in closet in master suite. Large 75-gallon energy saving water heater. Woodburning fireplace in master suite openers,covered walls and ceilings with direct access to home. Wet bars with corion tops. (in some designs). Elevations feature Mediterranean architecture _ Wood trimmed ceilings in kitchens and baths. Full 1/4 polished plate glass mirror over with file roofs. Built-in AM-FM music and intercom system. pullman Private deck and patio(may vary in size, Large oversize closets and storage space. Tempered glass shower enclosures for safety. Hydrobath 6-jet spa tub in addition to oversized material and location with exterior design). Gas line to deck or patio for future BBQ. The Kitchens ceramic tile shower. Private entry to each home. Custom oak cabinets. Pullman cabinet with corion tops. Built-in oak desk. Cast iron ceramic tubs. The Interior Features Ceramic rile counter tops with full splash. Wide choice of elegant vinyl floors from Extra thick wall constructor for sound control Armstrong,Congoleum or Mannington with unique smooth finish. La inviting� with oak,marble or file Please note:Many of the hears featured in the display ��+ g►vr•ers homes are upgnules or decorator suggestions and not floors. included in the purchase price.%resent the right Luxurious.Ca t b Cambra Mills to change floorplans,materials,features and prim. 'FF Y Y If you are in doubt,please contact your sales consultant. One,two or three woodburmng fireplaces with *Membership Information and Futility s derails are gas log lighters and a wide choice of finishes. EA L agile from our Sales xepmaentaticrs. 0" lie KE ENS tn,.n e If /1t'ain r •cw••ro wi'i 8'oo"ar ae•. Lw+Oa \ /damq"" Aditdstratlan ce••• Mltlll-Ptrpoaa Le py�p• CNN ACttvltl �/ j .. /Laa tiarapa / 9. tN.oe reft / PZ Bank I it 27A.8F(Irma Maee 4CeC• wo darga Ave" I j p e O e e ILLUSTRATIVE SITE PLAN LIE . . [J'�� /VWl1V© D O OD IJVU�UUL'�LJ UM M V O ° L`7UV U - • "� 29 A E 1984 PALM COURT PALM COURT PLAZA HUNTINGTON BEACH, CALIFORNIA A BWC/VANDERWOOD MIXED-USE DEVELOPMENT THE DEVELOPMENT PLANNING TEAM Developer: BWC/Vanderwood Company 615 South Flower Street Los Angeles, California 90017 (213) 624-1001 Planners/Architect: Carl McLarand Associates, Inc. 695 Town Center Drive, Suite 300 Costa Mesa, California 92626 (714) 549-2207 Consulting Engineers:. Walden & Associates, Inc. 4005 West Garry Avenue, Suite B Santa Ana, California 92704 (714) 549-8649 PALM COURT PALM COURT PLAZA HUNTINGTON BEACFI.CALIFORNIA A BWGVANDERWOOD MI»DEVELOPMENT STATISTICS Gross Acreage: 6.62 acres Net Acreage. 4.92 acres Adjusted Gross Acreages 5.69 acres District Classifications District 6 Mixed Use Maximum Building Heights 4 Stories Maximum Site Coverages 123,928 sq.ft. Actual Site Coverages 101,060 sq.ft. BWWkg Program Per Concept Plans Retail JRetoil 27,000 sq.it. Retirement Facility dministration 2,500 sq.ft. Kitchen 2,SOD sq.ft. 01n,ng 7,500 sq.ft. Multi-purpose 11,500 sq.ft. Su� 00Totol 24, 0 sq.f1. Health Care Facility(30 Rooms) 13,800 sq.ft. 3-Storey Residential(279 Units) 227.400 sq.ft. Retirement Facility Total 265,200 sq.it. �C 76,950 sq.ft. Private Balconies 35,100 so.ft. Total Open Space 112,050 sq.ft. Units: Studio 30% 84 units One Bedroom60% 162 units Two Bedroom 10% 33 units Total 279 units Parking Required: 27AW sq.ft.Retail(200 sq.11.per ear) 135 spaces 279 Senior Citizen Units @.6/unit(per Code) 167 spaces @.5/unit(per Client) 140 spaces 24,000 sq.it.Admktistratior4Multn-Purpose Assume 25 Employees 2S spaces Health Care Centers 30 Rooms @.S/room IS spaces Maxirrwm Required 342 spaces Minimum Required 3►5 spaces Parking Provkleds Two-Level Parking Structure(adjacent to retail) 164 spaces 66,700 sq.ft. Subterranean Parking Structure (below health tore/administration) 94 spaces 32,400 sq.ft. Surface Parking S8 spaces Total 316 spaces PROJECT TOTALS: Retail 27AM sq.ft. Retirement Facility 265,200 sq.ft. Garage Structures 99,IOD sq.ft. Grand Total 391,300 sq.ft. NOTE: Chicago Street vacated. No utility easement exists. 1 db. a 4,4 � n u ti • of Mates mads h U.S.A. • f�o P �o M�C�P o i��l��C�P �C�DONIC�P�9 ' • I • p DIr �"VAN mix. Each porthole gasket contains ur bleed passages � �� at a lower elevation than the main gasket which allow PLATE ANUFRAME HEAT EXCHANGER this to be accomplished. How N recovers waste heat HOW IT WOR��■ Heat recovery in pp de range of industrial, commercial � • and institutional applications is one of the heat transfer jobs a SUPERCHANGER unit handles with remarkable efficiency.A typical heat recovery application in a photo- LOW flow counter-currently between plates processing plant is shown in the drawings below. In The flow diagram below illustrates how the hot and cold illustrating the operation both before and after the in- liquids flow between the plates in a SUPERCHANGER stallation of the SUPERCHANGER unit, the drawings plate and frame heat exchanger. Plates supported by an show how the unit recovers heat from the waste hot upper guide bar are held in aframe which is bolted together. water used by the process machines and recycles it Nozzles attached to the end frames al low for entrance and back to the boilers. exit of fluids.A gasket mounted on each plate seals the channel between it and the next plate.The gaskets and portholes in the plates allow the fluids to flow in alternate Before SUPERCHANGER channels. Heat Exchanger • 95°F 50°F Fresh Water WARM LIQUID OUT Supply Inlet - COOL LIQUID IN Boiler Process Machines Drain 95°F COOL LIQUID OUT With SUPERCHANGER WARM LIQUID IN ~ h Heat Exchanger F� • 95°F 50°F The fluids flow through the channels counter-currently and are evenly distributed in each channel.As the liquids Boiler Fresh Water flow through the channels between the plates, the cold Process Machines Supply Inlet liquid becomes warmer and the hot liquid cooler. Preheated '• No chance of cross-contamination 95°F 90"F Intermixing or cross-contamination of hot and cold liquids is virtually impossible in the SUPERCHANGER SUPERCHANGER plate and frame heat exchanger. One reason for this is Heat Exchanger that the liquid flowing on the surface of each plate flows • on the inside of the boundary gasket.If one of the liquids 50°F should leak beyond a boundary gasket,it will flow to the 10 outside of the unit, thus preventing any possible inter- 55°F Cool Process Liquid I O '� In an installation such as this—typical of heat recovery applications in many different industries which use pro- cess hot water—the SUPERCHANGER plate and frame j heat exchanger normally recovers enough heat to pay for itself through reduced fuel costs in a matter of just a few months. In addition, considerable savings are also • achieved in reduced boiler maintenance which results from the use of preheated boiler feedwater. A further _ MEL benefit from heat recovery applications is the alleviating or eliminating of thermal pollution which the SUPER- CHANGER unit accomplishes by lowering the tempera- ture of the waste liquid going down the drain. HOW IT COMPARES TO SHELL AND TUBE: For many years, the most commonly used type of heat cations.One of the reasons for this is the turbulent flow e exchanger in industrial heat transfer applications has created by the corrugated plate patterns in the plate and been the shell and tube heat exchanger.With the advent frame heat exchanger.As the liquid travels in a channel, of plate and frame heat exchangers for general industrial it makes multiple turns which create eddy currents and use In recent years, however,the swing has been away violent mixing. The more turbulent the flow, the faster from shell and tube—simply because of the many heat is exchanged. With the turbulence created by a. • superior advantages offered by plate and frame typical SUPERCHANGER plate, for instance, the flow exchangers. condition for an aqueous fluid changes from laminar to To name a few: plate and frame heat exchangers require turbulent at a Reynolds number of approximately 200.In much less space, from one-tenth to one-half of the a shell and tube exchanger, the same flow condition is space required by shell and tube.Plate and frame units also ' attained at a Reynolds number in excess of 2,000. provide much greater flexibility, more ease in cleaning, For a side-by-side comparison between plate and frame much less fouling,no interleakage,less weight and gen- and shell and tube exchangers, the charts below show erally less cost. the difference in dimensions and comparative perfor- r Most important, plate and frame heat exchangers do a mance data for two units in similar applications. more efficient job of transferring heat in most appli- i ------------------------------ --------1 �• Space required for tube removal r r ------------------------------------- --r Plate and frame exchangers Typical units designed for the same heat transfer conditions. take as little as one-tenth the space required for shell and ITEM SUPERCHANGER SHELL AND TUBE tube exchangers, particularly when considering the space Surface Area 1000 sq.ft. 3000 sq.11 required for tube removal. Total Length Required 86 157' Width 32' 30 Diameter �• Height 84' 42 Gross Volume 18 ft, 116 ftJ Net Weight 1600 Ibs 6000 lbs. i ITEM SUPERCHANGER SHELL AND TUBE �• Efficiency High - "U value three to five times greater Low i Space Required 10%to 50% Twice as much to pull tube bundle Ease of Disassembly Easy - loosen bolts Complex - Tube bundle must be pulled Costs Less when stainless steel or higher grade of Higher,except in all carbon steel construction material is required Fouling Low due to corrugations and inherent turbulence High due to circular cross-sectioning and channeling • Heal Transfer Surface Plates easily added or subtracted Fixed surface only Weight and Installation Low -no concrete pads required High - concrete pads normally required Intermix Between Fluids Impossible due to gasket design Can mix,both at welds and a1 tube sheet ; I Inspection Disassemble and inspect Difficult - must normally pull tube bundle Chemical Cleaning Excellent due to corrugations/channel — - Satisfactory but must be cautious of dead spots i Maximum Viscosity 30 000 cps Nominal 10.000 cps ! • Pressure Drop_ _ _ Low to Medium _ _ _ _ _ Low Heat Loss - Practically none - no insulation required _ _ _ __Great arnourit - insulation required ` Temperalure Approach Can be designed for a 2'F approach with more than 51 to 10°F minimum approach required 90%heat recovery attainable --------- ------ - -- - --- -------------- -- -------- --... ----------- - ------ Design Siting Computer custom-designed per application Must always oversize to be safe Hold-Up Volume Low Very High Operations Multiple duties possible with connecting plates One unit required for each duty i h • . :, \ F �r, r y t I. i A NEW TOOL. FOR • CUTTING ENERGY COSTS • Low Temperature Absorption Chiller 0 • Absorption Heat Pump • Combination Chiller/Heat Pump L , ' • 871-8140 1 i i 'THE ESHEL LOWaTEMPERATURE ABSORPTION CHILLER i • INTRODUCTION Features and Benefits The ESHEL Low-Temperature Absorption Chiller is an advanced heat-activated cooling machine, origi- UNIQUE LOW TEMPERATURE RANGE nally developed for high performance in refrigera- FOR RESIDUAL HEAT INPUT tion and air-conditioning applications, powered by ESHEL chillers are designed to operate effectively recycled low temperature heat from residual dis- with residual heat input temperatures as low as 140OF charge heat or other sources. (600C), with 100% cooling capacity attained at the Supported by several years of successful field ex- nominal design temperature of 185°F (85°C). Up- perience, its applications now include virtually any graded capacity is attainable at input_temperatures of i industrial process that discharges low-temperature 185-205°F(85-95°C) and 1 igher. residual heat and simultaneously requires refrigera- tion and/or air conditioning. In addition, many com- WATER mercial facilities such as hotels, institutional build- VAPOR ings such as hospitals, and various types of residen- tial structures are also expected to prove technically GENERATOR feasible and economically advantageous. CONDENSER. j A HEAT-ACTIVATED MACHINEWEiiAT � The ESHEL chiller is a heat-activated cooling ( WA machine whose operation is based on principles known and used long before the advent of conven- tional, mechanical compression chillers. (See Fig. 1.) STRONG U&SOLUTION ., Both absorption-cycle and mechanical compres- sion-c cle types operate within the principle of ` r WATER Y ype Pe P P EXCHANGER VAPOR evaporating and recondensing a refrigerant liquid. r— — `: - However, while the mechanical system uses an elec- trically operated compressor to create the pressure ABSORBER differential required to achieve this, the absorption _ _ : EVAPORATOR type uses the heat-activated generator and absorber ,, with solution circulating pump. It consequently has T 1% few moving parts and requires minimal electric COOL l aMUFn WATM power. Dramatically increased costs for electricity PA " ) c�V O~ in recent years, along with increased needs for higher reliability, have spurred renewed interest in the absorption-type chiller. wEAxi - • UBr SOLUTION SOLUTION PUMP REFRIGERANT PUMP (Water) G Fig. 1. ESHEL Absoq bn Chien-parelel flow(sdmnadc). • 1 Icor,r-l. L M1LLtH's unique Features Provide: j * No Moving Parts Except Two Circulating Pumps ❑ Extremely Reliable Purging Prevents Adverse Effects Common in Competitive i Absorption Chillers ❑ Ability to Perform with Heat Source Temperature Appreciably Lower Than in Competitive Machines Substantial Savings in Electricity Requirements and Operating Cost Benefits, Including Peak Shaving, Where Applicable. Emergency Service Capability - Economically Met. i Typical Return on Investment Period: Just 1 to 3 Years ESHEL Low Temperature • i 'COOLING <i HEAT •a • • w� industrial ProCe" •�rnalustria! Process ' � CHILLER rj. Cn tn EVAPORATI Diesel Head Comlort - j • Heat Rejection of`: � Y�� " `'`: • Power 8 Heat Cyo%sue 'R. Cold Storage o I Combustion Heat = Other Uses Cr •• .0 TO Cr I4 Sorne T ypicai Applications .,. CHILLER PERFORMANCE AS FUNCTION CHILLER CAPACITY AS FUNCTION OF HEAT INLET AND COOLING WATER TEMPERATURES OF GENERATOR INLET TEMPERATURE CHILLED WATER LOAD AT 7°C(44,6°F) CHILLED WATER:7°C(44,6°F) COOLING WATER:29°C(85°F) °C °F D 100 212 120* a 120 PJ� 200 �dp°lo Al i a.90 g0010 I 100 JQ i :• F B0 180 SO°ro i 80 y0 �Q �P•0 w 70.160 I �QO �JQ G�JP PPOS I Z 60 O 60 140 i i 40 4`'� �JP O a¢ 50 120 a 20 �P � FPO I I� w 55 60 70 80 90 95 F Ua J j w _ 0 140 �-_ t80 200 212"F 10 15 20 25 30 — 35 C j - — -� —. 100 C COOLING WATER 60 70 80 90 I {{ I GENERATOR INLET TEMPERATURE - ----------- ---- -- — -. _I 1. i j Uti 01fici: SOLCOOR INC. _1 I wti I'm k Avenue NI W YORK N Y Ioo16 j P.O.BOX 30. AZOR 581y0, ISRAEL 1,11 nt 0 I I i b • 6 � a G 1 , 1 I DEPARTMENT OF DEVELOPMENT SERVICES r JAMES W. PALIN, Director GLEN K. GODFREY, Deputy Director of Planning PLANNING DIVISION STAFF MICHAEL ADAMS, Senior Planner �1 FLORENCE WEBB, Senior Planner CHARLES CLARK, Associate Planner • JEANINE A. FRANK, Associate Planner a MICHAEL STRANGE, Associate Planner HOWARD Z. ZELEFSKY, Associate Planner JEFF ABRAMOWITZ, Assistant Planner 4 DIANA BLAISURE, Assistant Planner SCOTT HESS, Assistant Planner • GAYLE O'BRIEN, Assistant Planner SUSAN PIERCE, Assistant Planner HAL SIMMONS, Assistant Planner SERGIO MARTINEZ, Senior Plan Checker a DON SHAW, Land Use Technician BOB FRANKLIN, Planning Aide PAM POSTEN, Planning Aide ROBERT SIGMON, Planning Draftsman • LISA CERAN, Planning Intern • CAROL CUSENZA, Planning Intern • JAN RICHARDS, Administrative Secretary LINDA PITTEROFF, Secretary SHEILA ROGERS, Clerk-Typist Senior SPECIAL ASSISTANCE MICHAEL SMITH, California Energy Commission AMINOIL USA' CHEVRON USA • CONSULTANT ° MICHAEL KLINE, KVB i • • �i V • i • 0 i D N • • CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF DEVELOPMENT SERVICES BUILDING DIVISION(714)536-5241 PLANNING DIVISION(714)536.5271 REQUEb -f FOR CITY COUNCIL: ACTION i - 7a FZ, September 6, 198 qI)1 Date ze Submitted to: Honorable Mayor and City Council Members tiq Submitted by: Paul E. Cook, City Administrator�� Prepared by: James W. Palin, Deputy City,Administrator �fI Subject: ADOPTION OF RESOLUTION NO. O G ANY INCREASE IN OIL OPERATIONS OFFSHO ORANGE COUNTY Consistent with Council Policy? [ ) Yes [ ) New Policy or Exception Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: 'Q STATEMENT OF ISSUE: State Lands Commission is currently holding a series of 13 public hearings along the California Coast Line to solicit input from all interested parties on the California Comprehensive Offshore Resource Study (CCORS). RECOMMENDATION: - Recommend that City Council adopt Resolution No. 1 as a formal position on oil operations in State waters off Huntington Beach. ANALYSIS: The State Lands Commission has requested from interested parties information on a broad range of subjects pertaining to the environment, oil and gas use, and economic resources offshore in State waters and public use of these resources. In reviewing the.City Council's prior actions on Lease Sale 95, it was determined that those prior documents needed to be augmented and modified to pertain to the current hearings being conducted by the State Lands Commission. The attached resolution, for City Council's review and approval, was formulated from a speech that Mr. Palin, Deputy City Administrator, will be presenting at the Santa Monica/Newport segment hearings pertaining to issues that have been extracted from a number of prior documents and resolutions approved by the City Council opposing offshore oil operations. Staff is recommending adoption of this resolution by the City Council, as it will carry more weight with the Coastal Commission in formulating their CCORS for the entire California coastline. 0019 100,P, PI O 5/85 RCA Page 2 Although this will not be adopted for presentation to the Commission at the August 31, 1988 meeting, they do not conclude their series of 13 meetings until September 15, 1988 in Sacramento. Therefore, the resolution can be forwarded by mail to the Commission for consideration prior to concluding their final hearing. FUNDING SOURCE: None required. ALTERNATIVE ACTION: To not adopt the resolution and only use oral public testimony at the August 31, 1988 hearing. ATTACHMENTS: 1. Resolution No. �1 7 2. California Comprehensive Offshore Resource Study 3. Flier by The California State Lands Commission JWP:lp (3397h) RESOLUTION NO. 5917 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH OPPOSING ANY INCREASE IN OIL OPERATION OR NUMBER OF OIL PLATFORMS OFFSHORE ORANGE COUNTY BETWEEN COASTLINE AND CATALINA ISLAND WHEREAS, the State Lands Commission is holding public meetings to receive comments on the California Comprehensive Offshore Resource Study ( "CCORS" ) ; and The purpose of the CCORS is to develop a broader understanding of the State 's coastal environment, energy needs and sources , and the relationship a particular coastal project may have to the needs and resources of the State as a whole; and The Orange County Coastline serves the recreational needs of Southern California providing facilities for sport fishing, boating , surfing, swimming , scuba diving, hiking , walking, picnicking, and camping; and The 'Orange County coastline is an economic resource of utmost importance _to -coastal -cities in that the tourist economy of coastal cities is heavily dependent upon tax proceeds, business opportunities, and jobs created by hotels, restaurants , retail shops and. other tourist dependent commercial ventures; and Coastal dependent tourism is a mainstay of the local economy in communities adjacent to the State Offshore Oil Operation area which is likely to adversely impact 1 _ 5917 socioeconomic conditions in both coastal and inland r. communities; and L ! It is in the State 's interest to insure the quality of the coastal environment by protecting against the hazards related to all exploration such as contamination by drilling muds, damage from oil spills , seepage from drilling operations and leaks during transport of oil; and Offshore oil drilling will require the increased utilization and expansion of existing onshore petroleum processing and transportation facilities which would increase air pollution and traffic congestion, adversely impact municipal services, and further impact an existing fresh water shortage; and Two energy-related facilities are currently operating in Huntington Beach which contribute heavily to air pollution in Orange County; and The City of Huntington Beach has already accepted its fair share of the responsibility and risks associated with the provision of the nation 's energy needs, particularly- in communities which are highly dependent upon tourism for their economic livelihood; and The City of Huntington Beach relies to a significant degree on a coastal dePendent economic base which requires a clean and healthy marine environment; and The Huntington Beach area includes sensitive ecological systems such as the Santa Ana River mouth, Huntington Beach Wetlands , Huntington State Beach Least Tern Natural Preserve, _ 2 _ 5917 and the Bolsa Chica Wetlands and Ecological Reserve which provide critical resources for migratory birds and endangered species; and Tidal flushing will soon be restored to seventeen acres of the Huntington Beach Wetlands and is expected to be restored to portions of the Bolsa Chica in the future, thereby increasing the potential for damage to critical ecological resources should an oil spill reach the shoreline; and The eight and one-half miles of beaches within Huntington Beach City limits provide a major portion of public beach use opportunities for Southern California with an estimated twelve million visitors per year; and The protection of our State ' s national and scenic resources require the preservation of marine life, careful ` management of energy resources and the retention of coastal views; and There are long term benefits in preserving and protecting the coastline ' s original character for future generations by pursuing alternatives to offshore oil exploration including -conservation and renewable energy resources which would be less damaging to the environment and economy of Orange County. NOW, THEREFORE , be it resolved that the City Council of the City of Huntington Beach vigorously opposes any additional oil operation in State waters offshore Huntington Beach . FURTHER RESOLVED, that the City of Huntington Beach has repeatedly opposed efforts to allow additional oil operation off Orange County shoreline because of adverse environmental and economic impacts to our community. _ 3 _ 5917 F PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 6th day of September . , 1968 . N,a o r• - ATTEST: APPROVED AS TO FORM: A City Clerk City Attorney d-ZS�a REVIEWED AND APPROVED: INITIATED AND APPROVED: � d City Administrator e ty City Administrator be 5917 4 - Remo No. 5917 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly appointed, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 6th day of September 19 88 by the following vote: AYES: Councilmembers: Kelly, Green, Erskine, Mays, Winchell NOES: Councilmembers: Bannister ABSENT: Councilmembers: Finley City Clerk and ex-officioWlerk of the City Council of the City of Huntington Beach, California 5917 CALIFORNIA COMPREHENSIVE OFFSHORE RESOURCE STUDY STATEMENT OF PURPOSE AND GOALS THE PURPOSE OF THE STUDY: The purpose of the California Comprehensive Offshore Resource Study (CCORS) is to develop a broader understanding of the State 's coastal environment, energy needs and sources, ana the relationship a particular coastal project may have to the needs and resources of the State as a whole. Prov�}l,..ions in law, the nature of the environmental review process, a'SP'id the complexity of the issues placed before the Commissi'gn- can put certain constraints on the Commission ' s ability Eo make informed decisions about specific projects. In light of these constraints, the Commission has expressed a desire to have the ability to supplement its regular reviews process. CCORS is intended to provide the kind of broad-base' information needed for the Commission to determine if a particular offshore project is in the best interests of the State. WHO WILL USE THE STUDY : The primary users for the study will be the members of the California State Lands Commission. The study may also be useful to members of the California Legislature, members of Congress, Federal, State and local agencies, environmental groups, industries, citizen groups and others interested iii coastal resource management, especially those who are concerned about an item before the Commission. STUDY GOALS: In order to fulfill the purpose of the CCORS study, the following goals have been set : 1 . The study will initiate the Commission ' s involvement in a coordinated interagency program to develop -; computerized information system comprised of :in inventory of the ecological, social and economic resources along the California coast, both onshore and offshore. However, the full implementation of this program is not expected to be completed within the study' s timeframe; -2- 2 . The study will, however, report on resources ( i .e . , what, where, sensitivity, etc. ) which could affect, or be affected by, development along the California coast, based on existing information. An emphasis will be placed on priority resources ( e .g . , air quality, sea birds, fisheries, etc. ) . This information will be presented in a concise and useful format , comparing the effects of existing , proposed and possible development activities in both State and Federal waters along the entire coastline; 3 . The study will identify existing and potential conflicts among competing users of coastal resources; 4 . The study will identify gaps in existing information and recommend specific studies and research projects which would fill those gaps; 5. The study will inventory existing environmental literature on the California/OCS region; 6 . The study will provide an overview of the State ' s energy needs and supplies and their relationship to the national and world energy picture; 7 . The study will discuss oil and gas production, transportation, refining, processing, and marketing as well as alternative energy resources; 8 . The study will address the decision-making and regulatory processes and suggest ways to improve how the Commission works with local government, concerned citizens and organizations, industries, the Federal government and other agencies within State government in formulating its decisions; 9. The study will present the range of expert opinions on technical issues; and 10 . The study will examine the assumptions and techniques that are used in the major models and projections for impact analysis and identify their strengths and weaknesses . The study will not cover information usually provided in a cumulative impact analysis as defined in Section 15355 of t:he State CEQA guidelines, nor will the study replace an Environmental Impact Report as required by the law. -3- In addition, based upon limits currently imposed on the CCORS study by time, finances, and legal constraints, the stu(;1 will not make predictions about where development will or will not take place and will not include original research projects initiated as a part of the. study. 23805 OREGON DEL Crescent City NORTE t1 tl i CALIFORNIA COMPREHENSIVE OFFSHORE HUMBOLDT 1 RESOURCE STUDY EDra". H11A60LDT COASTAL SEGMENT MAP* 1 I I 1 I f MENDOCMO f Ft.Bragg r MENDOCINO/SONOMA { t �r r u \ N SONOAM NAPA 1 �-� Sa0arf6f1I0 t � I ` ' I SOUND MAR:14 Plesburg Comm WSTA l SAN FRANCLSDO Sall Franceoo `. ALAMEDA -� SAN MATEO SANTA D � SAN FRANCISCO BAY CURA LA �i Monterey �\ CENTRAL COAST MDN EREr`� SAN LUG OBISPO A PACIFIC OCEAN �' ~ , SAWA BARBARA - ----- I \ � 1 VENRIRA \\ LOSANGELES 1 Santa Barbara \ I SANTA MARIA BASIN Lorg Beadl/San Pedro j ORANGE L 1 SANTA BARBARA SANTA MONICA/ Newport — CHANNEL o Beach SAN 01EGO NEWPORT � , Sari o. Segment No. Segment Name Segment Description•• SAN DIEGO 1. Humboldt Oregon Border to Cape Mendocino, MEXICO Humboldt County 2. Mendocino/Sonoma Cape Mendocino to Bodega Headlands,Sonoma County 3. San Francisco Bay San Francisco Bay 4. Central Coast Bodega Headlands to Point Estero, San Luis Obispo County 5. Santa Maria Basin Pt. Estero to Pt.Conception,Santa Barbara County 6. Santa Barbara Channel Pt.Conception to Pt.Dume,Ventura County 7. Santa Monica/Newport Pt. Dume to Newport Bay,Orange County 8. San Diego Newport Day to International Boundary Includes State Tidelands anal ine Fecerai t)CS "•These indicate base segwzns for analyvis. Discussion of specific issues may extend beyond the borders of a particular segment where necessary. The California State Lands Commission iI 11® �v THE COMMISSION THE LAND �o-ovo e'o"Oo o•- The State Controller, the Lieutenant Governor,and At statehood, California acquired nearly 4 million the State Director of Finance, serve as ex-officio acres of sovereign land underlying the State's members of the State Lands Commission. The first navigable waterways. it included the beds of more two are elected officials while the last is a cabinet than 30 navigable rivers such as the Sacramento level officer appointed by the Governor. Monthly and the Klamath. nearly 40 navigable lakes, meetings are held, usually on the last Thursday of including Lake Tahoe and Clear Lake, and the 3 each month.The meetings are open to the public. mile wide strip of tide and submerged land adjacent Any party that wishes to place an item on the to the coast and offshore islands of the State. This Commission's calendar should contacHhe watery domain, equal in size to Connecticut and Executive Office of the Commission's staff at least - Delaware combined, is managed by the California three weeks in advance. State Lands Commission. The Commission is assisted by a staff of more than Shortly after becoming a State.California also two hundred and fifty specialists in mineral received a grant of 2•square miles out of each 36 resources. land management, boundary square miles held by the Federal Government. determination, petroleum engineering and natural These lands were given to the State to support science. The staff is supervised by an Executive public education. At one time the State owned more Officer who is appointed by the Commission. ?hat, 5 million acres of these "school lands." . Ait;ough•many of them were sold as quickly as they were.recei�.ed, apr- ximate!y 85.000 acres remain .-Scattered throughout the State. None of these lands :rre,currendy available for sale. The Commission is I - Present membership of.the- I e�,a.luaiing:the,..env;ronmenta! quality of these lands I. ::State-Lands.Commission: I and negotiating with other public landowners to !. I exchange shese parcels in order to consolidate LEO T 1cCARTHY California Lieutenant Governor -holdings into larger contiguous blocks of land. Member, State Lands Commission In the 1850's, marsh lands surrounded many of the GRAY DAVIS bays, lakes and waterways throughout the State.To enable California and other states to reclaim their California State Controller "swamp and overflowed lands." Congress granted Member, State Lands Commission such lands to the various states. Most of this swamp JESSE R. HUFF land was subsequently sold to private parties for one California Director of Finance dollar an acre. They were given a credit on the Member. State Lands Commission purchase price of the land if it vmS reclaimed. CLAIRE T. DEDRICK, Because it was difficult to distinguish between these Executive Officer marsh lands and the adjacent sovereign lands. many title and boundary problems still exist. The The Commission's Executive Office Commission has been given the authority by the is located at: legislature to work with the private owners and resolve these problems through mutual agreement. 1807 13th Street All of the lands retained by the Stare must be Sacramento, 95814 administered for the benefit of the public. The State (916)322-4105 holds its sovereign lands in trust and they can no longer be sold. They can only be used for public purposes such as commerce, navigation,fishing and in the United States is located at THE GEYSERS in ' recreation. The school lands are held in trust for the Sonoma County. This continually growing complex betterment of the common schools of the State. generates enough electricity to provide for the needs of more than a half million people. It is the largest of its type in the world. More than half of the steam L used to generate electricity at THE GEYSERS OIL AND GAS comes from State geothermal leases. Over a half million acres of State-owned lands are located in areas with identified geothermal potential. The first California tideland oil well was drilled in In fact, the State has some land in every area where 1896 at Summeriand in Santa Barbara County. there are identified geothermal resources or where Within 10 years about 400 wells could-be seen on geothermal exploration and development are taking the beach and in the water just offshore. In these place. Some of this land will be leased for direct early years. no State laws existed to gov-6m the heat, non-electric applications. extraction of oil and gas from Stare-owned lands. Only a small portion of those State-owned lands In 1921. the Legislature began providing for the have been explored. However. increased industry issuance of prospecting permits and leases for oil interest in this vast energy source, coupled with new and gas development on the State's tide and Commission policies aimed at expediting the rate of submerged lands.,Another 17 years passed before development, has resulted in increased exploration exclusive jurisdiction overall oil.and:."s throughout-the State. devel_­pn-,en! on Stare-owned-properi-�,;-a.vas.given::to The.Commission encourages full utilization of- iheState_Lands Commission. ceothermakresources from Stale lands-in-an :The�State now-ieasesmore than 10O,sites on which environmentally sound manner while at the same oil corn,-anies have;de.veloped-some-.l000 wells that lime insuring.maximum economic return to the people of California for the use of the States: stake oil an m d gas from. State:t.ands:A royalty-is paid "omech-L-arrel of :oil that is etroved.!n-addition; resources. a over. I 000-AkeNs prodice•oil from granted tidelands in Long Beach.*Revenues received from oil and gas now total over a billion dollars. The State Lands Commission produces more revenue than any other LEASING non-tax state agency. This money lessens local tax burdens and supports higher education, water projects,and recreational development of publicly held lands. In its role as landlord-manager, the Commission The Commission has formulated firm procedures to works with many public and private entities to avoid oil pollution accidents caused by oil wells on develop a wide variety of programs utilizing State Stare-owned lands. So far, not one major incident lands. These programs include the leasing of land has involved wells located on lands leased by the for many purposes including marinas, industrial State. wharves, tanker anchorages, timber harvest, dredging,grazing,and mining. Owners of marinas along the State's navigable rivers, natural lakes,and bays are required by law to GEOTHERMAL lease the State's land over which they operate. Private parties that own a recreational pier adjacent to residential property must also obtain a permit. While, under current law, no rent is charged for California is rich in geothermal resources. The only these recreational permits, there4s a minimal commercial geothermal electric generating complex processing fee. Over a period of years.the beds of harms s and waterways may become obstructed with mud or silt. Q These areas are dredged from time to time to GRANTED LANDS maintain sufficient depth for navigation. Dredging permits are issued by the Commission to both 94 public and private parties. Dredging is also done to improve the configuration of the shoreline and Beginning almost with statehood, the California reclaim private and other public lands. Legislature began to grant tide and submerged lands in trust to cities and counties. Local Unsold school lands granted by the Federal governments were then able to develop the State's Government to the State remain in almost every harbor and waterfronts in accordance with locally county from Del Norte and Modoc in the north. to designed plans. San Diego and Imperial in the south. Much of this land is leased to private parties in orderto generate A portion of these granted lands have been and are revenue for the State.As a result,taxes to support being developed into marinas.harbors, aquatic education are less than they would be athout these parks, and recreational facilities"e local programs. governments themselves. Examples include the marina in Berkeley, the Now Harbor near Ft. Part of the school lands covered by forests are being Bragg, and the Long Beach Convention Center. managed to produce continuing crops of merchantable timber. By carefully controlling the These lands. although under direct local control, are use of these lands, the Commission can encourage monitored by the Commission to ensure grow,-h.and yet-protect the important environrental'- compliance .vith the urns of the vario;;s-:statutory —values •of the region. -grants:.These,grants encourage the rna-ximurn :development:of tieelands: consistent with the public dm other areas of ihe.State,some school,lands are trust. whiiP.-requiring trU5tee5 PO re-;tPJeSt any suitabie-for grazi rig•and-some-,may have-agricultural_ revenues produced..back into the lands where they potential:These:may.be lea sed-io-farmers and :are-generaied. The Long.Beach Grant is an ranchers to•incr-ease,.the State's-,agriculturaI output.- ..excellent exampieof;his system. The grant to the Shortly::after the'turmof the century,the State started ci^l.rrovides fbr-a-revenue sharing arrancemenr k.reserving.certain,mineral rights when-school land .beKveen the•citv.and the State for :he large amounts parcels were sold into private ownership. of royalty oil revenues generated from developments Consequently, the Commission leases some of its on tidelands granted to the city. mineral interests for mining operations. A royalty is paid for the removal of sand, gravel. precious metals, trona and other minerals. An application to use any of these lands can be PUBLIC SERVICE made to the Commission. Each applicant must PROJECTS submit an outline of the proposed project, supporting environmental data,and a filing fee. The staff will review each application and make an appropriate recommendation to the Commission for During the 1977-78 drought in California. receding waters revealed unknown pilings. action at one of its regular monthly meetings. If the discarded manmade objects. and other large debris. application fora !ease or permit is approved by the These objects impair navigation and create potential Commission, the applicant may use the land fora health and safety problems. To provide safer fee. waterways, the Commission has undertaken a The purpose of all of these leases and permits is to massive project to remove many of these allow prudent development of these lands today obstructions. So far the Commission has while protecting and sharing their valuable concentrated its efforts in the areas of Lake Tahoe resources for the people who will need them and the Sacramento/San Joaquin Delta. The tomorrow. Commission also has ongoing projects to remove beach and underwater hazards which were left as remnants of early oil drilling activitWe : Another public service provided by the Commission is boundary determination. In the late 1800's and early 1900's land was abundant and put to low density use. As a result. many early land descriptions which involved water boundaries were vacue and uncertain. The situation has radically changed in the last fifty years. With the tremendous population increases and development pressures that California has experienced recently, the need to establish the boundaries between private and public lands has rapidly accelerated. The resolution of these land title problems is important not only to protect the public's resources. but also to enable private parties to obtain sufficient title insurance. To meet these problems. the Commission has developed a program to research and establish boundaries between public and private lands. Research has concentrated on assembling data from county recorder's maps. minutes of public -greetings. libraries and arc-hives, irtervie•,.vs with historians.and !ong time residents of the affected a,eas. and on-site surveys. !With the various _cnrnm,on_boundaries be^,peen public and private lands extending_ more than 7.000 miles. it wile be some-time>before the Project is complete. .. SLC 3/87 F - REPORT OF f PROPERTY/WELL TRANSFER OR ACOUISITION We have been informed that you have Acquired/Transferred wells. Please complete and return the following to the: Division of Oil and Gas March 10 ,19 88 245 W. BroadwaV, Suite 475 �-- Long Beach, C.A. 90802-4455 Effective February 18. 1988 (date) W. M. Elliott Jr. transferred ownership of (old operator) the following described property to City of -Huntington Beach (new operator) 1. W. M. Elliott Jr., Well #3 (legal description of property) Block 2304 East Side Villa Tr: Huntington Beach, California Sec. 2 T. 6s , R. 11W S.B. B. 8, M., Orange (field or county) 2. (list of wells) (if additional space is needed, use back of form.) W. M. Elliott Jr. City Of Huntington Beach (name of cid operator) (name of new operator) 19411 Worchester Ln. 2000 Main Street (address) (address) Huntington Beach, Calif. 92646 Huntington Beach, Calif. 92648 �14 � 968 Phone _4919 Phone s7/4 ) 15 36 -rr.44 (signature) (title) (signature) (title) OC111A (7/M5/I)WRR/IM1 (9070M REQUES-I FOR CITY CO�N�IL-�� So�� a►1�4 �wN Date ctiti c. Submitted to: Honorable Mayor and City Council � � S Submitted by: Charles W. Thompson, City Administrat r Prepared by: Raymond.C. Picard, Fire Chi Subject: ORDINANCE RELATING TO REQUIREMENTS FOR BUILDING OVER OIL WELLS Consistent with Council Policy? [ ] Yes [X] New Policy or Exception 00 J*�/v g Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: The City's standards for building over or near abandoned oil wells needs to be modified to provide more case by case flexibility. Procedures need to be set forth by the Fire Chief to insure protec- tion of life, environment, and property. RECOMMENDATION: Approve the changes in the oil code and adopt the ordinance to give the Fire Chief the authority to set necessary requirements for new construction over or near abandoned oil wells. ANALYSIS: With the increased hazards associated with building over or near abandoned oil wells, the Fire Chief needs the authority to set standards he deems necessary to insure "state-of-the-art" protection to persons, property and the environment. These standards need to be handled on a case by case basis. Also, the well being built over should be abandoned to current State of California standards. FUNDING SOURCE: None required. ALTERNATIVE ACTIONS: Retain the current code provisions. ATTACHMENTS: 1. Proposed ordinance. 2. Ordinance reflecting revisions. CW T/RCP/JM/sr 6262f 1 PIO 4/84 i ORDINANCE NO. 2901 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH I _ a AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY AMENDING SECTION 15 . 32 .120 RELATING TO REQUIREMENTS FOR BUILDING OVER OIL WELLS The City Council of the City of Huntington Beach does ordain as follows : SECTION 1 . The Huntington Beach Municipal Code is hereby amended by amending section 15 . 32 . 120 to read as follows : 15. 32 . 120 Abandonment requirements prior to new construction. All abandoned or deserted wells or drill sites shall meet the most current abandonment requirements of the division of oil and gas prior to the issuance of any building or grading permit for development of the property. New structures shall not be constructed directly over abandoned wells unless due to the configuration of the property it is necessary. If it can be proven to be safe and there is no other alternative, it may be allowed if procedures set forth by the Fire Chief are followed . SECTION 2 . This ordinance shall take effect thirty days after its passage. PASSED AND ADOPTED by the City council of the City of Huntington Beach at a regular meeting thereof held on the 1st day of June , 1987 . 'r1 ,K ATTEST: APPROVED AS TO FORM: City Clerk City Attorney REVI D AND APPROVED: INITIATED AND APPROVED: 4ity Administr✓✓ator` /b.�YD Fire Chief "1 � 1 I jE Ord 1. 2901 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: i CITY OF HUNTINGTON BEACH- ) i I, ALICIA M. WENTWORTH, the duly elected, qualified City Clerk of the City of Huntington Beach and ex-officio Clerk of the City Council of the said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing ordinance was read to said City Council at a regular adjourned meeting thereof held on the 20th day of May 19 87 , and was again read to _.said City Council at a regular meeting thereof held on the 1st day of June 19 87 and was passed and adopted by the affirmative vote of more than a majority of all the members of said City Council. AYES: Councilmen: Mays, Kelly, Erskine, Green, Bannister NOES: Councilmen: Winchell, Finley ABSENT: Councilmen: None a—Z4g- City Clerk and ex-officio Cler of the City Council of the City of Huntington Beach, California 7V REQUE, NCIL. ,CTION ' 19r� Date May 1 , 1981 Submitted to: CITY CLERK NCL HNORA MBERS OF THE CITY COUNCIL Submitted by: HUTTON, City Attorney L*0SuJ6,- 0-t � Prepared by: GAIL HUTTON, City Attorney Subject: Amending Sections 17 . 10 . 080 & 17 . 10 .170 Relating To Abatement of Public Nuisances Consistent with Council Policy? [ ] Yes [ ] New Policy or Exception aft..*- iS?7 Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions,Attachments: STATEMENT OF ISSUE We have prepared an amendment to the property maintenance ordinance in an effort to provide additional , constitutionally required due process. The ordinance includes a procedure for enforcement by nuisance action . There is also a requirement that witnesses be sworn. This should insure reliable testimony if we have to bring a court action . Due process rights include a right to due notice, opportunity to be heard, and right of cross- examination. RECOMMENDATION: Adopt the attached ordinance . FUNDING SOURCE : . Not applicable . ALTERNATIVE ACTIONS: Do not pass the ordinance . ATTACHMENT: Ordinance. V - NO 5/85 c � ORDINANCE NO. 2897 AN ORDINANCE OF THE CITY OF H.UNTINGTON BEACH AMENDING THE HUNTINGTON BEACH ORDINANCE CODE BY AMENDING SECTIONS 17. 10 .080 AND 17. 10. 170 RELATING TO ABATEMENT OF PUBLIC NUISANCES The City Council of the City of Huntington Beach does ordain as follows : SECTION 1 . The Huntington Beach Ordinance Code is hereby amended by amending sections 17 . 10 .080 and 17 . 10 . 170 to read as follows : 17 . 10 . 080 Hearing by the city council . At the time and place stated in the notice of the public hearing, the city council shall hear and consider all relevant evidence, objections or protests, and shall receive sworn testimony of owners , witnesses, city personnel and interested persons relative to such alleged public nuisance and to proposed abatement measures . Each party shall be accorded procedural due process . The hearing may be continued from time to time . 17. 10. 170 Alternatives . Nothing in the foregoing sections shall prevent the city attorney from commencing a civil or criminal proceeding to abate a public nuisance under applicable provisions of the California Civil Code or Penal Code as an alternative to the proceedings set forth herein. -d i SECTION 2 . This ordinance shall take effect thirty days after its passage. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 1st day of June , 1987 . ATTEST: APPROVED AS TO FORM: City Clerk y City Attorney RE;ltyAdministrafor D APPROVED: :.:= Ord 1. 2897 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH } I, ALICIA M. WENTWORTH, the duly elected, qualified City Clerk of the City of Huntington Beach and ex-officio Clerk of the City Council of the said City, do hereby certify that the whole number of members of the City Council of the.City of Huntington Beach is seven; that the foregoing ordinance was read to said City Council at a regular meeting thereof held on the 20th day of May 19 87 , and was again read to said City Council at a regular meeting thereof held on the 1st day of June , 19 87 , and was passed and adopted by the affirmative vote of more than a majority of all the members of said City Council. AYES: Councilmen: Winchell , Mays , Finley , Erskine , Green , Bannister NOES: Councilmen: Kelly ABSENT: Councilmen: None `City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California R CITY COUNQ . ACTION Date Rebruagy 2, 1927 Submitt d t n able Mayor and City Council /� Submitted y• Charles W. Thompson, City Administrator U Pre par b p y: James W. Palin, Director, Development Services eT — Subject: JOINT GRANT APPLICATION TO LOCAL GOVERNMENT COA MANAGEMENT IMPROVEMENT PROGRAM Consistent with Council Policy? (h] Yes ( ] New Policy or Exception ----//// Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: l STATEMENT OF ISSUE : The Department of Development Services is seeking City Council approval for the submittal of a final grant application along with the cities of Laguna Beach, Newport Beach and San Clemente. The grant money, made available through the California State Secretary of Environmental Affairs, would fund a study which would analyze Federal Oil Lease Sale 95 and its associated environmental impact statement with respect to the potential impacts on the coastline of the four cities. This application has been prepared by Laguna Beach and a required public hearing on the grant application was held by their City Council on January 20, 1987. The final application is due February 15, 1987. RECOMMENDATION: Staff recommends that the City Council approve the attached resolution authorizing the City Administrator to make application to the grant program and committing the City' s portion of the required matching funds. ANALYSIS : The grant program provides funding for projects started no sooner than May 1987 and completed by May 1989. The grant requires that 20% matching funds be provided by the applicant . In this case, the matching funds will be divided four ways. Total Project Cost : $168, 000 Each City' s one-quarter share of matching funds : $8,500 This $8, 500 includes both direct cash and in-kind contributions. Staff is recommending that Huntington Beach do the majority of the printing and copying required, which would reduce the actual cash outlay to approximately $2,500. P10 4/84 Grant funds will be provided quarterly throughout the project ' s implementation period and will be disbursed on a reimbursement basis. The specific objectives identified in the draft grant application (attached) include the following benefits for the citizens of Huntington Beach: 1. A thorough analysis of Lease Sale 95 and its environmental impact statement will be made, including possible effects of oil leasing on air quality, transportation faciliites, tourism, marine life habitat, and recreational uses. 2 . Mitigation measures will be developed as appropriate to minimize any adverse impacts on the Orange County coastline. 3 . The conclusions of the study will be made available to the general public and elected officials through the publication of documents and the orchestration of several workshops. ENVIRONMENTAL STATUS : The grant proposal is exempt from the provisions of the California Environmental Quality Act. FUNDING SOURCE : As described herein and in the attached fiscal impact statement. ALTERNATIVE ACTION: Deny the grant application submittal. ATTACHMENTS: 1 . Resolution 2 . Fiscal Impact Statement 3 . Draft grant application )t,JWP:JA:kla RCA - 2/2/87 -2- (7190d) RESOLUTION NO. 5753 f A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AUTHORIZING THE CITY ADMINISTRATOR TO EXECUTE AN APPLICATION FOR FINANCIAL ASSISTANCE FOR A LOCAL GOVERNMENT COASTAL MANAGEMENT IMPROVEMENT PROGRAM GRANT FOR ACTIVITIES RELATED TO OIL LEASE SALE 95 . WHEREAS the City of Huntington Beach, recognizing the problems and issues identified in the attached application, Exhibit I for a local government Coastal Program Grant , desires to undertake projects which will help relieve problems related to offshore energy production; and The City of Huntington Beach has participated along with the cities of Laguna Beach, Newport Beach, and San Clemente in the preparation of an application package which deals with these problems , and the Secretary of Environmental Affairs , under authority of California Public Resources Code Section 35040, may grant financial assistance; and The City of Huntington Beach is committed to providing one-quarter of the 20 percent matching share required for the grant application. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington Beach that it hereby requests the Secretary of Environmental Affairs, under authority of California Public Resources Code Section 35040, to furnish financial assistance as may be provided. Such request for assistance is more particularly described in attachments to the application, Exhibit I , and by this reference made a part hereof as though set forth herein. BE IT FURTHER RESOLVED that the City administrator of the City of Huntington Beach be and he is hereby authorized and i empowered to execute in the name of the City of Huntington Beach all necessary applications, contracts, and agreements and amendments thereto to implement and carry out the purposes specified in this resolution. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the end day of February , 1987 . kjqo- ATTEST: APPROVED AS TO FORM: City Clerk 61c,,.,4%City _Attorney REVIE ND APPROVED: IN TIATED AND APPROVED: C y Administrator irec o'01r of eve op ent Services 1841L 1-23-87 EXHIBIT I ' cretary of Environmental fairs Page 1 Fiscal Application For Grant Funds From The Local Government Coastal Management Improvement Prograw Application L ar.- P a y e F Name CITY OF LAGUNA BEACH S t r e e*. A e c r e s s 505 Forest Avenue Ci*. y!71p Laguna Beach, CA 92651 - t v e r s o r, %a m e Kenneth Frank N u m o e r 714-497-3311 3 Frap�sed 'Grant Ferioc from July 1, 1987 to May 30, 1989 4 . Proposed Dudoet ( attach supportir,q scnecuies for eacr, line item ) See Exhibit I Expenditures : Line Item Dollars A Salaries and Weoes 5 23,800 B . Operating Expenses 5 - 24,200 C . Consulting Services S 120,000 D . Construction Expenses S -0- E . Fixed Assets S -0- Total , Proposed Expenditures S 168,000 Funding : A . Matching Funds : S 34,000 B . Grant Funds S 134,000 - otal . Proposed Funding S S . Funding Method ( check one ) _ Advance _j_ Reimbursement 6 . Cert if icat ion : I certify to the best of my knowledge and belief . under penalty of -.erjur t ',at data in thiE. apolicat ; on are true anc corre: . / Grantee Signature ��t'� Date h a r'.a and Tit 1 e Kenneth Frank, City Manggpr, T,aguna Beach : rar Mar,aocr Ar,provc : r c r V U i E ';V i r t R.t r. : ! + a r s al U r A; r Pf.'COUrce. dU2 ' c .scal B - ar:cr, =pprcvb . Signature : Date EXHIBIT I Page 2 SUPPORTING BUDGET SCHEDULE Consulting Services Including experts in the areas of Petroleum Engineering, Tourism, Marine Biology, Air Quality Projections Geology, Citizen Surveys and . Technical Editing 1600 Hrs. @ $75/Hr . Avg. $120, 000 Travel and Transportation 3 , 000 Clerical and Technical Support 1400 Hrs. @ $17/Hr . Staff Including Benefits 23, 800 Materials and Supplies 5, 200 Telephone 5 ,000 Postage, Mailing and Public Noticing 5, 000 Printing and Copying 6 , 000 TOTAL $168 , 000 Grant Share 134 , 000 Local Matching Share 34 , 000 ( 7202d) Re. So. 5753 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) so: ' CITY OF RM INGTON BEACH ) 1, ALICIA M. WENTWORTH, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of more than a majority of all the members of said City Council at a regular meeting thereof held on the 2nd day of February 19 87 by the following vote: AYES: Councilmen: Winchell , Mays, Finley, Kelly, Erskine, Green, Bannister NOES: Councilmen: None ABSENT: Councilmen: None v City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California j CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH To CHARLES W. THOMPSON From ROBERT J. rRANZ City Administrator Deputy City Administrator Subject REQUEST FOR CITY APPROPRIATION Date JANUARY 26, 1987 TO ACCOMMODATE APPLICATION FOR GRANT FUNDS, F.I.S. 87-2 As required under the authority of Resolution 4832, a Fiscal Impact Statement has been prepared and submitted relative to the City's proposed application for grant funding assistance to help in financing the written technical analysis of oil lease sale 95 and its potential impact on the south Orange County coastline. The grant funds total $168,000 with a matching fund requirement of $8,500 spread out over a two ear period. The application request Y PP � states that funds are to be paid out on a reimbursement basis, which, of necessity, will result in some minimal loss of interest income. Funding of the accompanying matching city services are to be satisfied by way of the respective departments absorbing same within their operating budgets over the forementioned two year project duration. ROBERT J. Z Deputy Cit Adninistrator RJF:AR:skd Attachments APPLICATION UNDER THE LOCAL GOVERNMENT COASTAL MANAGEMENT IMPROVEMENT PROGRAM 1. APPLICANT: The cities of San Clemente, Laguna Beach, Newport Beach and Huntington Beach are jointly submitting this application for funding. 2. NAME OF CONTACT PERSON: Mr. Kenneth Frank, City Manager, 505 Forest Avenue, Laguna Beach, California 92651 is coordinating the project. 3. FISCAL MANAGEMENT CONTACT: Mr. Kenneth Frank, City Manager, City of Laguna Beach, is also responsible for the fiscal management of the grant on behalf of the four cities. 4. PROJECT NARRATIVE: A. The four South Orange County coastal cities have joined together to submit this grant application. The purpose of the grant is to enhance local participation in upcoming Lease Sale 95. An executive committee, comprised of a councilmember from each of the four cities, and a staff committee comprised of a staff person from each of the four cities will serve as the coordinating mechanisms to assure achievement with the project objectives. B. The objectives of the project are threefold: 1. Analyze Lease Sale 95 and the attendant environmental impact statement with regard to its impacts on the South Orange County coastline, including the cities of San Clemente, Laguna Beach, Newport Beach and Huntington Beach. 2. Develop stipulations and mitigation measures, as necessary, to lessen any adverse impacts on Orange County in general and its coastal communities in particular. 3. Publicize the analytical conclusions through workshops, technical documents and other publications to insure that local elected officials and the general public are familiar with Lease Sale 95 -and have an opportunity to participate effectively in the preleasing program. 1 C. There are no active oil leases off the shores of San Clemente, Laguna Beach or Newport Beach. However, several current drilling operations exist in state waters near Huntington Beach. The four grant participants have a population totaling approximately 300,000. In addition, the total population of Orange County is approximately two million. Because of the nature of air pollution problems in the County and the extent of beach use by all County residents, it is expected that oil leasing could potentially impact almost everyone living in Orange County, as well as visitors from adjacent counties and other states. It is estimated that there are approximately ten million visitor days per year at the beaches and adjacent facilities of the four cities. The project will assist local decision makers and the general public in making recommendations to the Governor and the Secretary of the Interior to insure that any offshore drilling takes into account any possible impacts on Orange County residents. D. A primary result of the analytical effort undertaken through grant funds will be a written technical analysis of Lease Sale 95 and its impact on the South Orange County coastline. Two hundred copies of that document will be printed. In addition, a summary of the main technical document will be prepared and 10,000 copies of that pamphlet will be printed for public distribution. Furthermore, at least three workshops will be held to disseminate the information developed in the analytical study. E. For the first time it is anticipated that adequate technical information will be available to local decision makers and the public in order to assist them in understanding and commenting upon a federal offshore oil lease sale. A better understanding of the technical impacts of offshore oil leasing could lead to policies, recommendations and positions which could be adopted by state and national decision makers so that the federal offshore oil leasing program could proceed in an orderly manner. F. In previous federal lease sales, the cities of Huntington Beach, Newport Beach, Laguna Beach and. San Clemente have utilized primarily in-house planning :staff -to analyze and comment upon federal leasing proposals. The staff members do not always have the necessary technical expertise concerning the current status of oil drilling technology. Therefore, the grant will provide an entirely new opportunity for local elected -officials to participate actively and intelligently in federal leasing decisions. 2 G. In previous years local funds, primarily staff salaries and legal expenses, have been used in reviewing and commenting upon federal leasing proposals. Because of funding limitations imposed on cities as a result of tax cutting plans in recent years, local revenue is not available for a comprehensive technical analysis of lease proposals. No other federal, state, or regional funding sources are known to be available for the planning and mitigation aspects of federal leasing proposals. H. There are no practical alternative means to accomplish the objectives of the proposed project except for each of the four cities to submit individual grant applications which would be less cost effective and more cumbersome administratively. 5. WORK STATEMENT: Work Element 1 -- Analyze Lease Sale 95 and the attendant envi.romental impact statement with regard to its impacts on the South Orange County coastline, including the cities of San Clemente, Laguna Beach, Newport Beach and Huntington Beach. Areas of analytical concentration will include the possible effects of oil leasing on air quality, existing transportation facilities, economic development including tourism, marine life habitat, pleasure boating, sport and commercial fishing, beach cleanliness and geotechnic concerns. Private consultants will be employed starting in July of 1987 and continuing as late as May of 1989 in order to address these areas within the scope of Lease Sale 95. Work Element 2 . -- Develop stipulations and mitigation measures, as necessary, to lessen any adverse impacts on Orange County in general and its coastal communities in particular from oil leasing as a result of Lease Sale 95. Should the technical analysis indicate any adverse impacts, the technical consultants would develop conditions to mitigate the adverse nature of those impacts on residents in Orange County and the surrounding communities. Work ; l;:�aent 3 . - Publicize the analysis through workshops, technical documents and brief pamphlets. At a minimum, work products will include: -- An in-depth technical workshop designed primarily for staff members of the County, affected 'cities, special districts, educational institutions and the media. 3 -- A workshop for elected and appointed policy level officials of the County, affected cities and other interested agencies. -- A public workshop for interested citizens and the media to learn about the Lease Sale and its impact on their communities. -- A technical report which delineates the impacts expected from Lease Sale 95. Two hundred copies of that report will be prepared and distributed without charge to governmental agencies, educational institutions, libraries, the media and citizen organizations. -- A brief 2-6 page non-technical summary of the analysis will be prepared for public distribution. At least 10,000 copies of that pamphlet will be printed and made available without charge on a request basis to interested citizens. 6. PROJECT COSTS: Exhibit I delineates the proposed budget for the project. That budget totals $168,000. The local matching share would be $34,000. 7. PROJECT SCHEDULE: July-August 1987 Form executive committee and staff committee, prepare operating policies, refine project schedule based on Department of Interior timeframe for Lease Sale 95 and determine consulting expertise needed. September-December 1987 Recruit for and select technical experts to analyze Lease Sale 95 and its impact on Orange County. January-April 1988 Consultants review available materials, and prepare evaluations. May 1988 Individual technical evaluations are reviewed by staff committee for consistency and adequacy of product. .June-August 1988 Consultants respond to comments/questions from staff committee and prepare final drafts of individual technical reports. September-October 1988 Editorial consultant prepares draft of a unified technical report. 4 November-December 1988 Comprehensive draft report is reviewed by staff committee and arrangements are made for workshop sessions to be held in April. January-February 1989 Editorial consultant prepares final copy of technical report and summary brochure for widespread public distribution. March 1989 Documents are printed. April 1989 Workshops are conducted for policy leaders, technical staff personnel and the public. May 1989 Recommendations are submitted to the State Secretary of Environmental Affairs and the Secretary of the Interior and the grant project is finalized. 8. APPLICABLE LAWS: All applicable laws and regulations have been followed in preparing this application. 9. LETTERS OF COMMITMENT: Prior to submittal of the final grant application by February 15, 1987, the letters of commitment will be prepared. 10. PUBLIC COMMENTS: The public hearing will be held on Tuesday, January 20 at the Laguna Beach City Council Chambers at 6:00 p.m. Following that hearing the application may be modified to take into account the comments received. 5 REQUECK FOR CITY COUNCIL .-iCTION Date July 25, 1986 Submitted to: Honorable Mayor and City Council Submitted by: Charles W. Thompson, City Administrat QVL Prepared by: Raymond C. Picard, Fire Chief G t•�� `� Subject: OIL WELL FENCING STANDARDS Consistent with Council Policy? 44 Yes [ ] New Policy or Exc ption #as(a/D/rb Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: California State Law (CAC Title 14) and City Ordinance differ in regards to fencing requirements for oil operations. RECOMMENDATION: Approve Huntington Beach Ordinance amending the oil well fencing standards for the purpose of improving coordination of enforcement between governmental agencies. ANALYSIS: In regards to the department's enforcement of the fencing ordinance, the Fire Department has been enforcing Huntington Beach Oil Code 15.20.160 which has a height requirement of six (6) feet with NO barbed wire on top. The oil code in 15.12.040 also states the regulations of the Division of Oil and Gas as contained in the California Administrative Code, Title 14 (see attached) must be enforced. Their height requirement is five (5) feet with three (3) strands of barbed wire mounted on a 45-degree angle from the top of the fence. Exceptions to these requirements may be made by a supervisor of the Division of Oil and Gas. This, therefore, says all fences must be a minimum of six (6) feet with three (3) strands of wire. The wire would be required on all fences regardless of height and any exception can only be made by the Division of Oil and Gas and not the City of Huntington Beach. Ordinance Revisions: 1. Six (6) foot fences with an additional three (3) strands of barbed wire on top. 2. Where block walls exist, the individual inside pumping units could be fenced with chain link six (6) foot fences, with an additional three (3) strands of barbed wire on top. 3. All other fences, designs and materials need Division of Oil and Gas and City approval. The current situation is that there is a variance between.the State of California Standard and the City of Huntington Beach Standards. Approval of this ordinance would bring both laws in line and give a greater degree of protection to the oil operation sites. FUNDING SOURCE: None required. ALTERNATIVE ACTIONS: Do not approve change and enforce only the six (6) foot height limit. ATTACHMENTS: 1. Excerpts from TITLE 14. 2. Proposed City Ordinance. CWT/RCP/JM/sr 5330f PIO 4/84 RCA — OIL WELL FENCING - ATTACHMENT #1 STANDARDS 1774 OIL AND CAS TULE 14. (p. 94.16.8) (Register 8Z No.43-10-2342) 1774. Oilfield Facilities and Equipment Maintenance.' (a) Well cellars shall be covered and kept drained.Grating or flooring shall be installed and maintained in good condition so as to exclude people and animals. Cellars should be protected from as much runoff water as practical. (b) Production facilities,including but not limited to,tanks,pipelines,flow- lines, wellheads, and separators, shall not have excessive leakage. (c) Other production facilities and equipment,including but not limited to pumping units,compressors,tanks,and skimming devices,shall be installed and properly maintained for the protection of people, wildlife, and domestic ani- mals. (d) All equipment and facilities in urban areas shall be enclosed individually or with perimeter fencing in accordance with the provisions of Section 1778 (a) and (e) where it is necessary to protect life and property.Where necessary to protect life and property,enclosures in nonurban areas shall be constructed in accordance with Section 1778 (a) or (b). NOTE:Authority cited:Sections 3013 and 3106,Public Resources Code. Reference:See- tion 3106,Public Resources Code. HISTORY: 1. Amendment filed 10-21-82;effective thirtieth day thereafter (Register 82,No.43). . 41778 (p. 94.16.9) 1778. Enclosure Specifications. (a) Chain link fences. All chain link fences shall be constructed to meet the following specifications: (1) Fences shall be not less than 5 feet high and mounted on IV diameter steel posts with at least three strands of barbed wire mounted at a 45-degree angle from the top of the fence. (2) The fence shall be constructed of chain link or other industrial-type fencing of not less than 11-gauge wire and of not greater than 2-inch nominal mesh. (3) Supporting posts shall be securely anchored to the surface, spaced no more than 14 feet apart. Provisions for removable posts may be approved provided that the anchoring device is an integral part of the fence. (4) Tension wires of at least No.9 gauge coil spring wire,or uivalent,shall be stretched at the top and bottom of the fence fabric and shall fastened to the fabric at 24-inch intervals.There shall be no aperture below the fence large enough to permit any child to crawl tinder. (b) Wire fences. All wire fences shall be constructed to meet the following specifications: 1779 (p. 94.16.10) (1) There shall be either: (1) four strands of barbed wire sppaced 12 inches between strands and maintained with sufficient tension to preclude sagging;or (2) commercial livestock wire netting with a minimum height of 4 feet and sufficient tension. (2) Posts may be of any material of sufficient strength and rigidity to support the wire and restrain people or livestock from pushing them over. Posts shall be set no more than 10 feet apart and buried at least 12 inches into the ground. (c) Cates. Gates shall be of a structure substantially the same as the re- quired fences and shall be kept secured when not attended by an adult. (d) Screening. All screening to cover sumps shall meet the following specifications: (1) Be not greater than 2-inch nominal mesh. (2) Be of sufficient strength to restrain entry of wildlife. (3) Be supported in such a manner so as to prevent contact with the sump fluid. 10 (e) Other Types of Materials. Any material that can be used effectively to restrictaR may-bembstitut . the materials indicated in (a), (b), (c), -- and (d aR2Lo d by the supervisor. NOTE Authority cited:Sections and 3782,Public Resources Code.Reference: Sections 3106 and 3781.Public Resources Code. ORDINANCE NO. 2861 >... :' AN ORDINANCE OF THE CITY OF HUNTINGTON a- -BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY AMENDING SECTIONS 15.20.150, 15.20. 160, 15.20. 170 and 15.20.180 TO REFLECT FENCING STANDARDS The City Council of the City of Huntington Beach does ordain as follows: SECTION 1. The Huntington Beach Municipal Code is hereby amended by amending sections 15.20.150, 15 .20.160, 15.20.170 and 15.20.180 to reflect fencing standards to read as follows: 15.20.150 FENCE PERMIT REQUIRED. No fence or wall shall be constructed to enclose any oil well site, oil operation site or drilling island site in whole or in part until a permit therefore shall have been issued by the Development Services Department. As a condition of issuing such permit, the Director of Development Services or the Fire Chief may impose thereon any conditions as are necessary in the interest of the public safety, and such fence or wall shall be constructed in accordance with such conditions. These fence, gate and wall standards may be 'modified subject to the approval of the Division of Oil and Gas and 'the Fire Chief upon a determination by the Fire Chief that alternate means of restricting access have been provided and that said alternate means are as effective or more effective than these fence standards. The provisions relating to dedication of right-of-way and construction of improvements shall not be applicable to the issuance of such permit. All such enclosures shall be subject •to the setback requirements contained in this title. (ord. 2491) 15.20. 160 FENCES. All oil operation sites, oil heaters and tanks, an6 idle weldshall be completely enclosed by a chain link fence, masonry wall, or other approved fencing material according to City requirements in combination with all applicable Division of Oil and Gas requirements. (a) All chain link fence enclosures shall have a minimum height of six (6.) feet, topped with three(3) strands of barbed wire, spaced four (4) inches apart; (b) There shall be at least one gated opening for access, placed in a nonhazardous position and said gate( s) shall be kept locked at all times while left unattended by a watchman or service man; - 1. (c) There shall be no opening below the fence greater than - four (4) inches, (d) Support posts shall be set in concrete and shall be imbedded into the ground to a depth sufficient to maintain the stability of the fence as approved by the Building Division, but in no event less than twelve (12) inches; (e) Fencing constructed of individual chain link panels shall be securely latched, pinned or hinged to prevent unauthorized persons from gaining access to such operation, or drilling site; ( f) The chain link fabric shall be eleven (11) gauge galvanized steel and may be coated with vinyl or plastic material . (g) Post and rails shall be standard galvanized, welded pipe. Fences constructed after January 1, 1984 shall use pipe of the following outside diameters: End posts: 2 3/8 Line posts: 1 7/8 Top and bottom rails: 1 3/8 Movable panels around wells shall use 1 3/8 inch galvanized welded pipe for all frame members . (h) All pipe and other ferrous parts, except chain link fabric, shall be galvanized inside and outside. ( i ) Tension rods shall be three-eights (3/8) inch round steel bolt stock. Adjustable tighteners shall be turnbuckle or equivalent having a six ( 6) inch minimum take-up. Tension bars shall have a minimum thickness of ( 1/4 x 3/4) inch. 15.20. 170 MASONRY WALL SPECIFICATIONS. All masonry walls used to enclose in whole or in part any oil well site, oil operation site or drilling island site shall be constructed in accordance with standard engineering practices and shall meet the following specifications: (a) The wall shall be of a design compatible with the facilities, buildings and structures on and adjacent to the site; (b) The wall shall be at least six (6) feet in height, topped with three (3) strands of barbed wire, spaced four (4) inches apart; (c) It shall be constructed in accordance with the provisions of the Huntington Beach Building Code; (Ord. 2491, 1 `>=< Jul 81) 2 . � ,. (d) Barbed wire may be excluded from masonry perimeter walls if each individual pumping unit, oil heater, tank, and all =� other oil operation equipment, is protected with a fence that meets the standards of this code. 15.20. 180 GATE SPECIFICATIONS. For oil operations and drill sites, all chain link fences and masonry walls shall be equipped with at least one gated area. The gated areas must meet the following specifications: (a) Each gated area shall be at least twelve ( 12 ) feet wide and be composed of two (2) gates, each of which is at least six (6) feet wide, or one sliding gate at least twelve (12 ) feet wide. The gates shall latch and lock in the center of the twelve (12) foot span, each gate shall be topped with three (3) strands of barbed wire, spaced four (4) inches apart; (b) The gates shall be of chain link construction which . meets the applicable specifications or of other approved materials which, for safety reasons, shall be at least as secure as chain link fence; (c) They shall be provided with a combination catch and locking attachment device for a padlock, and shall be kept locked except when being used for access. to the site; (d) Hinges shall be heavy duty malleable iron or steel industrial service type with a 180 degree swing. (Ord. 2491, 1 jul 81) Sliding gates must be made of heavy duty malleable iron or steel industrial service type. SECTION 2. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be inval-id or unconstitutional by the decision of any. court of competent jurisdiction, such decisions shall not affect the validity of the remaining portions of this ordinance. The City • Council of the City of Huntington Beach hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase, or portions thereof, and amendments thereto, irrespective of the fact that any one or more sections, - . , subsections, sentences, clauses, phrases or portions, or "amendments be declared invalid or unconstitutional. 3. --- F M � SECTION 3. This ordinance shall take effect thirty days after its passage. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular ;meeting thereof held on the 2nd day of- — September 1986. Mayor ATTEST: APPROVED AS TO FORM: LO ity CIerK ,6/ City Attorney REVIEWED AND APPROVED: INITIATED AND APPROVED City Administrator Fire Chief \' 4. - Ord. No. 2861 F-: STATE OF CALIFORNIA ) COUNTY OF ORANGE ) es: CITY OF HUNTINGTON BEACH ) I, ALICIA M. WENTWORTH, the duly appointed, qualified City Clerk of the City of Huntington Beach and ex-officio Clerk of the City Council of the said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing ordinance was read to said City Council at a regular meeting thereof held on the 18th day of August 19 86 , and was again read to said City Council at a regular meeting thereof held on the 2nd day of September , 19 86 and was passed and adopted by the affirmative vote of more than a majority of all the members of said City Council. AYES: Councilmen: Kelly, MacAllister, Finley, Mandic, Thomas NOES: Councilmen: Bailey, Green ABSENT: Councilmen: None 0017 Pe City Clerk and ex-officio Cler of the City Council of the City of Huntington Beach, California F • 6 —� N&AoOo' BUS— Arl w� r v�1�gL Sh rid l� � 6832 Bar Harbor Lane Huntington Beach, CA 92648 December 10, 1985 Ji Mr. Ray Picard `; r Chief, Huntington Beach Fire Department 1 .� —' City of Huntington Beach P.O. Box 190 Cl7Y C.- Huntington Beach CA 92648 CiiYr Dear Chief Picard: I would like to express some concerns I have regarding the proposal being developed by your staff to "respond to the recent tragedy in which a boy was killed by oil pumping equipment. It is my understanding that your department will suggest a change to the Oil Code to require the addition of three strands of barbed wire to existing fencing around such equipment. Such a requirement, if not carefully conditioned, would have a serious negative impact on my neighborhood, Huntington Seacliff, and on other neighborhoods which incorporate or adjoin oil production "islands. " Seacliff was carefully planned and designed by the developer and the city to permit oil development to coexist with residential housing in a safe and unobstrusive manner. High block walls and careful landscaping have permitted this. The wall separating my back yard from Oil Island R, for example, is solid cinder block eight feet high; the drop to the ground on the other side of the wall is at least ten feet. The addition of barbed wire to this wall would not add appre- ciably to its security, but rather would create a highly unde- sireable visual effect and would pose a hazard in maintaining trees and other landscaping close to the wall. - As one neighbor expressed it, the effect would be to create a feeling of living next to the Berlin Wall. This effect would be apparent through- out the neighborhood. While I am sympathetic with the need for the city to respond to the problem of poorly enclosed oil wells, I would urge sensitivi- ty to visual and safety issues facing homeowners. This could be accomplished by either exempting from the ordinance high block J h Page Two walls surrounding oil islands, or by requiring oil companies to add fencing with barbed wire around each well inside the islands, thereby retaining the existing visual effect from outside the walls. Sincerely, W Gordon W. Smith copies: Hon. Robert Mandic Hon. John Thomas Environmental Board Seacliff Homeowners Association y/ Les REQUE# FOR CITY COUNG. . AC ION Date March 22, 1985 Submitted to: Honorable Mayor and City Council Submitted by: Charles W. Thompson, City Administrator APPROVED BY CITY COUNCIL Prepared by: Paul E. Cook, Director of Public Works --19�s Subject: Landfill Gas Recovery -- C[T�" ..L1:R C Consistent with Council Policy? [ ] Yes [XI New Policy or Exception Statement of Issue, RecommSpSption,Analysis, Funding Source,Alternative Actions,Attachments: STATEMENT OF ISSUE: TR[bpt >t� ) d'�p_/, ST landfill�J aeewe ttd �'`inay have potential -Ot for methane gas recovery and conversion to energy. 40rmek' Cov'J+ J RECONMENDATION: Authorize staff to solicit proposals for methane gas recovery. ANALYSIS: On November 15, 1982, the State of California Solid Waste Management Board informad the City that the Huntington Beach Municipal Landfill was not in compliance with the Federal Resources Conservation and Recovery Act of 1976. The law requires that methane gas in concentrations greater than 5% be prevented from leaving the boundaries of the site. The City engaged the services of a consulting firm and a plan for installing a methane crntrol system was designed. At that time, methane recovery did not seem feasible. In the past few months, the City has been contacted by four firms who operate methane recovery operations at landfill sites. Two of the firms would be interested in offer- ing the City a proposal to convert the escaping methane gas to energy. The City could conceivably enter into an agreement with a private company to: 1. Provide a system to comply with State requirements to prevent methane migration. 2. Develcp a methane recovery and conversion to energy system with the City participat- ing in profits. FUNDING SOURCE: No City funds would be expended. ALTERNATIVE ACTIONS: 1. Continue with the construction of a methane control system and make no attempt to recover gas for energy. 2. Hire a consultant to design a methane recovery system to be owned and operated by the City. ATTACHMENTS: : None. CWT:PEC:LE:Jy 1310 4/84 REQUE.,-. FOR CITY COUNCIOACTION �- a Date March 22, 1985 Submitted to: Honorable Mayor and City Council Gpv�GIL Submitted by: Charles W. Thompson, City Administrat r pygO'V SY GYTY 1 S" A Prepared by: Raymond C. Picard, Fire Chief �--� . .GITY CL�'g Subject: Huntington Beach Oil Code Revision Consistent with Council Policy? DQ Yes [ ] New Policy or Exception b�D 14 Statement of Issue, Recommendation, Analysis, Funding Source,Alternative Actions,Attachments: ISSUE: The City Council at their February 4, 1985, meeting requested a change be made to the Huntington Beach Oil Code Section 15.20.050 dealing with oil well signs. RECOMMENDATION: Approve the change to the Huntington Beach Oil Code Section 15.20.050. ANALYSIS: The Huntington Beach Oil Code, as it exists does not address free-standing oil well signs or insist on oil operator signs being posted on all perimeter fences enclosing leaseholds or drill sites. The .new revision allows the Building Department to monitor all free-standing signs through the permit process and also insure that the Fire Department has proper identification of wells for emergency response purpose. FUNDING SOURCE: None required. ALTERNATIVE ACTIONS: Reject oil code revision. ATTACHMENTS: Oil code revision. 2592f I PIO 4/84 s / i r ORDINANCE NO. 2759 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY AMENDING SECTION 15.20.050 RELATING TO OIL WELL SIGNS The City Council of the City of Huntington Beach does ordain as follows: SECTION 1. The Huntington Beach Municipal Code section 15.20.050 is amended to read as follows: 15.20.050 Signs. A sign shall be prominently displayed and maintained in good condition on or in front of the perime- ter fence next to the entrance of each well whether producing or not. Such sign shall be of durable material and unless otherwise required by the division of oil and gas, shall have a surface area of not less nor more than 4 (4) square feet . The sign shall be lettered with minimum 2 inch letters and contain the following: (a) Well name and number; (b) Name of operator ; (c) Telephone number of two (2) persons responsible for said well who may be contacted in case of an emergency. In the event the drill site or leasehold is fenced or walled, all entrances to said drill site or leasehold shall be posted with a like sign. In addition, a readily visible sign of durable material designating the well name and number shall be posted on or near each and every well within the drill site or leasehold. All freestanding signs and any sign larger than 4 square feet in surtace area shall be subject to the provi- sions of Huntington Beach Ordinance Code Article 976. SECTION 2 . This ordinance shall take effect thirty days after its passage. • 1. 1 1 PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 15th day of April 1985. Mayor ATTEST: APPROVED AS TO FORM: City C erk City Attorney REVIEWED AND APPROVED: INITIATED AND APPROVED: / R rev ity Administrato Fire Chief 08631 ahb 3/19/85 2. . Ord. No. 2759 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, ALICIA M. WENTWORTH, the duly elected, qualified City Clerk of the City of Huntington Beach and ex-officio Clerk of the City Council of the said City, do hereby certify that the whole number of members of the City Council 'of the City of Huntington Beach is seven; that the foregoing ordinance was read to said City Council at a regular meeting thereof held on the lst day of April 19 85 , and was again read to said City Council at a regular meeting thereof held on the 15th day of April , 19 85 and was passed and adopted by the affirmative vote of more than a majority of all the members of said City Council. AYES: Councilmen: Kelly, Mandic, Bailey, Finley, Green NOES: Councilmen: MacAllister, Thomas ABSENT: Councilmen: None City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California i v.r p gy CI't-y co REQUEST FOR CITY COUNCIL A Ty Date Oct be aITY aL Submitted to: HONORABLE MAYOR AND MEMBERS OF THE CITY C CIL Submitted by: CHARLES W. THOMPSON, City Administra Prepared by: GAIL HUTTON, City Attorney Subject: City Council-directed Amendments to Oil Committee ' s Proposed Amendments to the Oil Code (ORDINANCE NO. 2708) ; Huntington Beach Municipal Code Sections 15. 12 .110(h) and ( i ) , 15.12.120, and 15.12. 180. Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: At the September 6, 1984 meeting of the City Council, the City Attorney was directed to amend the proposed ordinance to reflect City Council and Planning Commission authority to modify or delete conditions of approval of oil code permits or any matter before the Planning Commission or City Council . Subsections (h) and ( i ) of section 15. 12.110 and section 15. 12 . 180 accomplish this objec- tive. ' Section 15. 12. 120 has been modified to grant, upon written request of the permittee, an additional 60-day extension to the 120-day commencement period already provided, in which to utilize a per- mit, or, in the alternative, where no work has begun and no writ- ten request for such extension has been made, the permittee may be granted a refund of 50 percent of the fees paid by him. RECOMMENDATION: Give Ordinance No. 2708, as amended, a first reading in light of substantive changes made. ALTERNATIVE ACTION: Direct staff to make additional amendments to Ordinance No. 2708. ATTACHMENT: Ordinance No. 2708 (Amended) 05511 P10 4/81 /,*40 t .Ivor� / ud�, 'p �' ORDINANCE NO. 2708 '�� 44_ , *r-r AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY AMENDING SECTIONS 15.08.220, 15.08.250, 15. 12.110, 15. 12.120, 15. 12.180, 15.20. 135, 15.20.160, 15.22.050, 15.22.060, 15.24.050, 15. 24.060, AND 15. 32.040; AND ADDING NEW SEC- TIONS 15.08.215, 15.20.13.5, 15.20.165, 15.20. 320, 15.24.080, AND 15. 32.085,. ALL PERTAINING TO THE HUNTINGTON BEACH OIL CODE The City Council of the City of Huntington Beach does ordain as follows: SECTION 1 . The Huntington Beach Municipal Code is hereby amended by amending sections 15.08.220, 15.08. 250, 15.12.110, 15. 12.120, 15. 12.180, 15. 20. 135, 15. 20. 160, 15. 22.050, 15.22.060, 15.24.050, 15.24.060 and 15.32.040 to read as follows: 15.08.220 New well. "New well" shall mean a new well bore or well hole established at the ground surface and shall not include redrilling or reworking of an existing well. ONO)11%0146� 4" 40�jja, An abandoned well shall be considered a new well for purposes of drilling, redrilling, or reworking. 15.08.250 Oil operation site. "Oil operation site" shall mean the physical location where oil operations are conducted except for any portion of the property which the surface owner is actively using for another purpose. 5..12.110 Permit procedure. A use permit from the board of zoning adjustments must be obtained prior to application for a drilling or activation permit. The application for a drilling, reworking, or activation permit shall be obtained from and filed with the department. Said application shall contain the following required- information: (a) The complete legal description of the property; (b) Plans and engineering specifications of structures, drilling derricks, drilling masts, tank and high-pressure systems 1. regulated by this code. Applicant need not file plans and engi- neering specifications of standard derricks, masts and tanks when such standard plans and specifications are already on file and approved by the department; (c) A plot plan showing the location of all oil facilities on the oil operation site including, but not limited to, wells, tanks, dikes, pipelines, heaters and storage sheds; (d) The location of the nearest public road or alley, occu- pied residences and commercial structures within five hundred (500) feet of the well; also the location of all churches, hospi- tals, rest homes, schools, preschools, nurseries and places of public assembly within five hundred (500) feet of the well; (e) A corporate surety bond in conformity with the provisions of this title; (f) A landscape plan which meets the requirements of this title. Exemption: reworking permits and wells which are not in developed areas, as defined in this code, shall be exempt from this requirement. (g) A statement signed by the applicant under penalty of perjury declaring that he is duly authorized on behalf of the operator to sign and file the application, and that the informa- tion contained in the application is true and correct. (h) The permit application form shall contain, in bold face type., the following -statement: NOTICE Any decision by the city on this application may be appealed to the city planning commission and to the city council by the applicant, or by any interested person pursuant to the appeal proce- dure contained in Huntington Beach Municipal Code section 15.12.180. (i) The planning commission or the city council shall approve., disapprove., modify or delete any matter pending before such body. 15.12. 120 Permit utilization No permit issued hereunder shall be valid unless utilization of the privileges granted thereby shall be commenced within 120 days from and after the date of issuance of the permit, or if after commencement, such activity 2. is suspended or abandoned at any time for a period of 120 days. If no work has commenced and the 120-day commencement period has not expired, the permittee may request, in writing an exten- sion of 120 days, or a refund of 50 percent of the fees paid. No refund shall be allowed once a 120-day extension has been granted. 15.20. 160 Fences . All oil operation sites, � HXXUO oil heaters and tanks, and idle wells shall be completely enclosed by a .chain link fence, masonry wall, or other approved fencing material according to the following city requirements in combination with all appli- cable state division of oil and gas requirements: (Xa) All chain link fence enclosures shall have a minimum height of six (6) feet; (%b) There shall be at least one gated opening for access, placed in a nonhazardous position and said gate(s) shall be kept locked at all times while left unattended by a watchman or serviceman; (0c) There shall be no opening below the fence greater than four (4) inches ; (%d) Support posts shall be set in concrete and shall be imbedded into the ground to a depth sufficient to maintain the stability of the fence as approved by the building division, but in no event less than twelve (12) inches; (Ae) Fencing constructed of individual chain link panels shall be securely latched, pinned or hinged to prevent unautho- rized persons from gaining access to such operation or �%X drilling site; 3. 4U)6JX%�J/W 0W 440/ (Of) ��iO Chain link fabric shall be eleven (11) gauge galvanized steel and may be coated with vinyl or plastic 0�//0/436/�W0� �46�O/U 1604/ (0g) Posts and rails shall be standard galvanized, welded Fences constructed after January 1, 1984 shall use pipe of the following outside diameters: End posts: 2 3/8 Line posts: 1 7/8 Top and bottom rails: 1 3/8 Movable panels around wells shall use 1/38 inch galvanized welded pipe for all frame members.. (1h) All pipe and other ferrous parts, except chain link fabric, shall be galvanized inside and outside. (0i) Tension rods shall be three-eighths (3/8) inch round steel bolt stock. Adjustable tighteners shall be turnbuckle or equivalent having a six (6) inch minimum take-up. Tension bars shall have a minimum thickness of 1/4 x 3/4 inch. 15.12. 180 Appeals. 4. Any decision -of the board of zoning adjustments or any decision of the fire chief to revoke a drilling, reworking, activation or annual renewal inspec- tion permit, or any determination that a well or equipment is idle may, within thirty (30) days of such decision, be appealed with the planning commission in accordance with the provisions of Huntington Beach Ordinance Code Article 981., except that no public hearings shall be required on any such appeal. (a) Upon such appeal, the planning commission shall have and exercise the power to hear and determine appeals where it is alleged there is error or abuse of discretion by imposition of . conditions of approval, i4jiJO%jo/�160/revocation of any permits issued hereunder, or determination of the existence of an idle well.(b) J(A All such appeals shall be in writing and shall be filed in triplicate in the department of development services. The grounds for appeal must be set forth specifically and the error described by the appellant. The following procedure shall apply to any appeal: (�i ) Within ten ( 10) days from and after the filing of the appeal, the director of development services shall transmit to the planning commission all papers involved in the proceedings and two (2 ) copies of the appeal. In addition, the director of development services shall make and transmit to the planning commission such supplementary reports as he or the appellant may deem necessary to present the facts and circum- stances of the case. Copies shall be mailed to the appellant ten (10) days prior to the hearing. These papers shall constitute the record of the appeal. ($ii) Upon receipt of the record of appeal, the director of development services shall set the matter for hearing and give notice by mail of the time, place and purpose thereof to appellant, and any other party who has requested in writing to be so notified. No other notice need be given. (�iii ) Upon the date for the hearing the planning commission shall hear the appeal unless, for cause, the planning commission shall on that date continue the matter. No notice of continuance need be given if the order therefor is announced at the time for which the hearing is set. The planning commission may sustain, overrule or modify the action of the board of zoning adjustments or the fire chief, and such action shall be final unless appealed to the city council, pursuant to the procedures 5. contained in huntington Beach Ordinance Code Article 988 and this section., except that no public hearings shall be required. (�iv) A written request for hearing by the city council from any decision of the planning commission shall be filed with the city clerk who shall place the matter on the next regular council agenda occurring not less than ten (10) days after receipt of such written request. The city clerk shall notify permittee/appellant of the date of such meeting at least ten (10) days prior thereto unless permittee/appellant stipulates to a shorter notice period. At the time set for hearing, the city council shall review the record, and after due -consideration thereof., together with any relevant testimony -and evidence from the permittee/appellant, interested parties, and city staff., may sustain, overrule or modify the decision of the planning commis- sion. The action of the city council shall be final. 15.22.050 Landscaping--Minimum area. The minimum area required to be landscaped at an oil operation site shall be the front and exterior side yard setbacks for the district. Any area enclosed by a fence meeting the requiremens of this title shall be excluded from the minimum area to be landscaped. 15. 22.060 Landscaping--Minimum requirements. The minimum number of trees and shrubs per square foot shall be as follows : Square footage of minimum landscape Minimum trees Minimum shrubs 0-149 1 3 150-249 2 6 250-349 3 9 350-449 4 12 450-549 5 15 550-649 6 18 650-749 7 21 750-849 8 24 850-949 9 27 t 950-1499 10 30 6. Square footage of minimum landscape Minimum trees Minimum shrubs 1500-1999 12 36 2000 - as determined by the director of development services The director of development services may reduce the number of trees and shrubs if, in his opinion, the topography, configuration or existing vegetation on a site warrants such reduction. Trees shall be at least fifteen (15) gallon size, and shrubs shall be at least five (5) gallon size. Minimum landscaping shall also include suitable ground cover.44$ An automatic irrigation system may be required by the fire chief when it is necessary to sustain and promote healthy plant life. The following plants are acceptable for use in landscaping, provided, however, that the director of development services may approve other plants which he finds adaptable to the particular site and provide effective screening of the oil operation: TREES: Eucalyptus Camaldulensis (Red River gum) ; Eucalyptus Sideroxylon (Red Iron bark) ; Metrosideros Tomentosa (New Zealand Christmas tree) ; Myoporum Laetum (Myoporum tree) . SHRUBS: Nerium Oleander (oleander) ; Escallonia Fradesi (Pink Princess) ; Metrosideros Tomentosa (New Zealand Christmas tree--- bush form) ; Myoporum Laetum (Myoporum--bush form) ; Photinia Fraseri (Red Leaf Photinia) ; Raphiolepis Indica Springtime (Pink Indian hawthorn) ; Carissa Grandiflora (natal plum) ; Moraea Irioidies ( fortnight lily) ; hemerocallis hybrids (day lily) ; Agapanthus Africanus (Lily of the Nile) ; Liriope Gigantea (turf lily) . GROUND COVER: Mesembryanthemum ( ice plant) ; Osteospermum; Fruticosum African daisy) ; Gazania Splendens (Gazania) ; Hedera Helix Hahnil (needle point ivy) . When feasible, all plant holes shall be twice normal size, and the planting medium shall be of good quality, imported soil. All landscaping shall be maintained in a neat, healthy condition. Dead vegetation and litter shall not be allowed to gather. The replacement of dead trees and other vegetation shall be made in conformance with the approved plan within thirty (30) days of written notice. 15.24.050 Freedom from debris. All property on which an oil 7 . operation site is located, and the area immediately adjacent thereto and under the control of the oil operator, shall at all times be kept free of (a) debris;' (b) pools of oil, water or other liquids; (c) weeds ; (d) brush; (e) trash, or other waste material. 15.24.060 Painting. All production equipment on the oil operation site shall be kept painted and maintained at all times, including pumping units, storage tanks, heaters, and buildings or structures. When requiring painting of such facili- ties, the fire chief shall consider the deterioration of the quality of the material of which such facility or structure is constructed, the degree of rust, and its appearance. Paint shall be of a neutral color, compatible with surrounding uses . Neutral colors shall include sand, grey and unobtrusive shades of green, blue and brown, or other colors approved by the chief. All production equipment shall be painted a neutral color, as defined herein, within six (6) months after the adoption of this chapter. EXCEPTIONS: The color requirements of this section shall not apply where there are continuing and ongoing multiple drilling operations which (a) do not have public access; (b) are not adjacent to existing residential property or property that is generally planned or zoned for residential use; and (c) are screened from public view. 15. 32.040 Nonproducing oil wells. Whenever any oil well, conforming with the provisions of the Huntington Beach Ordinance Code fails to produce at the quarterly rate of twenty (20) barrels of crude oil or other hydrocarbon substances or at a quarterly rate of one hundred thousand (100, 000) cubic feet of gas for sale, lease use or storage for two (2) successive calendar quarters, such well shall be classified as "nonproducing. " Such nonpro- ducing well, when located on a multiple well site, yG �4/¢SyI shall be maintained in accordance with the provisions of this title. When such nonproducing well is not located on a multiple well site the chief shall notify the operator that the well has been classified as nonproducing and, in the event the well is not reactivated within six (6) months of the date it first became nonproducing, a hearing will be initiated before the planning commission to show cause by the "0" zoning classification on the oil production site should not be removed. The state division of oil and gas shall be notified of such hearing. In the event the "0" zoning is re- moved, the well shall thereafter be an "idle" well and subject to the requirements for such wells as set forth below. 8. �, Whenever any oil well, which is nonconforming under the provisions of the Huntington Beach Ordinance Code, fails to produce at a quarterly rate of twenty ( 20) barrels of crude oil or other hydrocarbon substances or at a quarterly rate of one hundred thousand ( 100, 000) cubic feet of gas for sale, lease use or storage for two (2 ) successive calendar quarters, such well shall be classified as "nonproducing. " When any such well has become nonproducing, the chief shall notify the operator that the well has been so classified and give notice that said well will become an "idle" well thirty ( 30) days from the date of such notice unless the operator, within that thirty ( 30) day period, shows cause why the well should not be classified an " idle" well . In the event the operator fails to show cause why the well should not be classified an "idle" well, such well shall be so classified and any nonconforming rights to continue or reactivate such oil operation shall cease. Documentation that the well is an injection well or is part of a unit operation involved in an enhanced recovery project shall be considered acceptable for not classifying a well " idle. " SECTION 2 . The Huntington Beach Municipal Code is hereby amended by adding thereto sections 15.08.215, 15. 20.135, 15.20. 165, 15.20. 320, 15.24.080, and 15. 32.085 to read as follows: 15.08.215 Multiple well site "Multiple well site" shall mean two or more wells within a fenced surface area primarily used for the drilling and production of oil. Where two wells are separated by a developable parcel they will be considered separate sites unless both are enclosed by the same perimeter fence. 15.20.135 Belt guards required. Belt guards shall be re- quired on oil pumping equipment when determined by the fire chief to be hazardous. Guarding shall be as required by Title 8 of the California Administrative Code, Subchapter 14, section 6622. 15. 20. 165 Temporary fences. Except for pulling rigs, all temporary and/or portable oil equipment shall be enclosed for the duration of the operation with temporary fencing to meet the standards contained in this chapter, except for support posts which need not be anchored in more than two locations. 15.20.320 Plot plan of pipeline locations . Within six (6) months after adoption of this chapter, each operator shall submit to the department a plot plan indicating the approximate location of all active onshore pipelines used in his operation which are located off the leasehold, including wastewater, and trunk and gathering lines to transport crude oil or petroleum products. 9. 15.24.080 Performance of maintenance and repair. Maintenance and repair of oil operation equipment and sites shall be performed in a timely and workmanlike manner after notice. 15.32.085 Abandonment. The operator of any well that has been declared idle shall abandon said well within six months of receiving an order from the fire chief to abandon, with the concurrence of the state division of oil and gas. Section 3 . This ordinance shall take effect thirty days after its passage. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , ' 1984. Mayor ATTEST: APPROVED AS TO FORM: City Clerk 16,_12, .q City Attorney REVIEWED AND APPROVED: INITIATED AND APPROVED: r City Administrat Director of Dev o ent Services 10/12/84 0242L 10. n Page 14 - Council Min s - 9/4/84 1"f. OCEAN PACIFIC SURF CONTEST - CITY FESTIVAL 'S Councilwoman Bailey commended Ocean Pacific Company on the surfing contest they sponsored and commended the Merchants Guild on the City Festival. YOUTH BOARD Councilwoman Bailey stated that the Youth Board would like to meet with the City Council. ORDINANCE NO 2708 - ADOPTION - OIL CODE - CONTINUED TO 9/17/84 A motion was made by Pattinson, seconded by MacAllister, to remove consideration of Ordinance No. 2708 pertaining to the Oil Code from the table. The motion carried by the following roll call vote: AYES: Pattinson, MacAllister, Thomas, Kelly, Finley, Bailey NOES: None ABSENT: Mandic Council discussed Ordinance No. 2708 - "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY AMENDING SECTIONS 15.08.220, 15.08.250, 15.12.110, 15.12.130, 15.20.135, 15.20.160, 15.22.050, 15.22.060, 15.24.050, 15.24.060, AND 15.32.050; AND ADDING NEW SECTIONS 15.08.215, 15.20.135, 15.20.165, 15.20.320, 15.24.080 AND 15.32.085, ALL PERTAINING TO THE HUNTINGTON BEACH OIL CODE." (A public hearing and introduction of the ordinance, as amended, occurred on June 18, 1984. The motion to table consideration of Ordinance No. 2708 occurred July 2, 1984. ) Councilman Pattinson suggested amending Ordinance No. 2708 by adding a section to give the Planning Commission and Council control over amending or deleting conditions of approval. Councilman Pattinson left the meeting. Following discussion, a motion was made by MacAllister, seconded by Kelly, to direct staff to amend Ordinance No. 2708 to include a section empowering the Planning Commission and City Council to amend or delete conditions of approval and to continue consideration of Ordinance No. 2708 to September 17, 1984.- The motion carried by the following roll call vote: AYES: MacAllister, Thomas, Kelly, Finley, Bailey NOES: None ABSENT: Pattinson, Mandic FLAP GATE IN FLOOD CONTROL CHANNEL Councilwoman Finley stated her concern regarding the flap gate in the flood control channel near the Seabridge project. The Director of Public Works reassured Council that the gate will be in place before the rainy season. Page 14 - Council Minutes - 7/2/84 PROBLEM AT PROPERTY AT NEWLAND/HAMILTON Councilman Mandic suggested the Mayor discuss the problem with the property at Hamilton Avenue and Newland Street with Mills Land and Water Company' s Attorney Robert Moore. AB-3 (BOATWRIGHT) - SEVERANCE TAX ON OIL PRODUCTION - MOTION TO OPPOSE FAILED A motion was made by Pattinson, seconded by MacAllister, to send a telegram in opposition to Assembly Bill No. 3 pertaining to a proposed 6% severance tax on oil production'. The motion failed by the following roll call vote: AYES: Pattinson, MacAllister, Kelly .NOES: Finley, Bailey, Mandic ABSENT: Thomas ORDINANCE NO 2706 - ADOPTED - ZC 84-7 - NW CITY BOUNDARY TO SE CITY BOUNDARY AND INLAND 1,000 YARDS FROM SEA The Deputy City Clerk presented Ordinance No. 2706 for Council consideration - "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH BEACH AMENDING THE HUNTINGTON BEACH ORDINANCE CODE BY AMENDING SECTION 9061 THEREOF TO PROVIDE FOR CHANGE OF ZONING FROM THE NORTHWEST CITY BOUNDARY TO THE SOUTHEAST CITY BOUNDARY AND EXTENDING GENERALLY INLAND ONE THOUSAND YARDS FROM THE MEAN HIGH TIDE LINE OF THE SEA (ZONE CASE NO. 84-7).". On motion by MacAllister, second Pattinson, Council adopted Ordinance No. 2706, after reading by title, by the following roll call vote: AYES: Pattinson,. MacAllister, Kelly, Finley,• Bailey, Mandic NOES: None ABSENT: Thomas ORDINANCE NO 2707 - ADOPTED - ZC 84-3-2 - KOLEDO LANE N/SLATER The Deputy City Clerk presented Ordinance No. 2707 for Council consideration "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH ORDINANCE CODE tY AMENDING SECTION 9061 THEREOF TO PROVIDE FOR CHANGE OF ZONING FROM MEDIUM HIGH DENSITY RESIDENTIAL DISTRICT TO MEDIUM HIGH DENSITY RESIDENTIAL DISTRICT (TWENTY UNITS PER ACRE) ON REAL PROPERTY GENERALLY LOCATED ON KOLEDO LANE NORTH OF SLATER AVENUE (ZONE CASE NO. 84-3-2)." On motion by MacAllister, second Pattinson, Council adopted Ordinance No. 2706, after reading by title, by the following roll call vote: AYES: Pattinson, MacAllister, Kelly, Finley, Bailey, Mandic NOES: None ABSENT: Thomas ORDINANCE NO 2708 - ADOPTION TABLED - OIL CODE qA The Deputy City Clerk presented Ordinance . No. 2707 for Council consideration - "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH .till T x Page 15 - Council Minutes - 7/2/84 U ;.2 MUNICIPAL CODE BY AMENDING SECTIONS 15.08.220 15.08.250 15.12.110, ,• 15.12.120, 15.20.135, 15.20.160, 15.22.050, 15.22.060, 15.24.050, 15.24.060 AND 15.32.040; AND ADDING NEW SECTIONS 15.08.215, 15.20.135, 15.20.165, 15.20.320, 15.24.080 AND 15.32.085, ALL PERTAINING TO THE HUNTINGTON BEACH OIL CODE." A motion was made by MacAllister, seconded by Bailey, to adopt Ordinance No. 2706 after reading by title. Following discussion, a motion was made by MacAllister, seconded by Mandic, to table consideration of Ordinance No. 2708. The motion to table carried by the following- roll call vote: AYES: Pattinson, MacAllister, Kelly, Finley, Mandic NOES: Bailey ABSENT: Thomas EXECUTIVE SESSION Mayor. Kelly called an Executive Session of Council for the purpose of discussing litigation and personnel matters. RECESS - RECONVENE The Mayor called a recess of Council at 11:10 P.M. The meeting was reconvened at 11:30 P.M. ADJOURNMENT Mayor Kelly adjourned the regular meeting of the City Council of the City of Huntington Beach. Alicia M. Wentworth City Clerk and ex-officio Clerk of the City Council of the City ATTEST: of Huntington Beach, California BY Deputy City Clerk Alicia M. Wentworth City Clerk Mayor BY Deputy City Clerk IN THE 41, yED B y OI I Y Superior Court couN��� OF THE +�, STATE OF CALIFORNIA In and for the County of Orange . Cl- rY CLE ' CITY OF HUNTINGTON BEACH PROOF OF PUBLICATION CITY CLERK PUBLIC HEARING State of California ) `NOTICEOFPUBUCBEAR&G as. x,'"-HUNTINGYON BEACH 01L County of Orange ) F CODE AMENDMENT NOTICE IS HEREBY GIVEN that a icpublic hearing will be held by the City A PR I L L. ELLIOTTCouncil of the City of Huntington Beach, • in the Council Chamber of the Curie Cen- r That I am and at all times herein mentioned was a citizen of r ter,Huntington Beech,at the bout of 7:30 P.M.,or as soon thereafter as posaible on the United States,over the age of twenty-one years,and that I Monday the IBth day of June;1984.for am not a party to,nor interested in the above entitled matter; the purpose of considering in amendment that I am the principal clerk of the printer of the to the Huntington Beech Municipal Code +modifying Title 15 pertaining to oil operations. Said ,amendmment defines termHUNTINGTON BEACH IND. REV. ysaafetyreg regulations,modifies rmandplaanndd requirements, idle well produrea a newspaper of general circulation,published in the City of and abandonment procedures. A copy of proposed oil code amend- HUNTI HUNTINGTON BEACH 'merit is file in the Development Sere- ices Officem'°. ;. All interested persons are invited to f County of Orange and which newspaper is published for the attend said deeming and express their disemination of local news and intelligence of a general charac- amendments or against said-oil tads ter, and which newspaper at all times herein mentioned had " Further information maybe.obtsined and still has a bona fide subscription list of paying subscribers, 'tom the Office-of,the City Clem, 2000 `,Main Street,Huntington Beach,Califor- and which newspaper has been established, printed and pub- nia.:92648 (714)536-5227. j lished at regular intervals in the said County of Orange for a DATED MM����16;16M period exceeding one year; that the notice, of which the CITY OF liciaMNGTtworthON BEACH P g Y ; B�:Alicia M.,Wentworth annexed is a printed copy, has been published in the regular 'City Clerk and entire issue of said newspaper,and not in any supplement ``Pub.June 7,084 thereof,on the following dates,to wit: Hun4 Beach Lid:Rev:a3616fi - JUNE 7, 1984 I certify (or declare) under penalty of perjury that the forego- ing is true and correct. Dated at.....GARDEN..GROVE......................... California,this sth...day of ,JUNE 19 84 April L. Elliott ^� .fir..... Signatu 1/ Form No.POP 22984 JJ REQUEST FOR CITY COUNCIL ACTION Date June 4, 1984 Submitted to: Honorable Mayor and City Council 4 It -Submitted by: Charles W. Thompson, City Administrat Prepared by: James W. Palin, Director, Development Services ° Subject: AMENDMENT TO OIL CODE Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions, Attachments/ STATEMENT OF ISSUE : At its July 18, 1983 meeting, the City Council discussed a letter submitted by the Huntington Beach Independent Oil Operators Association requesting relief from certain sections of the screening and landscaping requirements contained in the Huntington Beach Oil Code. The City Council directed that the Oil Committee be reconvened to meet with the Association and make recommendations to the Council on the request of the independent oil operators as well as staff suggestions on other needed .changes. ,The Oil Committee met regularly from September, 1983 until March of 1984. Ruth Bailey and Ron Pattinson represented the City Council on the committee, and Frank Mirjahangir and Marcus Porter represented the Planning Commission. The Committee' s recommendations are attached. RECOMMENDATION : Amend the Oil Code, Title 15 of the Huntington Beach Municipal Code, as indicated in the attached ordinance. ANALYSIS: General Information: The proposed revisions to the oil code would modify existing sections or add new sections to Title 15 to accommplish the following : 1. Add Section 12.08 . 215, Multiple Well Site, defining a multiple well site. 2. Modify Section 15.08. 220, New Well definition to include abandoned wells for purposes of drilling. 0000V PIO 4/81 3. Modify Section 12. 08. 250, Oil Operation Site definition to exclude areas used by the owner for other purposes than oil production. . 4. Modify Section 15.12.110, Permit Procedure, to clarify that a use permit from the BZA is required for drilling or reactivation. 5. Modify Section 15.12.120, Permit Utilization, to allow a 75% refund of fees if work is never done and the permit expires. At present, the refund is all but $10.00 . 6. Add Section 15. 20. 135 , Belt Guards Required, requiring belt guards on all hazardous pumping equipment. 7. Modify Section 15. 20. 135, Fences to require fencing of all oil equipment, and standardizing fencing requirements. 8. Add Section 15. 20. 165, Temporary Fences requiring fencing for all temporary and portable oil equipment. 9. Add Section 15. 20. 320 , Plot Plan of Pipeline Locations requiring all oil operators to submit plot plans of active off-site oil lines within six months of the adoption of the ordinance. Presently there are no records of location or ownership of oil pipelines. This fact causes delays in finding and cleaning up pipeline spills. 10. Modify Section 15. 22.050 , Landscaping - Minimum Area to require landscaping within required setbacks only. Previously, landscaping was required from the lot line to the fence line. In some instances, this would be extremely expensive and may not be necessary to sufficiently improve the appearance of the oil site. 11. Modify Section 15. 22.060 , Landscaping - Minimum Requirements to require an automatic irrigation system when the fire chief determines it is necessary to sustain healthy plant life. Many of the oil sites are not equipped with water, and the operators feel it would be more cost-effective to haul water in for the landscaping rather than to set pipes. Wording is also being added to prohibit the accumulation of litter and to require the replacement of dead vegetation. 12. Modify Section 15. 24.050 , Freedom From Debris to clarify the definition of what area is to be kept free from debris. 13. Modify Section 15. 24.060 , Painting to require that equipment be kept painted. 14. Add Section 15. 24. 080, Performance of Maintenance and Repairs to require that maintenance and repairs take place in a timely and workmanlike manner. -2- 6-4-84 - RCA i r � 15. Modify 15. 32.040, Nonproducin5 Oil Wells to require notification of the State Division of Oil and Gas of a hearing to remove the "0" zoning from an oil site with an idle well. 16. Add Section 15.32.085, Abandonment to require that any wells which have been idle for over two years must be abandoned, with the concurrence of the State Division of Oil and Gas. ENVIRONMENTAL STATUS : The amendment is categorically exempt under CEQA. FUNDING SOURCE: None needed. ALTERNATIVE ACTIONS: 1. Do not approve the Oil Code Amendment as recommended. Portions of the code may be revised as Council wishes. 2. Refer the amendment back to the Oil Committee with suggestions for further revisions. 3. Do not approve any amendments to the Oil Code. The code would then remain in its present form. ATTACHMENTS: 1. Draft Oil Code Revisions 2. Ordinance No. CWT :JW P:JAF:j lm 07 57d ' -3- 6-4-84 - RCA Publish -q 84 NOTICE OF PUBLIC HEARING HUNTINGTON BEACH OIL CODE AMENDMENT NOTICE IS HEREBY GIVEN that a public hearing will be held by the City Council of the City of Huntington Beach, in the Council Chamber of the Civic Center, Huntington Beach, at the hour of 7:300 P.M. , or as soon thereafter as 't'Ft possible on Monday the day of June 1984 . for the purpose of considering an amendment to the Huntington Beach Municipal Code modifying Title 15 pertaining to oil operations. Said amendment defines terms and modifies permit procedures, safety regulations, fencing and landscaping requirements, idle well procedures and abandonment procedures. A copy of proposed oil code amendment is on file in the Development Services Office. All interested persons are invited to attend said hearing and express their opinions for or against said oil code amendment Further information may be obtained from the Office of the City Clerk, 2000 Main Street, Huntington Beach, California. 92648 - (714) 536-5227 DATED May 16, 1984 CITY OF HUNTINGTON BEACH By: Alicia M. Wentworth City Clerk �i �' LEGAL NOTICE NOTICE OF UBLIC HEARING NOTIC� I HEREBY GIVEN that a public hearing will be held by the City sAiGn of the City of Huntington Beach, California, for the purpose of considering Said hearing will be held at the hour of '}': P .M. , on in the Council Chambers Building of the Civic Ce4ter, 200 ain Street, Huntington Beach , California. All interested persons are invited to attend said hearing and express their opinions for or against the proposed C".4 J � .P. 4"= Further information may be obtained from the City Planning Department. Telephone No . (714) 536-5271 DATED this day of CITY PLANNING COMMISSION By A NOTICE TO CLERK TO SCHEDULE PUBLIC HEARING ITEM �frLJ TO: CITY CLERK'S. OFFICE DATE: . o� FROM: PLEASE SCHEDULE A PUBLIC HEARING USING THE ATTACHED LEGAL NOTICE FOR THE <�,?/,4t-bAY OF 19�� AP's "are attached ` AP's will follow �o AP's > . Initiated by: Planning Commission Planning Department Petition * Appeal Other Adoption of Environmental Status (x) YES NO Refer to Planning Department -'Extension # for a itional information. * If appeal , please transmit exact wording; to he required in the legal .: CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTING FUN BEACH To HONORABLE MAYOR JACK KELLY From GAI L HUTT0f AND MEMBERS OF THE CITY COUNCIL Cit y Attorney "�'� Sub Date 1 � I PROPOSED OIL CODE REVISIONS-- September 12 , 1984 AGENDA ITEM J-la A question has been raised regarding the City Council ' s control over administratively imposed conditions attached to permits for oil operations . The Huntington Beach Oil Code places with the Fire Department the responsibility for issuing permits for various oil operations including drilling , redrilling , reworking and activation (Chapter 15 . 12) . Other permits which may be required (e.g . , building or electrical permits ) are to be obtained from the appropriate j department of the city. Any conditions attached to the issuance of any of these permits may be reviewed by the City Administrator under section 401 (h) of the City Charter . Any such review by the City Administrator may be reviewed in turn by the City Council { under sections 301 and 401 of the City Charter. aRegarding zoning regulations , any conditions attached to a permit a required by the BZA may be appealed to the Planning C mission under Huntington Beach Ordinance Code section 9880. In addi<lo any member of the City Council may request a hearing before th City Council to consider any decision or requirement of the B A or Planning Commission (Huntington Beach Ordinance Code section 9815. 5) . In light of the general provisions set forth above , it is not necessary to set out any appeal or review rights in the Huntington Beach Oil Code , Huntington Beach Municipal Code , Title 15 . RECOMMENDATION: Because the proposed ordinance was introduced "as amended" but the amendment is not necessary to address the concerns raised , our recommendation is that the proposed ordinance be reintro- duced in its original form. GAIL HUTTON City Attorney cc : Charles Thompson , City Administrator James Palin , Director , Development Services 0000 Raymond Picard , Fire Chief Tom Shaw, Fire Protection Specialist lF.' Page 16 - Council Minutes - 9/17/84 happened because of the management of the park and the homeowner association decisions, and that the City and the cable company was not involved in the issue. 'EXECUTIVE SESSION - TO BE SCHEDULED Mayor Kelly requested the City Administrator to schedule an Executive Session of the City Council thirty minutes prior to the October 1, 1984 Council meeting. ORDINANCE NO 2708 CONTINUED TO LATER DATE The City Clerk presented Ordinance No. 2708 for Council consideration - "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL XCODE BY o�zAMENDING SECTIONS 15.08.220;'� 15.08.250,0k 15.12.110;k 15.12.120, 15.20.135, 15.20.160, 15.22.050, 15.22.060, 15.24.050, 15.24.060, AND 15.32.040; AND ADDING NEW SECTIONS 15.08.215, 15,20,135, 15.20.165, 15.20.320, 15.24.080 AND 15.32.085, ALL PERTAINING TO THE RUNTINGTON BEACH OIL CODE." A motion was made by MacAllister, seconded by Kelly, to continue consideration of Ordinance No. 2708 to a later date. The motion carried by the following roll call vote: AYES: MacAllister, Thomas, Kelly, Finley, Bailey, Mandic NOES: None ABSENT: Pattinson ORDINANCE NO 2726 - ADOPTED - APPEAL PROCEDURES FOR MASSAGE PERMITS The City Clerk presented Ordinance No. 2726 for Council consideration - "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY REPEALING SECTIONS 5.24.060, 5.24.070, 5.24.140, 5.24.230 THROUGH 5.24.330; AND ADDING THERETO NEW SECTIONS 5.24.060, 5.24.070, 5.24.140, 5.24.230 THROUGH 5.24.270 RELATING TO APPEAL PROCEDURES FOR MASSAGE PERMITS." On motion by MacAllister, second Kelly, Council adopted Ordinance No. 2726, after reading by title, by the following roll call vote: AYES: , MacAllister, Thomas, Kelly, Finley, Bailey, Mandic NOES: None ABSENT: Pattinson ORDINANCE NO 2732 - INTRODUCTION APPROVED - INDUSTRIAL DISTRICTS The City Clerk presented Ordinance No. 2732 for Council consideration - "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH ORDINANCE CODE BY REPEALING CHAPTER 95 THEREOF AND ADDING NEW CHAPTER 95 PERTAINING TO INDUSTRIAL DISTRICTS." On motion by MacAllister, second Kelly, Council approved introduction of Ordinance No. 2732, after reading by title, by the following roll call vote: lop �. o-Lcf?--70� 17. HM CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HIINIIN;TON BEACH - To HONORABLE MAYOR JACK KELLY From GAIL HUTTON AND MEMBERS OF THE CITY COUNCIL City Attorney Subject Date PROPOSED OIL CODE REVISIONS-- September 12 , 1984 AGENDA ITEM J-la A question has been raised regarding the City CouncillIs control over administratively imposed conditions attached to permits for oil operations . The Huntington Beach Oil Code places with the Fire Department the responsibility for issuing permits for various oil operations including drilling , redrilling , reworking and activation (Chapter 15 . 12) . Other permits which may be required (e .g . , building or electrical permits ) are to be obtained from the appropriate department of the city . Any conditions attached to the issuance of any of these permits may be reviewed by the City Administrator under section 401 (h) of the City Charter . Any such review by the City Administrator may be reviewed in turn. by the City Council under sections 301 and 401 of the City Charter. Regarding zoning regulations , any conditions attached to a permit. required by the IIZA may be appealed to the Planning Commission under Huntington Beach Ordinance Code section 9880. In addition , any member of the City Council may request a hearing before the City Council to consider any decision or requirement of the BZA or Planning Commission (Huntington Beach Ordinance Code section 9815. 5) . In light of the general provisions set forth above , it is not necessary to set out any appeal or review rights in the Huntington Beach Oil Code , Huntington Beach Municipal Code , Title 1S . RECOMMENDATION: Because the proposed ordinance was introduced "as amended" but the amendment is not necessary to address the concerns raised , our recommendation is that the proposed ordinance be reintro- duced in its original form. GAIL HUTTON City Attorney cc : Charles Thompson , City Administrator ,Tames Palin , Director , hevelopment Services Raymond Picard , Fire Chief Tom Shaw , Fire Protection Specialist �• CITY OF HUNTINGTON BEACH c�R INTER-DEPARTMENT COMMUNICATION NUNT+NGrUN BtACH ' 44 To HONORABLE MAYOR JACK KELLY From GAIL HUTTON (,�►'" 3 AND MEMBERS OF THE CITY COUNCIL City Attorney Subject Date PROPOSED OIL CODE REVISIONS-- September 12 , 1984 AGENDA ITEM J-la A question has been raised regarding the City Council ' s control over administratively imposed conditions attached to permits for oil" operations . The Huntington Beach Oil Code places with the Fire Department the responsibility for issuing permits for various oil operations including drilling , redrilling , reworking and activation (Chapter 15. 12) . Other permits which may be required (e.g. , building or electrical permits ) are to be obtained from the appropriate department of the city . Any conditions attached to the issuance of any of these permits may be reviewed by the City Administrator under section 401 (h) of the City Charter . Any such review by the City Administrator may be reviewed in turn by the City Counci) 1 under sections 301 and 401 of the City Charter. eRegarding zoning regulations , any conditions attached to a permit required by the BZA may be appealed to the Planning Commission under Huntington Beach Ordinance Code section 9880. In addition , any member of the City Council may request a hearing before the I j City Council to consider any decision or requirement of the BZA or Planning Commission (Huntington Beach Ordinance Code section 9815. 5) . In light of the general provisions set forth above , it is not necessary to set out any appeal or review rights in the Huntington Beach Oil Code , Huntington Beach Municipal Code , Title 15 . RECOMMENDATION: Because the proposed ordinance was introduced "as amended" but the amendment is not necessary to address the concerns raised , our recommendation is that the proposed ordinance be reintro- duced in its original form. A��� GAIL HUTTON City Attorney cc : Charles Thompson , City Administrator James Palin , Director , Development Services Raymond Picard , Fire Chief Tom Shaw , Fire Protection Specialist ► i ���� REQUEST" FOR CITY COUNCIL ACTION RCA 84-7 7 Date July 30, 1984 Submitted to: Honorable Mayor and City Council Members Submitted by: Charles W.• Thompson, City Administrator CW t ! 1 Prepared by: Jeri Chenelle, Executive Assistant Subject: ASSEMBLY BILL 3 (Oil Severance Tax: Income Taxes) b� Sl 9 ,7�e�'e���� 7M Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions,Attachments: Statement of Issue: At the Council meeting of July 2, 1984, discussion occurred regarding the .City Council taking a position on AB 3 (Oil Severance Tax: Income Taxes) . A motion to support the bill failed on a tie vote, due in part to not having seen the bill or an analysis. The League of California Cities has not taken a position on this bill. Recommendation Discretionary with Council. Analysis AB 3 is an act to amend the Revenue and Taxation Code_ and is entitled_ "Oil Severance Tax: Income Taxes." Existing law provides for a property tax on 1% full-cash .value. This. bill would tax producers of oil at 6% of gross market value, for the privilege of severing oil, on and after January 1, 1985. The tax would be in addition to ad valorem property taxes or any yield tax imposed in lieu of an ad valorem tax. The revenues from that tax would be deposited. in the State's General Fund. Under the existing Personal Income Tax Law, an individual taxpayer is allowed various credits for personal exemptions which are generally revised annually by an inflation adjustment factor. This bill would increase- the personal exemptions by an amount to be determined annually_ based on the amount of revenue generated under the Oil Severance Tax Law, less the total dollars claimed under the credit discussed above, for taxable years beginning on or after January 1, 1985.' - The bill provides that the amount of local property taxes lost as a result- of the general operation of the bill's provisions shall be determined, and that reimbursement of local agencies and school districts for local property taxes lost shall be.made to the extent money is appropriated by the State Legislature. . ,this purpose. _According to the: analysis prepared, by the Senate Committee on Revenue and Taxation, local governments, could`•'lose property taxes because when assessors, value ,oil properties for other than Proposition i3 base year assessments, they calculate the discounted present value of the future net income stream of the property to determine the property's fair market value. Any factor that changes the future income potential from the oil reserves. affects the market value calculations for property tax purposes. PIO 4/81 A severance tax can be expected to reduce the market value of mineral reserves, to some degree, by reducing the amount of economic reserves, the price applied to the reserves, and the economic life of the operation, thereby resulting in lower property tax collections. It is questionable whether this bill will be heard again before the- end of this legislative session August 31, 1§84. There is a possibility that a special meeting of the Senate Revenue and Taxation Committee may be called for August 8, and if it is, the bill may be heard and acted upon that day. The bill will still need to go before the Senate Finance Committee and then to the whole Senate for approval. Funding Source N/A Alternatives Support the bill, oppose the bill, or take no position. Attachments 1. Senate Committee on Revenue and Taxation Analysis of AB 3 2. Assembly Bill 3 3. Legislative History 1l�l n Assembly Bill 3 (Bates) AA` Amended April 26, 1984 JUL �; l.� 10r., Hearing Date : May 2 , 1984 OF Hi!iVT1i1GTO INI Senate Committee on Revenue and Taxation -,; - - Daniel E. Boatwright , Chairman r i fiY 14 SUBJECT: (1) Imposition of 6% Oil Severance Tax` (2) Personal Income Tax - Personal Exemption Credits (3) Bank and Corporation Tax _ Charitable Contribution Tax Credit (1) Imposition of 68 Oil Severance Tax CURRENT LAW: Under .existing California law, mineral rights and personal property associated with oil production (such as downwell improvements , pumping equipment , etc . ) are subject to local property taxes , based on the value of the right to extract these minerals from the ground. In addition , the income produced from oil production is taxable under either the Personal Income Tax or the Bank and Corporation Tax Law. These laws contain special write-off features affecting oil production such as the depletion deduction and the deduction for excess intangible drilling costs . Also under current law, there is a small severance tax per barrel of oil (about . 06% of the market value at the wellhead) administered by the State Division of Oil and Gas to recover the administrative costs. of that agency. PROPOSED LAW: Assembly Bill 3 proposes to impose a severance tax , commencing January 1 , 1985 , on oil production in the State at the rate of 6% of the gross value of each barrel of oil severed from the earth or water in this State . Such tax would be levied on any producer owning, controlling, managing or leasing any oil well producing in excess of 36 , 500 barrels_ per year. The State Board of Equalization would collect the tax and be reimbursed for administrative expenses . Revenues would be deposited in the General Fund. AB 3 provides that this tax would be in addition to the property tax on mineral rights and oil producing property; and provides a procedure whereby local agencies and school districts are reimbursed for any property taxes lost as a result of AB 3.. 515 Page 2 AR 3 (2) Personal Income Tax - Personal Exemption Credits CURRENT LAW: Existing Personal Income Tax Law allows tax credits for personal exemptions . Such credits are deducted from the tax computed on taxable income without benefit of such exemptions . Since 1979 , the credits have been revised annually under a system of indexing intended to compensate for inflation. For 1979 , the adjustment was- based on the excess of inflation over 3% per year : since 1980 the adjustment is based on the full amount of inflation . The inflation adjustment factors (indexing) since 1979 have been : 1979 6 . 9% Increase 1980 17 . 3% Increase 1981 8 . 3% Increase 1982 9. 3% Increase 1983 1 . 2% Decrease The current ( 1983 taxable year) personal exemption credits for the following types of tax returns are : Single/Married filing separately $38 Joint/Surviving Spouse $76 Unmarried Head of Household $76 Joint Custody Head of. Household $57 PROPOSED LAW: Assembly Bill 3 proposes to add Section 17054 . 1 to the Revenue and Taxation Code to provide that , commencing with the 1985 year, the Franchise Tax Board would increase the personal exemption credits as follows : (a) The State Board of Equalization would report to the Franchise Tax Board the total revenue deposited in the General Fund attributable to the 6% oil severance tax in the preceding fiscal year. (b) The Franchise Tax Board would determine the estimated number of individuals eligible -for the personal exemption credit in the current year. (c) The Franchise Tax Board would compute the additional credit so that the increase to be claimed (i .e . 'reduced General Fund revenue) equals the amount reported in (a) above less the amount claimed as a charitable contribution as described in (3) below. 516 Page 3 AB 3 (3) Bank and Corporation Tax - Charitable Contribution Tax Credit CURRENT LAW: Corporations are allowed a California deduction for contributions paid to certain organizations , up to a limit of 5% of net income . PROPOSED LAW: Assembly Bill. 3 proposes to add Section 23603 . 5 to the Revenue and Taxation Code to provide a Bank and Corporation tax credit for specified charitable contributions . For taxpayers subject to the 6% oil severance tax, a credit for -charitable contributions would be allowed equal to 50% of the amount contributed not to exceed $1 million or the amount of oil severance . tax paid, whichever is less . Such tax credit may be' carried over if the credit exceeds the taxpayer ' s tax liability; and it would be in lieu of any other deduction for that charitable contribution. AB 3 specifies the types of charitable contributions that qualify for the tax credit. Generally , the contribution must be to an exempt organization which provides direct services to clients in need or at risk in California. t FISCAL EFFECT: State : AB 3 excludes from the severance tax the first 36 , 500 barrels of oil severed per producer per year. According to the State Board of Equalization , this makes about 81% of California' s oil producers exempt from tax; but about 98$ of the total production would be subject to the tax. The Department of Finance estimates that producers affected would produce 375 million barrels of oil annually at a price of $23 per barrel . AB 3, provides that the severance tax be paid by the person acquiring the oil . Does this provision tax Elk Hills production; most of which belongs to and is leased out by the Federal Government? A 6% severance tax on this production would generate $78 million . Therefore , the 1985-86 revenue generated under AB 3 would range from $597 million (including Elk Hills) to $429 million (excluding Elk Hills) . The Department of Finance assumes $507 million would be received. 517 Page 4 AA 3 The potential range of the fiscal impact of AB 3 is therefore as follows : 1985-86 6% Oil Severance Tax +$429 to +$507 million Personal/Corporate Tax Interaction -$ 10 to -$ 9 million B of E Administrative Costs -$300 , 000 Increased General Fund Revenues $418. 7 to $497 . 7 million The amount of this General Fund revenue available to increase the personal exemption credits would be dependent on the participation in the proposed corporate income tax charitable contribution tax credit . Local : AB 3 disclaims any liability for state reimbursement of local agency state-mandated costs . In addition , AB 3 provides a procedure for determining the local property tax revenue loss resulting from the imposition of the severance tax. (See Comment W . However, reimbursement of such losses (estimated at between $8 and $15 million) will be made only tc `..- the extent money is appropriated by the Legislature for such purpose . COMMENTS: 1 . Article XIIIA, Section 3 of the California Constitution provides that "any changes in state taxes enacted for the purpose of increasing revenues collected. pursuant thereto, whether by increased rates or methods of computation must be imposed by an Act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature . " Two possible constrictions emerge from the language of Section 3 : (a) the two-thirds vote is required whenever a measure proposes any tax increase; or (b) a two-thirds -vote is required only when the effect of a measure is to produce a net increase in tax revenues . An Attorney General ' s opinion issued May 28 , 1982 stated that a two-thirds vote is required on any measure which proposes a tax increase, even when the estimated fiscal effect of the legislation was a net revenue loss. Therefore , AB 3 appears to violate this constitutional requirement since it is a majority vote bill . However. , the Attorney General was requested February 21 , 1984 for a written opinion as to �. whether or not the 1982 opinion is still a valid representation of the views of that office . 518 Page 5 AB 3 2 . The following arguments are cited by proponents to justify the imposition of a new state tax on oil production : (a). California is the only major oil producing state without a severance tax on oil , and our total tax revenues from the production of oil are the lowest of the major oil-producing states . (b) The levy would tax the depletion of a non-renewable resource which is part of the State ' s natural heritage and therefore fair that citizens benefit from its production. (c) Oil companies have benefitted substantially from oil price deregulation , and the tax will allow the public to share a small percentage of the redistribution of profits and income to oil companies . (d) Oil companies have enjoyed large property tax reductions in California since the adoption of Proposition 13 in 1978 . (e) The tax will not be passed on to consumers based on evidence from other states which indicate severance taxes cause no differences in gas prices at the pumps. 3 . Opponents of the oil severance tax indicate the following concerns : (a) Oil producers are not bound by world oil prices and would pass the tax forward to consumers , at least in part , in the form of. higher prices thereby causing inflationary pressures . (b) California is not a net exporting oil state and the new tax could not be exported to consumers in other states and therefore would be detrimental to California consumers . (c) A severance- tax would , to some degree , shorten the life of a field and the productive life of a well by cutting into profit margins , particularly for wells characterized by low production , high extraction costs and less valuable heavy crude oil . (d) The amount of oil that can be economically produced will cause the California oil industry to become less competitive . A severance tax would in the margin, drive some operators out of state or cause multi-state companies to shift -resources to other states in which they operate , and some smaller producers may be unable to compete (e) The imposition of a severance .tax, by reducing producer profit margins , would reduce the amounts available for 519 Page 6 AB 3 investment in the discovery and development of new wells which is counter to the national qoal of energy self-sufficiency. 4 . When assessors value oil properties for other than Proposition 13 base year assessments , they calculate the discounted present value of the future net income stream of the property to determine the property ' s fair market value . Any factor that -changes the future income potential from the oil reserves affects the market value calculations for property _tax purposes . A severance tax can be expected to reduce the market value of mineral reserves , to some degree , by reducing the amount of economic reserves , the price applied to the reserves , and the economic life o.f the operation; thereby resulting in lower property tax collections . Is it therefore appropriate to reimburse local agencies and school districts for local property taxes lost only to the extent such money is appropriated by the Legislature for such purpose? 5 . The following indicates the severance tax rates in effect in those states that impose such a tax: State Severance Tax Rate Alabama 8 . 0% Alaska 15 . 0% Arkansas 5 . 0% Colorado 2 . 0%-5 . 0% Florida 8 . 0% Louisiana 12 . 5% Michigan 6 . 6% Mississippi 6 . 0$ Montana 5 . 5% New Mexico 7 . 5% North Dakota 11 . 5% Oklahoma 7 . 085% Oregon 6 . 0% Texas - 4 . 6% Utah 2 . 0% Wyoming 6 . 0% 6. This Committee heard SB 310 (Presley) on April 20 , 1983 . SB 310 proposed a 3% severance tax with the proceeds earmarked for criminal law enforcement purposes . SB 310 was passed by this �.� Committee by a vote of Ayes-5 , Noes-2 . 520 Page 7 AB 3 7 . The state tax benefit associated with the proposed personal i.nromc tax reductions would be diluted by increased Federal tax paid as a result of reduced income tax deductions for state income taxes . This would enrich the Federal treasury via another form of reverse revenue sharing. Tax Levy Fiscal Committee: Yes ------------------------------------------------------------------ Prepared by : Roger D. Kluth 3/7/84* Ilk 521 �. ENDED IN SENATE APRIL 26, 4 AMENDED IN SENATE MARCH 1, 1984 AMENDED IN ASSEMBLY JANUARY 26, 1984 f AMENDED IN ASSEMBLY JULY 15, 1983 1 AMENDED IN ASSEMBLY MAY 31, 1983 CAUFORNIA LECISLATURE-IM-M REGULAR SESSION ASSEMBLY BILL No. 3 Introduced by Assemblyman Bates (Principal coauthor: Assemblyman Hannigan) -Assemblymen Hayden, Agnos, Campbell, Chacon, Costa, Farr, Goggin, Harris, Hauser, Isenberg, Killea, Klehs, Margolin, Molina, Moorhead, Papan, Tanner, Tucker, and Maxine Waters (Coauthor: Senator Rosenthal) December 6, 1982 An act to amend Seetiens 17041 aftd s9-, add Sections 17054.1 and 23603.5 to, and to add Part 21 (commencing with Section 42000) to Division 2 of, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST • AB 3, as amended, Bates. Oil severance tax: Income taxes. Existing law provides for a property tax of 1% full-cash value, as defined. This bill would tax producers of oil at 6% of gross market value, as defined,for the privilege of severing oil, as specified, on and after January 1, 1985. The tax would be in addition to, among other things, ad valorem property taxes or any yield tax imposed in lieu of an ad valorem tax. The revenues from AB 3 —2— —3— AB 3 that tax would be deposited in the General Fund. specified reason. Existing Personal itteeffte To* bttw ierpeses a ta* oft the This bill would take effect immediately as a tax levy. its spy; of residents, prtWyear*residers and Vote: majority. Appropriation: no. Fiscal committee: yes. ifr itee r- ne with preserribed ta* braekets State-mandated local program: yes. whieh impose a mamiffittm to* fate of. 14k apes tameable ineeme above a speeified ametint aed -e3 e&e revised The people of the State of California do enact as follows atmeally bye an inflatien adjustment. faeter. This bih wetrld inerease the ta* braekets by s�� 1 s�� - Seeliorr of the ` a ametrxts for taxable years begittoieg err er after }aftea ••y=-l-, 2 Tasalien Fede is amended to ready 4985; aed alse .would increase the zero braekel atnetmt by 3 "� {-a-} There shah be impesed few ew+ tamable gpeei€ied a ottnts 4 year apart the entire taxable ineeme e€every] resident. o€ Under the existing Bank and Corporation Tax Law, a 5 #Eris stale; emeept the head of a heoseheld as deed in corporation is allowed a deduction for contributions paid to 6 Seetiee WON, tameg ift the fallewift9 affiettftts ftftd 8+ the certain organizations, up to specified limits 7 fel}ewiftg rates opeft the ateottol e€taxable This bill would allow a corporation subject to the Oil 8 Severance Tax La w a credit under the Bank and Corporation . 9 If the tenable ineeme is- The la* ie' Tax Law, not to exceed specified amounts, in any income 10 Not ever 0,0W ...••••••••••••••••••• " tat* year,for certain charitable contributions in lieu of the existing 11 Over si;999 btA eol deduction. 12 ever ROW ................................. the tame Under the existing Personal Income Tax Law, an individual • 13 irzeerne taxpayer is allowed various credits for personal exemptions 14 Over $3, btA fret which are generally revised annually by an inflation 15 ever k4;5AA .................................. �'°" ' adjustment factor. 16. of e3feess ever This bill would increase the personal exemptions by 17 Over $4AW btA ftet speeified aetrnts an amount to be determined annually 18 ever $ � $50 Pitts ' Biased on the amount of revenue generated under the Oil 19 of emeess ever $4•,600 _everance Tax Law,.less the total dollars claimed under the 20 Over $6, btA r3e4c credit discussed above, for taxable years beginning on or after 21 ever $7,5A0 -....•••...........•••...........$95 Pitts 4-% January 1, 1985. 22 of emeess eves WOW Article XIII B of the California Constitution and Sections 23 Over ,AAA btA net 2231 and 2234 of the Revenue and Taxation Code require the 24 ever $9,9W .................•• •. ....••••••$ 5 Pit" ' state to reimburse local agencies and school districts for. 25 ef e `ess e` r $7, certain costs mandated by the state. Other provisions require . 26 Over $9,OW-btA reel the Department of Finance to' reviewstatutes disclaiming 00 ................................$O"' pis 696 these costs and provide, in certain cases, for making claims to 28 `' ` ever the State Board of Control for reimbursement. 29 Over $10A btA rtel This bill would impose a state-mandated local program by 30 ever $12,A9 Q120 Pitts 7-% creating new crimes. 31 ef ems ever However, this bill would provide that iio appropriation is 32 Over $12, btA � made ar o reimbursement is required by this act for a 33 ever M $425 � AB 3, —4= --5— AB 3 1 .............................:.. �i8a 1 of es ever 2 of 4 �� 2 fiver $13,,599 btA rtet I 3 Over. �12,500 � � 4 e,,er $�a;8A9 ............................... � �emeess ever 4 ever $44-88A ............................... Qoan � ;599 5 Over �,�98 btA stet_ 5 of epee o,fer �1�SAA 6 ever ............................... }g% 6 Over VA OW bttt ret 7 of emeess _ 7 e,,er $15-500 ............................. $'^n 7V& 8 Over 816,600... ............................. $830 � • 8 of e s ever- 44 I bttt trot 9 e€ s ever $�r5gg 9 fiver $}�588 10 10 ever $17,0 ................................ 8ab 11 +b* There shall be imposed fer eaeh tamable dear"peft 11 of emeess ever $15,560 12 the ewe taxable ifteeote of e 12 Over $17, btrt rtet Op . I p ear resident whiehis der+ved fit sources ift this 13 over $18;5A8 _4-.� � 14 state,e�ce, the head e€a hettseheld as deed it*Seetien 14 of Px s eves 15, 17042, a tale whieh shall be egeal to the tape eemputed 15 Q-ver WAW bttt ftet . 16 ruder subdivisiett -(-a+ as if the neftresidefit e. partlyear 16 ever $20;989 $7 n 17 resident were a resident multiplied by the ratio of 17 of emeess ever $18,600 18 Gafifor�ti�a se�rree ad�xsted gross ir2eeme to total adjusted 18 Over $2 nnn....................................Q460 Pitts 14-qr& 19 gross ineottte from ail settrees 19 of emeesq ever 20 +e} shall be imposed for eaeh taxable year ttpeft . 20 21 the entire tamable irteeffte of ever} resident of this state, 21 f+-4 There shall be imposed for eaeh taxable year upon 22 when staeh resident is the Read of a household,as defined 22 the entire taxable ineeme of e-very er 23 it3 Seet-iee 47848;temes ie the fig amounts aftd at the 23 par-0year regident whieh is derived fieffi settreeswi�thitt 24 following rates upon the afneunt of taxable itteeme. 24 this state whett staeh ttenresidefA er partlyear resident is 25 25 the head of a household;as de€irted itt Seetieft 17042,a tape 26 If the tie itteeme is- The tape is- 26 whieh shall be eqttal to the tare eeffiputed. ruder 27 Net e,,erS£;BAA ..............................AT tax- 27 sttbdrvtstett fie}as if the nottresidefft er partlyear resident Y 3veg `�r� 99;9 btA ftet 28 were a �t multiplied by the ratio of Californiafe�a 39 ever 899 .............' of the taxable 29 seuree adjusted gross ifteeote to total adjusted greys 10 itteeete 30 itteeme freot all des. 11 fiver $6,0W btA eat 31 fie} shall be imposed fer eaeh taxable gear upen 12 over $8-,000 .................................. phis g% 32 the taxable ifteeme of every estate,test,er eemtett tr-trst 13 of a ws ever $frggg 33 f and taxes itt.the� a�teuttts and at the� ,4 Over $&,AAA bt3t rtet �'• 34 mattes the afettat of taxafile �5 e,�er 89;SBA .................................. $F-80- Pitts a.% 35 ,6 of emeegs e,+eg 36 If the tamable ieeeote is- The tape is- .7 9ver $9,600 bt4 stet. 37 Net ever $2,000 ..............................' % of the taxable ioeet�e 38,8 ever �rl-!sAA ............................. �s 4�b btA � 9 of P�4 evef $9,600 39 Over $9,00A 0 Over $11,888 but trot , 40 ever $3,609 .................................$20 Pitts 2-96 AB 3 =6— —7 AB 3 1 of emeess ever $9,000 1 1978; and 'ending on or before.November a9; 4979; the 2- .fiver $3,500 btt net 2 Franehise T-et* Beard shall reeeurpnte the ineeme ta* 3 eN,er $5,000 .................................. plus 3% 3 �raekets by multiplying eaek ineeme braeket figure i-n 4 of e*eess ever AAA 4 subdiN,isien +a-)-,-fe};amd fie}by the iftflatiee aEbustmeet 5 Over O,OW btt net 5 faeter of 1:0S222, the afneents of eaeh braeleet to be .......... p1m 46 relx"ded eff to the eearest teR fle$ars ). . .. 6 -� ever �SAA .....................`... 7 of emeess elver $5,00 7 +1* For tamable years beginning en er after January 8 -fiver AAA bttt "et • 8 497- and ending on of before Neventbe;r �989; the 9 ever $8,9AA ................................. p1m 5slb 9 FTanehise Tam Beard shall eempute em inflatien 10 of emeess ever $6,5 10 adjttstfaeftt. faeter by adding AAA pereent to-that pertien 11 Over $8,000 but not 11 of the pereentage ehange figure f arnished pursuant to 12 ever $9,500 .................................. p w 6gb 12 paragraph +1+ whieh emeeeds three pereent (3-%), aftd 13 of emeess ever AAA .13 dividing the result by 400;the ametints of efiek braeket to 14 Over $9,,590 4ut net 14 be rounded o€€to the nearest tee dollars -($1$). 15 ever $11. ................................ plus.7-% 15 {4} For tamable years beginning en or after}teary 4; 16 of ems ever $9AN 16 19800 ending on or before November. 39;' 498& the -- 17 Over-$};9AA btt not 17 . Franchise T-am Beard shall eempute ern inflatieft 18 ever $ ......$495 plus 8� 18 factor by adding 49A pereent to t�at pertiott �1-&,FAA ......................... 19 of emeess ev ��er 19 of the pereentage ehaage figuk-e .whiek is- furnished 20 Over $12,600 but net 20 pursttant to paragraph+1+and diN,idiftg the result by 409.7 21 ever ;AAA ............................... plus 9�k 21 the of eaek bracket to be off to the 22 of emeess e-ver $12,500 22 nettrest tee debars 23 Over -AA bit net 23 {5* For tame years beginning en and after January 24 ever $15,6 ............................... $con phts 40`44s 24 4; 4982, aftd thereafter-, the Fr- T-a* Beard shaU 25 of emeess ever$A-,OW , 25 eempttt� en .faeter by adding 400 26 Over $15,500.................................... pk}s Ff% 26 pereent,to that pertion of the ehange figure `?7 of-emeess ever $k5;ra9A 27 whieh is furnished pt sttant to paragraph +1+ -and 28 28 dividing the restflt by 404,the amounts of eaeh-braeket to .29 {-€} The tam imposed by this part is not a surta*. 29 be reunded off to the nearest ten dollars ($10). w..30 +g}.For eaeh tmable year beginning on or after 30 {h} For tamable years.beginning on er aftet teary 4; 31 jottuar 4-j97&,the F rattehise T-a*Beard shag reeerepete 31 498a; and or--, the- Franchise Tam Beard shall 32 the ineeme tam braekets preseribed in subdivisions {a�-, 32 inelnde:the standard deduetion in effeet for -the 1982 33 {e)-, and jet-Soeh eefoputati shall be made ea follows- ..33 tamable year purseaet to€errner Seetien17171 in the base 34 +1+ The California Departrneat of industrial Belatiens '. 34 for of the ioeeme tam braekets pursuant 35 shag traesmit annually tfj the Franehise �f Beard the 35 to paragraph +5 of snbdivisien {g}- 36 ehange in *e Galifentiet Gaftsumer Briee :. 36_ For purposes of this Hart; the zere braeket arneunt 37 fndem for all items frem June of the prier ealeftdar year 37 defined by subdivision{b}o€Sect* shall be I- 38 to June of the eurrent ealendar year,no later than August 38 to the amount that otherwise would have been eemputed 39 4- of the etfrrent ealeudar year. 39 as the standard fleduetien under former Seet}eu 17-171.f8} For tamable years beginning en or after f anuary 4; 40 1t is the ifitent of the legislature that the, braelfet - AB 3 8 9- AB 3 I amount gm4 r-eplaee the standard deduetiofr formerly I of emeess ever 2 provided by Artiele 4 (eommeneiftg with Seetion 17-17.1} .2 Over $21,430 but fl0t- 3 of Ghapter 3-, Afid Am&be t9peated as aft additional to* 3 ever $.23,76 .................................$846.7-0 ph" !9,% 4 breeket to be reeemputed preseribed by 4 ef emeess ever $21,430 5 subdi-Asioft 5 Over W,760 b+A fret 6 * Fer taxable years "fming oft or after january, 4-, 6 ever $26,990 ................................$,,05a yn pit" NA& 7 198&,-fer poses efF P-aregf-apph (6.1 of subdivision+g,+ftft4 7 of emeess ever $23,760 8 subdi-visieft, +h-)-, the Fromehise T-" Board shall use the 8 Over ..........................141,289 ph" 4-1-%- 9 ametints and rates set fortit in paragraphs {4-}; +24-, aftd 9 of e3fee.ss ever-$26,09 10 +3* as thffitt , e aeaftd rates itt effeet for taxable years 10 11 beginning en or after january 4-, 4989-, aftd efrdifrg on er 11 {B} The tam rate sehedtile for taxpayers ift subdivisie 12 before November GO; 1984. 12 &PA 44 qhA be ft fellows- 13 +1+ The tam rate sehedule for taxpayers deseribed ift 13 14 subdivision 4* and jb+ sha4 be as fellows- 14 If the tamable tineeme is- Pre tom is. 15 15 Neat ever $4,OW .. ..........................No tax- 16 4f the ineeffte is- The t" is- 16 Over $4, bt4 "Ot 17 No+ ever $9,989..............................N-e, tax-. 17 over $10,26 ................................1 of tyre tamable 18 Over $2,000 btA nE4 18 19 ever $6,120 ..................................1 tamable 19 Over $10,250 btA not 20 20 ever $13,340 ................................$62.50 ph" 21 Over $6,1 bet Fiet • 21 of emeess ever $10,260 22 ever $-7-,440 ..................................$ai. plus 2-% 22 Over $13,340 btA fte+ 23 of emeess ever $5,190 23 ever $16,680 ....I...........................0M. Pitts 346 24 Over $?�,440 bt* ftet 24 of emeess ever $13,,340 25 over $9,;60 ........*...........................ilf;:7;L • 25 Over $15,680 btA fret f4ttS 26 of emeess ever $7-,440, 26 over $18,01 ................................$1 94. p6s 44� 27 Over $9,760 bttt fiet 27 of effeess over $15,680 d,11 47.29 28 ever $12,ig .................... - ph" 4-% .28 Over $18,010 bet fiet of emeess aver $9,76g 29 oN,er $29,340 ................................$287-70 Pitts 5% 30 Over $12,120 but fiet 30 of emeesq over $18,01 31 ever $4-44, 50 ......................-...T ..... 1.6() Pitts 5-CY& 31 Over but met 32 of emeess ever $12;188 32 ever $22, ..................................$404. Pitts 6% 33 .,GN,ei- $44,2M bti+ fiet 33 of emeess ever $20,340 34 ever $16,79 ................................$;&84 Pitts • 34 Over $22,688 bftt ftet 35 of emeess ever $14,46 35 ever $99,9W ................................$64- Pitts 7-%, 36 Over $16,799 bet fret 36 of emeess ever $22,688 37 ever $19,090 .................... 37 fiver $25,0W btA not $498.rgo Pitts 7-'Y& 38 ofeess ever $16,79 38 ever $9,330 ................................67-07, Pitts me 8-W& 39 Over $19,090 btA fteot 39 ofemeess ever $25,OW 40 ever $24,430 ................................$1659.150 Pitts 40 Over $27,33A bet not 3g AB 3 — 14— AB 3 1 reported pursuant to subdivision (a), less the total 1 ea erzdar year. 2 amount of dollars claimed as a credit pursuant to Section 2 +2} The F-raftehise T-�* Board 9heA add NO pereent to 3 the �� 3 is���them3 23603.5 by all taxpayers in the preceding fiscal year.. � ar�d die � � 41� 4 (c) In determining the amount of additional credit 4 pttrsttattt �; 5 provided by this section, the increase in the credit 5 J* The rft se T-ftm Beard 9hA mulfipl�, the 4983 6 provided by subdivision (b) of Section 17054 shall be 6 tamable ` eredise iftfifitief, ftdjustment. €seer , 7 twice the increase in the credit provided in subdivision 8 de�e�� h��off to�neftrest� 8 (a) of Section 17054. 9 SEC. 2. Section 23603.5 is added to the Revenue and 9 the eredits pwsuedtt to this 10 Taxation Code, to read.- 10 , t4le eredit s 11 23603.5. (a) There shall be allowed as a credit against 11 be twiee the eredit wed in seediNisie� •f )- 12 the taxes Y this imposed b 12 * For table a begs es or aver�y �; P part (except the minimum 13 fer purposese€ �sie�r -(-i} the use � 13 franchise fax and the tax on preference income) an 14 amount equal to the amount determined in subdivision 14Boardse the ametmts set 15 (b) for any taxpayer subject to the oil severance tax 15 aed *� as the ads to e€€eek.; fer tft*Ale years 16 imposed pursuant to Part 21 (commencing with Section 16 begs err or after Jemttary 4, 498� and endue oft or 17 4200'O) of Division 2 during the income year. AT^__��,�^_ 17 be€ere 39; 1984. 18 (b) (1) The amount of the credit allowed by this 18 +1+ The tweftWfive deters } ametmt set fer 3 19 section shall be 50 ercent of the amount ofan 19 ' ' {�} s be debars { � p y qualified 20 +2-} The debars { } afe� ImA ferth � • 20 charitable contribution made by the taxpayer during the 21 income year. 21 sebdivisie J* s ee ene �dred-debars ($100). 22 SECTION]. Section 17054.1 is added to the Revenue 22 (2) The amount of the credit determined pursuant to 23 and Taxation Code, to read. 23 paragraph (1) shall not exceed in any income year the 24 24 17054.1.. For taxable years beginning on or after lesser of the following. 25 ,January 1� 1985, the credits for personal exemption 25 (A) One million dollars ($1,000,000). 26 provided for by subdivisions (a) and (b) ofSection 17054 26 (B) The amount of tax due and paid under the_Oil 27 shall be increased annually by a fixed amount to be 27 Severance Tax Law (Part 21 (commencing with Section 28 42000), Division 2) during the income year. 28 determined by the Franchise Tax Board as ofSeptember 29 (c) For purposes of this section, qualified charitable 29 15 of each year as follows. 30 contribution"means a contribution or gift to or for. the 30 (a) The State Board ofEqualization shall report to the 31 use of an organization which meets both of the following 31 -Franchise Tax Board by August 15 of each year the total 32 requirements.. 32 revenue deposited in the General Fund in the preceding 33 (1) Is an exempt organization under Section 501 c 3) 33 fiscal year pursuant to Section 42166. • 34 of the Internal Revenue Code. O ( 34 (b) The Franchise Tax Board, based on the total 35 (2) Provides direct services to clients in need or at risk 35 number of individuals estimated to be eligible in the 36 in California, which include only the following services. 36 current taxable year for the credits for personal 37 (A) Community residential treatment programs for 37 exemption provided for by subdivisions (a) and (b) of 38 the mentally ill. g 38 Section 17054,shall compute the amount of the additional 39 credit so that the increase in the credit to be claimed 40 39 (B) Perinatal services to expectant mothers and 40 equals in the aggregate the total amount of dollars children. AB 3 — 16— — 17— AB 3 1 (C) Adult day health services to the frail elderly, and P. 1 Tax Act of 1980,pursuant to subsection (c) of Section 4996 2 other community-based programs for senior citizens 2 of the Internal Revenue Code. 3 (D) Independent living programs for the physically 3 42002. Except where the context otherwise_requires, 4. disabled. 4 the definitions given in this section govern the 5 '(E) Health clinics and health screening programs in 5 construction of this part. 6 underserved and low-income neighborhoods 6. (a) "Oil" means petroleum, or other crude oil,- 7 (F) Familyplanning services. _ 7 condensate, casinghead gasoline, or other mineral oil 8 (G) .Primary prevention programs in schools for 8 which is mined, produced or withdrawn from below_ the 9 mentally disturbed children. 9 surface of the earth or water in this state. 10 (H) Community-based programs for the 10 (b) "Producer" means any person owning, 1 developmentally disabled. 11 controlling, managing, or leasing any oil well and/or any 12 (I) Child care services, including. resource and 12 person who produces or extracts in any manner any oil by 13 referral. 13 taking it from the earth or water in this state, or any 14 (J) Child abuse service and prevention programs.. 14 ..person who. acquires the severed oil from a person or 15 (K) Foster care and adoption agencies.. ' 15 agency exempt from'the severance tax imposed pursuant 16 (L) Drug and.alcohol abuse rehabilitation programs. 16 to this part under the Constitution or laws of the United 17 �(M) Diversion and rehabilitation programs for. - 17 States or under the Constitution of the State'of California, 18 :juvenile offenders and ex-offenders 18 and shall include any person owning any royalty.or other 19 (d) In the case cohere the credit allowed under this 19 interest in any oil or.its value whether produced by him, 20 section exceeds the taxes imposed by this part (except' • 20 or by some other person on his behalf, either by lease, 21 the minimum franchise tax and the tax on preference 21 contract, or otherwise. 22 income) for the income year,.that portion of the credit 22 (c) "Production" means the total gross amount of oil 23 which�exceeds those taxes may not be carried over to 23 produced, including the gross amount thereof 24 . taxes imposed by this part in succeeding income years 24 attributable to a royalty interest, which amount for the 25 (e) The credit provided by this section shall be in lieu 25' purpose of the tax imposed by this act shall be measured '6 of any deduction which the taxpayer elects to claiin 26 or determined, in the case of oil, by tank tables compiled 27 under this part for that charitable contribution. 27 to show 100 percent of the full capacity of tanks without 28 SEC. 3. Part 21 (commencing with-Section.42000) is 28 deduction for overage or losses in handling, but with 29 added to Division 2.of the Revenue and.Taxation Code, 29 allowance for any reasonable and bona fide deduction for 30 . to read: .30 basic sediment and-water, and allowing for correction of 31 .31 temperature to 60 degrees Fahrenheit,and if the amount 32 PART 21. OIL SEVERANCE TAX 32 of oil-produced has been measured or determined by 33 33 tank tables compiled to show less than 100 percent of the 34 CHAPTER 1. DEFINITIONS' • 34 full capacity of tanks, such amount shall be,raised to a 35 35 basis of 100 percent for the purpose of the tax imposed by 36 42000. This part shall be-known and may be-cited as 36 this part. . 37 the "Oil Severance Tax Law." 37 (d) —Severed" or "severing" means the extraction or 38 42001. The oil severance tax is a "severance tax « 38 withdrawing from below the surface of the earth or water 39 impo—i by a state" for purposes of the Severance Tax T;39 of any oil, whether extraction or withdrawal sh ')e by 40 '.Adjt ent under the Federal Crude Oil Windfall Profitnatural flow, mechanical flow, forced flow, pun_r,ng or AB 3 — 18— 4Y '"k — 19— AB 3 1 any other means employed to get the oil from below the 1 42011. Except as otherwise provided in this act, the 2 surface of the earth or water and shall include the 2 tax shall be upon the entire production in this state, 3 withdrawing by any means whatsoever of oil upon which 3 regardless of the place of sale or to whom sold or by whom 4 the tax has not been paid, from any surface reservoir, 4 used, or the fact that the delivery may be made to points 5 natural or artificial, or from a water surface. 5 outside the state. 6 (e) "Gross value"means the sale price at the mouth of 6 42012. The tax imposed by this part shall be in 7 the well in the case of oil. Payments made by purchasers 7 addition to any ad valorem taxes imposed by the state, or 8 to producers for the. purpose of reimbursing such 8 any of its political subdivisions, upon any property rights 9 producers for taxes due hereunder shall not be 9 attached to or inherent in the-right to producing oil,upon 10 considered a part of the sale price. If oil is exchanged for 10 producing oil leases, and upon down-well . or 11 something other than cash, or if there is no sale at the 11 nonrecoverable machinery or equipment actually used in 12 time of severance or if the relation between the buyer 12 the operation of the well or any yield tax which is 13 and the seller is such that the consideration paid, if any, 13 imposed in lieu of an ad valorem tax. Any interest-in the 14 is not indicative of the true value or market price, then 14 land, other . than that herein enumerated, shall be 15 the board shall determine the value of the oil subject to 15 assessed and taxed as other property within the 16 tax, based on the cash price paid to producers for like 16 jurisdiction in which the property is situated. The tax 17 quality-oil in the vicinity of the well. 17 imposed by this part shall also be in addition to any 18 (f) "Barrel of oil"means 42 United States gallons of 231 18 business license tax imposed by any political subdivision 19 cubic inches per gallon computed at a temperature of 60 19 or any municipality upon the privilege of carrying on the 20 degrees Fahrenheit. 20 business of severing oil which business license- tax is 21 (g) "Person" has the same meaning as set forth in • 21 . computed and determined by the-number of barrels of oil 22 Section 6005. 22 severed by the person engaged in that business. 23 (h) "Board" means the State Board of Equalization. 23 42013. No equipment, material, or property shall be 24 24 -exempt from payment of ad valorem tax by reason of the 25 CHAPTER 2. IMPOSITION OF TAX 25 payment of the gross severance tax as herein.provided. 26 26 42014. Two or more producers which are 27 42010. On and after January 1, 1985, there is hereby 27 corporations and are owned or controlled directly. or 28 imposed an oil severance. tax upon the privilege of 28 indirectly, as defined in Section 25105, by the same 29 severing oil--from the earth or water in this state for sale, 29 interests will be considered as a single producer for 30 transport, consumption, storage, profit or use. The tax 30 purposes of application of the tax prescribed in Section 31 shall be borne ratably by all persons within the term 31 42010. 32 "producer" as that term is defined in subdivision (b) of 32 42015. There is exempted from the imposition of the 33 Section 42002. The tax shall be applied equally to all 33 oil severance tax imposed pursuant to this part all oil 34 portions-of the gross value of each barrel of oil severed, 34 owned or produced by any political subdivision of this 35 in excess of the first thirty-six thousand five hundred 35 state, including that political subdivision's proprietary -36 barrels per year per producer and shall be imposed at the 36 share of oil produced under any unit, cooperative, or 37 rate of 6 percent. The thirty-six thousand five hundred 37 other pooling agreement, except for oil produced from 38 barrel per year per producer exemption shall be prorated :38 and attributed to tide and submerged lands that have 39 for any portion of a year for which the oil severance tax = 39 been granted in trust by the state. 40 is in effect. AB 3 —20— ` • - 21— AB 3 1 CHAPTER 3. RETURNS AND PAYMENTS 1 42024. The board for good cause may extend for-not 2 . 2 to exceed one month the time for making an return or Y 3 42020. The tax imposed by this part shall.be due and 3 paying any amount required to be paid under this part. 4 payable to the board on a monthly basis. The tax shall be 4 The extension may be granted at any time provided. a 5 due and payable on or before the last day of the calendar 5 request therefor is filed with the board within or prior to 6 month based on the amount of oil produced during the 6 the period for which the extension may be granted._ 7 preceding calendar month, commencing with , 7 Any person to whom an'extension is granted shall pay, 8 8 in addition to the tax, interest at the adjusted annual rate 9 42021. If the oil-produced is not sold during the month 9 established pursuant to Section 19269 from the date on 10 in which it is produced, the producer shall pay the tax at 10 which the tax would have been due without the extension 11 the same rate and in the same manner as if the oil was sold 11 until the date of payment. 12 during that month. 12 13 42022. (a) Every producer shall make a return to the 13 CHAPTER 4. DETERMINATIONS 14 board at the time the tax is required to be paid upon 14 15 forms prescribed and furnished by the board. The return 15 Article 1. Deficiency Determination_ s 16 shall set forth such information as the board may 16 17 prescribe, including, but not be limited to, all of the 17 42030. If the board is not satisfied with the return or 18, following: 18 returns of the tax or the amount of tax required to be paid 19 (1) The location of the well. 19 to the state by any person,it may compute and determine 20 (2) The gross amount of the oil produced during the • 20 the amount required to be paid upon the basis of the facts 21 month `for which the return is filed. 21 contained in the return or returns or upon the basis of any 22 (3) The price paid therefor. 22 information within its possession or that may come into 23 (4) The correct name and address of the producer 23 its possession. One or. more.deficiency determinations 24 from whom the oil was purchased. in the event the 24 may be made of the amount due for one or for more than 25 severed oil was acquired from a person or agency exempt 25 one period. 26 from the severance tax under the Constitution or laws of 26 42031._ The amount of the determination, exclusive of 27 the United States or under the California Constitution. 27 penalties, shall bear interest at the adjusted annual rate 28 ' (5). The prevailing-market price of oil sold at the time 28 established pursuant to Section 19269 from the last day of 29 of production. . 29 the month following the monthly. period for which the 30' (6) The amount-of tax due. 30 amount or any portion' thereof should have been 31* (b) The return shall be accompanied by a remittance 31 returned until the date of payment. 32 of the full amount of tax,due. All monthly returns shall be 32 42032. • In making a determination the board may 33 signed by the producer, or a duly authorized agent 33 offset overpayments for a period or periods, together 34 thereof, and shall be verified under oath. . 34 with interest on the overpayments, against 35 42023. If any person fails to timely file the return 35 underpayments -for another period or periods, against 36 required by Section 42022, a penalty or 10 percent of the 36 penalties,and against the interest on the underpayments. 37 amount of the tax shall be added to the amount due, 37 The interest on underpayments and overpayments shall 38 together with interest_ at the adjusted annual rate 38 be computed in the manner set forth in Sections 42065 39 established pursuant to Section 19269 from the due date 39 and 42120. 40 to 'l�e date of payment. 40 42033. If any part of the deficiency which a. AB " —22--- 'i —23 AB 3 1 deficiency determination is made is due to negligence or '� 1 the mailing of the notice after that time, the notice may 2 intentional disregard of this part or authorized rules and 2 be mailed at any time prior to the expiration of the period 3 regulations; a penalty of 10 percent of the amount of the 3 agreed upon. The period so agreed upon may be 4 determination shall be added thereto. 4 extended by subsequent agreements in writing made 5 42034. If any part of the deficiency for which a 5 before the expiration of the period previously agreed 6 deficiency determination is made is due to fraud or an 6 upon. 7 intent to evade this part or authorized rules and 7 8 regulations, a penalty of 25 percent of the amount of the 8 Article 2. Determinations if No Return Made 9 determination shall be added thereto. 9 10 42035. The board shall. give to the person written 10 42040. If any person fails to make a return, the board 11 notice of its determination. The notice may be served 11 shall make an estimate of the amount of the total 12 personally or by mail; if by mail, service shall be made 12 production or purchase by the person and the gross value 13 pursuant to Section 1013 of the Code of Civil Procedure 13 of that oil or gas. The estimate shall be made for the 14 and shall be addressed to the person at his or her address 14 period or periods in respect to which the person failed to 15 as it appears in the records of the board, but the service 15 make a return and shall be based upon any information 16 shall be deemed complete at the time of the deposit of 16 which is in the board's possession or may come in its 17 the notice in the mail without extension of time for any 17 possession. Upon the basis of this estimate the board shall 18 reason. 18 compute and determine the amount required to be paid 19 42036; Except in the case of fraud,intent to evade this 19 to the state, adding to the sum thus arrived at a penalty 20 part or authorized rules and regulations, or failure to • 20 equal to 10 percent thereof. One or more determinations 21 make. a return, every notice of a deficiency 21 may be made for one or for more than one period. When 22 determination shall be mailed within three years after- 22 a person discontinues activities subject to the tax, a 23 the last day of the calendar month following the monthly 23 determination may be made at any time thereafter, 24 period, for which the amount .is proposed to be 24 within the periods specified in Section 42036, as to 25 determined or within three years after the return is filed, , 25 liability arising out of the person's activities subject to the 26 whichever period expires the later. In the case of failure 26 tax, irrespective of whether the determination is issued 27 to make a return, every notice of determination shall be 27 prior to the due date of the liability as otherwise specified 28 mailed within eight years after the last day of the 28 -in this part. 29 calendar month following the monthly period for which .29 42041. In making a deterimination the board may 30 the amount is proposed to be determined. 30 offset overpayments for a period or periods, together 31 42037. In the case of a deficiency arising under this 31 with interest on. the overpayments, against 32 part during the .lifetime of a decedent, a notice of 32 underpayments for another period or periods, against 33 deficiency determination shall be mailed within four 33 penalties,and against the interest on the underpayments. 34 months after written request therefor, in the form • 34 The interest on underpayments and overpayments shall 35 required by the board, by the- fiduciary of the estate 'or 35 be computed in the manner set forth in Sections 42065 36 trust or by any other person liable-for the tax or any 36 and 42120. 37 portion thereof. 37 42042. The amount of the determination, exclusive of 38 42038. If before the expiration of the time prescribed 38 penalties, shall bear interest at the adjusted annual rate 39 in Section 42036 for the mailing of a notice of deficiency 39 established pursuant to Section 19269 from the last day of 40 determination the taxpayer has consented in writing to , -.40 the month following the monthly period for which the AB 3 —24— - —25— AB 3 1 amount or any .portion thereof should have been 1 may deem necessary to insure compliance with this part. 2 returned until the date of payment. 2 The security may be sold .b the board in the manner p ym Y Y Y 3 42043. If the failure of any person to,file a return is 3 _prescribed by Section 42400. 4 due.to.fraud or an intent to evade this part or-rules and 4 42050. Any notice required by this article shall be 5 regulations, a penalty -.of'-25 percent of_ the amount 5 served personally or by mail in the manner prescribed for 6 required to.be paid:by the person, exclusive of penalties, 6 service'..of notice of a deficiency determination. 7 shall be added thereto in addition -to :the 10 percent ;;� 7 8 penalty provided-in-Section-42040. 8 Article 4. Redetermination .9. 42044. -Promptly after making.its determination the 9 .10 board shall .give to the person :written_notice of the 10 42055. Any:person against whom a determination is 11 estimate, determination, and penalty, the notice to be 11 made under Article 1 (commencing with Section 42030) 12 served personally or by mail.in-the manner prescribed-for 12 . or -.2 (commencing with Section 42040) or any person 13 service of notice of.a-deficiency determination. '13. directly interested -may.petition for a -.redetermination 14 14 within 30-days after service upon the:person of notice 15 Article 3. Jeopardy Determinations 15 thereof. If a :petition for redetermination is not filed 16 16within the 30-day .period, the determination becomes 17 42047. If the board believes that the collection of any 17 final at_the expiration of:the period. 18 tax or any amount of tax required.to be collected and paid 18 -42056. Every.petition for redetermination shall be in 19 to,the state-or of any determination will be jeopardized 19 writing and shall state the specific grounds upon which 20 by'delay, it shall thereupon make a determination of the , .20 the petition is founded. The petition may be amended to 21 tax or amount of,tax,required_to be collected, noting that - 21 state additional grounds at any-time prior to the date on 22 fact upon-the determination. The:amountAetermined,is 22 .which the board .issues its order or decision upon _the 23 immediately due and-payable. 23 petitioner for redetermination. 24 42048. :If the amount specified in-the determination is 24 42057. If.a petition for redetermination is filed within 25 not paid within -10 days after service of notice thereof 25 -the 30-day period, the board shall reconsider the 26 upon -the -person against -whom the determination is 26 determination and, if the person has so.requested in his 27 made' the amount becomes-final-at,the expiration.of the 27 _petition, shall.grant the person an oral-hearing and shall .28 10 days, ,unless a petition for redetermination -is filed 28 .give him or her 10 days' notice of the time and place of 29 within the 10-days, and the delinquency-penalty and the .29 .the-hearing. The board.may continue-the hearing from 30 interest provided in Section 42065 shall --attach ..to the - 30 time,.to time as may be necessary. 31 amount of the tax or the amount of the tax-required to be 31 42058. The board may decrease or increase the 32 collected. -32 amount.of.the-determination before it!becomes final, but 33 42049. The person. against. whom a jeopardy 33 the amount may be increased only if a claim for the 34 .determination is made may .petition for the , 34 increase is asserted by the board at or before the hearing. 35 redetermination thereof pursuant to Article .4 '35 Unless the penalty imposed by Section 42034 or .Section 36 (commencing with Section, 42055). He or she shall, 36 42043 applies. to the amount of the determination as . 37 however, file the petition for redetermination with the 37 originally made or as increased, the claim for increase 38 board within 10 days after.-the service upon him of notice 38 shall be asserted within eight years after the last day of 39 of determination. The person shall also within the 39 the calendar month following the month' )eriod for 40 -10 j period:deposit with the board such security as it 40 which the increase is asserted. AB ? --26- -27-- AB 3 1 42059. The order or decision of the board upon a 1 CHAPTER 5. COLLECTION OF TAXES 2 petition for redetermination becomes final 30 days after 2 3 service upon the petitioner of notice thereof. r. : 3 Article I. Security for Tax 4 42060. All determinations made by the board under 4 5 Article 1 (commencing with Section 42030) or 2 5 42070. The board, whenever it deems it necessary to 6 (commencing with Section 42040) are due and payable at 6 insure compliance with this part,may require any person 7 the time they become final. If they are not paid when due 7 subject thereto, to place with it such security as the board 8 and payable, a penalty of 10 percent of the amount of the 8 may determine. The amount of the security shall be fixed 9 determination, exclusive of interest and penalties, shall 9 by the board but, except as noted below, shall not be 10 be added thereto. 10 greater than twice the estimated average liability of 11 42061. Any notice required by this article shall be 11 persons filing returns for monthly periods,determined in 12 served personally or by mail in the manner prescribed for 12 such manner as the board deems proper, or ten thousand 13 service of notice of a deficiency determination. 13 dollars ($10,000), whichever amount is the lesser. The 14 14 limitations herein provided apply regardless of the type 15 Article 5. Interest and Penalties 15 of security placed with the board. The amount of the 16 16 security may be .increased or decreased by the board 17 42065. Any person who fails to pay any tax to the state 17 subject to the limitations herein provided.The board may . 18 or any amount of tax required to be collected and paid to 18 sell the security at public auction if it becomes necessary 19 the state, except amounts of determinations made by the 19 so to do in order to recover any tax or any amount 20 board under Article 1 (commencing with Section 42030) 20 required to be collected, interest, or penalty due. Notice 21 or 2 (commencing with Section 42040), within the time • 21 of the sale may be served upon the person who placed the 22 required shall pay a penalty of 10 percent of the tax or 22 security personally or by mail; if by mail, service shall be 23 amount of the tax, in addition to the tax or amount of tax,. 23 made in the manner prescribed for service of a notice of 24 plus interest at the adjusted annual rate established 24 a deficiency determination and shall be addressed to the 25 pursuant to Section 19269, from the date on which the tax , 25 person at his address as it appears in the records of the 26 or the amount of tax required to be collected became due 26 board. Security in the form of a bearer bond issued by the 27 and payable to the state until the date of payment. 27 United States or the State of California -which has a 28 42066. If the board finds that a person's failure to 28 prevailing market price may, however, be sold by the 29 make a timely return or payment is due to reasonable 29 board at private sale at a price not lower than the 30 cause and circumstances beyond the person's control, 30 prevailing market price thereof. Upon any sale any 31 and occurred notwithstanding the exercise of ordinary 31 surplus above the amounts due shall be returned to the 32. care and the absence of willful neglect, the person may 32 person who placed the security. 33 be relieved of.the penalty provided by Sections 42040 and 33 42071. If any person is delinquent in the payment of 34 42065. + 34 the amount required to be paid by him or in the event a 35 Any person seeking to be relieved of the penalty shall 35 determination has been made against him which remains 36 file with the board a statement under penalty of perjury 36 unpaid, the board may, not later than three years after 37 setting forth the facts upon which he or she bases his or 37 the payment became delinquent,or within 10 years after 38 her claim for relief. 38 the last recording of an abstract under Section 42085 or 39 of a certificate under Section 42091, give notice thereof .40 personally or by first-class mail to all persons, including ALA. 3 —28— —29— AB 3 1 any officer or department of the state or any political 1 whose obligation the notice was given if solely by reason 2 subdivision or agency. of the state, having in their 2 of such transfer or disposition the state is unable to 3 possession or under their control any credits or other 3 recover the indebtedness of the person with respect to 4 personal property belonging to the delinquent, or person 4 whose obligation the notice was given. - '5 .against whom a determination has been .made which 5 6 remains unpaid, or owing any debts to the delinquent or. 6 Article.2. Suit for Tax 7 such-personAn the case of any state officer, department 4 7 8 or agency, the notice shall be given -to such officer, .8 42075. At any time within.three years after any tax or 9 department or agency :prior to the time it presents -the 9 any amount of tax required to be,collected becomes due 10 claim of:the delinquent taxpayer:to-the-Controller..After 10 and payable and at any time within three years after the 11 -receiving-the notice-the persons so notified shall'neither .11 delinquency of any tax or any amount of tax required to 12 transfer nor make any other disposition of the -credits, 12 be collected, or within the period during which a lien is .13 other personal property, or debts in their possession or .13 in force as the result of the recording of an abstract under 14 under -their control at the time they receive.the notice 14 Section 42085 or of a certificate under Section 42091 or 15 until the board consents to a_transfer or disposition or 15 42092, the board may bring an action in the courts of this 16 until 60 days elapse after .the receipt of the notice, .16 state, of any other state, or of the United States in the 17 whichever period expires the earlier. All persons so . 17 name of the people of the State of California to collect the 18 notified shall forthwith after receipt of-the notice advise 18 amount delinquent together with penalties and interest. 19 the board of all such credits, other personal property, or 19 42076. The Attorney General shall prosecute the 20. debts in their possession,under their control, or owing by 20 action, and the provisions of the Code of Civil Procedure 21 them. If such notice seeks to prevent the transfer or other 21 relating to service of summons, pleadings, proofs, trials, 22 disposition of a deposit in a bank or other credits or .22 and appeals are applicable to the proceedings. 23 personal property in the possession or under the control 23 42077. In the action a writ of attachment may issue, 24 -of a bank, the notice to -be effective shall state the 24 and no bond or affidavit previous to the- issuing of the .25 amount, interest and penalty due from the person and 25 attachment is required. 26 shall be delivered or mailed to the branch or office of 26 42078. In the action a certificate by the board showing 27 such bank_at which-such deposit-is carried or at which .27 the delinquency shall be prima facie -evidence of the 28 such ' credits or personal property is held. 28 determination of the tax or the amount of tax, of the 29 Notwithstanding any other provision, with-respect .to a 29 delinquency of the :amounts set forth, and of the 30 deposit in a bank or other credits or personal property.in 30 compliance by the 'board with all the provisions of this 31 the possession or under the control of a bank, the notice 31 part in relation to the computation and determination of 32 shall only be effective with respect to an amount not in .32 .the amounts. 33 excess of two times the amount, interest and penalty due 33 42079. In any action brought under this part process 34 from the person. If, during the. effective period of the 34 may be served according to the Code of Civil Procedure 35 notice to withhold-, any person so notified makes any 35 and the Civil Code of this state or may be served upon 36 transfer or disposition of the property or debts required 36 any agent or clerk in this state employed by any person's 37 to be withheld hereunder, to the extent of the value of 37 .place of business maintained by the person in this state. 38 the property or the amount of the debts thus transferred 38 In the latter case a-copy of the process shall forthwith be 39 or paid he shall be liable to the state for any indebtedness 39 sent by registered mail to the producer at his principal or 40 dr inder this part from the person with respect to 40 home office. AB 3 —30— —31— AB 3 1 Article 3. Judgment for Tax 1 1 request of the board in the same manner as execution 2 2 may issue upon other judgments, and sales shall be held 3 42083. If any amount required to be paid to the state 3 under such execution as prescribed in the Code of Civil 4 under this part is not paid when due, the board may 4 Procedure. 5 within three years after the amount is due file.in the 5 6 office of the County Clerk of Sacramento County, or any 6 Article 4. Priority and Lien of Tax 7 county,a certificate specifying the amount required to be 7 8 paid, interest and penalty due, the name and address as 8 42090. The amounts required to be paid by any 9 it appears on the.records of the board of the person liable, 9 person under this part together with interest and 10 the compliance of the board with this part in relation to 10 penalties shall be satisfied first in any of the following 11 the determination of the amount required to be paid,and 11 cases: 12 a request that judgment be entered against the.person in 12 (a) Whenever the person is insolvent. 13 the amount required to be.paid-, together with interest 13 (b) Whenever the person makes a voluntary 14 and penalty as set forth in the certificate. 14 assignment of his assets. 15 42084. The county clerk immediately upon the ding 15 (c) Whenever the estate of the person in the hands of 16 of the certificate shall enter a judgment for the state 16 executors, administrators, or heirs is insufficient to pay all 17 against the person in the amount required to be paid, 17 the debts due from the deceased. 18 together with interest and penalty as set forth in this 18 (d) Whenever the estate and effects of an absconding, 19 certificate. The county clerk may file the judgment in a 19 concealed, or absent person required to pay any amount 20 looseleaf book entitled, "Special Judgments for Oil 20 under this part are levied upon by process of law. 21 Severance Tax." 21 This section does not give the state a preference over 22 42085. An abstract of the judgment or a copy may be 22 any recorded lien which attached prior to the date when 23 filed for record with the county recorder of any county. 23. the amounts required to be paid became a lien. 24 From the time of the filing the amount required to be 24 The preference given to the state by this section shall 25 paid _together with interest and penalty set forth 25 be subordinate to the preferences given to claims for 26 constitutes a lien upon all the real property in the county 26 personal services by Sections 1204 and 1206 of the Code 27 owned by the person liable or afterward and before the 27 of Civil Procedure. 28 .lien expires acquired by him. The lien has the force, 28 42091. If any amount required to be paid to the state 29 effect, and priority of a judgment lien-and shall continue . 29 under this part is not paid when due, the board may 30 for 10 years from the date of the judgment so entered by 30 within three years after the amount is due file for record 31 the county clerk unless sooner released or otherwise 31 in the office of any county recorder a certificate 32 discharged'. The lien may within 10 years from the date 32 specifying the amount, interest, and penalty due, the 33 of the judgment or within 10 years from the date of the 33 name and address as it appears on the records of the 34 last extension of the lien in the manner herein provided, 34 board of the person liable for the same, and the fact that 35 be extended by filing for record in the office of the county 35 the board has complied with all provisions of this part in 36 recorder of any county an abstract or copy of the 36 the determination of the amount required to be paid. 37 judgment and from the time of such filing the lien shall 37 From the time of the filing for record, the amount 38 be extended to the real property in such county for 10 38 required to be paid together with interest and penalty 39 years unless sooner released or otherwise discharged. 39 constitutes a lien upon all real property in the county 40 42086. Execution shall issue upon the judgment upon , 40 owned by the person or afterward and before the lien AB..3 —32— —33— AB 3 1 expires acquired by him. The lien has the force, effect,. 1 released or that the. lien has been subordinated as 2. and priority off-a judgment lien and shall continue for 10 • 2 provided in the certificate. 3 years from the time of the filing of the certificate unless 3 4 sooner released or otherwise discharged. The lien may, 4 Article.5. Warrant for Collection of Tax 5 within .10 years from the date of the filing of the 5 6 ' certificate or within 10 years from the date of the last 6 42100. At any time within three years after any person 7 extension of the lien.in the manner herein provided, be A 7 . is delinquent, in the payment of any amount herein 8- extended by filing for record a new certificate in the +� 8 required "to be paid, or within 10 years after the last 9 office of the county recorder of any county and from the 9 . recording of an abstract under Section 42085 or of a . 10 time of.such filing the lien shall be extended to the real 10 certificate under Section 42091, the board or its 11 property in such county for 10 years unless sooner 11 authorized representative may issue a warrant for the . 12 released or otherwise discharged. 12 enforcement of any liens and for the collection of any 13 42092:. Within the time allowed in Section 42091, the 13 amount required to be paid to the state under this part. 14 board may also file a certificate of state. tax lien with the 14 The warrant shall be directed to any sheriff, marshal or 15 Secretary of State . pursuant to -Chapter 14.5 15 constable and shall have m the same effect as a writ of 16 (commencing with Section 7220) of Division 7 of Title 1 16 execution. The warrant shall be levied- and sale made 17 of the Government Code. From the time of the filing of 17 pursuant to it in the same manner and with the same 18 the certificate with the Secretary of State, the amount 18 effect as a levy of and a sale pursuant- to a writ of 19- required to be paid, together with interest and penalty, 19 execution. 20. constitutes a lien upon all personal property in the.state 20 , 42101. The board may pay or advance to the sheriff, 21 owned by the person orafterwards acquired by him until 21 marshal or constable, the same fees, commissions, and 22 'the certificate of state tax lien lapses. Alien imposed by 22 expenses for his services as are provided by law for similar 23 this section shall not be valid as against a purchaser for 23 services pursuant-to a writ of execution.The board, and 24 value without actual knowledge of the lien. 24 not the court, shall approve the fees for publication.in a 25 42093. The board may at any time release all or any + 25 newspaper.. 26 portion of the property subject to any lien provided for 26 42102. . The fees, commissions, and expenses are the 27 in this part from the lien or subordinate the lien to other 27 obligation of the person required to pay any amount 28 liens and encumbrances if it determines that the amount, 28 under this part and may be collected from him by virtue 29 interest, and penalties are sufficiently secured by a lien 29 of the warrant or in,any other manner provided in this. 30 on other property or that the release or subordination of 30 part for the collection of the tax. 31 the lien will not jeopardize the collection of the amount, 31 } 32 interest, and penalties. 32 Article 6. Seizure and Sale 33 42094. The board may release any lien imposed under. 33 34 Section 42091 or 42092 if it finds that the liability , 34 42105. At any time within three years after any person 35 -represented by the lien, including any interest accrued 35 is delinquent in the payment of any amount, the board 36 thereon, is legally unenforceable. 36 may forthwith collect the amount in the following 37 � 42095. A certificate by the board to the effect that any 37 manner: The board shall seize any property, real or 38 property has been released from the lien or that the lien 38 personal, of the person and sell the property, or a •39 has been subordinated to other liens and encumbrances 39 sufficient part of it, at public auction to pay the amount 40 shall he conclusive evidence that the property has been ' 40 due together with any interest or penalties = nosed for AB —34— —35— AB 3 1 the delinquency and any costs incurred on account of the 1 any reason the receipt of the person liable for the amount 2 seizure and sale. 2 is not available, the board shall deposit the excess moneys 3 42106. Notice of the sale and the time- and place 3 with the State Treasurer,as trustee for the owner,subject 4 thereof shall be given to the delinquent person in writing 4 to the order of the person liable for the amount,his heirs, 5 at least 10 days before the date set for the sale in the 5 successors, or assigns. 6 following manner: The notice shall be enclosed in an 6 7 envelope addressed to the person at his last known 7 Article 7. Miscellaneous Provisions 8' address or place of business in this state. It shall be 8 9 deposited in the United States mail,postage prepaid. The 9 42110. The board .shall report to the Controller the 10 notice shall also be published for at least 10 days before 10 amount of collections under this part, and he shall keep 11 the date set for the sale in a newspaper of general 11 a record thereof. 12 circulation published in the county in which the property 12 42111. . The remedies of the state provided for in this 13 seized is to be sold. If there is no newspaper of general 13 chapter are cumulative,and no action taken by the board 14 circulation in the county, notice shall be posted in three 14 or Attorney General constitutes an election by the state 15 public places in the county 10 days prior to the date set 15 . to pursue any. remedy .to the exclusion of any other 16 for the sale. The notice shall contain a description of the 16 remedy for which provision is made in this part. 17 property to be sold, a statement of the amount due, 17 42112. In all proceedings under this chapter the board 18 including interest, penalties, and costs, the name of the 18 may act on behalf of the people of the State of California. 19 delinquent, and the further statement that unless the 19 20 amount due, interest, penalties, and costs are paid on or 20 CHAPTER 6. OVERPAYMENTS AND REFUNDS 21 before the time fixed in the notice for the sale; the 21 22 property, or so much of it as may be necessary, will be 22 Article 1. Chaim for Refund 23 sold in accordance with law and'the notice. 23 24 42107. At the sale the board shall sell the property in 24 42115. If the board determines - that any amount, 25 accordance with law and the notice and shall deliver to 25 penalty, or interest has been paid more than once or has 26 the purchaser a bill of sale for the personal property and 26 been erroneously or illegally collected or computed, the 27 a deed for any real property sold. The bill of sale or deed 27 board shall set forth that fact in the records of the board 28 vests the interest or. title of the person liable for the 28 and shall certify to the State Board of Control.the amount 29 amount in the purchaser. The unsold portion of any 29 collected in excess of the amount legally due and the 30 property seized may be left at the place of sale at the risk 30 person from whom it was collected or by whom paid. If 31 of the person liable for the amount. 31 approved by the State Board of Control the excess 32 42108. If upon the sale the moneys received exceed 32 amount collected or paid shall be credited by the board 33 the total of all amounts, including interest, penalties, and 33 on any amounts then due and payable from the person 34 costs due the state,the board shall return the excess to the i 34 from whom the excess amount was collected or by whom 35 person liable for the amounts and obtain his receipt. If 35 it was paid under this part, and the balance shall be 36 any person having an interest in or lien upon the 36 refunded to the person, or his successors, administrators, 37 property files with the board prior to the sale notice of his ; 37 or executors. 38 interest or lien, the board shall withhold any excess 38 In the case, however, of a determination by the board 39 pending a determination of the rights of the respective 39 that an amount not exceeding five thousand dollars 40 parties thereto by a court of competent jurisdiction. If for ' 40 ($5,000) was not required to be paid under this part, the r: AB 3 --36— —37— AB 3 1 board without obtaining approval of the State Board of 1 person making the overpayment with respect to the 2 Control may credit the amount on any amounts then due 2 amount being refunded or credited. 3 and payable under this part from the person by whom the . 3 . The interest shall be paid: 4 amount was -paid and may refund the balance to the 4 (a) In the case of a refund, to the last day of the 5 person or his successors, administrators, or executors. 5 calendar month .following the date upon which the 6 42116. (a) Except as provided in subdivision (b) no _ 6 person making the overpayment, if he has not already 7 refund shall be approved by the board after three years r 7 filed a claim,is notified by the board that a claim may be .8 from the last day of the month following the.close of the 8 filed or the date upon which.the claim is approved by the 9 quarterly period for which the overpayment was made, 9 board, whichever date is the earlier. 10 or, with respect to determinations made under Article 1 10 (b) In the case of a credit, to the same.date as that to 11 (commencing with Section 42030), 2 (commencing with 11 which interest is computed on the tax or amount against 12 Section 42040) or 3 (commencing with Section 42047) of 12 which the credit is applied. 13 Chapter 4, after six months from the date the 13 42121. (a) If the board determines that any 14- determinations become final,or after six months from the 14. overpayment has been made intentionally or by reason of 15 date of overpayment,whichever period expires the later, 15 carelessness, it shall not allow any interest thereon.' 16 unless a claim therefor is filed with the board within such 16 (b) If any person who has filed a claim for refund 17 period. No credit shall be approved by the board after the 17 requests the board to defer action on the claim,the board, 18 expiration of such period unless a claim for credit is filed 18 as a condition .to deferring action, may -require the _ 19 with the board within such period, or unless the credit 19 claimant to waive interest for the period during which 20' relates to a period for which a waiver is given pursuant 20 the, person requests the board to defer action on the 21 to Section 42038. '21. claim. 22 (b) A refund may be approved by the board_for any 22 23 period for which a waiver is given under Section 42038 if 23 Article 2. Suit for Refund 24 -a claim therefor is filed with the board before the 24 25 expiration of the period agreed upon. 25 42125. No injunction or writ of mandate or other legal 26 421-17. Every claim shall be in writing and shall state 26 or equitable process shall issue in any suit, action, or 27 the specific grounds upon which the claim is founded. 27 proceeding in any court against this state or against any 28 42118. Failure to file a claim within the time 28 officer of the state to prevent or enjoin the collection 29 prescribed in this article constitutes a waiver of any 29 under this part of any tax or any amount of tax required 30 demand against the state on account of overpayment. 30 to be collected. 31 42119. Within 30 days after disallowing any claim in 31 42126. No suit or proceeding shall be maintained in 32 whole or in part the board shall serve notice of its action 32 any court for the recovery of any amount alleged to have 33 on the claimant in the manner prescribed for service of 33 been erroneously or illegally determined or collected 34 notice of a deficiency determination. 34 unless a claim for refund or credit has been duly filed 35 42120. Interest shall be paid upon any overpayment 35 pursuant to Article 1 of this chapter. 36 of any amount of tax at the adjusted annual rate 36 . . 42127. .Within 90 days after the mailing of the notice 37 established pursuant to Section 19269 from the last day of 37 of the boards action upon a claim filed pursuant to 38 the calendar month following the quarterly period for 38 Article 1 of this chapter,the claimant may bring an action 39 which the overpayment was made; but no .refund or 39 against the board on the grounds set forth in the claim in 40 credit shall be made of any interest imposed upon the 40 a court of competent jurisdiction in any city city and AP - —38— —39 AB 3 1 county of this state in which the Attorney General has an 1 Sacramento in the name of the state. 2 office for the recovery of the whole or any part of .the 2 42136. The. action shall be tried in the County of 3 amount with respect to which the claim has been 3 Sacramento unless the court with the consent of the 4 disallowed. 4 Attorney General orders a change of place of trial. 5 Failure to bring action within the time specified 5 42137. The Attorney General shall prosecute the 6 constitutes a waiver of any demand against the state on 6 action, and the provisions of the Code of Civil Procedure 7 account of alleged overpayments. 7 relating to service of summons, pleadings, proofs, trials, 8 42128. If the board fails to mail notice.of action on a .8 and appeals are applicable to the proceedings. 9 claim within six months after the claim is filed, the 0 Article 4. Cancellations 10 claimant may, prior to the mailing of notice by the board 1 11. of its action on the claim, consider the claim disallowed 11 12 and bring an action against the board on the grounds set 12 42140. If any amount in excess of five thousand dollars 13 forth in the claim for the recovery of the whole or any 13 ($5,000) has been illegally determined either by the 14 part of the amount claimed as an overpayment. 14 person filing the return or by the board,the board shall 15 42129. If judgment is rendered for the plaintiff, the 15 set forth that fact in its.records and certify to the State 16 amount of the judgment shall first be credited on any oil 16 Board of Control the amount determined to be in excess 17 and gas production tax due and payable from the 17 of the amount legally due and the person against whom 18 plaintiff.The balance of the judgment shall be refunded 18 the determination was made. If the State Board of 19 to the plaintiff. . 19 Control approves, it shall authorize the cancellation of 20 42130. In any judgment, interest shall be allowed at 20 the amount upon the records of the board. If an amount 21 the adjusted annual rate established pursuant to Section 7 21 not exceeding five thousand dollars ($5,000) has been 22 19269 upon the amount found to have been illegally 22 illegally determined either by the person filing a return 23 collected from the date of payment of the amount to the 23 or by the board, the board without certifying this fact to 24 date of allowance of credit on account of the judgment or 24 the State Board of Control .shall authorize -the . 25 to a date preceding the date of the refund warrant by not 25 cancellation of the amount upon the records of the board. 26 more than 30 days; the date to be -determined by the 26 27 board. 27 CHAPTER 7. ADMINISTRATION 28 - 42131. A judgment shall not be rendered in favor of 28 29 the plaintiff in any action brought against the board to 29 42145. The board shall enforce the provisions of this 30 recover any amount paid when the action is brought by 30 part and may prescribe, adopt, and enforce rules and 31 or in the.name of an assignee of the person paying the 31 regulations relating to the application, administration 32 amount or by any person other than the person who paid 32 and enforcement.of this part. The board may prescribe 33 the amount. 33 the extent to which any ruling or. regulation shall be 34 34 applied without retroactive effect. 35 Article 3. Recovery of Erroneous Refunds 35 42146. The board may employ accountants, auditors, 36 36 appraisers, investigators, assistants, and clerks necessary 37 42135. The Controller may recover any refund or part 37 for the efficient administration of this part and may 38 thereof which is erroneously made and any credit or part 38 designate representatives to conduct hearings, prescribe 39 thereof which is erroneously allowed in an action brought 39 regulations, or perform any other duties imposed by this 40 in a court of competent jurisdiction in the County of 40 part or other laws of this state upon the board. AB .3 —40— _ —41 — AB 3 1 42147. Every person producing oil in this state shall 1 maintained by the board under this part.The information 2 keep whatever records, receipts, invoices, and other 2 so obtained pursuant to the order of the Governor shall 3. pertinent papers in that form which the board may 3 not be made public except to the extent and in the 4 prescribe and shall make them available for inspection 4 manner that the order may authorize that it be made 5 and audit by the board at whatever time and place which 5 public. 6 the board and-the person shall agree. 6 42150. Upon written request of the .assessor of any 7 42148. The board may require any producer or person ( 7 county containing oil, the board shall permit the assessor, . 8 in charge of production operations to furnish any 8 or any .duly authorized deputy or employee of such 9 additional information deemed to be necessary for the 9 assessor,to examine any records pertaining to the county 10 purpose of computing the amount of said tax,and for said 10 of such assessor which are-maintained by the board under . 11 purpose to examine the oil, the meter and other charts, 11 this part. It is unlawful for the assessor or any other 12 books, records, and all files of such.person. The board or 12 person examining records pursuant to this section to 13 any person authorized in writing by it may investigate 13 make known in any manner whatever the business 14 the character of the business of the person in order to. 14 affairs, operations or any other information pertaining to 15 verify-the'accuracy of any return made, or, if no return 15 any producer required to report to the board or pay a tax 16 is'''- ade-ly the person, to ascertain and determine .the 16 pursuant to this part, or the amount or source of income, 17 amount required to be paid. To that end the board may 17 profits, loans, expenditures, or any particular thereof, set 18 'issue subpoenas and examine witnesses under oath, and 18 forth or disclosed in any return;except that any appraisal 19 if any witness shall fail or refuse to appear at the request 19 data, including "market data" as defined in-Section 408, 20 of the board, or refuses access to books, records and files, 20 may be disclosed to any other assessor. Any assessor who 21 the district court of the proper county, or the judge 21 unlawfully discloses information of .any .producer 22 thereof, on application of the board, shall compel 22 required to report to the board or pay a tax pursuant to 23 obedience by proceedings for contempt,as in the case of 23 this part shall forfeit one thousand dollars ($1,000) to the 24 disobedience of the requirements of a subpoena issued 24 county, to be recovered on his official bond in an action 25 frbm such court or a refusal to testify therein. 25 brought in the name of the people by the Attorney 26 42149: Except as provided in Sections 42022 and 26 General, when directed to do so by the board. 27 42150, it is unlawful for the board or any person having 27 28 an administrative duty under this part to make known in 28 CHAPTER 8. VIOLATIONS AND RES.JUDICATA 29 any manner whatever the business affairs, operations, or 29 30 .any other information pertaining to any producer 30 . 42155. Any producer who fails or refuses to furnish 31 required to report to the board or pay a tax pursuant to 31 any return required to be made,or who fails or refuses to 32 .this part,-or the amount or source of income, profits, 32 furnish a supplemental return or other data required by 33 losses,expenditures,or any particular-thereof,set forth or 33 the board,is guilty of a misdemeanor and subject to a fine 34 disclosed in'any return, or to permit any return or copy 34 of not exceeding five hundred dollars ($500) for each 35 thereof or any book containing any abstract or particulars 35 offense, or be imprisoned for not exceeding one year in 36 thereof to be seen or examined by any person..However, 36 the county jail, or be subject to both the fine and 37 the Governor may,by general or special order,authorize 37 imprisonment in the discretion of the court. 38 examination by other state officers, by tax officers of 38 42156. Any person required to make, render, sign, or 39 another state, by the federal government, if a reciprocal 39 verify any report who makes any false or fraudulent 40 arrangement exists,or by any other person of the records 40 . return, with intent to defeat or evade the de" nination AB 3 —42— —43— AB 3 ~ 1 of an amount due required by law to be made is guilty of 1 normal assessment practices, on a per-parcel basis for 2 a misdemeanor. He or she shall for each offense be fined I 2 each tax rate area,that would have been assessed without 3 not less than three hundred dollars ($300) and not more 3 the enactment of this part. 4 than five thousand dollars ($5,000), or be imprisoned for 4 (3) The difference between the amount determined 5 not exceeding one year in- the county jail; or be subject 5 pursuant to paragraph (1) and the amount determined 6 to both the fine and imprisonment in the discretion of the 6 pursuant to paragraph -(2) shall be the amount of local 7 court. 7. property taxes lost as a result of the general operation of 8 42157. Any violation of this part, except as otherwise 8 this part. 9 provided, is a misdemeanor. 9 (b) Reimbursement of local agencies and school 10 42158. Any prosecution for violation of any, .of the 10 districts for local property taxes lost as a result of the 11 penal provisions of this part shall be instituted within 11 general operation of this part shall be made, to the extent 12 three years after the commission of the offense. 12 money is appropriated by the Legislature for this 13 42159. In the determination of any case arising under 13 purpose,to any county electing to seek reimbursement as 14 this part the rule of res judicata is applicable only if the 14 follows: 15 liability involved is for the same monthly period as was 15 (1) The auditor-controller of each county electing to 16 involved. in another case previously determined. 16 seek reimbursement pursuant to this chapter shall submit 17 17 to the board a claim for the amount of local property taxes 18 CHAPTER 9. DISPOSITION OF PROCEEDS 18 lost, as determined pursuant to subdivision (a). 19 19 (2) The board shall review the claim in order to 20 42165. All taxes, interest and penalties imposed and �� 20 confirm the accuracy of the determination of property 21 all amounts of tax required to be paid under this part shall 21 taxes lost. The board is authorized to perform any audit 22 be made in remittances to the State Board of 22 necessary to confirm the accuracy of the determination 23 Equalization and shall be deposited in the State Treasury 23 of property taxes lost, and shall have access to, and may 24 as provided in this chapter. 24 make copies of, all records public or otherwise 25 42166. All taxes,interest,penalties and other amounts V. 25 maintained in the office of the.county or its agent. 26 collected pursuant to this part shall be deposited in the 26 (3) The board shall reimburse local agencies 27 General Fund. 27 biannually on December 31st and April . 30th. -Any 28 28 adjustments resulting from any audit of the claim 29 CHAPTER 10. REIMBURSEMENT OF LOCAL AGENCIES 29 submitted by the auditor-controller shall be made in the 30 30 second installment payment. 31 42170. (a) Determination of the amount of local 31 8F�& 2- 32 property taxes lost as of a result of the general operation 33 reimbursement is 32 SEC. 4 No appropriation is made and no required b this act pursuant to Section � 6 of Article XIII B of the California Constitution or 33 of this part shall be determined as follows: y 34 (1) The amount of annual property tax shall be �1 35 Section 2231 or 2234 of the Revenue and Taxation Code 35 determined, based on rules and regulations governing 36 because the only.costs which may be incurred by a local 36 normal assessment practices, on aper-parcel basis for 37 agency or school district will be incurred because this act 37 each tax rate area, in accordance with the provisions of 38 creates a new crime or infraction, changes the definition 38 this part. 39 of a crime or infraction changes the penaltyfor a crime 39 (2) The amount of--annual property tax shall be 40 determined, based on rules and regulations governing ' 40 or infraction, or eliminates agrime or infraction. AB 3 44--- i 2 SEC. 5 This act provides for a tax levy within the 3 meaning of Article£V of the Constitution and shall go into 4 immediate effect. 0 'THUR.'64 ASSEMBLY WEEKLY IIISTOAl' Feb. 16—In Assembly. Concurrence in senate anu•ndntents Pending. A.B. No. 6—(Chaptered C E Afar. I—Senate amendments concurred in.To enrollment. (Ayes 42.Noes 35. Page 11299.) A.B. No. 7—(Died omn Afar. 2--E'.nro1lcd and to the C:uvernor at 10 a.m. Ater. 13—Veloed by Covemor. Mar. 13—Considcrttion of Governor's veto pending. A.B. No. 8—(Died in Comn Mar. 26—Governor's veto stricken from file. A.B. No. 9—(Chaptered - C A.B. N 2—(Died in Committee.) A.B. No. la—(Joint Rule 62 A.B. No. 3 Bates (Principal coauthor: Hannigan) Hayden, Agnos, ampbell, Chacon, Costa, Tarr, Coggin, Harris, Hauser, A.B. No. II—(Died in Com Isenberg, Killea, Klehs, Margolin, Molina, Moorhead; Papan, A.B. No. 12—Vasconcellos Tanner, Tucker, and Maxine Waters (Senator Rosenthal, and Roos. coauthor). An act to add Sections 17054.1 and 23603.5 to,and to add Part 21 (comrnencing An act to add Chapter 7 (c with Section 42(M) to Division 2 of, the Revenue and Taxation Code, Elections Code,relating relating to taxation,to take effect immediately, tax levy. take effect.immediately 1982 1982 Dec. 6—Read first time.To print. Dec. 6—Read first time. Dec. 7—From printer. May be heard in committee January 6. Dec. 7—From printer. N 19 3 1983 Jan. 4—Referred to Cot ]an. 4—Referred to Com.on REV. &TAX. April 18— Mav 31—* From committee chairman,with author's amendments:Amen From committe re-refd,and romer to Com re-refer to Com.on REV.&TAX. Read second time and amended. Appril 20—Re-referred to( June 1—Re-referred to Com. on REV. & TAX. A1ay 17-1n committee:S June 6—In committee:Set,first hearing.Ile.aring canceled at the request of author.. author. May 24—In committee: 1 June 13—In committee: ull postuo'2 b cQjumiLLc- May 31—From committe- June 27—In committee:> a. e •b committee. re-refer to Com Juty 6—From committee: Do pass and re-refer to Com. on W. & M. June 1—Re-referred to ( e-re erre yes . Voes 4.) (July 5). June 2—Joint Rule 61 su. July 15--From committee chairman,with author's amendments:Amend,and amendments: re-refer to Com. on :Com. & A1. Read second time and amended. second time A July 16—Re-referred to Co . on & Is W. 1. June 6—Re-referred to Aug. 17—In committee: Set, first hearing. Failed assa e. June 21—Joint Rule 61 sitAug. 23—In committee: Reconsideration can amer tnd i Aug. 25—From committee: o pass. yes 12. Noes 8.) (August 23). 14). eco:. Aug. 29—Read second time. To third reading June 22—Re-rer,..ed to( Aug. 31' To inactive file on motion of Assembly Member Bates. 1984 16. Noes 3.) (Ju and to Senate. i Jan. 19—Notice of intention to remove from inactive file given by June 23—In Senate.Read Assemblymember Bates. to C:om.'on E. P jan. 23=From inactive file. To third reading. July 6—In committee: I Jan. 26—Read third time, amended,and returned to third reading. July 18—From committe Jan. 30—Read third time, passed, and to Senate. (Ayes 41. Noes 28. Page Com. on FIN. July 19—Read second tit Jan. 31-1n Senate. Read first time.To Com. on RLS. for assignment. Aug. 2-1—From committ.: Feb. 16—Referred to Com. on REV. & TAX. Aug. 24—Read second tit. + Mar. 1—From committee chairman,with author's amendments:Amend,and Sept. 1—Read third time re-refer to committee.React second tithe,amended,and re-referred Sept. 9—Read third tirne to Com. on REV. & TAX. (Ayes 2T Nois Mar. 7—In committee:Set,first hearing.Hearing canceled at the request of Sept. 12—In Assembly. C., author. Sept. 13—Assembly refuse April 26—From committee chainntin,with author's amendments:Amend,and Cornmittee- (A re-refer to committee.Read second time,amended,and re-referred, 1984 to Com. on REV. & TAX. April 2—Assembly Men. May 2—n corm ee:,e ,secon hearing. Hearing canceled at the request apIwAnted to C of author. _ April 5—In :assembly. A• Died in Committee. Johnson. A.B. No. 4—(Pied ) April 30—Senators l uek)i Crnnmittee. . A.B. No. 5—(Chaptered - Chaptcr 1033.) 3—All t L Vd �, 1(a ; rJV1W "C ic.�. �. „A.�.:: rb- _q��►-� •`Jtci��',�• �_. dl�' ,� _ y !�i.+.:' REQUEST FOR CITY COUNr'L ACTION Date December 8, 1983 Submitted to: Honorable Mayor and City Council Su.bmitted by: Charles W. Thompson, City Administrator Prepared by: Raymond C. Picard, Fire Chief f ;�dltoVED BY CITY COUNGIL Subject: BID AWARD - FENCING FOR CITY WELLS70 & 65,L cy 0 C47*C.LRRK, T� 1 � Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: The City s Oil Code contains specifications for fencing around oil operation.sites. The fences around the City wells do not meet these standards at present. RECOMMENDATION: Approve the low bid or new fencing submitted by the Cook Fence Company, Inc. and authorize the Mayor and City Clerk to execute a contract in the amount of $2,050, plus contingencies of $205 for a total of $2,255. ANALYSIS: The City Council adopted a revised Oil Code in July 1981. Section 15.20.160 of this code contains specifications for adequate fencing of oil operation sites. The fencing around the City owned oil wells on the Civic Center property does not meet these standards. Because City is interested in cleaning up the oil operations within its boundaries, especially in the downtown area, we believe it should set a good example for other oil operators by complying with its own regulations. In addition, the present fences are not sufficient protection for the wells because they could easily be toppled or displaced and, therefore, constitute a safety hazard and possible insurance risk. For these reasons, both Development Services and the Fire Department staff believe the fencing should be replaced. Bids were solicited for the replacement of the fence around the three wells. The bids include the cost of slatting the fence to meet the screening requirements of Section 15.22.010. The bids are summarized below. Contractor Bid Cook Fence Company, Inc. $2,050 Sentry Fences $2,300 Alcorn Fence Company $3,100 Staff has reviewed the bid proposals and recommends acceptance of the Cook Fence Company, Inc. bid for $2,050 plus a contingency of $205 for a total of $2,255. FUNDING SOURCE: Unappropriated Fund Balance - General Fund ALTERNATIVE ACTIONS: 1. Reject staff recommendation and select one of the other bids. 2. Reject all bids and seek new bids. 3. Do not replace the existing fencing around the City owned wells. 1 ATTACHMENTS: l Financial Impact Report V CWT.IR.CP:dc CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH To Charles W. Thompson From Robert J. Franz City Administrator Chief of Administrative Services Subject Appropriation for Fencing Date December 8, 1983 of Oil Operation Sites FIR # 84-16 In response to the request of the Fire Department, a Financial Impact Report has been prepared and submitted relative to the installation of adequate fencing of oil operation sites . It has been estimated that an appropriation of $2,255 would be sufficient to provide the necessary funding for this project. Adequate monies are available in the City's unappropriated General Fund that may be used for this purpose. Should the City Council approve this appropriation, the unaudited, unencumbered balance in the fund will be reduced to $2,564,458. Robert .Franz Chief of Administrativ ar�O ces RJF/AR/cg r , CITY. OF HUNTINGTON BEACH FINANCIAL IMPACT REPORT .Project Name Installation of Fencing Around Oil Operation Sites Description Requested funding for this project. 1 . DIRECT PROJECT COSTS 1 . 1 One-Time Costs Land urn. , aci - Acquisition Construction ties, E ui ment. Other Total Cost . 2,255 2,255 1 .2• Recurring Annual Costs. Additional Materials 8 Outside Payroll Personnel Supplies Services. Revenues. Total .Cost 1 .3 Replacement/Renewal Costs N/A 2. INDIRECT COSTS- Loss of interest earning capability due to expenditure of funds. Financial Impact Report Page. 2 3. NON-DOLLAR COSTS N/A 4. BENEFITS TO BE DERIVED FROM THE PROJECT As stated by the requesting department, the City's complying with its own ordinance required specifications for adeguat 'fenci_ng of oil operation sites will not 0n1� set a good example to other oil operators in the area but conform to the Citv.ss intentions of cleaning up the oil operations within Huntington Beach boundaries . - 5. PROJECT USAGE Daily. 6. EXPENDITURE TIMING Subsequent to City Council approval and awarding of the bid . 7. COST OF NOT IMPLEMENTING THE PROJECT Failure to approve this request will allow the City the option of either selecting another firm to provide these services or to instruct staff on how, or whether, to proceed with the project. REQUES FOR CITY COUNCIL ACTION Date July 1-8_, 1983 Submitted to: Honorable Mayor and City Council Submitted by: Charles W. Thompson, City Administrat -- O ED By yo OUNCIL Prepared by: James W. Palin, Director of Developme t Services � - 19r Subject: GENERAL FUND APPROPRIATION FOR COASTA ENERGY IMPACT7. PROGRAM (CEIP) GRANT M CITY CLERK ry Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: Earlier this year, the City applied for a Coastal Energy Impact Program (CEIP) grant from the Coastal Commission, and .was awarded partial fund- ing in the amount of $4, 800 to fund continued monitoring of offshore oil development and related activities . Work on the grant is scheduled to begin in mid-July. An appropriation from the general fund is necessary now so that work on the grant can begin on a timely basis. RECOMMENDATION: Appropriate $4 , 800 from the general fund to cover the amount of the CEIP grant. This money will be reimbursed. ANALYSIS: Huntington Beach' s Local Coastal Plan policies call for closer monitoring of energy-related developments in the coastal zone, and increased partici- pation in energy impact planning. Huntington Beach has long been the site of significant energy production facilities, and has been proposed as a location for offshore oil and gas development, including onshore support bases, separation plants, and storage facilities, marine terminals, and pipeline landfalls. The City participated in the review process for Federal Lease-Sale No. 68 , and it is important to similarly participate in upcoming Lease-Sale No. 80, which will likely include tracts off the shore of Huntington Beach and is scheduled to take place within the 18 month time frame of this grant. This grant will provide some assistance to the City for participation in Federal and State offshore leasing and development activities and assessment of impacts from related onshore support facilities. Work on this grant is scheduled to begin in mid-July as soon as the Coastal Commission fully executes the grant agreement with the City. The duration of the grant is 18 months. A $4, 800 appropriation from the general fund is requested at this time so that work on the grant can begin on a timely basis. PIO 4/81 "CEIP GRANT APPROPRIATION July 5, 1983 Page 2 ALTERNATIVE ACTION: 1. Do not appropriate money from the general fund. This would mean that the City would be unable to accept the grant. FUNDING SOURCE: 1. $4, 800 Coastal Energy Impact Program (CEIP) grant from the Coastal Commission. SUPPORTING INFORMATION: 1. Fiscal Impact Report JWP:HDB: js CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH To Charles W. Thompson From Robert J. Franz City Administrator Chief of Administrative Services Subject General Fund Appropriation Date July 7, 1983 for Coastal Energy Impact Program Grant FIR # 83-54 In response to the request of the Development Services Department, a Financial Impact Report has been prepared and submitted relative to the City's approved application to the Coastal Commission for a Coastal Energy Impact Program (CEIP) grant. The grant funds total $4,800. The only immediate fiscal impact of this transaction will be to limit the City's earning capability during the interim prior to reimburse- ment of these funds from the Coastal Commission. Also, the City will be required to provide an in-kind match of approximately $2,298. This will be absorbed by the Development Services and Administrative Services operating budgets. Robert. J. F4anz Chief of Administrative Services RJF/AR/cg CITY. OF HUNTINGTON BEACH FINANCIAL IMPACT REPORT Project Name . ..I-nterim Ci.t-y Fund.in-g to Accommodate CEIP Project _ Description Requested funding of this program 1 . DIRECT PROJECT COSTS 1 . 1 One-TIME Costs an d Furn. ; aci - Acquisi.:ti-on.-_ : .Cons ruction. ties; Equipment _Other -.rotE8OCO st 4 800 4 1 .2 Recurring Annual Costs Additions . Materials S Outside NyrolI ._-Personnel Su lies _ So.rVices ..Revenues._ . Total_Cosi 1 .3 Replacement/Renewal Costs N/.A - 2. - INDIRECT COSTS Loss. of City's e.a-rning capability during the, interim prior to -reimbursement of these funds from the Coastal Commission. Financial Impact Report _ Page. 2 • 3. NON-DOLLAR COSTS N/A 4. BENEFITS TO BE DERIVED FROM THE PROJECT As enunciated by the requesting department, approval of th*T-s project will allow for a .partially subsidized effort towards a closer monitoring of energy related developments in the coastal zone as well as increased participation in energy impact planning. 5. PROJECT USAGE Daily. 6. EXPENDITURE TIMING Subsequent to City Council approval , work on the project is scheduled to commence in mid-July, 1983. It appears. likely that the initial request for reimbursement wi l l be- submi-tted on or before- September 1 , 1983. 7. COST OF NOT IMPLEMENTING THE PROJECT Failure to provide the required interim fiscal resources might jeopardize the Coastal Commission's previously awarded grant for the amount in question. CITY OF HIU TINGTON BEACH CITY COUNCIL COMMUNICATION • • ONFINUON RFA(H TO Bob Mandic , Mayor FROM June Allen Council Secretary SUBJECT SUGGESTED PROJECTS FOR DATE June 21, 1982 POSSIBLE AMINOIL FUNDING COUNCILMAN PATTINSON: Orangewood (home for dependent children) - This is not only a City project but a County project as well. This is a home for children that have been sexually molested, abused, and mistreated. It is an interim home until foster homes can be found. Private funds ($7, 000, 000) will build the facility and then it will be turned over to the 'County to be operated and maintained. The City of Huntington Beach has donated $40 , 000 toward the building. fund. MAYOR PRO TEMPORE MAC ALLISTER: Huntington Beach Pier - eventual replacement - potential joint venture '. YMCA - new building in Central Park 4th of July Parade (oldest in country) Youth Sports Complex in Central Park Ongoing Council on Aging for various seniors ' programs COUNCILMAN. THOMAS: At least 3 concrete ramps that would be built to extend nearer to the water at the beach for the' benefi,t of the handicapped . COUNCILWOMAN FINLEY: Library - Use funds to stimulate activity of the newly formed Library Financial Support Group with perhaps identified library projects targeting youth or other concerns COUNCILWOMAN BAILEY: Library Council on Aging Linear Park I Youth Programs Park Playground Equipment �,,� f REQUES-o" FOR CITY C®U CL-AC"TIO . Date December 21, 1981 Submitted to: Honorable Mayor and City Council Submitted by: Charles W. Thompson, City Administrator F Prepared by: James W. Palin, Director of Development Services Subject: MINOR AMENDMENT TO OIL CODE, INCREASING IITS� CONSISTENCY WITH NOISE ORDINANCE Pe#", � Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: i STATEMENT OF ISSUE: The Huntington Beach Oil Code gives wide authority to the Fire Chief to regulate excessive noise and vibration in general. Furthermore, it explicitly restricts well-servicing and requires sound proofing on other operations between the hours of 11 PM and 7 AM. The City' s Noise Ordinance requires that more restrictive standards for all noise sources take effect between the hours of 10 PM and 7 AM than apply. at other times.. Changing the ,Oil Code to require its special noise-related requirements to take effect at 10 PM instead of 11 PM would make it more consistent with the Noise Ordinance. Such a change to improve consistency in the two ordinances was recommended by the Oil Committee. RECOMMENDATION• Amend Sections 15. 20. 100 and 15 . 20. 110 of the Oil Code,, Title 15 of Huntington Beach 'Municipal Code, as indicated in the attached ordinance, which would require explicit noise-related requirements to take effect at 10 PM instead of 11 PM. This would improve con- sistency between the Oil Code and the Noise Ordinance. ANALYSIS• Last summer, the Oil. Committee studied the aspects of the Oil Code related to noise impacts as part of the overall review of the Code. The. Committee found that the Code provides the Fire Chief power to require mitigation of excessive noise and vibration that might result from oil operations and includes explicit provisions for restricting operations and requiring' .sound proofing. The j Committee concluded that no new noise-related regulations were needed. However, the Committee did find that some of those special provisions in the code take effect at 11 PM whereas the Noise Ordinance requires analagous noise-reduction provisions to take effect at 10 PM. To make the two ordinances more consistent, the Committee recommended that the Oil Code be changed 'to conform with the hours prescribed in the Noise Ordinance. r PIO 4/81 AMENDMENT TO OIL CODE, . Cont.. December 21, 1981 Page 2 ALTERNATIVE ACTION: 1. Do not change the Oil Code, leaving its noise-related provisions inconsistent -to a minor degree with the City' s Noise Ordinance and allowing certain operations to take place until 11 PM instead of 10 PM before special sound proofing is required. 2. Remand the noise-related sections of the Code to the Oil Com- mittee and/or staff for further analysis. Council should then provide direction as to what additional concerns related to noise such an analysis should address. FUNDING SOURCE• None required. SUPPORING INFORMATION: 1. Ordinance JWP:MM:jlm r-- I f IN THE Superior Court OF THE STATE OF CALIFORNIA / 3 In and for the County of Orange !UJ CITY OF HUNTINGTON BEACH, CITY CLERK O PROOF OF PUBLICATION Hearing OIL CODE `NOTICE OF PUBLIC HEARING ' State of California ) AMENDMENT To HUNTINGTON County of Orange )ss' a BEACH MUNICIPAL CODE "OH.CODE", NOTICE IS HEREBY GIVEN that a Rita J. Richter public hearing will be held by the City Council of the City of Huntington Beach, I in the Council Chamber of the Civic Cen- That I am and at all times herein mentioned was a citizen of ter,Huntington Beach,at the hour of 7:30 the United States,over the age of twenty-one years,and that I P-M.,or as soon thereafter as possible on Monday,the 21st day of December,1981, am not a party to,nor interested in the above entitled matter; for the purpose of fprWderm. gan amend- that I am the principal clerk of the printer of the ment to the Huntington Beach Municipal Code modifying the hours of operation of oil well drilling as permitted in Title 15 of Huntington Beach Ind. Review the`-oil ere . � All insereated'pen3ona are invited to a newspaper of general circulation,published in the City of attend said hearing and express theiropinions for or against said Code Amend- ment, Further information may be-obtained Huntington Beach 'from the office of the City Clerk,2000 i Count of Orange and which newspaper is published for the Main Street Hunk' n each,Califor- Y gP nia 92648—(714)536-b227.' disemination of local news and intelligence of a general charac- '-DATED November 25,1981. ter, and which newspaper at all times herein mentioned had CITY OF HUNTINGTON BEACHBy.ALICIA M.WENTWORTH and still has a bona fide subscription list of paying subscribers, City Clerk and which newspaper has been established, printed and pub- Pub.D w-10,1981 lished at regular intervals in the said County of Orange for a Hunt.Beach Ind.Rev.ttn968 E period exceeding one year; that the notice, of which the annexed is a printed copy, has been published in the regular and entire issue of said newspaper,and not in any supplement thereof,on the following dates,to wit: December 10, 1981 I certify (or declare)under penalty of perjury that the forego- ing is true and correct. Garden Grove Datedat................................................ California,this Qt ..d y o� �.. .....I.9$1••• . .... .. . ...... !`.. .. Sig `ure (/ i Form No.CAF-8138C Publish 12-10-81 NOTICE OF PUBLIC HEARING AMENDMENT TO HUNTINGTON BEACH MUNICIPAL CODE "OIL CODE" NOTICE IS HEREBY GIVEN that a public hearing will be held by the City Council of the City of Huntington Beach, in the Council Chamber of the Civic Center, Huntington Beach, at the hour of 7:30 P.M. , or as soon. thereafter as possible on Monday the 21st day of December 19 81 . for the purpose of considering an amendment to the Huntington Beach Municipal Code modifying the hours of operation of oil well -drilling as permitted in Title 15 of the "Oil Code." Ali interested persons are .invited to attend said hearing and express their opinions for or against said Code Amendment Further information may be obtained from the Office of the City Clerk, 2000 Main Street, Huntington Beach, California. 92648 - (714) 536-5227 DATED 11-25-81 CITY OF HUNTINGTON BEACH 'By: Alicia M Wentworth City Clerk s . LEGAL NOTICE �i�^-F� .s1.--�_.� 7a Jiw % NOTICE OF PUBLIC HEARING NOTICE IS�HEREBY GIVEN that a public hearing will be held by the City of the City of Huntington Beach, California, for the purpose of considering &AC Antu�d►KP..c4.. �d�i�r?i .. rnod��ytn� ►s kou�s a �ax. o�� w4t{ dry epvwti (fied w- TIT, �n � red Said hearing will be held at the hour of 7'1 o P.M. , on `De.U444.6W� z Sp , in� the Council Chambers Building of the Civic Center, 2000 Main Street, Huntington Beach, California. All .interested persons are invited to attend said hearing and express their opinions for or against the proposed Code A wteAJ m.11+ Further information may be obtained from the City Planning Department. Telephone No. (714) 536-5271 DATED this day of CITY Couwt � By / 7-0 N1,1'P-_�aAas4, RESOLUTION NO. 5051 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF lIU14TINGTON BEACH AUTHORIZING. AN APPROPRIATION PROM THE GENERAL FUND TO CONDUCT A . WORKSHOP FOR OIL AND GAS DISCOVERY EXTRACTION STUDY WHEREAS, the California Division of Oil and Gas has recog- nized the innovative studies produced by this city with respect to preserving surface access to underground oil reserves; and The Division of Oil and Gas has offered to furnish techni- cal assistance to the city and help the city in conducting a statewide workshop; and The amount required for such workshop 1s $3,900, to -be reimbursed to city by the California Division of 011 and Gas under the terms of the attached agreement , NOW, THEREFORE., BE IT RESOLVED by the City Council of the :+ City of Huntington Beach that it does hereby authorize the City Administrator to execute in the name of the City of Huntington Bea-ch all necessary. appl cations,• contracts , and agreements and amendments thereto to implement and conduct a statewide workshop as specified in the agreement, a copy of which is. .attached hereto and by this reference made a part hereof as though .set forth in full herein. RE. IIP FURTHER RESOLVED that an appropriation of $32'900 is hereby authorized to be . made from the general fund to study means o.f preserving surface access to subsurface petroleum resources in urban areas , such appropriation to be reimbursed to city by the California Division of Oil and Gas . i PASSED AND ADOPTED. by. the City. Council of the City of i Huntington Beach at a_ regular :meeting thereof held on the 16th day of _November _, 1981. ahh 1 1 its/81 1 I I i . i Mayor ATTEST: APPROVED AS TO FORM: City Clerk City Attorney REVIEWED AND APPROVED: INITIATED AND APPROVED: City Adm nistr—' or irec or o Development Services i j t i I I I i i i I i 2. �'� - ❑ CONTRACTOR By THE ST_NLAPD AGREEMENT — ATT E° GENERAL - El AGENCYSTATE OF CALIFORNIA 1 ElDEPT. OF GEN. SE-. STD. 2 !REV. �11!75! - ❑ CONTROLLER THIS AGREEMENT, made and entered into this _1st day of November 19A-L, ❑ in the State of California, by and between, State of California, through its duly elected or appointed, ❑ qualified and acting ❑ TITLE OF OFFICER ACTING FOR STATE AGENCY - NUMBER Director of Conservation Department of Conservation 2-44 hereafter called the State, and City of Huntington Beach hereafter called the Contractor. WITNESSETH: That the Contractor for and in consideration of the covenants, conditions, agreements, and stipulations,of the State hereinafter expressed, does hereby agree to furnish to the State services and materials, as follows: (Set forth service to be rendered by Contractor,umount to be txtid Contractor,time for perforinonce,or comph.-tion,and attuch plans and specifications,if any.) Under the terms and .conditions contained in this agreement, the Division of Oil and Gas agrees to provide a prorated share of labor and•material expenses to Contractor for pre- paring and conducting a workshop to implement strategies to protect and preserve urban petroleum resource surface areas and surface access. The following documents are hereby incorporated and made- a part of this agreement by reference. Exhibit A, consisting of two (2) sheets, entitled General Provisions Exhibit B, consisting of two (2) sheets, entitled Work Program Exhibit C, consisting of one (1) sheet, entitled Work Schedule Exhibit D, consisting of one (1) sheet, entitled Expenditure Schedule The.total amount payable to Contractor shall not .exceed $3,900.00, including all applicable State and local sales and use taxes. This agreement shall be effective from November 1, 1981 through blanch 31, 1982. I The provisions on the reverse side hereof constitute a part of this agreement. IN WITNESS WHEREOF, this agreement has been executed by the parties hereto, upon the date first above written. i I STATE OF CALIFORNIA CONTRACTOR ! 1 . I AGENCY CONTRAC TOR (IF OTHER. THAN AN INDIVIDUAL, STATE WHETHER A CORPORATION ETC.) RTNERSHIP, Department of Conservation PA iro) a / BY IAUTHO;3IZEO SIGNATURE) BV ( HORIZE SI AT - APPROVED AS TO FORM': 1 ® UTTON i TITLE TITLE it Attorne 1 Kent Borrowdale Y Y Fiscal Officer City Administrator ADDRESS. n y i ICONTiNUED ON SHEETS, EACH SEARING NAME OF CON TRACTORI 2000 Main St. Huntingt AMOUNT ENCUmDERED APPROPRIATION FUND y orn S' Department of General Services Use ONLY 3,900.00 Support General UNENCUMBERED BALANCE ITEM CHAPTER STATUTES FISCAL NEAR 5 348 b 99 1981 1981-82 IADJ. INCREASING ENCUMBRANCE FUNCTION - i General Operations ADJ. DECREASING ENCUMBRANCE LINE ITEM AL LO TNI ENT S 2-10-228-1/2 I hcrebt cerlift• ui;on my o:vn personol kno;%ledge. Mot buIIg!?ted film T.B.A. NO. are uvtiiIohlr. for III(! 1wriod and plfrpose of the expenditure stu.ed above, I SIGNATURE OF ACCOUNTING OFFICER DATE ® I hen ht I: rtift th1:t .III r.on,lilion, for I>.ruryllinn :..•t ford: i,: ,Stull• A11nnni�:If11tIC',' `du:n:r,l Sl cri,,:! 1210 I hove I-f-ull r"widi:11 twh n1:11 till.. J,:::unnnl .. ;lt• !I;II--( l -il n r:,•n i1t Ow 0'.p.111im-1 t of i 11wr.:', SI GNAI'URE OF-OFFICER SIGNING ON BEHALF OF THE AGENCY DATE D : CITY OF HUNTINGTON BEACH . EXHIBIT A General Provisions A. This agreement is sponsored by the City of -Huntington Beach, California, as a cooperative project between that city and the Division of Oil and Gas, Department of Conservation, State of California, to study ways in which surface access to subsurface petroleum resource may be retained in urban areas; to explore various methods that are legally available to local government to set aside suitable sites for oil operations.within larger tracts of urban land; and to co-host a workshop session to be attended by invited representatives from oil-producing cities or counties in Southern California. B. The following standard provisions, the Exhibits and attachments incorporated thereby and changes thereto, are essential, complimentary, and describe and provide for completion of this agreement. 1. Contractor agrees to indemnify, defend, and save harmless the State, its officers, agents, .and employees from any and all claims and losses accruing or resulting to any and all contractors, sub- contractors, materialmen, laborers, and any other person, firm, or corporation furnishing or supplying work, services, materials, or supplies in connection with the performance of, this contract, and from any and all claims and losses accruing or resulting to ! any person, firm, or corporation who may be injured or damaged by the Contractoroin the performance of this contract. " 2. Contractor, and the agents and employees of Contractor, in the per- formance of this agreement, shall act in an independent capacity and not as officers or employees or agents of State of California. 3. State may terminate this agreement and be relieved of the payment of any consideration to Contractor -should Contractor fail to perform the covenants herein contained at the time and in the manner herein pro- vided. In the event of such termination, the State may proceed with the work in any manner deemed proper by the State. The cost to the State shall be deducted from any sum due the Contractor under this agreement, and the balance, if any, shall be paid the Contractor upon demand. 4. Without the written consent of the State, this agreement is not assignable by Contractor either in whole or in. part. S. Time. is the essence of this agreement. 6. No alteration or variation, of the terms of this contract shall be valid unless made in writing and signed by the parties hereto, and no oral:understanding or agreement not incorporated herein; shall be binding on any of the parties hereto. 7. The consideration to be paid Contractor shall be in compensation. for the State's share of expenses incurred in the performance of this agreement as prescribed and provided herein. CITY OF HUNTINGTON BEACH -2- 8. As used herein, the term "CDOG" means the Division of Oil and Gas. The term "City" moans the. City of Huntington Beach. 9. CDOG's representative shall be Elbert R. Wilkinson. Both City and CDOG representatives are hereafter referred to as Project Officer. 10. . With the .consent of both parties,. this agreement may be amended or modified at any time. Either party may cancel this agreement by . issuing the other .at least IS days' written notice of intent to terminate. 11. Necessary modifications or changes to the Work Program and Work Schedule, Exhibits B and C, which do not alter or detract project objectives, affect expenditures, or extend the final completion date of this agreement, may be resolved, approved, and executed by mutual consent of both City and = CDOG Project .Officers. A copy of any amendment to .those Exhibits shall be forwarded to each party of this agreement for attachment thereto. 12. City shall not be entitled to payments for any work done prior to the commencement date of the agreement or for any services or materials other than that chargeable to CDOG as described in Exhibit D. In the event any portion of the work project is cancelled, CDOG agrees to. reimburse City for actual chargeable costs incurred up to the date of termination. 13. City may elect to receive progress payments provided the billing is submitted not more often than once a month, in arrears, and in accor- dance with tasks and amounts referenced in Exhibits B, C, and D as follows: . Task No. 4.1, $1,000.00; Task No. 5.3,- $1,350:00; Task No. 5.5, balance of actual amount of total expenditures due City not to exceed $1,550.00. 14. . Upon completion of all work in a satisfactory manner., and upon presen- tation of an itemized invoice(s) or statement(s) , in triplicate, CDOG shall pay City for the actual cost of performance according to the pro rata assessment of charges given in Exhibit D. The invoice(s) or statement(s) shall be submitted to Division of Oil and Gas, 1416 - 9th Street, Room 1310, Sacramento, California 95814. 15. The provisions of the attached Fair Employment Practices Addendum are made a part of this agreement by reference. 16. This agreement shall be null and void unless and until City provides and attaches hereto a copy. of its resolution, order, •.or. other lawful document approving execution of the agreement. _ 17. The final workshop proceedings report shall be accompanied by appro- priate recommendations for adopting or changing governmental juris- diction policies; and model ordinances or regulations which would serve to limit, prevent, or rectify existing or future urban area development encroachments and access barriers to petroleum resource surface areas and production sites. CITY OF HUNTINGrON BEACH EXHIBIT B Work Program Tasks: 1.0 Map parameters of the oil resource and surface needs for future recovery. 1.1 Identify oil zones in this area including their depth and charac- teristics; map representative cross-section. 1.2 Map areal extent of various zones. 1.2a . (optional) Estimate remaining recoverable reserves. 1.3 Estimate approximate horizontal reach directional drilling to different zones, accounting for depth, oil characteristics, and likely recovery methods. . . 1.4 Determine number of sites necessary for future waterfloods or FOR projects; determine approximate distribution of such sites in the study area. 2.0 Map .surface constraints limiting areas from future oil sites. 2.1 Map areas of steep slopes. 2.2 Map proposed roads and other public facilities. 2.3 Map existing development, including existing oil sites; and existing leases and ownership patterns. 2.4 Map proposed trails and recreation areas. 3.0 Compare area constraints to project needs. . 3.1 Map surface constraints versus surface needs; establish a set of possible future oil site distributions, which if preserved, would protect surface areas for future oil recovery. 4.0 Analyze regulatory options for preserving surface sites. 4.1 Determine a list of. regulatory land-use options, including the following: designate sites "resource production" ,in general plan; zone sites for oil extraction; use of eminent domain, tax abatement strategies for limiting uses on sites, transfer of development credits from oil sites to other parts of the plan area. 4.2 Analyze each option -on the following critieria: technical feasi- bility, legal constraints, fiscal impacts on the City, economic impacts on property owners, other goals of the specific plan, community sentiment and policy considerations, -"implementabiiity" and administrative costs. • V 1 1 1 VI I IVI\1 11•V 1 VI\ UV!\1J.1 " -2- 4.3 Recommend .an option to Planning Commission for incorporation into specific. plans. 5.0 Conduct a workshop for other jurisdictions on this issue, using Huntington Beach experience as a case study. 5.1 Prepare a workshop program to include the following topics: the problem of preserving surface areas for future oil recovery in urban areas, role of the local government and regulatory options, the Huntington Beach experience as a case study. 5.2 Invite speakers and assign topics, prepare visual aids and printed . . hand-outs. 5.3 Invite participants. 5.4 Hold one-day workshop in Huntington Beach; format will include presentations, lunch, and discussion groups: 5.5 Write and distribute "proceedings" of the workshop. CITY OF HUNTINGTON BEACH EXHIBIT C Work Schedule 1981 - Time Schedule - 1982 Task Product Provider 7Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. . 1 .1 Identify zones CDOG X X X 1.2 Areal extent of zones CDOG X X X 1.3 Drilling radii CDOG X X X 1.4 Number, location of sites CDOG X X X 2.1 Map slopes City X X X 2.2 Map roads City. X X X 2.3 Map existing developments City X X X 2.4 Map trails and recreation areas City X X X 3.1 Site distribution options City X X 4.1 List regulatory options CDOG and City X X X X 4.2 Analyze options CDOG and City X X X X 4.3 Recommend to Commission City X X 5.1 Prepare workshop program CDOG and City X X X X X 5.2 Prepare workshop materials CDOG and City X X X X X 5.3 Invite participants CDOG and City X X 5.4 Workshop CDOG and City X X 5.5 Plr:.:.a proceedings CDOG and ;City X X CITY OF HUNTINGTON BEACH EXHIBIT D - Expenditure. Schedule Cost Estimates and Contributor Labor Materials Task Product CDOG City CDOG City Extension 1.1 Cross sections 1.2 Areal map of oil zones 1.3 Drilling radii 1.4 Distribution of sites 2.1 Composite constraints map (topographical) $3,000 $5,000* $ 8,000 thru 2..4 3.1 Set of surface site options 5..00 - 500 4.1 Report on options and analysis of each $1,000 1,000 2,000 thru 4.2 4.3 - Staff report and presentation to Commission 500 v 500 5.1 Workshop: 1,750 thru 5.4 General expenses 1,000 . Room rental 200 t Lunch catering 200 Visual aids $100 Printing 200 Postage 50 5.5 Proceedings: 1,850 Printing 1;500 300 t Postage 50 ir Total pro rata costs: $3,500 $400 $ 3,900 $5,000 $5,700 10,700 Total estimated costs: $14,600 '�` 11►tse are tit wts vt--L -K ► C--I-j 7 dow-e_ ov (a, d� � P t tm=1r&,rj 4-0 pro-e c-t —Y OF HUNTINGTON .BEACH. FAIR EMPLOYMENT PRACTICES ADDENDUM 1. In the performance of this contract, the Contractor will .not discriminate against any employee or applicant for employment because of race, color, religion, ancestry, sex*, age*, national origin, or physical handicap*. The Contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, ancestry, sex*, age*, national origin, or physical handicap*. Such action shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising;layoff or termination; rates of pay or other forms of compen- sation; and selection-for-training, including apprenticeship. The Contractor shall post in conspicuous places, avail- able to employees and applicants for employment, notices to be provided by the State setting forth.the provisions of this Fair Employment Practices section. 2. The Contractor will permit access to his/her records of employment, employment advertisements, applica- tion forms, and other pertinent data and records by the State Fair Employment Practices Commission, or any other agency of the State of California designated by the awarding authority, for the purpose of investigation to ascertain compliance with the Fair Employment Practices section of this contract. 3. Remedies for Willful Violation: (a) The State may determine a willful violation of the Fair Employment Practices provision to have occurred upon receipt of a final judgement having that effect from a court in an action to which Contractor was a party, or upon receipt of a written notice from the Fair Employment Practices Commission that it has investigated and determined that the Contractor has violated the Fair Employ- ment Practices Act and has issued an order, under Labor Code Section 1426, which has become final, or obtained an injunction under Labor Code Section 1429. (b) For willful violation of this Fair Employment Practices provision, the State shall have the right to terminate this contract either in whole or in part, and any loss or damage sustained by the State in securing the goods or services hereunder, shall be borne and paid for by the Contractor and by his/her surety under the performance bond, if any, and the State may deduct from any moneys due or that thereafter may become due to the Contractor, the difference between the price named in the contract and the actual cost thereof to the State. *See Labor Code Sections 1411 1432.5 for further details. STD. 3 (0/77) as? g nos. No. 5051 4 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) es: CITY OF HUNTINGTON BEACH ) I, ALICIA M. WENTWORTH, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of,-Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of more than a majority of all the members of said City Council at a regular meeting thereof held on the 16th day of November 19__eL_, by the following vote: AYES: Councilmen: MacAllister. Thomas. Pattinson, Finley. Bailey. Mandic, Kelly NOES: Councilmen: None ABSENT: Councilmen: None City Clerk -and ex-officio Clerk of the City Council of the City of Huntington Beach, California The foregoing:instrument is a ca-�Y of-thhe original on file i�i��isl�► mat pity-Clerk'and Ex offici9.G.Ierk,of the City Council of the Clty of�Huntinton Beach, U. By_--' Deputy •�• ! ' ❑ CONTRACTOR .1 THE Si .ANDARD AGREEMENT — ATTOR, GENERAL El AGENCY_ 9TATE OF,CAUFO R - ❑ DEPT. OF GEN. SER. -STD, 2 (REV, �1 1/75) � - ❑ CONTROLLER THIS AGREEMENT, made and entered into this _1st day-of November 19--.U_, ❑ in the State of California, by and between, State of California, through its duly elected or appointed, ❑ qualified and acting ❑ TITLE OF OFFICER ACTING FOR STATE AGENCY - NUMBER Director of Conservation Department of Conservation. 2-44 hereafter called the State, and City of Huntington Beach hereafter called the Contractor. WITNESSETH: That the Contractor for and in consideration of the covenants, conditions, agreements, and stipulations of the State hereinafter expressed, does hereby agree to furnish to the State services and materials, as follows: (Set forth service to be rendered by Contractor,amount to be paid Contractor,time for performance or completion,and attach plans and specifications,it any.) Under the terms and conditions contained in this agreement, the Division of Oil and Gas agrees to provide a prorated share of labor and material expenses to Contractor for pre- paring and conducting a workshop to implement strategies to protect and preserve urban petroleum resource surface areas and surface access. the following documents are hereby incorporated and made a part of this agreement by reference. Exhibit A, consisting of two (2) sheets, -entitled General Provisions Exhibit B, consisting of two (2) sheets, entitled Work Program Exhibit C, consisting of one (1) sheet, entitled Work Schedule Exhibit D, consisting of one (1) sheet, entitled Expenditure Schedule The total amount payable to Contractor shall not exceed $3,900.00, including all applicable State and local sales and use taxes. This agreement shall be effective from November 1, 1981 through March 31, 1982. The provisions on the reverse side hereof constitute a part of this agreement. IN WITNESS IV-HEREOF, this agreement has been executed by the parties hereto, upon the date first above written. STATE OF CALIFORNIA CONTRACTOR AGENCY CONTRACTOR (IF OTHER THAN AN INDIVIDUAL, STATE WHETHER A CORPORATION Department of Conservation PARTNERSHIP, ETC.) BY (AUTHORIZED SIGNATURE) jY2ORIZ �It OVED AS.TO FO HUTTON TITLE Kent Borrowdale E y Attorney Fiscal Officer d�iT`{ aDktatstTraTo ADDRESS \ (CONTINUED ON SHEETS, EACH BEARING NAME OF CONTRACTOR) 2. i oo MA-10 ST. 17-(,V 2 By. AMOUNT ENCUMBERED APPROPRIATION FUND Department of General Services Use6NLY 3,900.00 Support General UNENCUMBERED BALANCE ITEM CHAPTER STATUTES FISCAL-'IEAR 348 b 99 1981 1981-82 ADJ. INCREASING ENCUMBRANCE FUNCTION General Operations AUJ. DECREASING ENCUMBRANCE LINE ITEM ALLOTMENT 2-10-228-1 2 1 hereb• certif• upon n own personal.knowledge that budgeted fand T.B.A. NO. B.R. NO. Y S ( t Y P' R- R-• are available for the period and purpose of the expenditure stated above. SIGNATURE OF ACCOUNTING OFFICER DATE 1 hereby I:ertify that all conditions for exemption sat forth in Stutu Administrlltive Morino Se:ctior. 1:09 have been conit)lied with (Ind this docunnmt is ;:z(snpt from review by the Uepartnumt of Vinnnco. - SIGNATURE OF OFFICER SIGNING ON BEHALF OF THE AI�ENCV DATE ' _TY OF HUNTINGTON BEACH EXHIBIT A General Provisions A. This agreement is sponsored by the City of Huntington Beach, California, as a cooperative project between that city and the Division of Oil and Gas, Department of Conservation, State of California, to study ways in which surface access to subsurface petroleum resource may be retained in urban areas; to explore various methods that are legally available to local government to set aside suitable sites for oil operations within larger tracts of urban land; and -to co-host a workshop session to be. attended by invited representatives from oil-producing cities or. counties in Southern California. B. The following standard provisions, the Exhibits and attachments incorporated thereby `and changes thereto, are essential., complimentary, and describe and provide for completion of this agreement. i 1. Contractor agrees to indemnify, defend, and save harmless the State,. its officers, agents, and employees from any and all claims and losses accruing or resulting to .any and all contractors, sub- contractors, materialmen, laborers, and any other person, firm, or corporation furnishing or supplying work, services, materials, or -supplies in connection with-the performance of this contract, and from any and all claims and losses accruing or resulting to any person, firm, or corporation who may be injured or damaged by the Contractor in the performance of this contract. 2. Contractor, and the agents and employees of Contractor, in the per- formance of this agreement, shall act in an independent capacity and not as officers or employees or agents of State of California. 3. State may terminate this agreement and be relieved of the payment of any consideration to Contractor should Contractor fail to perform the covenants herein contained at the time and in the manner herein pro- vided. In the event of such termination, the State may proceed with the work in any manner deemed proper by the. State. The cost to the State shall be deducted from any sum due the Contractor under this agreement, and the balance, if any, shall be paid the Contractor upon demand. 4. Without the written consent of the State, this agreement is not assignable by Contractor either in whole or in .part. S. Time is the essence of this agreement. 6. No alteration or variation of the terms of this contract shall be valid unless made in writing and signed by the parties hereto, and no oral understanding or agreement not incorporated herein, shall be binding on any of the parties hereto. L . 7. The consideration to be paid Contractor shall be in compensation for the State's share of expenses incurred in-the performance of this agreement as prescribed and provided herein. CITY HUNTINGTON BEACH -2- 8. As used herein, the term "CDOG".means the Division of Oil and Gas. The term "City" means the City of Huntington Beach. 9. CDOG's representative shall be Elbert R. Wilkinson. Both City and CDOG representatives are hereafter referred to as Project Officer. 10. With the consent of both parties, this agreement may be amended or modified at any time. Either party may cancel this agreement by issuing the other at least 15 days' written notice of intent to terminate. 11. Necessary modifications or changes to the Work Program and Work Schedule, Exhibits B and C, which do not alter or detract project objectives, affect expenditures, or extend the final completion date of this agreement, may be resolved, approved, and executed by mutual consent of both City and CDOG Project Officers. A copy of any amendment to those Exhibits shall be forwarded to each party of this agreement for attachment thereto. 12. City shall not be entitled to payments for any work done prior to the commencement date of the agreement or for any services or materials other than that chargeable to CDOG as described in Exhibit D. In the event any portion of the work project is cancelled, CDOG agrees to reimburse City for actual chargeable costs incurred up to the date of termination. 13. City may elect to receive progress payments. provided the billing is submitted not more often than once a month, in arrears, and in accor- dance with tasks and amounts referenced in Exhibits B, C, and D as ' - follows: Task No. 4.1, $1,000.00; Task No. 5.3, $1,350:00-; Task No. 5.5, balance of actual amount of total expenditures due City not to exceed $1,550.00. 14. Upon completion of all work in a satisfactory manner., and upon presen- tation of an itemized invoice(s) or statement(s) , in triplicate, CDOG shall pay City for the actual cost of performance according to the pro rata assessment of charges given in Exhibit D. The invoice(s) or statement(s) shall be -submitted to Division of Oil and Gas, 1416 - 9th Street, Room 1310, Sacramento,. California 95814. 15. The provisions of the attached Fair Employment Practices Addendum are made a part of this agreement by reference. 16. This agreement shall be null and void unless and until City provides and attaches hereto .a copy of its resolution, order, •or. other lawful document approving execution of the agreement. 17. The final workshop proceedings report shall be accompanied by appro- priate recommendations for adopting or .changing governmental juris- diction policies; and model ordinances or regulations which would serve to limit, prevent, or rectify existing or future urban area development encroachments and access barriers to petroleum resource surface areas and production sites. CITY HUNTINGTON BEACH EXHIBIT B Work Program Tasks: 1.0 Map parameters of the oil resource and surface needs for future recovery. 1.1 Identify oil zones in this area including their depth and charac- teristics; map representative cross-section. 1.2 Map areal extent of various zones. 1.2a (optional) Estimate remaining recoverable reserves. 1.3 Estimate approximate horizontal reach directional drilling to . different zones, accounting for depth, oil characteristics, and likely recovery methods. 1.4 Determine number of sites necessary for future waterfloods or FOR projects; determine approximate distribution of such sites in the study area. 2.0 Map surface constraints limiting areas from future oil sites. 2.1 Map areas of steep slopes. . 2.2 Map proposed roads and other public facilities. 2.3 Map existing development, including existing oil sites; and existing leases and -ownership patterns. 2.4 Map proposed trails and recreation areas._ 3.0 Compare area constraints _to project needs. 3.1 Map surface constraints versus surface needs; establish a set of possible future oil site distributions, which if preserved, would protect surface areas for future oil recovery. 4.0 Analyze regulatory options for preserving surface sites. 4.1 Determine a list of regulatory land-use options, including the following: designate sites ."resource production" .in general plan; zone sites for oil extraction; use of eminent domain, tax abatement strategies for limiting uses on sites, transfer of development credits from oil sites to other parts of the plan area. 4.2 Analyze each option on the following critieria: technical feasi- bility, legal constraints, fiscal impacts on the City, economic impacts on property owners, other goals of the specific plan, community sentiment and policy considerations, -"implementabiiity" and. administrative costs. CITY OF HUNTINGTON BEACH -2- 4.3 Recommend an option to Planning Commission for incorporation into specific plans. 5.0 Conduct a workshop for other jurisdictions on this issue, using Huntington Beach experience as a case study. . 5.1 Prepare a workshop program to include the following topics: the problem of preserving surface areas for future oil recovery in urban areas, role of the local government and regulatory options, the .Hunting.ton Beach experience as a case study. 5.2 Invite speakers and assign topics, prepare visual aids and printed hand-outs. 5.3 Invite participants. 5.4 Hold one-day workshop in Huntington Beach; format will include presentations, lunch, and discussion groups. 5.5 Write and distribute "proceedings" of the workshop. i CITY OF HUNTINGTON BEACH EXHIBIT C Work Schedule 1981 - Time Schedule - 1982 Task Product Provider Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1.1 Identify zones CDOG X X X 1.2 Areal extent of zones CDOG X X X 1.3 Drilling radii CDOG X X X 1.4 Number, location of sites CDOG X X X _ 2.1 Map slopes City X X X 2.2 Map roads City X X X 2.3 Map existing developments City X X X 2.4 Map trails and recreation areas City X X X 3.1 Site distribution options City X X 4.1 List regulatory options CDOG and City X X X . X 4.2 Analyze options CDOG-and City X X X _ X 4.3 Recommend to Commission City X X 5.1 Prepare workshop program CDOG and City X X X X X S.2 Prepare workshop materials CDOG and City X X X X X 5.3 Invite participants CDOG and City X X S.4 Workshop - CDOG and City X X 5.5 Wr).t'e proceedings CDOG and City X X CITY OF HUNTINGTON BEACH EXHIBIT D Expenditure Schedule Cost Estimates and Contributor Labor Materials Task Product CDOG City CDOG City Extension 1.1 Cross sections 1.2 Areal map of oil zones 1.3 Drilling radii 1.4 Distribution of sites 2.1 Composite constraints map (topographical) $3,000 $5,000 $ 8,000 thru 2.4 3.1 Set of surface site options 500 500 4.1 Report on options and analysis of each $1,000 1,000 2,000 thru 4.2 4.3 Staff report and presentation to Commission 500 500 5.1 Workshop: 1,750 thru 5.4 General expenses 1,000 Room rental 200 Lunch catering 200 Visual aids $100 Printing 200 Postage 50 5.5. Proceedings: 1,850 Printing 1 500 300 Postage 50 r .Total pro rata costs: $3,500 $400 $ 3,900 $5,000 -$5,700 10,700 Total estimated costs: $14,600 Y OF HUNTINGTON BEACH FAIR EMPLOYMENT PRACTICES ADDENDUM 1. In the performance of this contract, the Contractor will not discriminate against any employee or applicant for employment because of race, color, religion, ancestry, sex*, age*, national origin, or physical handicap*. The Contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, ancestry, sex*, age*, national origin, or physical handicap*. Such action shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising;layoff or termination; rates of pay or other forms of compen- sation; and selection for training, including apprenticeship. The Contractor shall post in conspicuous places, avail- able to employees and applicants for employment, notices to be provided by the State setting forth the provisions of this Fair Employment Practices section. 2. The Contractor will permit access to his/her records of employment, employment advertisements, applica- tion forms, and other pertinent data and records by the State Fair Employment Practices Commission, or any other agency of the State of California designated by the awarding authority, for the purpose of investigation to ascertain compliance with the Fair Employment Practices section of this contract. 3. Remedies for Willful Violation: (a) The State may determine a willful violation of the Fair Employment Practices provision to have occurred upon receipt of a final judgement having that effect from a court in an action to which Contractor was a party, or upon receipt of a written notice from the Fair Employment Practices Commission that it has investigated and determined that the Contractor has violated the Fair Employ- ment Practices Act and has issued an order, under Labor Code Section 1426, which has become final, or obtained an injunction under Labor Code Section 1429. (b) For willful violation of this Fair Employment Practices provision, the State shall have the right to terminate this contract either in whole or in part, and any loss or damage sustained by the State in securing the goods or services hereunder shall be borne and paid for by the Contractor and by his/her surety under the performance bond, if any, and the State may deduct from any moneys due or that thereafter may become due to the Contractor, the difference between the price named in the contract and the actual cost thereof to the State. *See Labor Code Sections 1411 - 1432.5 for further details. STD. ] (8/77) ` CBF z:r.+ahmtens'wra.r,w�+r.-w.'�.^+e'-�^.t-•"...-.-- -'_ "..- T= _—.. -.. i.:..-...:rll=�:.�'^-'_T.'. .......i r r^.T'TT"_'.'^,T;"::ap-.-�— -�•�.-..,,.. __ '_.'' _ '! -- p REQUE FOR "CITY COUNCIL ACTION �v Date November 9, 1981 Submitted to: Honorable Mayor Ruth Finley and Members of the City Council Submitted by: Gail Hutton, . Ci uy= Att:orney Subject: Payment for Oil and Gas Consulting. Att ne Sheldon L. Foreman/Nancy Knight Fees for Analysis and Negotiation of Pe ro ina Lease Backup Material Attached: [x]Yes [ ]No Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions: STATEMENT OF ISSUE: Pursuant to joint decision of Charles W. Thompson, City Administrator, and Gail Hutton, City .Attorney, and by"'authorization of Municipal Code §3. 03. 100 (Authority to Hire Professional Services not to Exceed $2500) oil and gas legal consultation was secured with the firm of Sheldon L. Foreman. I attach hereto the statement for the month of July which was authorized for payment and paid in the amount. of $801. 80. r Recently, two additional billings, for the month of August in the amount of $1, 475 and for the month of September in the amount of $7105have been sub- mitted to this office for payment . This brings the total amount for pro- fessional oil and gas legal consultants to $2, 986 . Since this amount exceeds the authorization by $486 it is necessary for the Council to authorize payment . RECOMMENDATION: Approve the expenditure of $486 from the City ' s Contingency Account No. 101593 and authorize the final payment to our oil and gas consulting law firm of Sheldon L. Foreman in the amount of $486 . , _ ANALYSIS: Though the law firm was notified of the need to keep the. City aware of the time and fees (see page one, July 17, 1981 letter to Nancy M. ' Knight, Attorney at Law) , the August and September billings .did not arrive until after the last Council meeting with Petrofina. We have further been assured by the law firm that unless further services are needed, these .three statements are the entire billing for the consultation and no charge has been or will be made for the five and one half to six hours expended waiting for the City Council , to conduct their study -session on the Summy/Petrofina lease earlier scheduled where Ms. Knight remained ready to confer with the City Council. Council should also be aware of our efforts to receive reimbursement for legal and petroleum engineering consultant fees. Although Petrofina refused from a policy standpoint to pay such consultant fees through the lease, they did agree to a $5000 gift to the City for our "Clean-up-the- bluffs matching grant" challenged by the $25, 000 'Aminoil grant. That check was previously delivered to the City Administrator at the prior Council meeting. r �" PIO 3/81 _ l _ REQUEST FOR CITY COUNCIL ACTION - 2 - November 9, 1981 The City Administrator has authorized payment up to $2500 through the Non-departmental Contingency Fund, leaving the balance of $486 to be authorized. RECAPITULATION OF LEGAL SERVICES AND FEES July $ 801. 80 . August 13475 . 00 - September 710 . 00 Total $2, 986 . 00 Less Contingency Fund _2,500 .00 . Balance Owing to Sheldon L. Foreman $ 486 . 00 FUNDING SOURCE: Non-departmental Contingency Fund Account No. 101593• GH:mcb ---` Attachments: 1. Memo :re Petrofina Lease 2. Letter to Nancy. Knight 3. July, August, September Billings J� CITY OF HUNTINGTON BEACH LokINTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH To Charles Thompson From Gail Hutton City Administrator City Attorney Subject Petrofina Lease Date July 13, 1981 Deputy City Attorney, Art Folger, and I have reviewed the subsurface oil and gas lease submitted by the Petrofina Corporation through their agent, R. K. Summy, Inc. A threshold question which we have been unable to fully ascertain is the business decision data which may have been developed regarding the value of the lease. A secondary question involves which, if any or all, of the various production zones the City wishes to include in the lease. Need for Certified Petroleum Engineering Consultant--I have seen the various documents produced by the Development Services Department and believe them to be well done in gathering facts for assisting a petroleum engineer in providing analysis and recommendations to the City regarding this lease. Unfortunately, the information which Mike Multari has gathered for the City is not verified by a recognized petroleum engineer consultant. IT IS MY RECOMMENDATION TO YOU THAT WE RETAIN SUCH A PERSON FOR THIS PURPOSE. Need for Oil and Gas Attorney--I have consulted with a highly-qualified and long-experienced oil and gas attorney, Sheldon Foreman, in Santa Ana; his experience has been of the last twenty-five.years and ranges over all of the oil fields of California including specifically Bakersfield, Long Beach, Huntington Beach and Newport. He has recommended that we retain a petroleum engineer, -and he offered the name of Barry L. Evans,. of Fullerton, telephone number: (714) -879-6670. This particular consultant evaluates all oil leases for the Security-Pacific National Bank, among his other substantial clients. I would also recommend that, in as much as this field of law is highly technical, our office retain as a consultant, Sheldon Foreman, at a fee of $125 per hour; I would estimate that such a total consulting fee would be in the nature of $500 to $1,.000. I am informed that many of the small land owners in the downtown area who are being. sought by the Summy Corporation to sign same or similar pooling arrangements leases are waiting to see what kind of an arrangement. the City of Huntington Beach makes, and whether we accept the existing lease. There remain many questions unanswered which require experienced oil and gas legal analys s to assist us after we have gotten a petroleum engineer's report. Y Gail Hutton City Attorney GH:mcb cc: James Palin, Development Services Mike Multari, Development Services, Planning Division Bill Amsbary, Asst. City Attorney Art Folger, Deputy City Attorney OFF ICE OF CITY ATTORNEY P.O.BOX 190 2000 MAI N STR E ET F�ouNtr ?�`` HUNTINGTON BEACH " CALIFORNIA 92648 GAIL HUTTON TELEPHONE City Attorney (714) 536-5555 July 17 , 1981 Ms . Nancy M. Knight , Attorney at Law and Mr. Sheldon L. Foreman, Attorney at Law 1538 N . Century Blvd . Santa Ana, CA . 92703 Dear. Nancy : I am sorry I didn ' t get to speak with ,you on my initial call to your'. law office . In view of the apparent- urgency of an impending council. study session to review a proferred oil and gas lease I t;jas happy to have the opportunity to explore the problems with Roy . . He has indi- . sated that you will moth confer on a consulting basis in regard to the City of Huntington Beach ' s oil and gas lease . Roy has .represen-ted to me that the legal fees for consultation will be $125 per hour and I have received the approval of the City Admin- istrator to retain you on that basis . Please notify me when the City has incurred $600 worth of legal consultation fees in this regard because at some point thereafter it will. be necessary for me to seek approval of the City Council to authorize further professional services . I was delighted to meet Barry Evans , and feel confident based .on Ro.y ' s and your prior recommendation of him for a petroleum engineering analysis of the Petrafina/R. K . Summy subsurface oil and .gas lease offer. He informed me this day that he. wil.l be submitting to your .office and to the City the results of his analysis of the position of th.e City of Huntington Beach . You will no doubt, after- receipt of all of the documents _i am herewith transmitting to you, have your work cut out for you this next week . .I have convinced the City Council that we do not have sufficient materials and reliable sources of information to draw any conclusions as to our bargaining position, nor as to the options available to us. through. the leasing information submitted and they have agreed to put it off for a period of time until we can gather together the report of Barry Evans , our professional consultant and the oil and gas expertise . of your firm. Psis . Nancy-M. Knight; and Mr. Sheldon L. Foreman - 2 July 17 , 1981 . Although I have already outlined much of the problem to Roy , if he has not had an opportunity to go over our situation with you I will- provide you with the following facts : R. K. Summy, Inc . on ..beha.lf of Petrafina has been leasing the -downtown encyclopedia lot areas of the City of Hunt.inCton Beach for the last six months in an effort to put: together a pool for the recovery by secondary and tertiary means , oil which has not ,yet been extracted from this field. This area includes. several zones of pr. oduction. . The City , according to our Development Services Department information, owns about; 125 parcels of mineral interests . On some of those. parcels we also own the surface rights . The Tease provides you with the information as to what Summy is willing to offer to. the City in return for an assignment of those_ righty. The City also has a significant interest, as from the production of revenue, in that we would very much like to clean up, consolidate and abate industrial noises on oil operations goring on in the town-lot area of the City . . We are also interested in deriving rental income from a proposed consolidated drill site on City property . A third consideration .is the -public impact of the City ' entering into a pooling arrangement for so many parcels . of land where approximately three thousand separate mineral interests exist , Summy has succeeded in leasing- approximately one thousand of these and the remainder of non-City-owned parcel owners are watching carefully to see what action and what deal the City makes with Summy . It is something of a heavy .burden to know that our action may well be reflected in actions taken by mineral interest owners who do not have the resources or sufficient interest to engage profession1l; representation. I-am forwarding herewith copies of the proferred subsurface oil and gas lease reports No . 1, 2 and3 of the Huntington Beach Energ : Series produced by the City of Huntington .Beach Department of Development Services, Planning Division and certain A to relating to various par- cels o.f land proro ed to he leased from the City . /1 f ter you have had ate .opportun i_ty to review the materials and the Poport; p0epared by Barry Evans , please give me an astimate time. involved in further consultation to assist us in advising our City Council . PIS Hancy M. Knight and Mr. Sheldon L. Foreman July 17, l08l Nancy , I am delighted to have an opportunity to work ,:rith you and . Roy in this regard, and will be happy to provide you with any additional information available to us at this point . Please give me a call after you have had an opportun:i.ty to review these matters . Sincerely, . J Gail Hutton City Attorney . City of. Huntington Beach GH : mcb Enclosures. cc : Art Folger, Deputy City Attorney William S . Ainsbary , Assistant City Attorney � 1 t' k i itt& :iya !{• .v i �, � t{ } t i•' y+R p¢ r• 7 � ' 4"l,j".4�1 �.t #'�Irtalr�t{!,".hGk�9, �r'lp �i+ t� 1,�y 0 � :.ir '.' �(w IY��,,0✓<�� � R �T rr ,� F,4. .{', .' ��t;A �. •` _�:•r..n ,�Fr1' { {r`r �l}. '�It,,4 1{ •4 { n' ,y ' b.1ri �'. +, '�- I y � 1 {i y _ t Tl � -�• � � t f . .i r.,, ! r � ����t�� �•��=`T.��t�It'� r� b lP r��t �����}� �' I`� n ��( �',i ,,w�a� '� � y` ' rar � .� /.1 1 t...�,� �,T't1 r(1 .,'�•r �� ��� tl� • pq { to i,t+ r.,aa� !1 W�,/+��w,� + �y� ,�.�J" - t 1 '� 4'r11_rr ��1-�'i.�•'��t:� �+��i' 94,DiA1'-Ir a-•.�t�.,o„., { Yl rh 1•.r y, 'M•4-440 {tl w-.+rr +i►rFWr�+WtllfR. ,�.,� �r r t. �;A 1 �', , cat �.• p �...,t. ..ri•F�,1 ♦...�.r»+t �r5r�`;� ' fta l,:' i� ,� {+ ` j ?r �r� , �.+.+►r'M► #JbY�rj,�,�IN td'�M'!4 •'�I d'rjt t �..{`,• .q n � �' .'ti}.f � � } �+w+-r.w{e 1�,1�'1 f�'�t'� �t `•�I , r.' %r. r• '' ��k'j � \• ' i. � Y. r �' �`Hl.!•►f'M•�':Q r�'�.i"���� rr ' r .I 41.r1 .��. .!�,,,kar'I•, ..`r ..', f11 ,.,, ,5 .�' ,4�� ;'�• •r.1 h':' r.M `��.'t,,a li;�k: City cf IfuntingLoll He acil Box 190 llunLingtort Ise�Ych , CA 92648 S T n `i' E I'I L•; I� '1' FOY professional services rendered during the mo:lth of July, ]_981 : RCviCW of p170po��eC] stzbsur. facr� ] ease cting w. C , TltcJm�lson , G . Ilutto I $ 1 >0 . 00 Preparation of draft of letter to R. K. Subtly _1 50 , nn Xeroxing : 9 copies at $ + 20 $ 800 . 00 _ 1 . 80 $ 801 . 80 RECEIVE[) C1 FY AT�17f'rJ�Y iIUG 1 U lyl AM 7f8f911Ujjiju,: i liV OVE TO ORN1 y ( GAIL ►Illrrora G_��J a /—. C...,� c<^-„ City Altorncy if ,� C�..� �_�'� � �v�"••" i LAW O° FICF_S SHELDON L. FOREMAN . SH ELU0N LFOREMAN 1535 IJOnTH-CFNT1.1[7v BOU1-EVAt:n' - � - NANCv MORSE KNIGHT SANTA ANA.CALIFORNIA 92703 5.1.2 SC September 2 , 1981 Gail Hutton, Esq. City of Huntington Beach P . 0. Box 190 Huntington Beach, CA 92648 S T A T E M E N T ----------------------------------------------------------------- For professional services rendered during the month of August, 1981 : 8/5/81 . Telephone conference w. City Atty. re Petrofina Lease; . 6 hours $ 75 . 00 8/13/81 Meeting w. City Atty. and representa- tives of R K Summy and Petrofina re lease negotiations (S. Foreman and N. Knight) ; 2 . 6 hours 650 . 00 8/18/81 Meeting w. City Atty. , Petrofina re tease negotiations (S. Foreman and N. Knight) ; 3 . 0 hours 750 . 00 $ 1 , 475 . 00 AFFROVED FOR FAYNU IT Date-.-..... 1. As previously advised by Mrs. Knight, all time is invoiced at the rate of $125 per hour. LAW C°:FICES - SHELDON L. FOREMAN 1539 WORT!_! CENTUF:Y BOULEVAREI S14ELOOrI L.FOREK!nN TELEr-"(?'JF NANCY MORSE KNIG14T SANTA ANA•CALIFORNIA 92703 1.1 cc•o-21r.p October 6 , 1981 Gail Hutton, Esq. City of Huntington Beach P. O. Box 190 Huntington Beach, CA 926.48 S T A T E M E N T ---------------------------------------------------------------- For professional services rendered during the month of September, 1981: 9/9/81 Conference w. G. Hutton re Petrofina Lease; 2 . 5 hours $ 310 . 00 9/10/81 Conference w. G. Hutton. re Petrofina; 2 . 0 hours 250 . 00 9/14/81 Conference w. . B. Tippen re lease; , 4 hours 50 . 00 9/15/81 . Conference w. G. Mutton, B. Tippen re Petrofina Lease; . 8 hours 100 . 00 CITY ATTORNEY'S OFF.ICE $ 710 . 00 APPROVED FOR FA.Y1.'ENT As previously advised by Mrs- Knight, all time i!�. intoicdd at the rate of $125 per hour. +Ly -�' CITY OF HUNTINGTON . BEACH t: INTER-DEPARTMENT COMMUNICATION . . HUNTINGTON BEACH To Charles W. Thompson From F. B . Arguello City Administrator Chief of. Administrative Services Subject Requested Funding For Legal Date November 10, 1981 Consultants Relative To Pet rofina . Lease FIR # 81-82 In response to the City Attorney's office, a Financial Impact Report has been prepared and submitted with respect to the funding for contracting of oil and gas legal con- sultation services with the firm of Sheldon L. Foreman in excess. of the original authorization of $2,500.00. It has been' suggested that an appropriation in the amount of $4,86.00 would suffice for this purpose. Adequate monies are available in the Contingency Account (#101593) for this expense. Should the City Council choose to approve the request, the balance in. the account will be reduced to $120,278. F. B. Argu llo Chief of Administrative Services FBA/AR/cg RKEIVED CITY ATTORNEY rizf-rki nc Ni IMT►*Ir`TnN r?CRrr►A, 140V 1 U 1981 AM '1lay.dY�-1�i �PM 1,8191TIU112111213i4IM CITY OF HUNTINGTON BEACH FINANCIAL IMPACT REPORT . Project Name Payment for Oil and Gas Consulting Attorneys Description Request for the funding of legal consultation servicgs relativc to the Petrofina lease. 1 . DIRECT PROJECT COSTS 1 . 1 One-Time Costs Land urn. , aci i- Acquisition Construction ties, Equipment- Other Total . Cost . 486.00 486.00 1 .2 Recurring Annual Costs Additional Materials & Outside Payroll Personnel Su lies Services Revenues Total Cost 1 . 3 Replacemen.t/Renewal Costs N/A 2. INDIRECT COSTS Loss of potential for generating interest on these funds . Financial Impact Report Page 2 3. NON-DOLLAR COSTS N/A 4. BENEFITS TO BE DERIVED FROM THE PROJECT City has gained the benefit of the consultants' expertise in this specialized field. 5. PROJECT USAGE N/A 6. EXPENDITURE TIMING Subsequent to City Council approval . 7. COST OF NOT IMPLEMENTING THE PROJECT Difficult to ascertain i.n that project -has already been completed. r ~ V huntington beach planning depart t staff Yt report. FINA SUBSURFACE OIL AND GAS LEASE INTRODUCTION American Petrofina (FINA), a large oil company based in Dallas, is attempting to "unitize" the Townlot and Downtown subsurface oil field. "Unitization" refers to the practice of getting all the mineral rights owners and active oil production interests in an oil field to join together .so that the oil can be produced on a pool-wide basis, rather than on a well-by-well basis. Unitization allows the use of waterflood and other enhanced recovery methods so that significantly more oil can be extracted.-if a unit is formed. Unitization also allows for equipment consolidation, so typically less land is used and scattered wells and tanks can be largely concentrated into . a very few landscaped, screened and sound-proofed sites called "islands". The first step in assembling a unit is to get a significant number of the parties holding mineral interests in the pool to lease their mineral rights to the oil production company. In exchange for allowing the company to "work" or produce oil from one's mineral interests, a "royalty" or percentage of the revenues earned from the oil and gas produced is received. To this end, FINA, through a leasing. agent called R. K. Summy, Incorporated, has, approached all the parties holding mineral interests in the Townlot/Downtown area, asking them to lease their subsurface interests to the company. The City of Huntington Beach owns the mineral rights on approximately 130 of the roughly 3,000 lots in this area. Consequently, FINA has asked the City to lease its mineral rights and to participate in the project. FINA estimates that about 60 percent of the mineral interests have already been leased. Company representatives have suggested that many of the .people who have not yet signed the lease are waiting for the City to make a decision regarding the City-held mineral rights. BENEFITS OF A UNIT PROJECT IN THE TOWNLOT/DOWNTOWN Unitization and consolidation projects would result in very significant benefits to the City. First, and most important, a consolidated unit operation would help clean up the widely scattered and inefficient wells and tanks now found in the Townlot/Downtown .area. The waterflood program would be conducted in "islands" from which the necessary Wells will be "slant" drilled or "directionally" drilled into the oil pool. These islands will be screened, landscaped and soundproofed. Many of the' existing wells and all the existing tank systems in this area would be removed, freeing these oil sites for new uses, cleaning up the appearance of the City and removing conflicts between oil and residential uses. -1- r f Secondly, the project, if successful, would provide significant revenues to the City. Sources of revenues include 1) the "per barrel" production fee, 2)the royalty on the City's share of the oil and gas produced, 3) increased property tax on the subsurface mineral rights and 4).increased fees for drilling, inspections and related services. Of these, the per barrel tax is probably the most important. Staff has estimated these revenues to be on the order of $125,000 annually, (calculated in constant 111979" dollars -- this fee is tied directly to the inflation rate and the total will rise annually accordingly). The royalty share depends on a number of factors: 1) the amount of oil produced, 2) the royalty rate or percentage, and 3) the proportion of the pool one's mineral interests include. From a geologic point of view, the City-held mineral rights do not lie in the prime part of the oil pool, and certain important oil "zones" or strata do not seem to underly many of the City's holdings. Some City holdings, therefore, might not be included' in the unit and no royalty would be paid on those sites. Thus, it is difficult to estimate the royalty the City will receive for signing the lease. Estimates range from several hundred to $1,500 per lot annually, depending on the amount of oil produced, its price and if the lot is actually included in the unit. If every lot were included in the productive pool and the maximum quantities were realized, annual royalty revenue could approach $200,000. The other revenue sources are relatively minor compared to the per barrel fee and possible royalty. Another benefit from unitization, in addition to oil field clean-up and increased revenue, is that 'more ,oil is produced, and domestic oil is an increasing valuable natural resource. The project would tend to produce this additional oil more efficiently: more oil is produced using less land, fewer wells and less time. In summary, the benefits of a successful unit project are very significant: 1) Elimination of many existing oil sites - improving the appearance of the City - freeing valuable land for new uses - reducing existing conflicts between oil and residential uses 2) All new facilities will be in screened, landscaped and soundproofed islands, reducing impacts on nearby uses. 3) Substantial revenues are provided the City from the per barrel fee, the royalty and other fees and taxes. 4) More oil is produced, faster and more efficiently. In light of these benefits, the City Council has adopted policies to promote unitization and consolidation. For example, a policy in the Coastal Element states explicitly: "Encourage unitization and consolidation of oil operations when such activities 1) reduce the area used for oil facilities, 2) are not more environmentally disruptive than existing arrangements, and 3) do not jeopardize public health, safety or welfare." -2- c ~ 1 Discussions of the benefits of unitization and consolidation are included in many. City documents including "The Coastal Energy Impact Program", Huntington Beach Energy Series, Report No. 1, "Preserving Surface Access to Underground Oil Reserves in Developed Areas", and Report No. 2, "Fiscal Impact of Oil Operations in Huntington Beach". FINA'S PROPOSED PROJECT FINA. is interested in forming a unit in the Townlot/Downtown. The first step is to get the parties holding the mineral rights to lease those interests to the unitization company. If 75 percent of the interests are leased, the unit can be approved by the State. The next step is to work out an agreement among the existing "working interests", that is, among all the existing oil companies now producing oil in this area. This is a very complex process because the value of different operations depends on the size of the holdings, age and location of the wells, relationship to the proposed project and many other variables. Working out a "unit" agreement which is acceptable to all these parties is difficult. In Signal Hill, a unit agreement which encompasses a larger area and fewer operators than in the Townlot, took seven years to assemble. Thus, based on past experience, it will be several years before FINA will be able to put the unit together and begin drilling and production. Before drilling and production can begin, FINA will have to conduct very extensive geologic and engineering analyses. FINA will then be required to submit a unit plan to the State Division of Oil and Gas for review and approval and an Environmental Impact Report must be prepared. Before any operation begins, the City will have numerous opportunities to carefully review and control the development. Almost certainly zone changes will be required before any new "islands" can be established. Also, an operator must receive a permit from the City before any well can be drilled. The EIR, zone change and drilling permit processes will ensure that the actual project is fully reviewed by the City before it is approved. At this point, FINA is simply asking the City to sign the lease; they are at the initial step of a long and difficult project and no specific developments have yet been proposed. The lease only affects mineral rights and in no way does it encumber the surface nor does it in itself entitle the company to any surface development or drilling privileges. STAFF ACTION TO DATE Early last summer FINA representatives began meeting with City staff and with individual members of the Council to explain to them the proposal and to gain guidance as to the proper presentation of the lease to the City. The lease for the City's mineral rights was analyzed by the City Administrator's office, City Attorney's office and the Department of Development Services. Staff concluded that the kind of project proposed -- a unitization and consolidation program in the Townlot -- is an excellent one which provides an opportunity to realize many important benefits to the community. However, a very detailed analysis of the complicated subsurface oil and gas lease necessitated additional expertise. Consequently, the City Attorney's office retained two well-regarded consultants to help the staff evaluate the proposed lease: Mr.Barry Evans,-a petroleum engineer, and Sheldon Foreman and Associates, a legal firm specializing in oil and gas matters. -3- 3 Staff reviewed the proposed lease with these consultants and concluded that while the overall project was one the City should clearly encourage, there were particular aspects of the lease itself which could be improved to better serve the best interests of the community. Staff then met with representatives of FINA to help them change the original lease proposal to one which takes into account the concerns raised by staff and our consultants about the original lease. This revised lease is the one submitted to the Council for their consideration. THE PROPOSED SUBSURFACE OIL AND GAS LEASE The following summarizes the terms of the proposed subsurface oil and gas lease: 1) "Term" or length of agreement: The original lease included a 10 year term. Staff recognized that this kind of unit project is very difficult to assemble; less complicated programs have taken over seven years to put together. Thus, an overall term of 10 years is reasonable. However, we want to be assured that this time is actively spent pursuing the unit agreement. Thus, in the revised lease, the primary term is reduced to five years which can be extended to 10 years only if 75 percent of the "leasable" lots have been acquired by lease which is a measure that significant progress is being made toward implementation of the project. 2) Royalty: The lease provides for a one-sixth royalty on all oil and gas produced in proportion to the number of lots the City owns in the overall producing unit, for example, if all 3,000 lots are in the unit and the City owns 130 of them, then the formula for the royalty is approximately the following: (# of barrels produced(price per barrel)(130/3,000)(1/6). A survey of other units and leases revealed that historically royalties of approximately 1/12'to 1/8 were offered until recently, when 1/6 became more typical. In certain conditions royalties of greater than 1/6 are offered: where the units are relatively easy to put together, the reserves and geology are well-known and the pay-back on investment is less risky. None of those circumstances apply to this unit -- it will be among the most difficult to put together considering the very highly fragmented ownership of the mineral rights and the large number of extant, small-scale operators. Thus, the 1/6 royalty appears reasonable for the following reasons: a) The City has a policy to encourage this kind of project due to the large number of significant benefits, both fiscal and non-fiscal, to . the community and in this area forming a unit is a difficult project and a risky, expensive investment. Note that neither Chevron nor Aminoil, two large companies very familiar with this field, have shown an interest in attempting to unitize this area. The principal goal is to encourage the private sector to undertake this costly and risky venture because of the numerous benefits that result to the City overall. t -4- r b) One-sixth is the royalty share commonly offered in these kinds of projects today; however, one-eighth was the more typical share , historically. c) Considering the number of lots the City owns and their location in the field, royalty revenues are likely to be much less significant than revenues from the per barrel fee and other sources if the project is successful. r3) wever, to insure that the City's interests are protected, additional wording is ommended which would state that in the event that FINA executes leases erein ten percent or more of the lots receive more than one-sixth royalty, City's royalty shall be increased to a percentage equaling1he average of all he lots whose royalties are greater than one-sixth. l for Performance: The original lease proposal allows parties holding a jority of the mineral interests to require the operator to commence medying any default in the obligation of the .lease or the lease becomes void. The revised lease allows the City by itself to cite the operator for any defaults and to require ameliorative action. 4) Assignment: In the revised lease, the City has the right to approve a new operator if FINA proposes to assign the lease to another company. This will insure that the interests are not assigned to a company which does not have the technical or financial ability to pursue the unitization project. 5) Costs for Waste Disposal: The original lease required that the cost of disposing of wastewater would be deducted from the royalty, which is a typical provision. The revised lease, however, limits this deduction to a maximum of only 2 percent of the royalty share. 6) Other Provisions: Once drilling is begun, wells must be drilled at a rate of at least one per six months, so as to expedite completion of the program; "offset" wells must be drilled if necessary to protect lessor's oil from being drained by another party's well; the lessee has the right to pool the mineral rights and to form a unit in accordance with the State's rules; if the unit project is achieved, the lease remains in effect so long as paying quantities of oil or gas are produced; until oil or gas is produced, FINA will pay the City $25 per lot per year as rent. 7) Other Changes from the Original Lease: In addition, changes to the term, call for performance rights, assignment rights, and a cap on wastewater disposal costs and a few other technical changes were made to the original lease: any gas found in paying quantities may be commingled, metered and sold and a royalty paid on such; purchase price of the lessor's royalty oil cannot be less than that received by the lessee; lessor may retain only 10 subsurface acres around each well if the unit covering the overall pool is dissolved. City staff and our legal consultant will be happy to answer any other questions about the lease. -5- 1 �F NO ADVERSE EFFECTS ON DOWNTOWN PLANS A successful unit project will not interfere with City plans for Downtown and Townlot revitalization in any way. In fact, a successful unitization would enhance revitalization plans by removing many of the existing, scattered wells and tanks and generally cleaning up oil operations in the area. Oil facilities will be concentrated into a few islands, freeing valuable surface areas now used for oil for other development. Unitization is the method to conduct oil operations in urban areas most efficiently and with the least impacts; consequently, a successful unit project would go a long way toward enhancing the City's beachfront image. RECOMMENDATION In light of the benefits to the community that may result from this project, staff recommends that the City lease its mineral rights to FINA and participate in the project. FINA is a large, well-known company with the financial and technical capabilities to pursue this difficult program. The lease FINA has revised addresses, the concerns raised by staff and our consultants about the original proposals. However, an additional agreement should be reached to insure that the City will receive a royalty qual to the average of all of the lots. whose royalties are greater than one_-sixth if ten percent or more of the total leased lots receive such greater royalty. -6- f i SUBSURFACE OIL AND GAS LEASE THIS LEASE,made as of the 6th day of March, 1981,by and between the parties whose names are subscribed hereto as Lessor on the Signature Page attached hereto, hereinafter called "Lessor" (whether one or more), and R. K. Summy, Inc., a corporation, hereinafter called "Lessee"; WITNESSETH 1. The lands covered by this lease are all that portion lying below five hundred feet(500')from the surface of the land described on the Lessor's I Signature Page attached hereto and is hereinafter referred to as the"leased land."Notwithstanding any provision to the contrary contained herein, II this lease and all rights granted to Lessee hereunder are expressly limited to those depths lying below five hundred feet(500')from the surface of the land described on the Lessor's Signature Page,and Lessee shall not have the right to enter upon or use the surface of such land lying above said depth. 2. Lessor,for and inconsideration of the sum of One Dollar($1.00)and of other valuable consideration in hand paid,the receipt and adequacy of which is hereby acknowledged,and of the covenants and agreements hereinafter contained on the part of Lessee to be kept and performed,does hereby let,demise and lease unto Lessee,its successors and assigns the leased land now owned or hereafter acquired by Lessor,by operations of law or otherwise, with the exclusive and sole right to prospect, explore, mine, drill and operate the leased land for oil, gas, and other hydrocarbon substances,hereinafter referred to as`said substances,'and to produce,take,treat,store,remove and to dispose of said substances from the leased land, and the right to inject into the leased land, gas, steam, water, salt water or other fluids for purposes of pressure maintenance or secondary recovery of oil,gas and other hydrocarbon substances from the leased land and the right to conduct secondary recovery operations,together with all other rights necessary or convenient for any and all of said purposes including, but not limited to subsurface rights of way for drilling,repairing, redrilling, deepening, maintaining, operating, abandoning, reworking and removing wells, into and through said leased lands, and such other necessary subsurface easements in and through the leased lands. 3. This lease,except as otherwise herein provided,shall remain in force for a term of five(5)years from the date hereof(hereinafter referred to as the"Primary Term"),and for so long thereafter as oil,gas or other hydrocarbon substances shall be produced from the leased land,or land with which the leased land may be pooled,in quantities deemed paying by Lessee,or as Lessee shall conduct drilling operations(including,but not limited to,drilling,deepening,plugging back,redrilling,repairing,cleaning out and similar operations)on the leased land or lands with which the leased land may be pooled, or shall be excused therefrom as hereinafter set forth;provided, however,that so long as Lessee shall continue to drill wells within the intervals permitted in Paragraph 9 hereof,Lessee shall be deemed to be conducting drilling operations within the meaning of this provision. 4. The expression"royalty share"as used hereinafter shall mean the fraction one-sixth(1/6)and all royalties shall be payable on a quarterly basis not later than the last day of January,April,July and October of each calendar year for the preceding calendar quarters ending December 31, March 31, June 30 and September 30, respectively. 5. Lessee shall pay to Lessor as royalty on oil the royalty share of all oil produced, saved and removed from the leased land. Lessee may purchase Lessor's royalty oil at the public posted market price currently offered and paid in the field in which the leased land is located for oil of like _ gravity and quality the day the oil is removed from gauging tanks. In the event there is no such public posted market price, Lessee may purchase Lessor's royalty oil at the same price the company or companies purchasing the majority of the oil in the field in which the leased land is located shall be paying for crude oil of like gravity and quality.In no event will the purchase price of Lessor's royalty oil be less than the purchase price of Lessee's oil.In the event Lessee shall treat the oil produced for the purpose of making the same marketable,Lessor shall bear his royalty share,of the cost of treating such oil and for disposing of water or other waste materials by Lessee,which Lessee may deduct from any payments due Lessor insofar as the maximum deducted by Lessee be no greater than 2%of Lessor's royalty share for the cost of treating oil or no greater than 2%of Lessor's royalty share for disposing of water or other waste materials.In determing the gravity,quality and quantity of oil purchased,the methods and practices including metering which are usual and customary among major oil purchasing companies shall be followed. The customary temperature corrections and deductions for injected oil, water and other substances shall be made. 6. In case of sale by Lessee of gas produced from said leased land in the natural state as produced,Lessee shall pay Lessor in cash the royalty share of the net proceeds of such sale received by Lessee. In case gas produced from said leased land is utilized by Lessee(in excess of the amount herein allowed to be used by Lessee free of royalty)in the natural state as produced,Lessee shall pay Lessor in cash the royalty share of the market value of the gas so utilized.In case Lessee delivers such gas to a third party for treatment,Lessee shall pay Lessor in cash(a)the royalty share of the market value of the net natural gasoline and/or net other liquefied petroleum gases redelivered to Lessee and utilized by Lessee(in excess of the amount herein allowed to be used by Lessee free of royalty)and(b)the royalty share of any net proceeds received by Lessee from the sale of natural gasoline and/or other liquefied petroleum gases redelivered to Lessee after deducting the royalty share of the cost of delivery for sale and(c)the royalty share of any net proceeds received by Lessee from the sale of residual dry gas redelivered to Lessee and(d)the royalty share of the market value of residual dry gas redelivered to Lessee and utilized by Lessee(in excess of the amount herein allowed to be used by Lessee free of royalty).In case Lessee shall extract in its own plant or facility on said leased land or elsewhere natural gasoline and/or other liquefied petroleum gases from the gas produced from said leased land,Lessee shall pay Lessor in cash as royalty(a)the royalty share of 40%of the market value of the net natural Page 1 of 8 gasoline and/or net other liquefied petroleum. s so extracted and utilized by Lessee(in excess of. Count herein allowed to be used by Lessee free of royalty)and(b)the royalty share of 40%of any net proceeds received by Lessee from the saie of the net natural gasoline and/or other net liquefied petroleum gases so extracted and sold by Lessee after deducting the royalty share of the cost of delivery for sale and(c)the royalty share of 60%of any net proceeds received by Lessee from the sale of residual dry gas and(d)the royalty share of 60%of the market value of residual dry gas utilized by Lessee(in excess of the amount herein allowed to be used by Lessee free of royalty).The market value of natural gasoline or other liquefied petroleum gases for the purposes hereof shall be the price as posted and generally paid by major processors for products of like specifications and quality effective in the same district on the date of extraction by Lessee or of redelivery to Lessee.The market value of gas in its natural state and residual dry gas for the purposes hereof shall be the price generally paid to Lessee by the major purchaser for gas of like specifications and quality effective in the same district on the date of delivery or redelivery to Lessee. Lessee shall have the right to deduct from Lessor's royalty on any gas produced hereunder the royalty share of the cost, if any,of compression for delivery, transportation and/or delivery thereof. Lessee shall have the right to commingle gas produced from said leased land with other gas and thereupon the royalty shall be computed upon an appropriate fraction of the commingled gas.If Lessee commingles gas produced from Lessor's property or from a unit which includes all or a portion of Lessor's property with another unit or units,Lessee shall be required to meter all gas prior to commingling.Nothing in this agreement contained shall require Lessee to save, market or utilize gas from said leased land unless there be a surplus above lease requirements and a market at the well for same,nor shall Lessee be required to extract or cause to be extracted any products therefrom. - 7. Lessee shall not be required to account to Lessor for or pay royalty on oil, gas, natural gasoline, other liquefied petroleum gases, hydrocarbons,associated substances or water used by Lessee in its operations hereunder(including,without limiting the generality hereof),for fuel and/or lifting and/or injection purposes anywhere in said leased land,and gas or other substances used as fuel or lost or consumed in the gathering, compressing for processing and processing thereof and Lessee may use such oil,gas and other substances free of charge.In no event shall Lessee be responsible to Lessor for its failure or inability to save any of said substances,or for shrinkage or loss thereof, and royalty shall not be payable in respect to any of such substances lost through evaporation,leakage,fire or otherwise.In the event Lessee in its operations hereunder shall substitute other fuel or power for fuel obtained from said leased land,Lessee shall be entitled to deduct from the amount of the increased royalty accruing thereby to Lessor the royalty share of the cost of such other fuel or power,provided that no deduction hereunder shall in any event exceed the amount of such increased royalty. 8. Lessee agrees to commence drilling operations on the leased lands or lands pooled therewith within said primary term and to prosecute such drilling operations with reasonable diligence until oil or gas is found in paying quantities,or to a depth at which further drilling operations would,in the judgment of Lessee,be unprofitable or impractical,or it may at any time within said primary term terminate this lease and surrender said lands; provided that,commencing two(2)years from the date hereof,if Lessee has not theretofore terminated this lease or commenced drilling operations, Lessee shall pay or tender yearly in advance,as rental to Lessor,an amount equal to the sum paid to Lessor on the execution hereof until operations have been commenced on leased lands or lands pooled therewith.Should Lessee elect to commence drilling operations on leased lands or lands pooled therewith,and if oil, gas or other hydrocarbons shall not be obtained in paying quantities in such well, and such well is abandoned,Lessee shall: Commence drilling operations on said leased lands or lands pooled therewith for another well within six(6)months after the completion as a dry hole or the abandonment of the last`preceding well and prosecute such drilling operations with reasonable diligence until oil,gas or other hydrocarbons shall have been found in paying quantities by Lessee,or until further drilling would,in the judgment of Lessee,be unprofitable or impracticable;or terminate this lease;or Lessee may defer the commencement of further drilling operations(except offset wells)during any period for which rentals have theretofore been paid or until six(6)months after the abandonment of the last preceding well,whichever 1,later,and so long thereafter as Lessee continues the payment of rentals annually on a pro rats basis and in the manner and at the rate above provided,but in no event shall the commencement of drilling operations be deferred beyond the expiration of the primary term by the payment of such rentals.The consideration expressed in Paragraph 2 above covers all rental for the first two years of the primary term hereof. 9. Within six(6)months after the completion and testing of a well producing oil in quantities deemed paying by Lessee,Lessee shall commence drilling operations for another well for oil or gas,and thereafter continuously operate one string of tools,allowing six(6)months(subject to extension as provided in this lease)between the completion or abandonment of one well and the commencement of drilling operations for the next succeeding well until one well has been drilled for each forty(40)acres,or major fraction thereof,of the leased land or land with which the leased land may be pooled;provided,however,that if and when drilling on the leased land or lands with which the leased land may be pooled shall indicate that oil cannot be produced therefrom in quantities deemed paying by Lessee but that gas can be produced in quantities deemed paying by Lessee,the obligation of Lessee hereunder shall be to drill only one(1)well for each one hundred sixty(160)acres,or major fraction thereof;the number of wells to be an average of one(1)to forty(40)acres for oil wells and one(1)to one hundred sixty(160)acres for gas wells,regardless of where drilled.Lessee shall be given credit for so much of the time in each such six(6)months drilling interval as is not utilized because of drilling by Lessee sooner than required and such credit may be used to extend subsequent drilling intervals in such manner as Lessee may determine.Lessee may drill as many additional wells as it may elect in excess of the number hereinabove specified. Lessee shall not be obligated to use more than one(1)string of tools for drilling on the leased land or lands with which the leased land may be pooled. 10. In the event a well is drilled and completed upon adjacent property in which Lessor has no interest and the producing interval of such well is located within 330 feet of the exterior boundaries of the leased land and oil or gas in paying quantities is produced therefrom,Lessee agrees providing it is not then drilling or has not theretofore drilled in the leased land an offset thereto,and provided this lease has not been fully drilled in the zone (formation)in which the offset operator completed said offset well as being commercially producible pursuant to Paragraph 28 herein,within six(6) months after production of oil or gas in paying quantities from said well,if said well is then still producing oil or gas in paying quantities,either to offset such well by the formation of an operating unit under Paragraph 28 hereof and the commencement of drilling operations hereunder, or to surrender and terminate this lease under the provisions of Paragraph 28 hereof as to a portion of the leasehold,no dimension of which portion shall be less than 330 feet. 11. Lessee may commingle oil produced from any operating unit or units created under the provisions of Paragraph 28 hereof with oil produced from any other operating unit which is producing from the same pool or structure and located in the vicinity thereof. For the purpose of accounting hereunder,the quantity of oil produced and saved from each operating unit shall be determined on the basis of gauges or meter readings and adjusted to conform to the shipping tank measurements of the commingled oil.Lessee shall take samples and make tests of the oil produced and saved from each operating unit or units prior to commingling and such samples and tests shall be the basis of determining the gravity and water,sand and other foreign substance of such oil. 12. After completion of the first well herein required,there shall be no obligation upon the part of Lessee to drill in or produce from and operate Page 2 of 8 the leased land,except as to offset wells vells offset are being operated,so long as the mark ;e in the field for oil of the quality and gravity produced on said property shall be Five 1,,jars($5.00)or less per barrel at the well. Lessee may at any time and from time to time suspend the production of gas from the leased land, but for any period during which such production is entirely suspended,oil not having been discovered in quantities deemed paying by Lessee in the leased land,Lessee shall pay to Lessor quarterly in advance,commencing on the first day of the month following such suspension,as advanced royalty,the sum of Twenty-five Cents(250)per acre on the leased land then covered by this lease and Lessee shall have the right to reimburse itself for any such payment out of one-half(�/z)of any royalties which shall thereafter become payable hereunder. Such production may not be suspended,however,when there is a market for the gas in the field at a price which will pay Lessee to drill for and produce the same with a reasonable profit. 13. Lessee agrees to perform all operations in a careful,workmanlike manner and in accordance with the laws of the State of California.Lessee shall keep full records covering the production and sale of gas,oil and natural gasoline from the leased land,and such records shall be open at all reasonable times to the inspection of Lessor or Lessor's duly authorized representative. 14. Lessee agrees, subject to the other provisions of this lease, to operate each completed oil or gas well with reasonable diligence and in accordance with good oil field practice so long as such well shall produce oil or gas in quantities deemed paying by Lessee;provided,however,that Lessee shall not be obligated to remove any oil, gas or other hydrocarbon substances produced from the leased land by any means other than a subsurface line. 15. All the labor to be performed and materials to be furnished in the operations hereunder shall be at the sole cost and expense of Lessee,and Lessor shall not be chargeable with,nor liable for,any part thereof,and Lessee shall keep said land duly and fully protected against all liens of every character arising from or connected with its operations.Lessor hereby grants unto Lessee full power and authority to do and perform all and every act and thing necessary or appropriate to be done to protect said leased land against all liens of every character arising from or connected with its operations, including the right to post a Notice of Non-Responsibility on behalf of Lessor. 16. In consideration of the payment made by Lessee to Lessor for the execution of this lease,it is agreed that Lessee may at any time,or from time to time,either before or after discovery of oil in the leased land,quitclaim this lease,either in its entirety or in part,and thereupon Lessee shall be released from all further obligations as to the part or parts so quitclaimed,and all rentals and drilling obligations as set forth in this lease shall be reduced pro rata according to the amount of acreage so quitclaimed by Lessee;it being particularly understood, however,that all leased lands so quitclaimed shall remain subject to—and Lessee shall have the right to use and enjoy—such subsurface rights of way and easements through the quitclaimed portion of the leased land as may be necessary or convenient,in whole or in part,for Lessee's operations in the leased land retained under this lease or other lands whether or not pooled with the leased land;provided,however,that any well drilled through any such quitclaimed portion of the leased land shall have no part of its producing interval in such quitclaimed portion. 17. Lessee shall pay all taxes levied on its improvements and personal property.Lessor shall pay all taxes and assessments on the leased land, exclusive of Lessee's mineral rights therein,and on all other improvements and personal property thereon.All increase in the taxes and assessments on the leased land or,if Lessee shall have quitclaimed a portion thereof,on such part thereof as is retained by Lessee under this lease,caused by or resulting from the discovery or production of oil,gas or other hydrocarbon substances thereon and therefrom,whether assessed upon the leased land as a whole or as mineral rights or otherwise,and all charges and taxes of whatsoever kind or collected by reason of the production,sale or removal of oil,gas or other hydrocarbon substances from the leased land shall be borne by the parties hereto in the proportion of the royalty share by Lessor and the remainder by Lessee.If Lessor shall fail to pay any taxes,assessments or charges required to be paid by Lessor,Lessee may at its option pay the same and in such event Lessee may reimburse itself for such taxes, assessments or charges so paid by it from any royalties or rentals accruing hereunder. 18. On the expiration of this lease, or its sooner termination, Lessee shall quietly and peaceably surrender possession of the leased lands to Lessor, and shall cause a good and sufficient quitclaim deed to be placed of record in said County. 19. In case of default in performance by Lessee of any of its obligations under this lease,and the failure to commence to remedy the same within ninety(90)days after receipt of written notice so to do signed by parties owning a majority of Lessor's interest or in the event the leased land is pooled with other lands as provided in paragraph 28 hereof by parties owning a majority of the landowners'interest in all the lands so pooled,specifying the particulars in which it is claimed Lessee is in default and thereupon to continue such remedying with reasonable diligence to completion,then at the option of Lessor all rights of Lessee under this lease shall forthwith cease and terminate except that Lessee shall have the right to retain all wells then producing or in the course of drilling or having work done on them,as to which Lessee is not in default,together with ten(10)acres surrounding the producing interval of each well producing or being drilled for oil or one hundred sixty(160)acres surrounding the producing interval of each well producing or being drilled for gas with full right to drill new wells on the lands so retained and to operate,produce,redrill,deepen or plug back to any depth,and to perforate casing at any depth believed to be in an oil or gas zone,and properly to maintain all such wells subject to all provisions of this lease,so long as such wells respectively shall produce oil or gas in quantities deemed paying by Lessee.Lessee shall retain the amount of acreage around each oil or gas well so designated by the State of California's Division of Oil and Gas.Temporary discontinuance of production from any well in order to work on such well,or cessation of production in any well which is followed by work on such well diligently conducted to restore production therefrom shall not be deemed to be an end of producing from such well within the meaning of this paragraph.Forfeiture of rights in this paragraph provided shall be the exclusive remedy of Lessor for the breach of any obligations hereunder except the obligations of Lessee to make payment of rentals or royalties. 20. Notwithstanding anything in this lease contained to the contrary, it is expressly understood and agreed that the obligations of Lessee hereunder shall be suspended so long as and to the extent that Lessee is prevented or hindered from complying with such obligations in part or in whole by the elements,accidents,strikes,lockouts,riots,delays in transportation,inability to secure materials in the open market,acts of war or conditions attributable to war or compliance by Lessee with federal,state,county,municipal or other governmental agency regulations,rules or orders including but not limited to failure or refusal to grant land use or operating licenses or permits, or with proration or curtailment regulations of authorities constituted by law,or other causes beyond the reasonable control of Lessee,whether similar or dissimilar to the foregoing.This lease shall remain in full force and effect during any suspension of any of Lessee's obligations under any provisions of this paragraph and for a reasonable time thereafter, provided,that after the removal of the cause or causes preventing or hindering the performance of such obligation,Lessee diligently commences or resumes the performance of such obligation. Lessee shall have the right'to join in the execution of and to comply with the voluntary agreement of producers representing a majority of the production in the district in which the leased land is located with respect to proration or curtailment of production in said district,provided such agreement is not contrary to law or to comply with any laws,regulations or governmental orders with respect Page 3 of 8 to any such proration or curtailment of produc Whenever Lessee is required to make a payment o ;r termination of this lease as to any of the . lands included hereunder as an alternative to commencing drilling operations, then, so long as the ouugation to commence drilling operations is suspended by any provision of this paragraph,Lessee shall not be required to make such payment nor shall this lease be terminated.If before Lessee may commence drilling operations in the leased land it must secure a permit therefor or approval thereof in any form from any federal,state,county or municipal body or agency,then if Lessee shall have applied for such permit within sixty(60)days prior to the date upon which such drilling operations must be commenced under the terms of this lease to avoid a forfeiture or termination thereof,the obligation to commence such drilling operations shall be suspended until such time as such permit is granted,or in the event such permit is denied so long as Lessee shall in good faith and with due diligence conduct proceedings appealing from such denial,for a period of thirty(30)days thereafter;provided,however,that in no event shall such obligation be suspended under this paragraph beyond a period of two(2)years from the time upon which such drilling operations should otherwise have been commenced. 21. "Drilling operations" as used in this lease is defined to mean any work or operations for the actual purpose of drilling a well hereunder including but not limited to operations commenced on other land in preparation of the ground therefor and the building of roads and facilities, provided the same be followed by the construction or erection of a derrick,the installation of drilling equipment and actual drilling in other land,for a well or wells to be slant drilled into leased lands or lands pooled with leased lands and that all such work be prosecuted diligently. 22. In the event that the leased land is less than the entire fee interest in the lands described,or if mineral rights only are leased and less than the entire mineral rights are covered,then the royalties herein provided for shall be paid Lessor only in the proportion which Lessor's interest bears to the entire undivided fee interest in the land as a whole or in the mineral rights therein.If it develops that Lessor owns less than the interest purported to be leased hereby,then the rentals herein provided for shall be paid Lessor only in the proportion which Lessor's interest bears to the interest purported to be leased hereby.If Lessor owns a greater interest in the lands described than is purported to be leased hereby or hereafter acquires any additional interest or title in the lands described,by operation of law or otherwise,then this lease shall cover such greater or additional afteracquired interest or title,and Lessor agrees to give Lessee written notice of any such acquisition as soon as the same is made,in which event the rentals and royalties payable to Lessor shall be increased proportionately. 23. Lessor hereby agrees to defend Lessor's title to the leased land and agrees that Lessee, at its option, may pay and discharge any taxes, mortgages or other liens existing,levied or assessed on or against the leased land and,in the event it exercises such option,it shall be subrogated to the rights of any holder or holders thereof and may reimburse itself by applying to the discharge of any such mortgage,tax or other lien,any royalty or rentals accruing hereunder.Lessee,at its option,shall have the right to defend any suit brought attacking Lessor's title to the leased land,or to bring a quiet-title action in Lessor's name to validate Lessor's title thereto or in its own name to validate Lessee's title to the leasehold created hereby,and in such case Lessor agrees fully to assist and cooperate with Lessee in any such action. The reasonable cost and expense of any action to defend or validate Lessor's title shall be deductible by Lessee from monies becoming due to Lessor hereunder. 24. If the estate of either party hereto is assigned or conveyed(and the privilege of assigning in whole or in part is expressly allowed),the rights and obligations created hereby and the covenants hereof shall extend to and be binding upon such party's assigns or transferee,and the party so assigning or transferring such interest shall thenceforth be released from all obligations hereunder to the extent of the interest so assigned or transferred,but no change of ownership in the land or in the rentals or royalties shall be recognized by Lessee until Lessee has been furnished with written notice of such transfer or assignment,with evidence thereof satisfactory to Lessee,which notice shall designate in writing the address to which checks covering payments affected by such change shall be mailed.If this lease shall be assigned to as a particular part or as to particular parts of the leased land,such division or severance of the lease shall constitute and create separate and distinct holdings under the lease of the several portions of the leased land as thus divided, and the holder of each such portion of the leased land shall be required to comply with and perform the Lessee's obligations under this lease for,and only to the extent of,his portion of the leased land;provided that nothing herein shall be construed to enlarge the drilling or rental obligations, and provided further that the commencement of the drilling operations and the prosecution thereof, as provided in Paragraph 8 hereof, either by the Lessee or any assignee hereunder, shall protect the lease as a whole. 25. All statements of production and royalty and all payments to be made by Lessee to Lessor hereunder shall be sent to the persons whose names are hereunto subscribed as Lessor on the Signature Page attached hereto, respectively,at the addresses shown thereon. Lessee shall, upon notification of change of ownership in the lands or in rentals or royalties hereunder,as provided in Paragraph 24 hereof,divide and distribute the same to the new owners of such interests;provided,however,that at any time after royalty becomes payable hereunder,Lessee may,at its option,withhold payment of such rentals or royalties until parties owning a majority of Lessor's interest designate in writing a recordable instrument delivered to Lessee,a bank,trust company or corporation in California,as a common agent and depository,to receive all payments due hereunder to such persons. Such designation may be changed at any time in the same manner.Delivery of all statements and payments hereunder may be made by depositing the same in the United States mail duly addressed to Lessor at the above address or addresses or to such agent and depository which shall constitute full performance of Lessee's obligation to make such delivery.In the event that the amount payable under this lease shall result in a payment of less than Twenty-five Dollars($25.00)becoming due Lessor,Lessee may,at its option,withhold and accrue sufficient periodic payments until the total due Lessor exceeds Twenty-five Dollars ($25.00). 26. Lessee may give any notice or deliver any document hereunder to Lessor in person or by delivering the same by mail addressed to Lessor at the address shown on the signature page attached hereto.Any notice from Lessor to Lessee shall be given by sending the same by mail addressed to Lessee at 1415 McDonald Way,Bakersfield,California 93309.All notices so given by mail shall be deemed delivered when deposited in any United States Post Office.Either party may at any time by appropriate written notice to the other change the address to which that party's notices are to be sent. 27. For the consideration paid at the time of execution of this agreement and without any additional consideration to be paid therefor,Lessor hereby grants to Lessee and its assigns the exclusive easement and right to drill into and through the leased land,by means of a well or wells,whether producing or injection drilled from surface locations outside the leased land together with the sole and exclusive right to repair, redrill, deepen, maintain,rework and operate such wells and produce oil,gas and other hydrocarbons from,or inject gas,steam,water,saltwater,or other fluids into, such wells which may be drilled into or through the leased land or into other land, whether or not pooled with the leased land;such subsurface rights-of-way,easements and servitudes to continue for the duration of this lease and thereafter as hereinafter provided.If Lessee shall assign to any third party or parties such subsurface rights granted to Lessee under this paragraph, the said subsurface rights of Lessee shall not thereby be diminished,in such event both Lessee and its assignee shall have,hold and enjoy said rights,each independently of the other.The subsurface rights of Lessee and of each assignee of Lessee under this paragraph shall continue so long thereafter as oil,gas or other hydrocarbon substances are produced by means of any such well or as drilling,redrilling or remedial operations are being conducted with respect to any such well. Lessee and each such Page 4 of 8 assignee utilizing any such rights after th ration,surrender,forfeiture or other termination o, .ease shall pay to Lessor a rental for each well subsequently maintained by it under or through the leased land at the rate of One Dollar($1.00)per annum per foot of the horizontal projection (computed to the nearest foot)of the surveyed course of the part of the well of such Lessee or assignee lying within the confines of the leased land,the rental with respect to any such well to commence on the completion thereof and to continue until such well is abandoned in accordance with the requirements of the State of California;provided,however,that Lessor shall not be entitled to receive any rental under the provisions of this paragraph during such times as Lessor is entitled to receive royalty or rentals under other provisions of this lease.During the term of this lease,Lessor shall not grant any subsurface rights of way, easements or servitudes in and to the leased land in respect to the drilling for or the production of oil, gas, hydrocarbons and associated substances to any other person, firm or corporation without the written consent of Lessee. 28. Lessee is hereby given the right at its sole option,by a written declaration of pooling,at any time or from time to time,to combine or pool all or any part of the leased land with all or any part of any other tract or tracts of land,so as to create by such combining or pooling one or more operating units for the development and production of oil,gas and other hydrocarbon substances.Any such operating unit shall not exceed six hundred and sixty (660)contiguous acres in area;provided,however,that any such operating unit may nevertheless include all or any part of the lands within any oil drilling district which embraces the leased land and which may be established by any federal,state,county or municipal body or agency acting by and pursuant to any present or future law,ordinance,rule or regulation;and provided further that such operating unit and leased land shall be subject to all of the provisions and conditions of any such oil drilling district and any present or futue laws,ordinances,toles or regulations of any federal,state, county or municipal body or agency.The designation of such operating unit shall be made prior to ninety(90)days after the completion of a well capable of producing oil or gas from the lands within the operating unit,but in no event shall such unit be created later than twenty(20)years from the date of this lease;and such designation shall define the area which shall constitute such operating unit.In the event and as soon as any such operating unit is so created,Lessee shall promptly record in the office of the county recorder of the county in which the leased land is situated such written declaration of pooling,and Lessee shall give written notice of such pooling to Lessor.In the event Lessee shall acquire an Oil and Gas Lease covering any interest in any land within the boundaries of any such unit,then such Lease and the rights covered thereby shall by included in such unit providing such Lease authorizes such inclusion and Lessee has recorded such Lease with the County Recorder in the County wherein such unit is situate.Such unit,as theretofore created by such Declaration of Pooling,shall be considered as amended to cover such Lease.In the event of such pooling,then,in lieu of computing royalties upon substances produced from the leased land as provided in Paragraphs 4,5 and 6 hereof,Lessor's royalty shall be computed and paid upon the value of the total of oil,gas and other hydrocarbon substances produced,saved and sold by Lessee from such operating unit or units,in the proportion that the amount of said leased land included in such unit bears to the total land in such unit;and in lieu of the taxes provided to be borne by Lessor under Paragraph 17 hereof,Lessor shall bear the royalty share of such taxes on land in such unit and taxes on the production therefrom in the same proportion as production is allocated to said leased land included in such unit. For the purpose of determining drilling obligations for such unit,which shall be equal to the drilling obligations set forth hereinabove in this lease,the entire land within such unit shall be treated as if it were covered by one lease,and the drilling of a well into such unit,whether or not in said leased land;shall fulfill Lessee's. drilling obligations under this lease to the same extent as if such well were drilled in said leased land,and no offset obligations shall accrue with respect to the several tracts of land which have been pooled within the same operating unit.Upon the pooling of less than all of the leased land,as hereinabove provided,this lease shall be severed,and leased land included in such unit and leased land not included in such unit shall be segregated and constitute separate and distinct leaseholds,and the performance of the obligations of one such separate leasehold shall validate that one regardless of any default in the other separate leasehold.Lessee may,at any time,quitclaim to the persons entitled thereto all or any part of the land included within such unit, and thereupon Lessee shall be released from all further obligations with respect to land so quitclaimed,and all drilling requirements with respect to lands included within said unit shall be reduced pro rata,and any such quitclaim covering any such land,other than said leased lands,shall have the same force and effect,for the purpose of clearing title to the quitclaimed land,as if Lessor had joined in such quitclaim.The division of royalties from such unit between each Lessor and other owners of interest in such unit shall,after the discovery of oil or gas in paying quantities,not be changed, altered or affected notwithstanding any subsequent surrender or quitclaim or forfeiture of any land in such unit,save and except land surrendered because of lack of good and merchantable title;provided,however,that in the event the leased land or any part thereof,after surrender or quitclaim or forfeiture shall be made subject to any other oil or gas lease or a well be commenced thereon for oil or gas,then such of the above described leased lands so surrendered or quitclaimed or forfeited shall thereupon and forever thereafter be excluded from participating in the benefits accruing from such unit,but Lessee shall not be held responsible or accountable for payments made without actual knowledge of the execution of any such other oil or gas lease or the drilling of any well for oil or gas in such quitclaimed,surrendered or forfeited land.Lessee may,at its sole option,at any time when there is no production from such unit of oil or gas in quantities deemed paying by Lessee,terminate such operating unit by a written declaration thereof,in the same manner in which it was created.Upon the termination of any such operating unit,if only a part of the leased land was included therein,this lease shall no longer be considered as a separate and distinct lease,and the effect of such termination shall be to return this lease to the status in which it was immediately prior to the creation of such operating unit as though no operating unit had been created. 29. This agreement may be executed in any number of counterparts with the same force and effect as if all parties signed the same document. The execution hereof by any person named as Lessor herein shall bind such person's interest whether or not any other person named as Lessor herein shall execute the same. 30. The entire agreement between the parties is set forth in this lease,and no covenant or agreement,express or implied,other than those set forth in this lease,shall be binding upon either of the parties hereto except insofar as this lease may subsequently be modified by written agreement of the parties. 31. In the event leased land is pooled under Paragraph 28 hereof,the benefits of Lessor including rent and royalty accruing under the provisions of Paragraph 28 hereof are appurtenant to the leased land of Lessor,and any transferee or subsequent owner of the title to the leased land of Lessor shall be entitled to receive such appurtenant benefits under Paragraph 28 hereof,except to the extent that such benefits shall be expressly reserved or shall have been theretofore transferred in whole or in part.A reservation or exception of all or any specified portion of the minerals or oil or gas or other hydrocarbon substances in any instrument shall constitute,for the purpose of this agreement,a reservation or exception of all or such specified portion of the appurtenant benefits under Paragraph 28 hereof. 32. The Lessor has executed an extra copy of the Lessor's Signature Page attached to this lease, and it is hereby agreed that such Lessor's Signature Page may be attached to an identical copy of this Subsurface Oil and Gas Lease,together with other signature pages from other identical oil and gas leases executed by other lessors,for the sole purpose of recording the same in the Official Records of the county wherein said leased lands are situate,it being expressly understood that the attaching of such Signature Page to a similar lease shall not constitute a pooling or combining of the leased land with any other land. Page 5 of 8 33. The primary term as herein providt, .11 be extended an additional five(5)years if Lesse I assigns acquire by lease or assignment 1,875 lots within the area known as"Downtown"more fully described as being that area between Pacitic Coast Highway and Palm Avenue and Lake Street and Goldenwest Street.If,at the end of the initial 5 year primary term,Lessee or its assigns has acquired sufficient lots,and the primary term is extended for 5 additional years,then the lease will remain in full force and effect and subject to all of the terms and conditions as set forth herein. 34. Notwithstanding anything in this lease herein contained, if the City of Huntington Beach finds Lessee or its assigns in default in its performance under the obligations of this lease,then the City of Huntington Beach can call for performance by Lessee under the terms and conditions of Paragraph 19 above.Prior to any assignment of the Lessee's interest hereunder which would result in operations conducted by a party other than American Petrofina or its affiliates,Lessee shall notify the City of Huntington Beach in writing and the City will have 30 days from receipt of such notice to disapprove such assignment.If written disapproval is not received within said 30 days then such action will be considered to be approval by the City of the Change of Operator.The City of Huntington Beach shall have the right at regular office hours in Lessee's office,to inspect the books and records kept by Lessee and to ascertain the amount of production shipped from the leased lands or lands pooled therewith. 35. Subject to the provisions hereinabove set forth, this lease and agreement shall be binding upon and inure to the benefit of the heirs, administrators, successors and assigns of the respective parties hereto. J IN WITNESS WHEREOF, the parties hereto have caused this lease to be executed the day and year first above written. R. K. Summy, Inc. By LESSEE STATE OF CALIFORNIA SS. COUNTY OF On this day of in the year 1981 before me, a Notary Public in and for said County and State residing therein, duly commissioned and sworn, personally appeared , known to me to be the of said corporation, and known to me to be the person who executed the within instrument on behalf of said R.K.Summy,Inc.the corporation that executed and whose name is subscribed to the within instrument, and acknowledged to me that R. K. Summy, Inc. executed the same pursuant to a resolution of its Board of Directors. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Official Seal the day and year in this certificate first above written. Notary Public in and for said County and State Page 6 of 8 /''~ THIS PAGE INTENTIONALLY LEFT BLANK Page 7 of 8 LESSOR'S SIGNATURE PAGE ALL THAT PORTION OF THE LANL PING BELOW FIVE HUNDRED FEET (5t 3ELOW THE SURFACE OF: Lot(s) Block No. Tract No. City of Huntington Beach, Orange County, California as per map recorded in Book , Page(s) of Maps, in the office of the County Recorder, Orange County, California. Together with all right,title and interest which the undersigned may now have or hereafter acquire in the above-described premises or in the real property included in any avenues,alleys,highways,roads or streets adjacent to the above-described premises,without any right to Lessee to use the surface or that portion of the subsurface lying above the depth of five hundred feet(500')below the surface of the above-described premises. The Lessor hereby leases the above-described land located in Orange County,California,to R. K. Summy,Inc.,subject to the terms —/ and provisions of the Subsurface Oil and Gas Lease to which this Lessor's Signature Page is attached. SUBSCRIBING WITNESS LESSOR Social Security No. Mineral Interest Social Security No. Parcel No. Social Security No. Delivery Date Social Security No. Amount Paid ADDRESS: to Lessor and amount to be used as rental pursuant to Paragraph 8 of said Subsurface Oil and Gas Lease. STATE OF CALIFORNIA COUNTY OF SS. On , before me, the undersigned, a Notary Public in and for said County and State, personally appeared personally known to me to be the same person whose name is subscribed to the within instrument as a subscribing witness thereto who being by me duly sworn, deposed and said that he resides in the County of , State of California; that he was present and saw personally known to him to be the same person(s)described in and whose name(s)is(are)subscribed to the within instrument as a(the)party(ies)thereto, sign and execute the same; and that he, the affiant, then and there subscribed his name to said instrument as a witness. WITNESS my hand and official seal. Notary Public STATE OF CALIFORNIA COUNTY OF J SS. On 19 , before me, the undersigned, a Notary Public in and for said County and State, personally appeared known to me to be the person whose name subscribed to the within Instrument, and acknowledged to me that executed the same. WITNESS my hand and official seal. Notary Public Check No. Page 8 of 8 72- REQUESI FOR CITY ..COUNCIL ACTION Date October 21, 1981 U IL Submitted to: Honorable Mayor and City Council TD BY GIT� GO Subri-iitted by: Charles W. Thompson, City Administrator Prepared by: Department of Development Services Subject: PROPOSAL BY CALIFORNIA DIVISION OF OIL A S TO GRANT $3, 900 TO THE CITY TO HELP THE STATE CONDUCT A WORKSHOP ON PROTECTING ACCESS TO OIL RESERVES /G� -,�'y,S� Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: e��C- The California . Division of Oil and Gas (DOG) has recognized the City' s innovative. work on protecting surface access to oil reserves and on increasing the compatibility of oil extraction with other uses. THe DOG would like to conduct a State-wide workshop on these issues, using Huntington Beach' s analyses as the background for the program. The DOG has offered the City $3, 900 to help the State pre- pare for and conduct this workshop. RECOMMENDATION: 1. Authorize the City Administrator to execute in the name of the City the contract offered by the DOG regarding the proposed workshop. . 2. Appropriate $3, 900 from the general fund to .cover. expenses in- curred in fulfillment of the agreement, which will be reimbursed by the DOG. as tasks are completed. ANALYSIS: The City of Huntington Beach has produced innovative studies regard- ing the problem of preserving surface areas for oil extraction in urban areas. Analysis of this .problem is found in the City' s "Coastal Energy Impact Program" and in the Huntington Beach Energy Series, particularly Report No. 1, "Preserving Surface Access to. Underground Oil Reserves. in Developed Areas. " The State Department of Conservation has stated that working toward solutions to help protect oil reserves in urban areas is among the top goals of this administration. The State has also recognized the City of Huntington Beach as an innovator and a model for other jurisdictions regarding this issue. The State would like to conduct a workshop, inviting representatives from- all the cities and counties in California where oil is produced, to discuss this prob- lem and possible solutions. The analyses done by Huntington Beach will constitute the background for this discussion. PIO 4/81 Page 2 Continuing and future oil production is an important factor con- sidered in the City plans, notably in the Coastal Plan and in the not-yet-complete Ellis/Goldenwest Specific Plan. The State would like to use our- analysis in the latter- plan as a case study for the .workshop. The City Department of Development Services is study- ing oil uses .in this .area as part of the preparation of the specific ;.,plan. - The DOG will provide Development Services with technical assistance and will pay the City $3, 900 to help them adapt that study for the State-wide workshop and to help them conduct- the workshop itself. This arrangement would allow the City to get technical and some limited financial assistance from.. the DOG for .the Ellis/Goldenwest Specific Plan. It would also provide an opportunity for the City to receive State-wide recognition as an innovator in this difficult and important issue of accommodating oil production in developed areas. FUNDING SOURCE: Initial expenditures would be incurred from the general fund and reimbursed. by the State Division of Oil and Gas. ALTERNATIVE ACTIONS: Do not authorize agreement to the contract; .the City will lose an opportunity to participate in this project and receive State-wide recognition for its innovative planning.-efforts. Development Services will still study this -issue in the Ellis/Goldenwest area as part of the specific plan. ATTACHMENTS: 1. Resolution 2. Proposed Work Program JWC:MM:df 4. CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH To Charles W. Thompson From F. B. Arguello City Administrator Chief of Administrative Services Subject Requested Funding To Conduct Date November 9, 1981 Workshop On Protecting Access To Oil Reserves FIR # 81-81 In response to the Development Services Department, I am hereby submitting a Financial Impact Report relative to the requested funding to accommodate the proposed project in question. It. has been suggested that an appropriation in the amount of $3,900 would be adequate for this purpose. This project will be financed by a grant from the State of California. The City may seek reimbursement on a monthly basis. Therefore, the cost to the City will be the possible interest lost on the money spent prior to reimbursement by the State. F. B. Argue o Chief of Administrative Services FBA/AR/cg CITY OF HUNTINGTON BEACH FINANCIAL IMPACT REPORT Project Name Workshop on Protection of Access to Oil Reserves Description Request for grant funded appropriation to participate in state-wide workshop on increasing compatibility of oil extraction with other uses. 1 . DIRECT PROJECT COSTS 1 . 1 One-Time Costs Land urn. , aci i- Acquisition Construction ties, Equipment, Other Total Cost 3,900 3,900 1 .2 Recurring Annual Costs Additional. Materials & Outside — Payroll Personnel Supplies Services Revenues Total Cost 1 .3 Replacement/Renewal Costs N/A 2. INDIRECT COSTS N/A Financial Impact Repot Page 2 3. NON-DOLLAR COSTS N/A 4. BENEFITS TO BE DERIVED FROM THE PROJECT Ability of the City to have viable input in the project sponsored by the California Division of Oil and Gas - and add to the validity of this effort. 5. PROJECT USAGE Daily. 6. EXPENDITURE TIMING Participation in the program to be predicated on City Council approval . 7. COST OF NOT IMPLEMENTING THE PROJECT Arbitrary/undeterminable. RESOLUTION NO. 5051 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HU14TINGTON BEACH AUTHORIZING AN APPROPRIATION FROM THE GENERAL- FUND TO CONDUCT A WORKSHOP FOR OIL AND GAS DISCOVERY EXTRACTION STUDY WHEREAS, the California Division of Oil and Gas - has recog- nized the innovative studies produced -by this city with respect i to preserving surface access to underground oil reserves ; and The. Division of Oil and Gas has offered to furnish techni- cal assistance to the city and help the city in conducting a statewide workshop; and The amount required for such workshop is $3,900, to be reimbursed to city by the California Division of Oil and Gas under . the terms of the attached agreement , NOW, THEREFORE, BE -IT RESOLVED. by the City Council of the City of Huntington Beach that it does hereby authorize the City Administrator to execute in the name of the City of Huntington Beach all necessary applications, contracts:, and agreements and amendments thereto. to implement and. conduct a statewide workshop i. As specified in the agreement,. a copy of which is attached hereto and by this reference made a part hereof as though set forth in full herein. BE IT FURTHER RESOLVED .that an appropriation of $3,900 is hereby authorized to be made from the general fund to study means of preserving surface 'access to _subsurface petroleum resources in urban areas, such appropriation to be -reimbursed to city by the California Division of Oil and Gas . PASSED AND ADOPTED -by the City Council of the City of Huntington Beach at a regular meeting thereof field on the 16th _ day of November _, 1981. i i. Fhb 11 !4/81 1, J • Mayor ATTEST: APPROVED AS TO FORM: 107 --City Clerk City Attorney 1 REVIEWED AND APPROVED : INITIATED AND APPROVED: A I, City Adm isfrQ or irec or o Development Services i i i i i I 2. i I i I 1 CITY 01: fIUNTINGTON Bf•ACII EXHIBIT A General Provisions A. This agreement is sponsored by the City of Huntington Beach, California, as a cooperative project between that city and the Division of Oil and Gas, Department of Conse.rvation, .State of Cal.ifornia, to study ways in which surface access to subsurface petroleum resource may be retained in urban areas; to explore various methods that are legally available to local government to set aside suitable sites for oil operations within larger tracts of'urban land; and to co-host a workshop session to .be attended by .invited representatives from oil-producing cities or counties in Southern California. B. The following standard provisions, the Exhibits and attachments incorporated thereby and changes thereto, are essential, complimentary, and describe. and provide for completion of this agreement. 1 . Contractor agrees to indemnify,. defend, -and. save harmless the 'State, its officers, agents, and employees from any and all claims and losses accruing or resulting to any and all contractors, sub- contractors,' materialmen, laborers, and any other person,. firm, or corporation furnishing or supplying work, services, materials, or supplies in connection with the performance of this contract, and from any and all claims and losses accruing or resulting to any .person,. firm, or corporation who may be injured or damaged by . the Contractor in the performance of this contract. 2. _ Contractor, and the agents and employees of' Contractor, in the per-. form.ance_of this agreement, shall. act in an independent capacity and not as officers or employees or agents of State of California. 3.. State may terminate this agreement and be relieved "of the payment of any consideration to Contractor .should Contractor fail to perform the covenants Herein contained at the time and in the manner- herein pro- vided. In the event of such termination, the State may proceed with the work in any manner deemed proper by the State. The cost to the State shall be deducted from any sum due the Contractor under this agreement, and the balance, if any, shall be. paid the Contractor upon demand. 4 Without the written consent of the State, this. agreement. is not assignable by Contractor either in whole or in part. 5. Time is the essence of this agreement. 6. No alteration or variation of the terms of this contract shall be valid unless made in writing and signed by the parties hereto, and no oral understanding or agreement not. incorporated herein, shall be binding on any of the parties hereto. 7. The consideration to be paid Contractor .shall be in compensation for the States share of expenses incurred in the performance of this agreement as prescribed and provided herein. CITY OF HUNTINGTON BEACH -2 8. As used herein, the term "CDOG" means. the Division of Oil and Gas. The term "City" means the City of. Huntingion Beach. 9. CDOG's representative shall be Elbert R. Wilkinson. Both City and CDOG representatives are hereafter referred to as Project Officer. 10. With the consent of both parties, this agreement may be amended or modified at any time. Either party may cancel this agreement by issuing the other at least 15 days' written notice of intent to terminate. 11. Necessary; modificat-ions or changes to the Work Program and Work Schedule, Exhibits Band C, which do not alter or detract project objectives, affect expenditures, or extend the final completion date of :this .agreement, may., be resolved; approved, and executed by _mutual consent of both City and CDOG Project Officers. A copy of.any amendment to those Exhibits shall be forwarded to each party of this agreement for attachment thereto. 12. City shall not be entitled to payments for any work done prior to the commencement dat6. 6f the agreement or for any services or materials other than that chargeable to CDOG as described in Exhibit D. In the event any portion of the work project is cancelled, CDOG agrees to reimburse City for actual chargeable costs incurred up to the date of termination. 13. City may elect to receive. progress payments provided-the billing is submitted not more often than once a month, in arrears, and in .accor- dance with tasks and amounts referenced in Exhibits B, C, and D as follows: Task No. 4.1, $1,000.00; Task No. 5.3, $1,350.00; Task No. S.5, balance. of actual amount of total expenditures due City not to exceed $1,550.00. 14. Upon completion of all work in a satisfactory manner,. and upon presen- tation of an itemized invoice(s) ,or statement(s)., in triplicate, CDOG shall. pay. City for the actual cost of performance according to the pro rata assessment of charges given. in Exhibit D. The invoice(s) or statement(s) shall be submitted to Division of -Oil and Gas, 1416 .- 9th Street, Room 1310, Sacramento, California 95814. 15. The provisions of the attached Fair Employment Practices Addendum are made a part of this agreement by reference. 16. . This agreement shall be null. and void .unless and until City provides and attaches hereto a copy of its resolution; order, -or other lawful document approving execution of the agreement. 0. The final workshop proceedings report shall be accompanied by appro- priate recommendations for adopting or changing governmental juris- diction policies; and model ordinances or regulations which.would serve to limit, prevent., or..rectify existi'ng or future -urbin:area development encroachments and access barriers to petroleum resolirce surface areas and production sites. CITY 01' I IUNT I NG'rON BEACH EXHIBIT B Work Program Tasks: 1 .0 Map parameters of the oil resource and surface needs for future recovery. 1.1 Identify oil zones in this area including their depth and charac- teristics; map representative cross-section. 1 .2 Map areal extent of various zones. 1 .2a (optional) Estimate remaining recoverable reserves... 1.3 Estimate approximate horizontal reach directional drilling to different zones, accounting for depth, oil characteristics; and likely recovery methods. 1.4 Determine number of sites .necessary for future waterfloods or' EOR projects; determine approximate distribution of such sites in the study area. 2.0 Map surface constraints limiting areas from future oil sites. 2.1 Map areas of steep slopes. 2.2 Map proposed roads and other public facilities: 2.3 Map existing development, including existing oil sites; and existing leases and ownership patterns. 2.4 Map proposed trails and recreation areas. 3.0 Compare .area constraints to project needs. 3. 1 Map surface.cons.traints versus surface needs; establish a. set of possible future oil site distributions, which if preserved, would protect surface areas for future oil recovery. 4.0 Analyze regulatory options for preserving surface sites. 4.1 Determine a list of regulatory land-use options; including the following: designate sites ''resource production" .in general plan; zone sites for. oil extraction; use of eminent domain, tax abatement strategies for limiting uses on sites, transfer of development credits from oil sites to other parts of the plan area. 4.2 Analyze each option on the following critieria technical f.easi- bil-ity, legal constraints, fiscal impacts on .the City, economic impacts on property owners, other goals of the specific Plan, community sentiment and policy considerations, Ilimplementabii ty" and administrative costs. -2 4 .3 Recommend an option to Planning Commission for incorporation into specific plans. S.0 Conduct a workshop for other jurisdictions on this issue, using Huntington Beach experience as a case study. 5. 1 Prepare a workshop program to include the following topics: .the problem of preserving surface areas for future oil recovery in urban areas, role of the local government and regulatory options, .the Huntington Beach experience as a case study. . 5.2 Invite speakers and assign topics, prepare visual 'aids and printed hand-outs. 5.3 Invite participants. 5.4 Hold one-day workshop in Huntington Beach; format will include presentations, lunch, and discussion groups. 5.5 Write and distribute "proceedings" of the workshop. Ci;Y CF iiUN .`, EXHIBIT C Work Schedule. 1981 - Time Schedule - 1982 Task Product Provider Aug: Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 .1 Identify zones CDOG. X X X 1.2 Areal extent of zones CDOG X X X 1 .3 Drilling radii CDOG X . X X 1.4. Number, location of sites CDOG X X X 2.1 . Map slopes City X X X 2.2 Map roads City X X X 2.3 " Map existing developments City X X X 2.4- Map trails and recreation areas City X X X 3.1 Site distribution options. City X X 4.1 List regulatory. options CDOG and City X X X X 4.2 Analyze options CDOG and City. X _ X X X 4.3 Recommend .to Commission City X X S.1 Prepare workshop -program CDOG and City X X X X X S.2 Prepare workshop materials. CDOG and City X X X X X S.3 Invite participants CDOG and. City X. X S.4 Workshop - CDOG and City X X ` S.S' Wi proceedings . CDOG and City - X X EXHIBIT D. Expenditure Schedule Cost Estimates and Contributor Labor Materials Task Product CDOG City CDOG City Extension 1.1 Cross sections 1.2 Areal map of oil zones 1.3 Drilling radii 1 .4 Distribution of sites 2.L Composite constraints- map- (topographical) $3,000 $5,0004t $ 8,000 thru 2.4 . 3.1. Set of surface site options S00.* Soo 4.1 Report on options and analysis of each $1,000 1,000 2,000 thru 4.2 4.4 Staff report and presentation to Commission S00 4 Soo S.1 Workshop: 1,7S0 thru 5-.4 General expenses 1,000 Room rental . . 200t . Lunch- catering 200 Visual aids $100. Printing _- 200 Postage- so S.S_ Proceedings:. 1,8S0 Printing 1;500 _ 300 t Postage S0 Total pro rata costs: $3,.500 $400 $ 3,900 $5.31000 $5,700 10,700 Total estimated costs: $149600 '►l�tse ov+e t4twv�s �,,t,+i,�. -P",C;ct� - E CI_" OF HUNTINGTON BEACH FAIR EMPLOYMENT PRACTICES ADDENDUM 1. In the performance of this contract, the Contractor will not discriminate against any employee or applicant for employment because of race, color, religion, ancestry, sex*,age*, national origin, or physical handicap*. The Contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion; ancestry,sex*,age*, national origin,or physical handicap*. Such action shall include, but not be limited to, the following: employment, upgrading, demotion_ or transfer; recruitment or recruitment advertising;Iayoif or termination;rates.of pay or other forms of compen- sation: and selection for training, including apprenticeship. The Contractor shall post in conspicuous places, avail- able to employees and applicants for employment, notices to be provided by the State setting forth the provisions of this Fair. Employment Practices section. 2. The Contractor will permit access to his/her records of employment, employment advertisements, applica- tion forms, and other 'pertinent data and records, by the State Fair Employment Practices.Commission, or any other agency of the State of•California designated by the awarding authority, for the purpose of investigation to ascertain compliance with the Fair Employment Practices section of this contract. 3. Remedies for Willful Violation: (a) The State may determine a:'willful'violation of the Fair Employment .Practices provision to have occurred upon receipt of a final judgement having that effect from a court in an action to which Contractor was a party, or upon receipt of'a written notice from the Fair Employment Practices Commission that it has investigated and determined that the Contractor has violated the Fair Employ- ment Practices Act and has issued an order, under Labor Code Section 1426, which has become final, or obtained an injunction under Labor Code Section 1429. (b) For willful violation of this Fair Employment Practices provision, the State shall have the right to terminate this contract either in whole or in part, and any loss or damage sustained.by the State in . securing the goods or services hereunder shall be borne and paid for by the Contractor and by his/her surety under the performance bond, if any, and the State may deduct from any moneys due or that thereafter may become due to the Contractor, the difference between the price named in the contract and the actual cost thereof to the State. *See Gabor Code Sections 1411 - 1432.5 for further details. • asf i ' hes. No. 5051 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) as: . CITY OF HUNTINGTON BEACH ) I, ALICIA M. WENTWORTH, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of.the City. Council of the.- City of Huntington Beach. is seven; that the foregoing resolution was passed and adopted by the affirmative vote of more than a majority ofzall the members of said City Council at a regular meeting thereof held on the 16th day of Noyember 19_bj_, by the following vote: AYES: Councilmen: MadAllister. Thomas. Patiinson. Finley. Bailey. Mandic. Kelly NOES: Councilmen: None ABSENT: Councilmen: None 107 City Clerk and ex-officio Clerk of the City 'Council of the .City of Huntington Beach, California I The fioregoin : +nstrumentis-,"a correct My of ahe, original on file in this office. .19 Attest, City 0-le Ex-officio Clerk-of.:tlie City Counc,d of the Clty_of Huntington_Beach, Cal. Deputy Bye _ ..... REQUES i FOR CITY COUNCIL--ACTION RCA '81-2 Date September 15, 19 81 Submitted to: Honorable Mayor and 'City Council Submitted by: Charles W. Thompson, City Administratof� Subject: -EXEMPTING CERTAIN OIL OPERATIONS FROM .HUNTINGTON BEACH MUNICIPAL CODE SECTION 15. 24. 060 , PAINTING Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions, Attachments: Statement of Issue: There is a need to clarify the City' s ordinance regarding the colors . used to paint oil equipment that is located within the city. Recommendation: Adopt Ordinance exempting certain oil operations from color requirements, as outlined in Municipal Code Section 15. 24. 060 where certain conditions are met. Analysis: The existing ordinance makes no provision for unique or special cases where the painting of oil well pumps would not be visible from public streets and where they do not abut updri_ residential property. On-going oil well drilling results in constant. splattering of oil on the pumps and other equipment. In such cases, neutral shades tend to look worse than in cases where it is masked. Therefore, there is no need to re. quire oil producing operations that are removed from public access and public view and are not adjacent to residential property to paint oil-- equipment to conform to specific color requirements for aesthetic pur- poses. The proposed ordinance will assure oil operators ; that such specific color requirements will not be imposed upon them. Funding Source: Not applicable. Alternative Action: Not to adopt Ordinance p15i-5 P10 4/81 J ORDINANCE NO. 2515 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY AMENDING SECTION 15. 24 .060 RELATING TO PAINTING OF OIL PRODUCTION EQUIPMENT The City Council of the City of Huntington Beach does ordain as follows : SECTION 1. The Huntington Beach Municipal Code is hereby amended by amending section 15. 24 .060 to read as follows : 15. 24.060 Painting. A11 production equipment on the oil operation site shall be painted and maintained at all times, in- cluding pumping units , storage tanks , heaters, and buildings or structures. When requiring painting of such facilities, the fire chief shall consider the deterioration of the quality of the ma- terial of which such facility or structure is constructed, the degree of rust, and its appearance. Paint shall be of a neutral color, compatible with surrounding uses. Neutral colors shall include sand, grey and unobtrusive shades of green, blue and brown, or other colors approved by the chief. All production equipment shall be painted a neutral color, as defined herein, within six (6 ) months after the adoption of this chapter. EXCEPTIONS: The color requirements of this section shall not apply where there are continuing and ongoing multiple drilling operations which (a) do not have public access; (b) are not ad- jacent to existing residential property or property that is gen- eraZ planned or zoned for residential use; and (c) are screened from public view. SECTION 2. This ordinance shall take effect thirty days after its adoption. PASSED AND ADOPTED by the City council of the City of Huntington Beach at a regular meeting thereof held on the day of 1981. ATTEST: Mayor City Clerk ahb 9/17/81 1. .f INITIATED AND APPROVED: APPROVED AS TO FORM: GAIL HUTTON, City Attorney xA City Administrator Deputy City Attorney 1 2. 121 CALA� 41 aG Lr CITY CW MVMTIMO N BEACH INTER-DEPARTMENT COMMUNICATION Of At-if Charles Thompson. From James W. Palin, Director City Administr Development Services SUPPLEMENTAL INFORMATION Date May 14, 1981 REGARDING ORDINANCE NO. 2491 AMENDING, THE CITY'S OIL CODE The bepartment .of Development Services :has submitted .a .Request for Council recammending that_ the Council- adopt the .Amendments to the citv 's. Oil .Code .degeloped by staff and: the Oil Committee, Staff wouid. like to 'suinit. the following supplemental information regarding : th6 proposed amendments: ] . Technical Errors. The following minor,. technical changes should e made before the Council adopts the draft ordinance. Page 6, section 15.08. 310;. change ".lines" to liners" . r Page 10, Section 15.12.110 (f) ; 4(0� "Landscape plans sha-1 1 not be required !or reworking permits Pa ZO n 15.20.160(b) (5) ;. change "chapter" to ha ter 15:22" . Page 30,. Section 15.32.010(c) ; . change "land t "and" 2 Time of 0 eratiot, The code currently allows oil operations .within 00 feet o . .res encee 'to continue from 7 A.M. to 11 P.M. , even if the operations are not soundproofed. Prior to the 1977 amend- ments to the- codo, . these hours of operation were 7 A..M. •to. 9 P.M. Development Services recommends that the 9 P.M. limit for operations 1� ,> which .are not soundproofed and which are near residences . s more appropriate. Thus_, we recotm�end that Section 15 20. 100 (2) be changed fr. 7 A._M -._ and 11 P." M, " to "7 A M. to 9 .P.N[ "; .Section . 11 15. 20. 100W� be changed from "11 P.M. and 7 A.M. " to "9 _P.M. and 1 A.M. "; and Section 15.20. 110' be changed from "11 P.M. and 7 A.M. " �)h to "9 P.M. and 7 A.M. " _ Soundproofing for. Internal Combustion En 'fines . At .the .last Oil Committee meeting-, . concern was. raised about-the. use of intern- combusion engines . to run oil well pumps; - especially near hom s, because they are sometimes noisy and. disturb the -.residents. Several options were discussed ranging from a. ban on such engines to .no change to the existing set of. regulations. The. sentiment of the committee was that 's general provision could be .added to the Oil Code allowing the chief to require soundproofing if any oil- related facility created "excessive noise or vibrations: " CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTING fI)N ACApI To Charles Thompson From James W. Palin, Director City Administr Development Services Subject SUPPLEMENTAL INFORMATION . - Date May 14,. 1981 REGARDING ORDINANCE No. 2491 AMENDING, THE` CITY'S OIL CODE The Department of Development Services has submitted. a Request for Council recommending that the Council adopt the amendments to the Citv' s Oil Code developed by staff and the Oil Committee. Staff would like to submit the following supplemental information regarding the proposed amendments: 1. Technical. Errors. The following minor, technical changes should e made b6forg the Council adopts the draft ordinance. Page 6, Section 15.08. 310; change "lines" to 'liners" . . Page 10, Section 15. 12.110 (f) ; "Landscape plans shall not be required for reworking permits. ' Pa 0 -:-Section 15.20.160 (b) (5) ; change "chapter" to �� cha ter 15.22" . Paqe 30, Section 15.32.010 (c) ; change "land t 2 Time- -of: Operation. The code currently allows oil operations within 00 feet of residences to continue from 7 A.M. to 11 -P.M.., even , if the operations are not soundproofed. Prior to the 1977 amend- ments to the code, these hours of operation were 7 A.M. to 9 P.M. Development . Services recommends that the 9 P.M. limit for operations r .which are not soundproofed and .which are near residences s more appropriate. Thus, we recommend that Section 15. 2Q .1001W(2) be changed f "7 A.M... and 11 P.M. " to "7 A.M. to 9 lP.M. " ; Section "1 15.20.100ro o. be changed from "ll P.M. and 7 A.M. " to "9 P.M.. and A M. "; and Section 15,20.110 be changed from "ll P.M. and 7 A.M. " to ".9 P.M. and 7 A.M. " . 3 Soundproofing for Internal Combustion Engines.. At the last Oil .Committee meeting, concern was raised about the use of internal combusion engines to. run oil well pumps, especially near homes, be they are sometimes noisy and disturb the residents. Several options were discussed ranging from. a ban on such engines 'to no change to the existing set of regulations. The sentiment of the committee was that. a .general provision could be added to the Oil Code allowing the chief to require soundproofing if any oil- related-facility created "excessive noise or vibrations . " �A Oil Code Amendment May . 14, 1981 nacre 2 Development Services staff discussed .this recommendation with the City Attorney's staff during the preparation of the final draft ordinance. The Attorney s office felt that such a general pro- vision was not necessary because existing. sections in the Oil Code and the City's "Noise Ordinance" addressed excessive noise and that if internal combustion engines create special problems, then the provision should be' directed at that special problem. Consequently, a more specific provision directly related to internal combustion engines was. drafted: Section 15.20.090 (c) "Where oil operations are conducted in a developed area and an- internal combustion engine is used, such site shall be soundproofed to meet the requirements of the Huntington Beach Municipal Code. " (Chapter 8 .40 of the Municipal Code sets the noise level standards to be complied with. ) Development Services concurs with the Attorney's office that the more. specific requirement is a better way of addressing potential problems with internal combustion engines. We would like to add,, however, the following sentences to the section drafted by the Attorney's office: Add. to Section 15. 20. 090 (c) "Evidence of compliance shall consist of submittal of an acoustical analysis report prepared under the supervision of a person experienced in acoustical engineering. All measures recommended to mitigate noise to acceptable levels shall be incorporated into the facility These provisions will reduce the cost to the City in administering and enforcing this section of the code, and will generally contribute to a better mitigation of unacceptable noise. Development Services recommends that the Oil Committee work further on these provisions and develop .draft regulations for internal combustion engines for consideration by the Council as soon as possible. 4 . Recommendations. Development Services recommends that the Council adopt Ordinance No. 2491 with the above-mentioned technical errors corrected and with the "ll P.M! in Section 15. 20.100(a) (2) and (b) (.2) , and Section 15. 20. 110 changed to "9 P.M. " Development Services further recommends that the Council direct the Oil Committee to 1) discuss further the proposed provisions related to internal combustion engines and 2) recommend to the Council language specific to the problem of internal combustion engines, as soon as possible. OF/MM/dc t CITY OF HUNTINGTON BEACH a� INTER-DEPARTMENT COMMUNICATION HUNTINCTON REACH - To Charles Thompson From James W. Palin, Director City Administr Development Services Subject SUPPLEMENTAL INFORMATION Date May 14 , 1981 REGARDING ORDINANCE NO. 2491 AMENDING THE CITY' S OIL CODE The Department of Development Services has submitted a Request for Council recommending that the Council adopt the amendments to the City' s Oil Code developed by staff and the Oil Committee. Staff would like to submit the following supplemental information regarding the proposed amendments: 1. Technical. Errors. The following minor, .technical changes should e made before the Council adopts the draft ordinance. Page 6., Section 15.08. 310; change "lines" to "liners" Page 10, - Section 15.12. 110 (f) add• "LandscanP ' not be required for reworking ermits " Pakge20; Section 15.20.160 (b) (5) ; change "chapter" to �w'chapter 15. 22" . Page 30, Section 15. 32. 010 (c) ; change "land to "and" . '!2. Time of Operation. The code currently allows oil operations within 00 feet of residences to continue from. ? A.M. to 11 P.M. , even if the operations are not soundproofed. Prior to the 1977 amend- ments to the code, these hours of operation were 7 A.M. to 9 P.M. Development Services recommends that the 9 P.M. limit for operations which are not soundproofed and which are near. residences is more appropriate. Thus, we recommend that Section 15. 20 . 100 (a) (2) be changed from "7 A.M. and 11 P.M. " to "7 A.M. to 9 P.M. " ; Section 15. 20. 100 (b) (2) be changed from "ll P.M. and 7 A.M. " to 119 P.M. and 7 A.M. "; and Section 15. 20. 110 be changed from "11 P.M. and 7 A.M. to "9 P.M. and 7 A.M. " �l Soundproofing for Internal Combustion Engines . At the last Oil Committee meeting, concern was raised about the use of internal combusion engines to run oil well pumps, especially near homes, because they are sometimes noisy and disturb the residents . Several options were discussed ranging from a ban on such engines to no change to the existing set of regulations. The sentiment of the committee was that a general provision could be added to the Oil Code allowing the chief to require soundproofing if any oil- related facility created "excessive noise or vibrations. " Oil Code Amen dmen May 14 , 1981 Page 2 Development Services staff discussed this recommendation with the City Attorney's staff during the preparation of the final draft ordinance. The Attorney' s office felt. that such a general pro- vision was not necessary because existing sections in the Oil Code and the City' s "Noise Ordinance" addressed excessive noise and that if internal combustion engines create special problems , then the provision should be directed at that special problem. Consequently, a more specific provision directly related to internal combustion engines was drafted: Section 15. 20 .090 (c) "Where oil operations are conducted in a developed area and an internal combustion engine is used, such site shall be soundproofed to meet the requirements of the Huntington Beach Municipal Code . " (Chapter 8 .40 of the Municipal Code sets the noise level standards to be complied with. ) Development Services concurs with the Attorney' s office that the more specific requirement is a better way of addressing potential problems with internal combustion engines . We would like to add, however, the following sentences to the section drafted by the. Attorney's office: Add to Section 15. 20 . 090 (c) "Evidence of compliance shall consist of submittal of an acoustical analysis report prepared under the supervision of a person experienced in acoustical engineering. All measures recommended to mitigate J noise to acceptable levels shall be incorporated into the facility These provisions will reduce the cost to the City in administering and enforcing this section of the code, and will generally,contribute to a better mitigation of unacceptable noise. Development Services recommends that the Oil Committee work further on these provisions and develop draft regulations for internal combustion engines for consideration by the Council as soon as possible. 4 . Recommendations . Development Services recommends that the Council adopt Ordinance No. 2491 with the above-mentioned technical errors corrected and with the "ll P.M." in Section 15. 20 .100(a) (2) and (b) (2) , and Section 15. 20. 110 changed to "9 P.M. " Development Services further recommends that the Council direct the Oil Committee to 1) discuss further the proposed provisions related to internal combustion engines and 2) recommend to the Council language specific to the problem of internal combustion engines , as soon as possible. OP/MM/dc ( 0 f-• _ v Page N4 - Council Minutes - 5/18/81 PUBLIC HEARING - AMENDMENT TO TITLE 15 - RBMC - .OIL ORDINANCE - ORU NO 2491 - INTRODUCTION APPROVED AS AMENDED The Mayor.announced that this was the day and hour set for a public hearing to consider an amendment to Title 15 of the Huntington Beach Municipal Code (the Huntington Beach Oil Code). -The amendment constitutes a ge eral revision to the Oil Code including clarification on administration, and requirements, The Director of Development Services referred to his memo dated May 14, 1981 and recommended that the portion of the code pertaining to time of operation and soundproofing for internal combustion engines be considered at another time.. He.suggested that the hours of operation remain at "7 A.M.. and 11 P.M.' and that 15.20.100 (c) be deleted from the code pending further study of.these matters by the Oil Committee. Mike Multarii, Associate Planner, reviewed the proposed changes in the oil code The City Clerk announced that all legal requirements for.publication and .posting had been met and that she had received no communications or written protests to the matter.. The Mayor declared the hearing open. There being no one present to speak on the matter and there being no protests filed, either oral or written, the hearing .was closed by the Mayor. i The City Clerk. rdinance No. 2491 by title - AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTIHGTON BEACH MUNICIPAL CODE BY REPEALING TITLE 15 AND ADDING THERETO A NEW TITLE 15 ENTITLED, "HUNTINGTON BEACH OIL CODE". A motion was made by Patti6son, seconded by MacAllister, to approv . introductionA� of Ordinance No. 2491, after reading by title, 004ll--�1 Irk Page #5 - Council Minutes - 5/18/81 ge 6, Section 15.08.310. change the word "lines" to "liners"; Page 10. Section .12.110(f);idd the words "Landscape plans"shall­not be required for reworking perm it; Pa. "18, delete- ecti n 15.20.100(c) pertaining to he use of an internal combu engine; Page 0, Sectidn .15.20.160(b) change "Chap�',.ar"-6. "chapter 15.22"; Page. 30; Section 15.32.010(c) change "land" The motion carried ..by the following roll call- vote: - AYES: MacAllister, Pattinson, Finley, Bailey. Mandic, Kelly NOES: None ABSENT: Thomas Councilman Mandic stated his concern regarding contacting an absentee owner in case of an emergency. The Director of Development Services stated that staff could explore the possibility of requiring that.owners reside .within a radius of twenty-five miles of the property and that if this concept were feasible an ordinance with this amendment could be prepared. i Councilman MacAllister. referred to Aminoil 's difficulty in getting permission from CALTRANS to build a slump stone fence around their property and requested that Council support the oil company in this matter. A motion was made by Bailey, seconded by Kelly, to direct the Oil Committee to discuss further the proposed provisions related to the hours of operation and the provision related to the use of internal combustion engines and to bring the matter back to Council foe consideration. The motion carried unanimously.. Page N3' - Council Agenda - 5/18/81 D-2b. AMENMENT TO TITLE 15 MC - OIL ORDINANCE2491 - INTR_DU ION - purpose of considering an amendment to Title ach ? l f�l Baring for the purp T" 15 of the Huntington Beach MuniCadgeneralHrevisionntoethe { (1, �l__ oil Code). The amendment constitutes ' Oil Code including clarification on administration; and require- meets for screening11 end landscaping, among other changes. RA: Approve the revised Huntington Beach Mun�cOVeainOtroduction Title tl a 15 and of ter reading ,by ti tl.e, app of Ord.:_2491 - "AN ORDINANCE OF THE .CITY OF -HUNTIE BY BEANG• THE HUNTINGTON BEACH HERETOUAINEWATIT�EEISY REPEALING TITLE 15 AND' ADDING . ENTITLED, "HUNTINGTON BEACH OIL CODE". �o�l _ " , �D� <1S1 wtHun �S n+;1es\ bath ,�,�o..� on•�-� \5 Paldw0ad iutc•�1J -efPie� �cou.l6� � 5 T f o„Ic1 ►,alp{�� ,Jail bit (A�TiIA Ws weV 4 I e � �. DENIAL OF ZONE rpcc D-2c. APPEAL TO PC D sw . ear .ng or t ecC -2-� ORDINANCE NO- I�'►a ' Comm ss i on s. re Q' request .to rezonc AN ORDINANCE OF THB, CITY. OF HUNTINGTON..:BBAC Center Drive betr AMENDING THE HUNTINOTON .BEACH ,OADINANCB :000 \ (Residential Agr*' BY 11NBNDINa .SECTION .9061: THEREOF - ��' District. Negat POR CHANGE OF ZONING. ORON LOW DEN tTY RBST, o (4,AA �+P'SI`'ADJ RA: The Plann DBNTIAL•DISTRICT TO AECRBATIONAL 0. ACB �;., }>I , �� ` Counci 1 a DISTRICT ON AEAL -PRO.P6RTY,�LDCATED ON. SO $IDS OF, CENTER DRIVB SENSEN. BEACH BWLEVAR S y Ri�64 Byb AND 00►1'HARD gTRBBT (ZONB CASE No. 81=2) \ y enttruiltn► u\ 4f zAO�A", "^ �., p,;b� �4++y+ ► lac � � ,�.�a . * AI • ;. 1 be ate W�' `{J'.lu `C�Nf/P ' rt�i. Q w�.� uPf Pa Y g� MII¢• Sk41i \ g� n01 Wcnlc� .leLD �q G atk. la6�ad +e se• ceM:. ,Mrb•►IQ it P 1 �,. .�1i�� locotwq f Pai•net utb•I qi tP° L„ tebraMe� 1+ btonr►° me-9.od p►ej h1}'Vwa Ct �. � ,,,,r�` 00. P-i.k.P41.-'"y P,e PPrw'"-.arse _ 3 f k �t�"p� q K K. core rr\� P RP 3 ra t , ' ITT.— -8 R FAMILY DOD GEea tot a anning F, _ 1T2d APPEAL TO PC DEN L. OF .. - -- - Hearing for We' purpose of consi Bring an app _ la J01 Commission's recommendation for denial of Cofootditihigh wroughonal �o ,sue No: 81-8, a .request to constiune onfaVsite)located on the w/s. �P'.v ' 4 `� c�' yr� iron fence at zero property of each Boulevard between Heil Avenue and Chrysler.Drive in the /%P�O�°�ro,- lug P t���d�is C4 (Highway Cormiercial) Diszt trict. s d�r„y „en .O F4y_ �� ,, .RA: The Planning Colmmiss•ion-and staff has recommended that rti P'°o` r eit�r 040 3 . ONO the City Counci 1 deny CECE�g, with findings of fact. a r` �a`� M �,y PPS;e°`�'�c� '� ��, •. 1 &rvt a d�S eto ° P'�, f R ( Q�, µaid �� • .� y� (3) i I 1 ( c) Where oil operations are conducted in a developed area ,. and an internal combustion engine is used, such site shall be soundproofed to meet the requirements of the Huntington Beach Municipal Code. . 110 Well servioigg hours. It shall be unlawful to do any wor etween t e hours of 11 p.m. and 7 a.m. in connec- tion with pulling a well which is within two hundred (200) feet of any residential building, except where circulation in the well must be maintained.,. or the well would be endangered if the pulling work were not continued. .1.5.20.120 Wellhead safet .e ui ent. . On all wells there shall be connected to ' the -easing string a two (2) inch. steel valve with a rated working pressure. equal . to that .of the corre- sponding .caving head for the purpose of bleeding off casing . pressure and for hookup to kill the well in 'case of .an emergency. 1 . 20.1 0 Blowout prevention. In all cases, .protection shall be prow -a to prevent blowout during oil operations as required by and in conformance with the requirements of the state. division of oil and gas and the safety orders for dril- ling and production of the state division of industrial safety. 15.20. 140 'cellars. The following regulations shall apply to. cellars: `l (a) Every cellar shall be constructed In accordance with the. Huntingto n Beach Building Code and with the requirements as they now ekist, or are hereafter amended, ,of the California division of industrial safety; .. (b) Except during drilling and servicing operations, such . . cellars shall be kept covered., free from water, oil drilling fluids, rubbish, debris , or other substances; (a) All multiwell cellars exceed ing .three 0) feet in depth and twerity-five. (25.) . feet in length . shall have two .(2)- separate Means .:of exit or entrance. If the cellar exceeds two hundred (200) feet in. leng th, a third means of . entrance and .exit shall be provided. The. depth of such. cellars shall be the vertical .distance between the lowest point of the floor of such cellar and the adjacent ground level; (d) Multiwell cellare.. shall have a steel grate or covering with no unobstructed openings in excess of .three (3) inches. 15. 20.150 Fence . emit re uir.ed. No . fence or wall shall be cone ructe to enclose any oil well site, oil operation site or drilling island site in whole or in part until a permit '�0 18. 4 REQUES FOR CITY COUNCIL ACTION ;. Date May 8 , 1981 Submitted to: Honorable Mayor and City Council Submitted by Charles W. Thompson, City Administrato�l Prepared by: Development Services Department Subject: REVISIONS TO THE HUNTINGTON BEACH MUNICIPAL OIL CODE, TITLE 15 Statement of Issue, Recommendation,Analysis, Funding.Source,Alternative Actions,Attachments: STATEMENT OF ISSUE: As part of the implementation phase of the City' s Local Coastal .Plan, the Coastal Commission funded the City to review and update the Municipal Oil Code. The purpose of this update was to ensure that important coastal resources were being protected and to better safeguard the public health, safety and welfare. Last summer, the City Council activated an Oil Committee which is composed of members of the Council and Planning Commission, representatives of the State, the industry ' and the general public , and various City staff _persons. During the last eight.months, this committee has been working on numerous improvements to the Oil Code. The revised code which has been developed by the committee is attached for your review and adoption. \ RECOMMENDATION: Adopt the attached revised Huntington Beach Municipal Oil Code, Title 15. ANALYSIS : The principal revisions to the Oil Code recommended by the committee are summarized below. The revised code: 1. Clarifies how the ordinance is to be administered; it states explicitly the parts of the code which are enforced by the Fire Department and the parts which are enforced jointly by the Fire Department and the Development Services Department. 2 . Allows the Council to expand the Oil Committee membership and to appoint additional "ad hoc" members to the committee to ensure that affected interests in the community are adequately represented. 3 . Requires additional information on applications to drill and re- . drill wells. This information includes plot plans of all oil facilities existing or proposed for the site as well as' the , location of adjacent buildings and roads. - . PIO 4/81 4 . Makes the Planning Commission the body which hears appeals on decisions related to drilling, redrilling and reactivation permits rather than the Board of Appeals. 5. Increases the surety bonds on new wells from $5 ,000 to $10 ,000 dollars. 6. Conforms with the more restrictive Fire Code in regard to well setbacks; the Fire Code is currently used in such cases . 7. Requires all oil operation sites in developed areas to be screened and landscaped by July 1 , 1983 . 8 . Requires all operators to cover or bury exposed pipelines in developed areas which are not enclosed in a fence. 9 . Prohibits the storage of drilling, redrilling, reworking and other portable equipment on site unless the site is screened and if such storage is permitted in the base zone. 10 . Allows City personnel to inspect oil spill plans required by the State. 11. Requires all equipment to be painted a neutral color such as gray, sand, blue, green or brown. 12 . Removes abandonment requirements which are pre -empted by --the State. 13. Requires vapor recovery or vent system around the well-heads when buildings are constructed over abandoned wells. . The intended result of all of these -changes is a better, more compre- hensive Code. The new painting, screening and landscaping require- ments , especially, should significantly improve the appearance of oil operations in Huntington Beach. Development Services staff are currently working on reports on oil spill contingency planning and enhanced oil recovery technologies which should be completed by June, 1981. These reports will be reviewed by the Oil Committee. Additional -changes to the Oil Code may be recommended as a consequence and will be forwarded to Council at that time. ALTERNATIVE ACTION: Retain the existing Oil Code. FUNDING SOURCE: No funds required. SUPPORTING INFORMATION: Revised Huntington Beach Municipal Oil Code, Title 15 ?CWT:JW H rfl. . 1pS:jh N rHF Superior Court OF THE STATE OF CALIFORNIA In and for the County of Orange CITY OF HUNTINGTON BEACHY CITY CLERK PROOF OF PUBLICATION Hearing Amends NO. 15 State of California ) I PUBLIC NOTICE County of Orange )ss NOTICE OF PUBLIC HEARING' AMENDS TITLE 15 "OIL ORDINANCE" Rita J. Richter NOTICE IS HEREBY GIVEN that a public hearing will be held by the City That I am and at all times herein mentioned was a citizen of Council of the City of Huntington Beach, en- the United States,over the age of twenty-one ears,and that I te the Council Chamber of the Chic 7:30 g Y- Y � ter,Huntington Beach,et the hour of 7:30 am not a party to,nor interested in the above entitled matter; P.M.,or as soon thereafter'as possible on that I am the principal clerk of the printer of the Monday the 18th day of May,1981 for the purpose of considering an amendment to )Title 15 of the Huntington Beach Munici- pal HUntington Beach Ind. Review l Co code (the Huntington Beach oa � Code).The amendment constitutes a gen- a newspaper of general circulation,published in the City of I eral revision to the Oil Code including clgrification on administration, and re- quirements for screening and landscap- Huntington Beach j ing among other changes. Al}interested persons are invited to attend said hearing and express their County of Orange and which newspaper is published for the opinions for or against said amendment. disemination of local news and intelligence of a general charac- Further information may be obtained 000 ter, and which newspaper at all times herein mentioned had j from the Office of the City Clerk,i Main SCieet;Huntington Beach,Califor- ifor- and still has a bona fide subscription list of paying subscribers, nia 92648-(714)536-5227. - and which newspaper has been established, printed and pub- DATED May 4,1981. lished at regular intervals in the said Count of Orange for a i. By:ALIC A M.WENTW BEACH g Y g ! By:ALICL4 M.WENTWOftTH period exceeding one year; that the notice, of which the City-Clerk 981 annexed is a printed copy, has been published in the regular Pub.May 7, Ind Hunt.Beach Ind..Rev. and entire issue of said newspaper,and not in any the tt10698. thereof,on the following dates,to wit: May 79 1981 I certify(or declare) under penalty of perjury that the forego- ing is true an&correct. Dated at...... Gal'd2n.G1'.o.Y Califo 'a,thi. 7..h.da ay. ... .I 1, ..... ...... .... F�.... . ... . L S' nature V Form No.CAF-81380 .• ='%F^ vI WY:'6.]:!F•%.WWVS-ll.ti c:•:nqc5a,nc t l Publish Mai �8c81 NOTICE OF PUBLIC -HEARING AMENDS TITLE 15 "OIL ORDINANCE" NOTICE IS HEREBY GIVEN that a public hearing will be held by the City Council of the City of Huntington' Beach-, in .the Council- Chamber of the Civic .Center, Huntington Beach, at the hour.of 7:30 P X , or as soon thereafter as possible on Monday the 1$th day of May 19 81 for the purpose of considering an amendment to Title 15 of the Huntington Beach Municipal Code ,(the Huntington Beach Oil Code). The amendment constitutes a general revision to the Oil- Code including clarification on administration, and requirements for screening and landscaping, among other changes. All interested persons are invited to attend said hearing and express their opinions for or against said amendment Further information may be obtained from the Office of the City Clerk, 2000 1•1a;;: Street, Huntington Beach, ,California. 92648 - (714) 536-5227 DATED May 4- 1981 CITY OF HUNTINGTON BEACH By: Alicia M. Wentworth City Clerk Publish ''a-,r Y, 1§di NOTICE OF PUBLIC _HEARING AMENDS TITLE 15 "OIL ORDINANCE" NOTICE IS HEREBY. GIVEN that a public hearing will be held by the city Council of the City of Huntington Beach, in the Council Chamber of the Civic Center, Huntington Beach, at the hour of 7:30 P.M. , or as soon thereafter as possible on Monday the 18th day of May 19 81 for the purpose of considering an amendment to Title 15 of the Huntington Beach Municipal Code (the Huntington Beach Oil Code). The amendment constitutes a general revision to the .011 Code including clarification on administration, and requirements for screening and landscaping, among other changes. All interested persons are invited to attend said hearing and express their opinions for or against said amendment Further information may be obtained from the Office of the City Clerk, 2000 Main Street, Huntington Beach, California. 92648 - (714) 536-5227 DATED May 4. 1981 CITY OF HUNTINGTON BEACH By: Alicia M. Wentworth City Clerk . . . :NM.frK.:!r.•f_ Ct+iV.ct�sww�++ram-+-�na.rrawwa.�..r... - - NOTICE TO CLERK TO SCHEDULE PUBLIC HEARING n ITEM LODE AN1Ea1DmEn/T TO: CITY CLERK'S OFFICE DATE: S� FROM: IkvEl-oPMF+UT SERVICES PLEASE SCHEDULE A PUUBBLIC HEARING USING THE ATTACHED LEGAL NOTICE FOR THE Lb9 DAY OF 1"! el , .197 AP's are attached AP's will follow No AP's Initiated by: Planning Commission Planning Department Petition * Appeal Other Adoption of Environmental Status W YES NO Refer to 9AL. Simplo t4 , Planning Department - Extension # $SyS for additional information. * If appeal, please transmit exact wording to be required in the legal. Publish Pos tcar NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that a public hearing will be held by ' the _ City Council of the City of Huntington Beach, in . the Council. Chamber of the .Civic Center, Huntington Beach, at the hour of P.M. p or as soon thereafter an possible, on the - day of 19 _, for .the purpose of considering toWP Title I S' Run4in t4M MVrnici�a ( Code- ,, U'e Ntimi/A 10s, r ea�� Oi l cod e.. "T6 e WKe0jMe"'t Cb n JWv;4e f a d es?c ra 1 re-V,JjA4 fa fLe ©j ' Code- 1,4-ch/J;"# C•'G /ph Do, Ctdyw fG'�jdh YNetl'� �t�C J'�8('J'I�blq h',v l4yl7J'tgPi�J�- � aw>ON�-,• O'C4pi- cL r`e�Jr� lJ All interested persons are invited to attend said hearing and expresi their opinions for or against said Further information may be obtained from the Office of the. City Clerk. DAB' CITY OF- HUNTINGTON BEACH By: Alicia M. Wentworth City Clerk 1 � ORDINANCE NO. AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY REPEALING TITLE 15 AND ADDING THERETO A NEW TITLE 15 ENTITLED, "HUNTINGTON BEACH OIL CODE" The City Council of the City of Huntington Beach does ordain as follows : SECTION 1. Title 15 of the Huntington Beach Municipal Code is hereby repealed. SECTION 2. The Huntington Beach Municipal Code is hereby amended by adding thereto a new Title 15 entitled, "Huntington Beach Oil Code," to read as follows : Chapter 15 .04 GENERAL PROVISIONS '15.04. 010 Title . This title shall be known and may be cited as the City of Huntington Beach Oil Code. "Code, as re- ferred to in this title , unless the context clearly indicates otherwise, shall mean the City of Huntington Beach Oil -Code. 15.04 .020 Purpose . It is hereby declared to be the - pur- pose of this title to establish reasonable and uniform limita- tions , safeguards and controls for present and future opera- tions .related to drilling for and production of oil , gas , and other hydrocarbon substances within the city so that this activity may be conducted in harmony with other uses of land, thus pro- tecting the people in the enjoyment and use of their property and providing for their comfort , health, safety and general wel- fare. 15. 04.030 Administration. The fire chief, or his duly appointed representative, is hereby authorized and directed to enforce the- provisions of this code, except that requirements pertaining to fences, walls and gates, and idle wells shall be jointly enforced by the fire chief and the director of de- velopment services , or their duly appointed representatives. 15. 04 . 040 Oil committee--Authorization and duties. The /ahb 4/29/81 1. council may from time to time appoint, on an ad hoc basis, an oil committee which shall include , but is not limited to, the following : a member of the city council, a member of the planning commission, the city attorney, fire chief , director of development services , or the duly authorized agents of such members , a repre- sentative of. the Western Oil and Gas Association, and a member of the. Independent Oil Producers Association. A representative of the California division of oil and gas may be requested to serve as an ex officio member of such committee . The committee shall act as an advisory body to the department and city council with regard to the contents of this code and its revision. 15- 04 . 050 Right of entry. Whenever .necessary to enforce any of the provisions of this code, or whenever the chief has reasonable cause to believe that there exists in any building or upon any premises any condition contrary to the provisions of this code, the chief may enter such building or premises at all reasonable times to inspect the same or to perform any duty im- posed_ upon the chief by this code. I.f such entry is refused, the chief shall have recourse .to every remedy provided by law. to secure entry. No owner or occupant or any other person having;charge, care or control of any .building or premises shall .fail or neg- lect, after proper demand,. to permit prompt entry therein by the chief for, any purpose pursuant to this code. 15- 04. 060 Operator' s agent. Every operator of any well shall designate himself or an agent, or agents , who is a resi- dent of the state of California, upon whom all orders and notices provided in this code may be served in person, or by. registered or certified mail. Every operator so designating such agent shall within ten. (10) days notify the department in writing of any change in such agent or such mailing address unless operations within the city are discontinued. 15. 04. 070 Well acquisition notice. Every person who ac- quires any well, property or site upon which oil operations exist, whether by purchase, transfer, assignment , conveyance , exchange or otherwise, shall within ten (10) days after acquiring such well , property, or site, notify the department in writing of his owner- ship. The notice shall contain the following: , (a) The name and address of the person acquiring such well, property or site; (b) The name and location of the well; ( c) The date of acquisition; 2. l t (d) A description of the properties and equipment trans- ferred; ( e) The name and address of any person designated for sere- ice of notice. 15. 04. 080 Transfer of operator. The operator of every well shall notify the department in writing of the transfer to another operator of such well .for any purpose. Within ten (10) days after such transfer by reason of sale, assignment, transfer, conveyance or exchange, said notice shall be given and shall contain the following: (a) The name and address of the person to whom such well was sold, assigned, transferred, conveyed or exchanged; (b) The name and location of the well; ( c) The date of sale, assignment, transfer , conveyance or exchange; (d) The date when possession was . relinquished by the former operator, and a description. of the properties and equip- ment transferred. Chapter 15 .08 DEFINITIONS 15 .08. 010 Definitions. The terms used in this title shall, unless the context indicates otherwise, 'have the respective mean- ings herein set forth. 15. 08. 020 Abandonment. "Abandonment" shall be as defined by the division of oil and gas of the department of conservation and shall include the restoration of the drill site as required by these regulations . 15. 08. 030 Approved type and approved design. " Approved type and approved design" shall .mean and include improvements , equipment or facilities of a type or design approved by the development services department , fire department , or public works department. 15. 08. 040 Blowout preventer. "Blowout preventer" . shall mean a mechanical, hydraulic , pneumatic or other device or com- bination of such devices secured to the top of a well casing including valves , fittings and control mechanism connected therewith which can be closed around the drill pipe , or other 3. tubular goods which completely closes the top of the casing and .is designed for preventing blowout. 15. 08. 050 Cellar. "Cellar" shall mean an excavation around and above the top ,joint of the casing of a well. 15. 08 .060 Completion of drilling , redrilling and rework. Drilling, redrilling and rework is completed, for .the purpose of these regulations., thirty (30) days after the drilling, redrilling or rework crew has been released through completion of its work or released by those so employing said crew. 15. 08.070 Department. "Department" shall mean the fire department. 15. 08. 080 Derrick. "Derrick" shall . rlean any portable framework, tower, mast or structure which is or are required or used in connection with drilling, reworking, operating, or main- taining a well for the production of oil, gas or other hydrocarbons from the earth. 15. 08.090 Desertion. "Desertion" shall mean the cessation of operation at a drill site without compliance with the pro- visions of .this code relating to suspended operations , idle wells , or abandonment. 15. 08. 100 Developed area. "Developed area" shall mean: (a) Any area within 150 feet of an occupied residential, commercial, or office/professional structure -which is itself within one hundred (100) feet of another occupied residential, commercial, or off ice/professional structure; or (b) Any area within a public park, beach or recreation area which has been developed and opened for public use. 15. 08. 110 Division of oil and gas. "Division of oil and gas." shall mean the Division of Oil and Gas of the Department of Conservation of the state of . California or *any other state agency charged with its responsibilities . 15. 08. 120 Drilling. "Drilling" shall mean digging or boring a new well for the purpose of exploring for, developing or pro- ducing oil, gas or other hydrocarbons , or for the purpose of in- jecting water, steam or any other fluid or substance into- the earth. 15. 08. 130 Drilling equipment. "Drilling equipment" shall mean the derrick, together with all parts of and appurtenances to such structure, every piece of apparatus , machinery or equip- - 4. ment used or erected, or maintained for use in connection with drilling. 15. 08. 140 Drill site. "Drill site" shall mean the premises used during the drilling or reworking of a well or wells located thereon. 15. 08. 150 Enhanced recovery. "Enhanced recovery" shall mean any production method which involves the injection of water, gas, steam, or any other fluid into the .earth for .the purpose of ex- tracting oil or other hydrocarbons. 15. 08. 160 Fluids. "Fluids" shall mean any gas or liquid. 15. 08. 170 Gas. "Gas" shall mean any fluid, either com- bustible or noncombustible, �wh c-h--isw�=-pzr-od-u�ced, in_a=-natu-raP, s-t-a=t=e •fr-om—th-e=earth--and which maintains a gaseous .or rarefied state at standard temperature and pressure conditions. It shall .also mean the gaseous components or vapors occurring in or derived from petroleum or natural gas. 15. 08. 180 Injection well. "Inj.ection well" shall mean a well or gas well used for the purpose of injecting water, waste- water, brine, hydrocarbons , steam or any other substance as a means.: of enhanced recovery, repressurization or disposal whether under pressure, gravity or vacuum. 15. 08. 190 Lessee. "Lessee" shall mean the person who has executed an oil or gas lease .or sublease, or the owner of the land. or minerals , or his heirs, or who conducts or carries on any oil or gas exploration, development and operation thereof, or any person so operating for himself or others . 15. 08. 200 Lessor. "Lessor" shall mean the owner of surface or mineral rights who has executed a lease. 15. 08. 210 Maintenance. "Maintenance" shall mean and include the repair or replacement of machinery, equipment, ap- paratus, structure , facility and parts thereof , used in con- nection with an oil operation site or drill site as well as any other work necessary to reduce fire. hazards or any hazards to employees, public health, safety and welfare. 15. 08. 220 New well. "New well" shall mean a new well bore or well hole established at the ground surface and shall .not in- clude redrilling or rework of an existing well which is not aban- doned. 15. 08. 230 011 field recovery heater. "Oil field recovery heater" shall mean any steam generator , or air or water heater 5• used in an oil field thermal recovery operation. 15. 08. 240 Oil operation. "Oil operation" shall mean the use or maintenance of any installation, facility or structure used, either directly or indirectly, to carry out or facilitate one or more of the following functions : drilling, redrilling, rework and repair, production, processing, extraction, enhanced recovery, stimulation, abandonment, storage or shipping of oil or gas from the subsurface of the earth. 15. 08. 250 Oil operation site. "Oil operation site" shall mean the physical location where oil operations are conducted. 15. 08. 260 Operator. "Operator" shall mean any person drilling, maintaining, operating, pumping or in control of any. well . However, if the operator , as herein defined, is different from the lessee under an oil or gas lease of any premises af- fected by the -provisions of this title , then such lessee shall also be deemed to be an operator. In the event that there is no oil or gas lease relating to any premises affected by. this title, the owner of the. fee. estate in the premises shall also be deemed an operator. 15. 08 . 270 Outer boundary line. Where several contiguous . parcels of land in one or different ownerships are operated as a single oil or gas lease or operating; unit , the term "outer boundary line" shall mean the exterior limits of_ the land in- cluded in the lease or unit. In determining the contiguity of any such parcel of land, no street, road or alley lying within the lease or unit shall be deemed to interrupt such contiguity. 15. 08. 280 Owner. "Owner" shall mean a person who owns a legal or equitable title in and to the surfaces of the drill site or oil operation site. . . 15. 08. 290 ProcessinE. "Processing" shall mean the use of oil operations for gauging, recycling, compressor repressuring, injection, reinjection, dehydration, stimulation, separation . ( including but not limited to, separation of liquids from gas ) , shipping and transportation, and gathering oil, gas , other hydrocarbon substances, water or any combination thereof. 15. 08. 300 Redrill. "Redrill" shall mean recompletion of, an existing well by deepening or sidetrack operations extending more than 150 feet from the existing well bore . 15. 08. 310 Rework. "Rework" shall mean recompletion of an existing well within the existing bore hole or by deepening or sidetrack operations which do not extend more than ._150 feet from the existing well bore, or replacement of well lines or casings . �tirCa 6. 15. 08. 320 Source of ignition. "Source of ignition" shall mean any flame, arc, spark or heated object or surface capable of igniting Liquids, gases or vapors . 15. 08. 330 Sump or sump pit. "Sump or sump pit" shall mean an earthen pit lined or unlined for the discharge. of oil field wastes . 15. 08. 340 Tank. "Tank" shall mean a container, covered or uncovered, used in conjunction with the drilling or production of oil , gas or other hydrocarbons for holding or storing fluids . 15. 08. 350 Well. "Well" shall mean any oil or gas well or well drilled for the production of oil or gas , or any well rea- sonably presumed to contain oil or gas . "Well" shall include the injection wells for the purpose of enhanced recovery, re- pressurization of the. field and disposal wells for the purpose of disposing of wastewater. 15. 08. 360 Well servicing. "Well servicing" shall mean the maintenance work performed within any existing well bore which does not involve drilling, redrilling or reworking. Chapter 15. 12 PERMITS AND FEES 15 . 12. 010 Permit required . Permits shall be obtained from . the city of Huntington Beach for the oil operations , activi- ties, or structures in the city limits of Huntington Beach, as :required by this title. 15. 12 . 020 Drilling or redrilling permit. Drilling or re- drilling shall not .be commenced unless or until : ( a) A copy of approval for .such operations from the di- vision of oil and gas is submitted to the chief; and (b) A permit for such operations has been obtained from the department. Said permit is her.ein referred to as a "drilling permit ." 15 . 12. 030 Annual renewal inspection permit . The chief shall inspect annually, and at such other times as he deems: nec- essary, each producing oil well and suspended. or idle well or any oil well deemed idle by this title for the purpose of aster- taining whether the well is being operated or maintained within the standards of this .code. On the first day of July next after the issuance of a drilling permit and on the first day of July of 7• t each year thereafter until the well has been abandoned, as pro- vided in this code, an annual renewal inspection permit shall be obtained from the department for each and every well, including injection wells. 15. 12.040 Annual renewal inspectionpermit--Additional requirements. a Fencing: Beginning July 1 , 1983, an annual renewal inspection permit shall not be issued for any well in a developed area, as defined in this . title, which is not enclosed by a fence which conforms to the specifications contained in Chapter 15. 22 of this title, and the regulations of the division of oil and gas as contained in the California administrative code as they . presently exist .o.r may hereafter be amended. The chief, may grant an extension of six (6 ) months so that fencing requirements may be met if the area has become developed since. the issuance of the last annual renewal inspection permit. (b) Landscaping : Beginning July 1, 1983 , an annual re- newal inspection permit shall not be issued for any well in a developed area, as defined in this title, which has not been landscaped to conform to the requirements of this title and to a landscape plan, submitted for the review and approval of the chief and the director of development services . The chief may grant an extension of six (6 ) months so that landscaping re- quirements may be met if the area -has become developed since the issuance of the last annual renewal inspection permit. Land- scaping shall not be required for any well or tank-which is not visible from a public street. 15. 12 . 050 Wastewater annual permit. Oil well wastewater shall not be discharged into the city' s sanitary sewer system unless a permit therefor is obtained each calendar year for every well discharging such wastewater into the system. 15. 12.060 Reworking permit. Reworking shall not be com- menced unless or until: (a) A copy of approval for such operation from the division of oil and gas is submitted to the chief; and (b) A permit for such operation has been obtained from the department. Said permit is herein referred to as a "rework per- mit. " 15. 12 . 070 Activation permit. No idle well shall be activated without obtaining an activation. permit in accordance with the provisions of this title. 15. 12 . 080 Other permits. Building, plumbing, electrical, mechanical, fire, _demolition, and .other permits shall be obtained 8. f rom. the appropriate department in accordance with the require- . ments of, and in the manner specified by 'Title 17 of the Huntington Beach Municipal Code. 15. 12 . 090 Encroachment permit. An encroachment permit shall be obtained from the public works department when it is necessary to encroach over public property with any oil oper- ation. 15. 12. 100 Fees .set by resolution--Fee payment date. Fees shall be required for the issuance of each of the permits re- quired pursuant to this chapter. Such fees shall be set by resolution of the city council. Said resolution shall also determine the conditions of payment and collection of the required fees. The annual inspection _f ee shall be due and payable on July 1 of each year and., if not paid , shall be delinquent on August 1 of the same year. The wastewater annual permit fee shall be due and payable on January 1 of each year and, if not paid, . shall be Jelin- quent on February 1 of the same year. The drilling, reworking, and .activation fees shall be due and payable at the time of application therefor. 15. 12. 110 Permit procedure. The application for a drilling, reworking, . or activation permit shall be obtained .from and filed with the department. Said application shall contain the follow- ing required information: (a) The complete legal description of the property; (b) Plans and engineering specifications of structures, drilling derricks , drilling masts , tank and high-pressure systems regulated by this code. Applicant need not file plans and engineering specifications of standard derricks , masts and tanks when such standard plans and specifications are already on file and approved by the department; ( c) A plot plan showing the location of all oil facilities on the oil operation site including, but not limited to, wells , tanks, dikes, pipelines, heaters and storage sheds; (d) The location of the nearest public road or alley, oc- cupied residences and commercial structures within five hundred (500) feet of the well, and the location of all churches, hospi- tals, rest homes , schools , preschools , nurseries and places of public assembly within five hundred (500) feet of the well; 9• a ( e). A corporate surety bond in conformity with the provisions of this title; (f) . A landscape plan which meets the requirements of this title. Exemption: Wells which are not in developed areas, as defined in this code, shall be exempt from this requirement. (g) A statement signed by the applicant under penalty of perjury declaring that he is duly authorized to sign on behalf of the operator and file the application and that the information contained in the application is true. and correct . 15. 12 . 120 Permit utilization. No permit issued hereunder shall be valid .unless utilization of the privileges granted thereby be commenced within one hundred twenty ( 120 ) days from. and after the date of issuance of the permit , or if after com- mencement., such activity is suspended or abandoned at any time for a period of one hundred twenty ( 120) days. If no work has commenced and the one hundred twenty (120 ) days commencement period has not expired, the permittee may re- quest, in writing, a refund for his fees paid minus ten dollars ( $10) . 15- 12 . 130 Additional permits. The permits required by this title are in addition to and are not in lieu of any permit which may be required by any other provision of the Huntington Beach Municipal Code or by any other government agency ., The department shall not issue any permit under this title until all other per- mits required by other municipal departments , if any, have been is.sued and a fee, if required, has been paid. 15- 12 . 140 Persons liable for fees. Each of the persons whose duty it is to obtain any permit shall be declared and made to be ,jointly and severally liable for the payment of the fee required to be paid. 15- 12. 150 Penalty for delinquency. Any delinquent fee shall be subject to a penalty in an amount equal to 10 percent of, such fee. Such penalty shall be added thereto for each month for such delinquency, and shall be collected as part of such fee. 15. 12 . 160 Grounds for suspension or revocation. The chief may, in writing, suspend or revoke any permit issued under the provisions of this code upon finding any of the following : ( a) A permittee has failed, neglected or refused to per- . form, comply with and abide by any of the conditions of the permit ; 10. r (b) That permittee has failed or neglected or refused to comply with or abide by, or has in any way violated any of the provisions of this code, or of any other ordinance of the city, or any other law, rule., or regulation either directly or in- directly, by reason of or in connection with or incidental to his conduct of oil operations.; (c) If any of the. permittee ' s operations or the contin- uance thereof upon the premises covered by the permit are a menace or hazard to public or private property, or to any in- terest of the city, or to the lives or safety of. persons ; (d) Any of the permittee' s operations or the continuance thereof upon the premises covered by the permit constitutes a public nuisance as described in this title; (e) If permittee shall have made any willful misrepre- sentation of facts in any application for any such permit, or in any report or record required by this code to be filed or furnished by .permittee. . 15- 12 . 170 Effect of suspension or revocation of permit. No person shall carry on any of the operations authorized to be performed under the terms of any permit during any period of suspension thereof or after the revocation thereof, or pending a ,judgment of the court upon any application for writ taken to review the decision or order of the city in suspending or re- vo.king such. permit; provided, however, that nothing therein contained shall be eonstrued . to prevent the performance of such operation as may be necessary in connection with a diligent and bona fide effort to cure and remedy the default, or violation for which the suspension or revocation of the permit was ordered, or such operation as necessary for the safety of persons or as required by the division of oil and gas. 15- 12. 180 Appeals. In addition to the hearings provided for by this title, any person or entity whose drilling, re- working, activation or annual renewal inspection permit is re- voked or whose well or equipment is deemed by the chief to be idle may, within thirty (30) days of the decision of the chief, file a written appeal to the planning commission .in accordance with the following procedure : .(a) The planning commission shall have and exercise the power to hear and determine appeals where it is alleged there is error or abuse of discretion regarding the revocation of any permits issued hereunder or determination of the existence of an idle well, as provided by this title. (b) An appeal shall be in writing and shall be filed in 11 . triplicate in the department of development services. The grounds for appeal must be set forth specifically and the error described by the appellant. ( c) Within ten (10) days from and after the filing of the appeal, the director of development services .shall transmit . t.o the planning commission all papers involved in the pro- ceedings and two ( 2) copies of the appeal. In addition, the director of development services shall make and transmit to the planning commission such supplementary reports as he may deem necessary to present the facts and circumstances of the case. Copies _shall be mailed to the appellant ten (10) days prior to the hearing. (d) Upon receipt of the records , the director of development services shall set the matter for hearing and give notice by mail of the time, place and purpose thereof to appellant , and any other party who has requested in writing to be so notified. No other notice need be given. ( e) Upon the date for the hearing the planning commission shall hear the appeal unless , for cause, the planning commission shall on that date continue the matter. No notice of continuance need he given if the order therefor is announced at the time for which the hearing was set. Chapter 15. 16 . BONDS 15 . 16. 010 Existing wells--Exception for present bonds. Except as to oil bonds existing on the effective date of this oil code which satisfy the requirements of the previous Huntington Beach Oil Code, a bond in the form required by this title shall be filed for each well drilled prior to aid effec- tive date of this title, which has not been abandoneg prior to said effective date in accordance with the standards and laws of the state of California and the requirements of the Huntington Beach Municipal Code. 15. 16. 020 New wells--Bond .required. A bond or bond rider in the form required by this title shall accompany every appli- cation for drilling or reworking of any oil well, injection well, or disposal well. 1.5. 16 . 030 Bond form. Bonds or riders to existing bonds shall be on forms approved by the city attorney and shall be filed with the department. 15. 16 .040 Single bonds. Corporate surety bonds in the 12 . penal sum of ten thousand dollars ($10 ,000) shall be required for each well. The bonds shall be executed by the operator as principal and by the authorized surety company as surety and conditioned that the principal named in the bond shall faithfully comply with this title and any other ordinance of the city of Huntington Beach, which ordinance, law, rule or regulation in any manner pertains or applies to any of the principal' s oil operations. Compliance by the principal named in the bond shall include compliance with any and all provisions , amendments and changes in .the Huntington Beach Municipal Code regularly adopted. The bond shall secure the city of Huntington Beach against all costs, charges and expenses incurred by it for the failure of the principal to comply fully with the provisions of the Huntington Beach Municipal Code. The bond shall include the correct name and number and legal description or precise .location of the well and such other information as may be nec- essary to identify the oil .well readily. Any operator may fur- nish negotiable securities or cash in lieu of a corporate surety bond. The obligations and liabilities under the bonds required hereunder ( co rporate, .surety or cash) are continuing obliga- tions and liabilities , and the liability of the surety under this bond may be terminated solely and - only at the time or times , in the manner and by strict compliance with the provi- sions for termination of liability as set forth in the Huntington Beach Municipal Code. Regardless --of expenditures which may in- cur from action on any bond, said bond shall always be main- tained at its original face value, and it shall be the re- sponsibility of the principal to insure and provide that the bond shall be fully maintained. 15. 16. 050 Substitution. A substitute bond may be filed in lieu of the bond on file hereunder and the department shall accept and file same if it .is qualified in proper form and substance. The. bond for which it is substituting shall then be exonerated . 15. 16 . 060 Blanket bonds. Any operator, in lieu of filing a separate bond on each well as required by the foregoing, may file a blanket bond in the amount of fifty thousand dollars ( $50,000 ) if he has more than five (5) wells. 15. 16. 070 Default in performance of conditions--Notice to be given. Whenever the department finds that a default has occurred in the performance of any requirement or. condition of these regulations , a written notice thereof shall be given to the principal and :to the surety on the bond. Such notice shall specify the work to be done, the estimated cost thereof and the period of time deemed by the department to be reasonably necessary for the completion of such work. After receipt of such notice, the surety shall, within the time therein specified, either cause 13 . 1 , or require the work to be performed, or failing thereupon, shall pay over to the department 125 percent the estimated cost of doing the work as set forth in the notice . Upon receipt of such monies, the department shall proceed by such mode as deemed convenient to cause the required work to be performed and com- pleted, but no liability shall be .incurred therein other than for the expenditure of said sum in hand. In the event that the well has not been properly abandoned under the regulations of .the division of oil and gas , such additional money may be demanded from the surety as is necessary to restore the drill. site in conformity with the regulations of this title. In the event the surety does not cause the work to be performed and fails or refuses to pay over to the department. the estimated cost of the work to be done as set forth in the notice, the city may proceed to obtain compliance and abate the default by way of civil action against the surety, or by criminal action against the principal, or by both such methods. 15. 16. 080 Exoneration. When the well or wells, covered by said bonds have been properly abandoned in conformity with all regulations of this title, and in conformity with all regulations of the division of oil and gas and notice to that effect has been received by the department , or upon receipt of .a satisfactory substitute bond, the bond issued in compliance with these regu- lations shall be terminated and cancelled and the surety relieved . of all obligations thereunder. Chapter 15 .20 DRILLING, OPERATION AND SAFETY REGULATIONS 15. 20. 010 Derricks. All derricks and portable masts used for drilling or reworking shall meet the standards and specifica- tions of the. American Petroleum Institute as they presently exist or may be amended hereafter. All drilling, redrilling or reworking equipment shall be re- moved from the operation site within thirty (30) days following the completion of drilling, . redrilling or reworking unless other- wise permitted by the division of oil and gas . 15. 20. 020 Inspection. If a well is to be drilled or re- worked within one hundred fifty ( 150 ) feet of any occupied structure or street right-of-way, after the operating equipment is securely in place and prior to commencement of drilling, the operator shall notify the department for the purpose of inspec- tion. If an inspection is anticipated to be needed other than during normal working hours, . the operator shall notify the de- 111 . partment during a working day of the approximate time the operator will be ready for the inspection and shall not commence drilling until the department has made an inspection and given approval to commence. The chief shall not give his approval until all the applicable provisions of the Huntington Beach Municipal Code have been met. The chief shall make his inspec- tion within a reasonable time after receiving notice from the . operator. Upon completion of drilling or reworking operations , the operator shall notify the department , and the chief shall make an inspection of said drill site to insure that provisions of this code and/or any conditions of the drilling or rework per- mit have been met. 15. 20 .030 Well setbacks . It shall be unlawful to drill any well , the center of which at the surface of the ground is located within twenty-five (25) feet (a) From any outer boundary line, or (b) From any recovery .heater, oil storage tank, or source of ignition, or ( c) Within one hundred (100)- feet of .any building not. nec- essary to the operation of the well, or (d) Within three hundred (300) feet of any building used as a place of public assembly, institution or school, or ( e) Within twenty (25) feet of any public street, road or highway or future street right-of-way. Setbacks shall conform to appropriate provisions of the Huntington Beach Ordinance Code. (f) The distances set out in subsections ( c) ,. ( d) and ( e) of this section may be reduced at the discretion of the chief if a six (6 ) foot masonry wall is constructed around the perimeter of the site. 15. 20. 040 Lights. No person shall permit or allow any lights located on any oil operation. site to be directed in such a manner so that they shine directly on adjacent prop- erty or property in the general vicinity of the oil operation site. 15. 20.0.50 Signs . A sign shall be prominently displayed and maintained in good condition near or on the pumping unit or fence of each well whether producing or not . Such sign shall be of durable material and, unless otherwise required by the di- vision of oil and gas , shall have a surface area of not less 15 . than two (2 ) square feet nor more than four (4 ) square feet and shall be lettered with the following: ('a) Well name and number; (b) Name of operator; ( c) Telephone numbers of two (2) persons responsible for said well who may be contacted in case of an emergency. In the event the drill site or leasehold is fenced or walled it shall be .sufficient if all entrances to said' drill site or leasehold are posted with a like sign. In addition, a readily visible sign- of durable material designating the well name and number shall be posted on or near each and every well within the drill site or leasehold. . 15. 20. 060 "No smoking" signs. "No smoking" signs of a durable material. shall be posted and maintained in all locations approved or designated by the fire chief. Sign lettering shall be four (4 ) inches in height and shall be red on a white background or white on a red background. 15. 20. 070 'Waste removal. Rotary mud, drill cutting, oil. or liquid hydrocarbons and all 'other. oil field wastes derived or resulting from, or connected with the drilling or reworking .of any well shall be discharged into a portable steel tank. Waste materials shall be removed from the operation site within thirty ( 30) days from and after completion of drilling. 15. 20. 080 Unlined sump, sump pits or skim ponds--Prohibited. No person shall own, operate, have possession of , be in .control of or maintain any well site, former well site or property on which an unlined sump or sump pit or skim pond is located. All such sumps or sump pits and .skim ponds shall be excavated of all for- eign materials and filled with compactible earth to the level of . the surrounding terrain. The provisions of this section shall not apply to portable sump tanks as required by the state divi- sion of oil and gas or the regional water pollution control board. 15. 20. 090 Private roads and drill sites. Prior to the commencement of any drilling operations, all private roads used for access to the drill site and the drill site itself shall be surfaced with crushed rock, gravel or decomposed granite, or oiled and maintained to prevent dust and mud. In particular cases these requirements governing surfacing of private roads may be altered at the discretion of the chief after considera- tion of all circumstances including, but not limited to, the following: distances from public streets and highways ; distances from adjoining and nearby property owners whose surface rights 16 . are not leased by the operator; the purpose for which the prop- erty of such owners is or may be used; topographical features ; nature of the soil; and exposure to wind. 15. 20. 100 Oil operations--Location--Time. (a) It shall be unlawful for any person to engage in any work whatsoever on any oil operation site within three hundred (300) feet of a dwelling unit, church, hospital, rest home, school , preschool, nursery, or other place of public assembly, except in the following situations : ( 1) Where such work consists of minimum maintenance or surveillance on the oil operation site ; or ( 2) Where such work is conducted between the hours of 7 a.m. and 11 p .m. ; or (3) In case of emergency; or (4) Where so ordered by the division of oil and gas ; or ( 5) Where the work being so conducted is soundproofed and such soundproofing is approved by the chief._ (b) Where. operations are conducted beyond a distance of three hundred (300) feet from the -aforementioned facilities, the chief may, in cases of disturbance, such as excessive noise or vibration, require the oil operator to : (1) Enclose the derrick and all drilling machinery used in connection with drilling of any well, with fire resis- tant soundproofing material, which shall be maintained in a serv- iceable condition. No operations other than well logging shall be conducted outside the enclosure; or (2) Enclose all drilling machinery used in connection with the drilling, redrilling, or reworking operations with fire resistant soundproofing material including the drilling mast or derrick, which shall be so enclosed on a minimum of three (3) sides to a height of twenty (20) feet, and conduct no operations between the hours of 11 p.m. and 7 a.m. with the exception of circulation of fluids and well logging. The chief may allow other phases of the operation to continue during the restricted hours if, in his opinion, the noise is minimal , if required by the division of oil and gas , or in the case of emergency. 15. 20. 110 Well servicing hours . It shall be unlawful to do any work between the hours of 11 p.m. and 7 a.m. in connec- tion with pulling a well which is within two hundred (200) feet of any residential building, except where circulation in the well must be maintained, or the well would be endangered if the 17. pulling work were not continued . 15. 20 . 120 Wellhead safety equipment. On all wells there shall be connected to the casing string a two (2) inch steel valve with a rated working pressure equal to that of the corre- sponding casing head for the purpose of bleeding off casing pressure and for hookup to kill the well incase of an emergency. 15. 20. 130 Blowout prevention. In all cases, protection shall be provided to .prevent blowout during oil operations as required by and in conformance with the requirements of the state division of oil and gas and the safety orders for dril- ling and production of the state division of industrial safety. 15. 20. 140 Cellars . The following regulations shall apply_ to cellars : (a) Every cellar shall be constructed. in accordance with the Huntington Beach Building Code and . with the requirements as they now exist, or are hereafter amended, of the California division of industrial safety; (b) Except during drilling and servicing operations , such cellars shall be kept covered, free from water, oil drilling fluids , rubbish, debris , or other -substances; (c) All multiwell cellars exceeding three (3)' feet in depth and twenty-five (25) feet in length shall have two (2) separate means of exit or entrance. If the cellar exceeds two hundred (200) feet in length, a third means of entrance and exit shall be provided. The depth of such cellars shall be the vertical distance between the lowest point of the floor of such cellar and the adjacent ground level; (d) Multiwell cellars shall have a steel grate or covering with no unobstructed openings in excess of three (3.) inches. 15. 20. 150 Fence permit required. No fence or wall shall be constructed to enclose any oil well site, oil operation site- or drilling island site in whole or in part until a permit therefor shall have been issued by the development services de- partment. As a condition of issuing such permit , the director of development services or the chief may impose thereon any conditions as are necessary in the interest of the public safety, and such fence or wall shall be constructed in accordance with such conditions. The provisions relating to dedication of right-of-way and construction of improvements shall not be ap- plicable to the issuance of such permit . All such enclosures shall be subject to the setback requirements. contained in this title. 15. 20. 160 Fences. All oil operation sites , drilling is- 18. lands, and individual drill sites having external moving parts hazardous to life or limb shall be completely enclosed by a chain link fence, masonry wall, or other approved fencing material ac- cording to one of the. following requirements : (a) Individual drill sites : ( 1) All chain link fence enclosures shall have a mini- mum height - of six (6) . feet ; ( 2) There shall be at least one gated opening for access , placed in a nonhazardous position and said gate( s) shall be kept locked at all times while. left unattended. by a watchman or serviceman; ( 3) There Shall be no opening below the fence greater than four (4) inches; . ( 4) Fencing constructed of individual chain link - panels shall be securely latched, pinned or hinged to prevent unauthorized persons from gaining access to. such equipment or oil site ; ( 5) Support posts shall be set in concrete and shall be imbedded into the ground to a. depth sufficient to maintain the stability of the fence; . (6) The fence shall at all times be maintained in a state of good repair. (b) Oil operation sites and drilling islands: All chain link fences used to enclose in whole or in part any oil opera- tion site or drilling island site shall meet .the following specifi- cations : (1) The fence fabric shall be at least six (6 ) feet in height; (2) Support posts shall be set in concrete and shall be imbedded into the ground to a depth sufficient to maintain the stability of the fence ; . ( 3) The chain link fabric shall be galvanized steel' wire with a minimum plating of 1. 2 ounces of zinc per square foot of surface area or shall be coated with vinyl or plastic material, approved by the chief, with both selvages barbed; ( 4) The chain link fence fabric shall have a minimum thickness of eleven (1.1 ) gauge; (5) The chain link fabric shall be two (2) inch mesh; 19 . provided, however, three and one-half (3 1/2) inch mesh may be used. on any . fence where the fabric is interwoven with artificial screening of redwood slats or other material approved by the chief and the director of development services in accordance with the provisions of this .chapter ; (6) Post and rails shall -be standard galvanized , welded pipe, schedule forty ( 40) or thicker; provided,. however, that nongalvanized drill pipe may be used if it exceeds schedule forty ( 40 ) in thickness; ( 7) All pipe and other ferrous parts, except chain link fabric and. drill pipe , shall be galvanized inside and out- side with a plating which contains a minimum of 1. 2 ounces of zinc per square foot of surface area; (8) Tension rods shall be three-eighths (3/8 ) inch round steel bolt stock. Adjustable tighteners shall be turn- buckle or equivalent having a six (6) inch minimum take-up . Tension bars shall have .a minimum thickness of one-fourth by three-fourths (1/4 x 3/4) inch. 15. 20. 170. Masonry wall specifications . All masonry walls used to enclose in whole or in part any oil well site , oil operation site or drilling .island site sh all be constructed in accordance with standard engineering practices and shall meet the following specifications : (a) The wall shall be of a design compatible with the facilities, buildings and structures on and adjacent to the site; (b) The wall shall be at least six (6) feet in height; (c) It shall be constructed in accordance with the pro- visions of the Huntington Beach Building Code. 15. 20 . 180 Gate specifications. For oil operations -and drill sites , -all chain link fences and masonry walls shall .be equipped with at least one gated area. The gated areas shall meet the following specifications : (a) Each gated area shall be twelve ( 12) feet wide and be composed of two (2) gates , each of which . is six (6 ) feet wide, or one sliding gate twelve (12) feet wide: The gates shall latch and lock in the center of the twelve (12) . foot span; (b) The gates shall be of chain link construction which meets the applicable specifications or of other approved material which, for safety reasons, shall be at least as secure as. chain 20 . link fence; (c) They shall be provided with . a combination catch and locking attachment device for a padlock, and shall be kept locked except when being used for access' to the .site; (d) Hinges shall be heavy duty malleable iron or steel industrial service type with a one hundred eighty ( 180) degree swing. 15. 20 . 190 Operation' of oil field recovery heaters. All oil field recovery heaters shall have a valid state of California "permit to operate" and shall be equipped with and operated by safety controls which monitor certain essential operating con- ditions and .which shall shut down the boiler and require manual restart when any of the essential conditions vary from pre- scribed limits. An emergency shutdown switch shall :be in- stalled a minimum of fifty (50) feet from the oil field re- covery heater and shall be identified as such by a sign with let- ters not less than three (3) inches high. 15. 20. 200 Notification of installation. Prior to the in- stallation and operation of any oil field recovery heater, the person or entity. proposing to install and operate such heater shall so notify the department. All heaters shall be installed and operated in compliance with the applicable provisions of this chapter. 15. 20. 210 Installation. . The distance between oil field recovery heaters and residential, commercial, and public as- sembly buildings shall be as follows : (a) Oil-.fired recovery heaters : five hundred (500 ) feet. Except where enclosed by a six (6) foot high masonry wall, the distance may be, reduced to one hundred (100 ) feet; (b) Gas-fired recovery heaters : three hundred (300) feet. Except where enclosed by a six (6) foot high masonry wall, the distance may be reduced to fifty (50 ) feet. ( c) All oil field recovery heaters shall be separated a minimum of twenty-five (25 ) feet from any oil storage tank, wellhead or public right-of-way; ( d) Oil field recovery heaters being operated in a de- veloped area, as defined in this title, shall be completely fenced, including the wellhead, with a six (6) foot high chain link or other approved fence complete_ with two ( 2) self-closing gates installed on opposite .sides of the enclosure. Steam lines from the heater to the wellhead shall be buried to a depth of 21 . one foot or wrapped with a minimum of one inch thick approved asbestos pipe insulation. 15. 20 . 220 Soundproofing. Where an oil field recovery heater is operated within an occupied residential area, the chief may, in cases of disturbance such as excessive noise or vibration, require the operator to: (a) Enclose the heater with a fire-resistant , soundproofing material which shall be maintained in a serviceable condition; or (b) In the case of emergency or when it has been determined by the chief that the noise or vibration is detrimental to the health, safety or welfare of the surrounding neighborhood, the chief may order the operator to cease operations . 15. 20 . 230 Muffling exhaust. It shall be unlawful for any person, owner or operator to discharge into the open air the exhaust .from any steam engine , internal combustion engine stationary or mounted on wheels, used in connection with the drilling of any well or for use on any production equipment unless it is equipped with an exhaust muffler, or mufflers or an exhaust muffler box constructed of noncombustible materials sufficient to. suppress noise and prevent the escape of obnoxious gases, fumes or ignited carbon or .soot . 15. 20 . 240 . Public nuisance declared . The foregoing sec- tions notwithstanding, no person shall conduct any oil operation in a manner that would create a noise, odor or vibration detri ' mental to the health, safety or welfare of the surrounding neigh- borhood or any considerable number of persons . Such operation is hereby declared to constitute a public nuisance. 15. 20 .250 Fire prevention--Sources of ignition. All elec-' trical equipment used, installed or maintained within fifty . ( 50) feet of a drilling rig, or within twenty-five (25) feet of any other oil operation shall be installed and maintained in accord- ante with all applicable state and municipal regulations . No boiler, pass-through boiler, steam generator, direct- fired heater, gas or oil-burning device, or other open flame shall be located closer than twenty-five (25) feet from a well- head or oil storage tank. 15. 20 .260 Oil storage tanks . All tanks used .for the storage, production of oil, or the disposal of wastewater shall conform to ,the following: (a) A.P.I. Specifications. All tanks shall conform to American Petroleum Institute A. P. I. ) . specifications unless other specifications are approved by the chief. 22. (b) Structural Requirements. If , as determined by the chief, any structure used or operated in connection with any oil operation is structurally unsound to the point of being hazardous, he may order the person in charge of such oil oper- ation to provide licensed civil or structural engineers' analy- sis pertaining to the adequacy of said structure . ( c) Dikes and Capacity Requirements . All persons owning, operating or having control of storage tanks, clarifying tanks or tanks used in connection with the production of oil shall construct and maintain dikes around said tanks . Drainage dikes and walls shall be constructed and maintained to meet the stand- ards of the National- Fire Protection Association as they presently exist or may hereafter be amended. 15. 20. 270 Tank setbacks. All new tanks, Including replace- ment tanks, and permanent structures shall be set back pursuant to the standards of the National Fire Protection Association as they presently exist or may hereafter be amended , but in all cases shall be at least .a minimum of twenty-five (25) feet from an ultimate right-of-way as defined in the Huntington Beach Ordinance Code. EXCEPTION: The replacement of existing oil storage tanks, which pose a hazard of bursting or. of severe leakage or of any other danger to persons or other property., and which .cannot meet the required setback limits, may be- authorized by the chief but in no case may the replacement tank be of a larger capacity, diameter or height than the existing tank. 15. 20. 280 Setbacks--General . With the exception of pumping units, no oil production equipment over forty-two (42 ) .inches high shall be located or relocated within the safety-sight angle at street intersections. The safety-sight angle shall be triangular and formed by measuring to a point twenty-five (25 ) feet along the front and exterior side lot lines of a corner lot .from the point of inter- section of said lines and striking a hypotenuse between the two points , as illustrated in the diagram included herein. 15. 20 ..290 Portable pulling masts and gin poles--Removal . of. All well servicing equipment , including portable pulling masts and gin poles, shall be: removed from the leasehold, oil operation site or drill site within seven (7) days after com- pletion of a well servicing operation. 15. 20 . 300 Pipelines. Within six (6 ) months after adoption of this chapter, all pipelines in developed areas, as defined in this title, which are not enclosed within a fence shall be placed . 23 . / SAFETY SIGHT ANGLE HUNTINGTON BEACH CALIFORNIR. PLANNING DIVISION underground or covered with materials approved by the chief. Such covering shall be maintained in a neat , orderly, secure manner. 15. 20.310 Storage of equipment . (a) No drilling, re- drilling, reworking, or other portable equipment shall be stored on the oil operation site which is not essential to the everyday . operation of the oil well located thereon. This includes the removal of idle equipment unnecessary for the . operation of gas wells, flowing wells, disposal wells , water and steam injectors and wells produced by electric bottom hole pumps . However, drilling or production equipment may be stored on an oil opera- tion site if such site is entirely enclosed with a fence that conforms to the specifications set out in this title and the Huntington Beach Ordinance Code, and such storage is a permitted use in the base zone district of the site. ( b) Lumber, pipes , tubing and casing shall not be left on the oil operation site except when drilling or well servicing operations are being conducted on the site. ( c) Waste control shall conform to applicable provisions of the Huntington Beach Fire Code. ( d) It shall be illegal for any person, owner or operator to park or store any vehicle or item of machinery in any driveway, alley or upon any oil operation site which constitutes a fire hazard or an obstruction to or interference with fighting or controlling fires except that equipment which is necessary for the maintenance of the oil well site or for gathering or trans- portation of hydrocarbon substances from the site. Chapter 15.22 FENCING, SCREENING AND LANDSCAPING 15. 22. 010 Fencing and screening--Developed areas. On or before July 1, 1983, all oil wells and tanks located in de- veloped areas , as defined in this title, shall be enclosed with a fence constructed of one of the following materials : .(a) A solid masonry wall; (b) A chain link fabric with three and one-half (3 1/2) inch mesh interwoven with redwood slats. The director of development services may approve the use of other opaque materials for use with chain link fabric if he finds such materials are compatible with surrounding uses and effectively screen the oil operation.; (c) Any other material , compatible with surrounding uses, 24. which effectly screen the oil operation site, approved by the director of development services. ( d) All fencing, masonry walls , redwood slatting, or other comparable materials for use with chain link fabric , shall be of a solid neutral color, compatible with surrouding uses , and maintained in a neat, orderly, secure condition. Neutral colors shall include sand, grey and unobtrusive shades of green, blue and brown, or other colors approved by the chief . 15. 22. 020 Fencin .and screening--Drilling, redrilling and activation. Within sixty ( 0) days of completion of drilling .or redrilling, or within sixty (60) days of activation of an idle well if such well is located in a developed area, as defined in this title, such well shall be enclosed by a fence which con- forms to the requirements of this chapter, the provisions set out -elsewhere in this code , and the regulations of. the division of oil and gas contained in the California administrative code as they presently exist or may hereafter. be amended. 15. 22 . 030 Fence setbacks. Minimum setbacks for all fences shall meet the provisions of the Huntington Beach Ordinance Code applicable to the oil operation site but in no case shall be less than five ( 5) feet from the ultimate right-of-way of any pub- lic. street. The director of development services may reduce such required setbacks where an oil well or other necessary equipment is or must be located in the setback area,. in which case special landscaping requirements for screening purposes may be imposed. 15. 22. 040 Landscaping for developed areas--Drilling and activation. Prior to the issuance of any drilling or activation permit , a landscaping plan which meets the requirements of this chapter, shall be submitted for review and approval by the chief and the director of development services . Within sixty (60) days after completion of drilling or redrilling or within sixty (60) days after activation of an idle well, any oil operation site in a developed area, as defined in this title, shall be .landscaped in conformance with .the plan submitted and approved , and the specifications contained in this chapter. Landscaping shall not be required for any well which is not visible from a public street. 15. 22. 050 Landscaping--Minimum area. The minimum area re- quired to be landscaped at an oil operation site shall be that area between each lot boundary line fronting a public street and a- line or lines drawn parallel to each lot boundary line fronting on a public street and through the center of any well or tank on such site. When there is more than well or tank on an oil operation site, the well or tank closest to each boundary line fronting .on a public street shall be used to determine the mini- mum landscape area. Any area enclosed by a fence meeting the re- 25. quirements of this title, shall be excluded from the minimum area- to be landscaped. (See Figures 1 and 2. ) 15. 20. 060 Landscaping--Minimum requirements. The minimum number of trees and shrubs per square foot shall be as follows : Square footage of minimum landscape Minimum trees Minimum shrubs . 0-149 1 3 150-249. 2 6 250-349 3 . 9 350-449 4 12 450-549 5 15 550-649 6 18 650-749 7 21 1750-849 8 24. 850-949 9 2.7 950-1499 10 30 1500.-1999 12 36 2000 - as. determined by the director of development services The director of development services may reduce the number of trees and shrubs if, in his opinion, the topography, configuration_ or existing vegetation on a site warrants such reduction. Trees shall be at least fifteen ( 15) gallon. size , and shrubs shall be at least five (5) gallon size. Minimum landscaping shall also include suitable ground . cover and an automatic irrigation system. The following plants are acceptable for use in landscaping, provided, however, that the director of development services may approve other plants which he finds adaptable to the particular site and provide effective screening of the oll operation: TREES : Eucalyptus Camaldulensis (Red . River gum) ; Eucalyptus Sideroxylon (Red Iron bark) ; Metrosideros Tomentosa (New Zealand Christmas_ tree) ; Myoporum Laetum (Myoporum tree) . SHRUBS : Nerium Oleander (oleander) ; Esallonia Tradesi ( Pink. Prihcess) ; . Metrosideros Tomentosa (New Zealand Christmas tree--bush form) ; Myoporum Laetum (Myoporum--bush form) ; Photinia Fraseri (Red Leaf Photinia) ; Raphiolepis Indica Springtime (Pink Indian hawthorn) ; Carissa Grandiflora (natal plum) ; Moraea. Irioidies ( fortnight lily) ; hemerocallic hybrids (day lily) ; Agapanthus Afric.anos (Lily of the Nile) ; Liriope Gigantea ( turf lily) . GROUND COVER: Mesembryanthemum ( ice plant) ; Osteospermum; . Fruticosum African daisy) ; Gazania Splendens (Gazania) ; Hedera Heliz Hahnii (needle point ivy) . 26. o . TANK APPROVED TANK PERIMETER- s FENCE 0 o O a WELL a - V*AMMLANDSCAPE AREA ;V EXAMPLES OF LANDSCAPE AREA FIGURE 1 HUNTINGTON BEACH 04LIFORNIA PLANNING DIVISION Y - APPROVED PERIMETER FENCE TANK WELL a 0 0 LANDSCAPE AREA J T b EXAMPLES. OF LANDSCAPE AREA FIGURE 2 ACEn HUNTINGTON BEACH CALIFORNIA PLANNING DIVISION When feasible, all plant holes shall be twice normal size, and the planting medium shall be of good quality, imported soil. All landscaping shall be maintained in a neat, healthy condition. Chapter 15 . 24 CLEANUP AND MAINTENANCE 15 .24._ 010 Cleanup after well servicing. After completion of well servicing or abandonment operations , the responsible party shall pump out the cellar, clean the drill site area and repair all damage to public property caused by such servicing or abandonment operations . 15. 24. 020 Oil smell plans required. An oil spill contin- gency plan or spill plan shall be required for every oil opera- tion site, and . available for inspection by the chief at any time.. Plans prepared pursuant to the provisions of the California Administrative Code, Title 14, Article 3 shall meet the require- meets of this section. 15. 24 .030 Cleanup after spills , leaks and malfunctions. After any spill, leak or malfunction,: the responsible party shall remove or cause to be removed to the satisfaction of the chief all oil and waste materials from any public or pri- vate property affected by such spill_, leak or malfunction. 15. 24 .040 Releasing. of .fluids. No person shall deposit, place, discharge or cause or permit to be placed, deposited or discharged any oil, naptha , petroleum, asphaltum, tar , hydro- carbon substances or any refuse including wastewater and brine from any oil operation or the contents of any container used in. . connection with an oil operation in, into, or upon a public right-of-way, a storm drain, ditch or sewer ; a sanitary drain- or ' sewer; any portion of the Pacific Ocean or any body of water; or any private property in this city. EXCEPTION : Treated wastewater and brine may be discharged either into a sanitary sewer if a permit is obtained for such discharge in accordance with the provisions of this title, or into an outfall approved by the regional water quality control board. 15. 24 .050 Freedom from debris . All property on which an oil well site is located shall at all times be kept f ree. of (a) debris; (b) pools of oil, water or other liquids; (c) weeds; ( d) brush; ( e) trash, or other waste material. 15. 24 .060 Painting. All production equipment on the oil operation site shall be painted and. maintained at all times, 27 . including pumping units , storage tanks , heaters , and buildings or structures . When requiring painting of such facilities , the chief shall consider the deterioration of the quality of the material of which such facility or structure is constructed, the degree of rust , and its appearance . Paint shall be of a . .neutral color, compatible with surrounding uses. Neutral colors shall include sand, grey and unobtrusive shades of green, blue and brown, or other colors approved by the chief . All produc- tion equipment shall be painted a neutral color, as defined herein, within six (6) months after the adoption of this chapter. .15. 24 .070 Gas emission or burning prohibited. No person shall allow or cause or permit gases to be vented into. the at- mosphere or to be burned by open flame except as provided by law or as permitted by the division of oil and gas or appropriate air pollution control district. Chapter 15 .28 WASTEWATER SYSTEM 15 .28. 010 Wastewater system. For the purpose of handling industrial wastes from oil and gas wells, including wastewater and brine, the department shall issue a sewer connection permit whenever such waste is to be deposited into the city' s sanitary sewer system, provided such industrial waste does not contain more than one hundred ( 100) milligrams/liter of any crude, dis- tilled or refined petroleum products , mud,. rotary mud, oils, or other residual products mentioned in Orange County Sanitation District Discharge. regulations. Such industrial waste shall be processed through. a clarification system approved by the depart- ment. At no time shall discharge water be over 1400 Fahrenheit at point of entry to the sewer. 15. 28.020 Sewer connection permit--Application fee. No connection shall be made to the city' s sanitary sewer system until a sewer connection permit has. been obtained from the department. An application for such sewer connection permit shall be filed with the department together with a fee of one hundred dollars ( $100) per sewer connection: . 15. 28. 030 Contents of application--Property description. .Said application shall contain a description of the property upon which said water or wastewater is located, . the name of the owner of the property, the point .where the water will be discharged into said sanitary sewer,. the location of the clari- tying plant , type of plant to be used, .including plans and specifications approved by the department and the method of clarifying and settling the objectionable substances from said water, including plans and specifications of wastewater settling 28 . systems . 15. 28 .040 Damages . The permittee shall be responsible for all damages to city property. 15. 28. 050 Discharge line. The discharge line shall have an approved gate valve and shall be provided with an approved method of observing or testing the wastewater for impurities. 15. 28. 060 Rules for laying drainpipe to sanitary sewer. The method of installation for the discharge line from the clarifying tank, including all pipe and fittings , shall be in accordance with the provisions of the Huntington Beach Plumbing. Code. No sewer connection to the city' s sanitary sewer system shall be made by other than a licensed plumbing contractor. Chapter 15 .32 NONPRODUCING AND IDLE WELLS 15 . 32. 010 Production report--Filing dates. The operator of any well shall file with the department, during the first thirty (30) days of each quarter, -for the last preceding calendar quarter, a statement in such form as the chief may designate, .showing: ( a) The amount of oil and gas produced from each well during the period indicated and the number of days during which fluid was produced from each well; (b) The number of wells drilling, reworking, producing, idle, and owned or operated by such person; ( c) In lieu of. the above, the operators may submit to the chief copies of state of California, division of oil and gas Form 110 report, as submitted to the state division of oil' land gas ; (d) Oil operators and . buyers of gas from wells in Huntington Beach shall be required to meter such gas for inspec- tion and review by the chief when the latter requests same. 15. 32.020 Production report--Failure. Failure to report .. production as required in this chapter shall constitute a mis- demeanor punishable as set forth in Chapter 1.16 of the Huntington Beach Municipal Code. 15. 32 . 030 Production report--False. Filing a false, fraud- ulent, or intentionally .inaccurate report shall constitute a mis- 29. demeanor punishable by fine, imprisonment or both. 15. 32 .040 Nonproducing oil wells . Whenever any oil well, conforming with the provisions of the Huntington Beach Ordinance Code fails to produce at the quarterly rate of twenty (20) bar- rels of crude oil or other hydrocarbon substances or at a quar- terly rate of one hundred thousand (10.0,000 ) cubic feet of gas for sale, lease use or storage for two (2 ) successive calendar quarters , such well shall be classified as "nonproducing." Such nonproducing well, when located on a site with other oil prod uc- tion operations , shall be maintained in accordance with the pro- visions of this title. When such nonproducing well is located on a site having no other oil production activity, the chief shall notify the opera- for that the well has been classified as nonproducing and, in the event the well is not reactivated within six (6) months of the date it first become nonproducing, a hearing will be initiated before the planning commission to show cause why the 110" zoning classification on the oll production site should not be removed. In the event the 110" zoning is removed , the well shall thereafter be an "idle" .well and subject to the requirements for such wells as set forth below. Whenever any oil well , which .is nonconforming under the pro visions of the Huntington Beach Ordinance Code , fails to produce at a quarterly rate of twenty ( 20 ) barrels of crude oil or other . hydrocarbon substances .or at a quarterly rate of one hundred thousand (100 ,000) cubic feet of gas for sale, lease use or storage for two (2) successive calendar quarters , such well shall be classified as "nonproducing. " When any such well has become nonproducing, the chief shall notify the- operator that the well has been so classified and give notice that said well will be- come an "idle" well thirty (30) days from the date of such no- tice unless the operator, within that thirty ( 30) day period, shows cause why the well should not be classified an "idle" well. In the event the operator fails .to show cause why the well should not be classified an "idle" well, such well shall be so classified and any nonconforming rights to continue or reactivate such oil operation shall cease. Documentation that the well is an in,jection .well or is part of a unit operation involved in an enhanced recovery project shall be considered acceptable for not . classifying a well "idle. " 15 . 32. 050 Idle wells . When a well is deterrnined to be an " idle" well according to the provisions of section 15. 32. 040 above, the surface area of the. well site shall be cleaned pursuant to the following: - ( a) . Notice shall be sent by the chief , by registered or 30 . certified mail, to the owner of the fee simple interest in the land on which such well is situated as shown on the last equalized assessment roll, and to the owner of the mineral rights on which such well is situated as shown on the last equalized assessment roll, and to the operator of such well as indicated on either the records of the state division of oil and gas , department of conservation or the records of the department. Once the notice is sent, the well or wells specified therein may not be activated unless the requirements of Chapter 15. 40 of this code are adhered .to and satisfied. (b) The notice shall indicate the name and location of the well in question and a statement by the chief .of the rea- sons why such well is an idle well, as defined by section 15. 32. 040 of this code. 15. 32 .060 Site restoration--Procedure . Within thirty (30 ) days after notice has been mailed, the parties to whom the notice has been sent shall clean and restore the drill site and surface in conformity with the following requirements : (a) The derrick and all appurtenant equipment thereto existing above the surface of the ground level shall be removed from the drill site; (b) The drilling and production equipment, tanks , towers and other surface installations shall be removed. from the drill site or tank farm site; ( c) All concrete, pipe (except tubing head) , wood and other foreign materials existing above or on the surface of the ground level shall be removed from the drill site or tank farm site ; (d) All oil, waste oil, refuse or waste material including debris , ,junk, trash and accumulated piles of miscellaneous material shall be removed from the drill site or tank farm site; (e) The rathole and all holes, depressions - and sumps shall be cleaned out of all foreign material (except well cellar walls) regardless of depth and filled and packed with clean compactible soil; (f) . The wellhead shall be capped with a . blind flange and a minimum of two (2) inch steel bleeder valve shall be installed, which shall be locked in a closed position. 15. 32.070 Extension of nonconforming rights. In the event the chief finds that the operator has shown that the subject well should. not be classified an "idle" well, he is -authorized to extend the nonconforming rights of such oil operation for a 31 . i period not to exceed six (6) months. Such extension may be subject to reasonable conditions to insure that the oil operation site is maintained in a safe and clean condition. In order to extend the nonconforming rights , the chief shall find that; (a) Because of special circumstances applicable to the property, including its size , shape, topography, location, or surroundings, the strict application of the provisions of this section deprives such property of privileges enjoyed by other property in the vicinity and in the same zoning classification; (b) Approval will not constitute a special privilege inconsistent with the limitations upon other properties in the vicinity and in the same zoning classification; -(c) Approval will not be detrimental to the public welfare or. injurious to property or improvements in the area; (d) Approval will not be in conflict with established general and specific plans and policies of the city; ( e) That the site is adequate to accommodate continuation of the use; (f) That there is compliance with the applicable provisions of the Huntington Beach Municipal Code. 15. 32.080 Site restoration--Time limit. The time period provided for- compliance herein shall be suspended from the date an appeal is filed pursuant to section 15 .12.170 of this code, until final decision is rendered on the appeal. 15. 32 .090 Abandonment procedure. Whenever abandonment occurs pursuant to the requirements of the division of oil and gas, the person so abandoning shall be responsible .for the restoration of the drill site and oil operation site to its original condition as nearly as practicable in conformity with the regulations of this code, as provided in this title. 15. 32.100 Abandoned well requirement . The responsible party shall furnish the chief with: (a) A copy . of the approval of the division of oil and gas , confirming compliance with. all abandonment proceedings under the state law; and (b) A notice of intention to abandon under the provisions of this section and stating the date .such work will be commenced. 32. Abandonment may then be commenced on or subsequent to the date so stated. 15: 32. 110 Abandoned well--Surface requirements . Abandon- ment shall be approved by the chief after restoration of the drill site and the subsurface thereof has been accomplished in _conformity with the following requirements : (a) The derrick and all appurtenant equipment thereto shall be removed from the drill site ( b) All tanks, towers and other surface installations shall be removed from the drill site ; (c) All concrete, piping, wood and other foreign materials, regardless of depth, shall be removed from the drill site, unless part of a mult_iwell cellar that is being used in connection with any other well for which a permit is in force; (d) All holes and .depressions shall be. filled with clean, compactible soil. All oil, waste oil, refuse or waste material shall be removed from the drill site. 15. 32. 120 Abandonment requirements prior to new construc- tion. All abandoned or deserted wells or drill sites shall meet the most current abandonment requirements of the division of oil and gas. prior to the issuance of any building or grading permit for development of the property. To the maximum extent practicable., new structures shall not be constructed directly over abandoned wells. When structures are constructed over abandoned . wells , however, the installation of vapor recovery systems around the well, as approved by the . chief, shall be required. 15. 32. 130 Maintenance of records . The chief shall main- tain current and accurate records of each well drill site or lease. Such records shall reflect the status of each well and .its drill site or lease with respect to each of the regulatory provisions of this oil. code. The records shall also indicate whether each well is producing, idle, or abandoned and whether it is in compliance with the Huntington Beach Municipal Code. Chapter 15.36 NUISANCE OIL WELLS AND SITES 15 . 36. 010 Notice and hearing. Whenever the chief determines that a . public nuisance, as described in section 33 . ti 15. 20. 240 exists on any property or in connection with any well , drill site or lease he shall give notice to the property owner, the lessee of surface or mineral rights , the oil operator and the occupants . of any such property to abate such nuisance. The notice shall also state that in the event the nuisance is not abated , as directed, the objectionable _material or con-. dition may be removed and the nuisance abated by the city, and the cost of removal assessed upon the lands and buildings from or in front of which the nuisance is removed and such cost shall constitute alien upon such land until paid. The notice shall also specify a date and time 1within thirty ( 30 ) days of :the date of the notice when the city council will hold a public hearing to afford those so notified an opportunity to be heard concerning the determination of the chief and the notice to remove or eliminate the nuisance conditions . The city council may direct the department to proceed with the work nec- essary to remove the objectionable conditions or materials and to take such other action as is necessary to abate the nuisance. 15. 36 .020 Work--Costs report--Hearing on assessment. The work shall proceed under the direction of the chief and may be done by city forces or private contractor. The individual in charge of the work shall keep a. record and account of the costs of abatement. Upon completion of the work, a report shall be filed with- the city clerk who shall set a. hearing before the city council. The parties to be assessed shall receive by first class, prepaid mail a notice of a public hearing on the assess- ment. 15. 36 .030 Notice of lien filed to pay assessment. If the cost of assessment is approved by the city council after - the hearing thereof, a notice of lien shall be .filed in the office of the county recorder for each parcel of land involved, and when .. recorded, shall be delivered by the chief to the county con- troller and assessor who is expressly authorized to enter the amount thereof in the county assessment book opposite the descrip- tion of said parcels, and thereafter such amount shall be collected at the time and in the same manner as ordinary municipal taxes are collected, and shall be subject to the same penalties and the same procedures under foreclosure and sale in case of delinquency, as provided for ordinary municipal taxes . Notice to pay the assessment shall be sent to the parties liable to be assessed. 15. 36.040 Additional remedies ._ As to any lots or property declared to be a nuisance hereunder, the city attorney of the city of Huntington Beach may proceed to abate the same by filing 34 . r a civil action to abate 'a nuisance against the owners , or oil operators, or lessees or occupants thereon. Chapter 15 .40 ACTIVATION OF IDLE WELLS 15 .40. 010 Activation permit required. No person shall activate or put into production any oil well that is an idle well . pursuant to this code, or any well whose drill site has been cleaned and restored in accordance with this code, unless an activation permit has been first obtained pursuant to the pro- visions of this title. 15. 40.020 Application and fee. An application, on a form provided by the department , shall be filed with the depart- ment together with the required permit fee. The application shall include a plot plan and such other information necessary to show that the property and the oil operation will comply with the provisions of this title and Article 968 of the Huntington Beach Ordinance Code. No activation permit application shall be accepted by the department unless the .property on -which the well is located may be lawfully used for oil operations in accordance with the pro- visions of the Huntington Beach Ordinance Code and -the required permit application fee is paid. Such fee shall not be refundable. 15. 4.0. 030 Action bbychief and director of development services. Within ten 10) working days after such application is filed, the chief and the director of development services shall review the application. If the chief finds that activation of the well as requested in the application and the property on which the oil operation is .to be located meets all of the re- quirements of this title, and if the director of development services determines that all applicable provisions of the Huntington Beach Ordinance Code have been met, the chief shall .issue the activation permit. If the director of development services is unable to find compliance with the applicable pro- visions of the Huntington Beach Ordinance Code, the chief shall deny the permit and shall give notice to the applicant of such denial. 15. 40 .040 Expiration of permit . Any activation permit issued under the provisions of this title shall expire by limitation and become null and void if the oil operation autho- rized by such permit is not commenced within one hundred twenty ( 120) days from the date of issuance of such permit . 35 . 15. 40. 050 Test permit. At the request of the applicant and prior to the issuance of the activation permit , the chief may grant a test permit .for a period not to exceed ninety (90 ) days. This test permit is to authorize the applicant to operate the well on a. test basis to determine if said well is capable of producing in the quantities specified in this code. The test permit shall not be issued unless the drill site and oil operation is in compliance with all the provisions of this title and other applicable provisions of the Huntington Beach Ordinance Code except that equipment, materials and opera- tions necessary for the conducting of the test shall be permitted. Should the well fail to produce oil, gas or .other hydro- carbon substances within the ninety (90) day period in a manner sufficient to demonstrate that it is capable of producing the quantities specified in this code , the applicant shall abandon the well within one hundred eighty ( 180) days .from the issuance of the test permit in accordance with the regulations of the division of oil and gas -and this title . 15. 40 . 060 Cease and desist order. If , at any time, any operator is in violation of any of the provisions of this title, the chief may order compliance and set a reasonable period of time for same. If compliance is not obtained within the time period specified, the chief shall order, in writing, the operator to cease and desist operation of the well immediately. The operator shall immediately comply with the order of the .chief to cease and desist and shall not resume any operation at the site affected unless and until the written approval of the chief is obtained. SECTION 3. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of com- petent Jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance . The City Council of the City of Huntington Beach hereby declares that it would have adopted this ordinance and each section, subsection, sentence , clause, phrase, or portions thereof, and amendments thereto, ir- respective of the fact that any one or more sections, subsections, sentences, clauses , phrases or portions , or amendments be declared invalid or unconstitutional. SECTION 4. Neither the adoption of this ordinance nor the . repeal of any ordinance shall in any manner affect the prosecu- 36. 1 tion for violation of ordinances which violations were committed prior to the effective date hereof, nor be construed as affecting any of the provisions of such ordinance relating to the co.11ec- tion of any license or penalty of th.e penal provisions applicable to any violation thereof, nor to affect the validity of any bond or cash deposit in lieu thereof, required to be posted, filed or deposited pursuant to any ordinance and all rights and obligations thereunder appertaining shall continue in full force and effect.. SECTION 5. . The provisions of this ordinance insofar as they are substantially the same .as existing provisions of the Huntington Beach Municipal Code relating to the same subject matter shall be construed as restatements and continuations and not as new enactments . SECTION 6. This ordinance shall take effect thirty days . after its adoption. PASSED AND ADOPTED by the City Council of the City. of Huntington Beach at a regular meeting thereof held on the day of 1981. Mayor . ATTEST: APPROVED AS TO FORM: City Clerk City Attorney REVIEWED AND APPROVED : INITIATED AND APPROVED : City Administrator ~Director of Development Services ' i 37 . REQUEST FOR CITY COUNCIL ACTION Submitted by James W. Palin Department Development Services l'! Date Prepared July 10 , 1980 Backup Material Attached Q Yes R No Subject REACTIVATION OF THE OIL COMMITTEE City Administrator's Comments Approve as Recommended d� Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions: STATEMENT OF ISSUE: i) The City Council -approved a work program and application for a Coastal Energy Impact Program in April, which has since been funded by the Coastal Commission. The work program called for a review of the City' s Oil Code. The current Oil Code provides for the appointment of an ad hoc Oil Committee which can advise the Council and staff on possible revisions to the Code prior to implementing any change to the code. RECOMMENDATION• Reactivate the Oil Committee to assist in the review of the Oil Code; choose a member of the Council to serve on the Committee. ANALYSIS: As part of the LCP process, the City must review the Oil Code, at least as it affects oil operations in the coastal zone. The Council approved a work program for this review, which is funded by a Coastal Commission grant. A discussion of the work-to-date by staff, and a list of some of the possible issues identified so far, are included in the attached letter. The Oil Committee .would help staff in the review of the Code and would advise staff regarding possible improvements. Members of the 'Oil Committee include a member of the Council, a member of the Planning Com- mission, the Fire Chief, Director of Development Services, the City Attorney, and representatives from the Western Oil and Gas Association and the Independent Oil Producers Association. Staff would also like to invite a representative from the State Division of Oil and Gas as an "ex-officioll member. Plo 3/78 Page Two ALTERNATIVE: The Council could direct staff to continue work on the Oil Code review without input from an Oil Committee. This alternative, however, would diminish the opportunity for formal input by public representatives, the principal affected departments and representatives of the industry. FUNDING SOURCE- Development Services staff time throughout the review process is funded under the Coastal Commission Grant. Respectful submitted, James W. Palin, Director Department of Development Services MM:gc CITY OF . hIUNTINC�T'®IV BEACH P.O. BOX 190 DEPARTMENT OF DEVELOPMENT SERVICES CALIFORNIA92648 BUILDING DIVISION(714)536-5241 PLANNING DIVISION(714) 536-5271 TO: Honorable Mayor FROM: James alin and City Council Director, Development ATTN: Floyd G. Belsito Services SUBJECT: OIL CODE REVIEW June 13, 1980 Cities throughout the State's coastal zone, including Huntington Beach, are working on Local Coastal Plans (LCP's). In each case, the City must review its plans and ordinances to ensure that the.requirements of the Coastal Act are met. Oil production is an important land use in the Huntington Beach coastal zone. Most of the City's ordinances regulating this activity are found in the "Oil Code" (Section 15 of the Huntington Beach Municipal Code). As part of the local coastal planning process, the City must review the Oil Code and amend it, if necessary, to meet the requirements of the Coastal Act. The purpose of this memo is to 1) explain why review of the Oil Code is being undertaken now, 2) identify some of the sections of the code where improvements should be made and 3) to request the Council to appoint an oil committee, as provided for under the existing code, to advise the staff and the Council on possible revisions. State Funding and Council Direction The Oil Code review is one of the tasks provided for in a "Coastal Energy Impact Program" grant recently awarded Huntington Beach by the State Coastal Commission. The City Council approved the work program and application for this grant at their meeting of April 21, 1980. Staff have begun work not only on the Oil Code review task but also on several of the other projects included in that work program. Rationale As noted above, the principal impetus for reviewing the code at this time is the preparation of the LCP. Before permit power over land uses in the coastal zone can be returned to Huntington Beach, the City must show that its ordinances are adequate to enforce the mandates of the Coastal Act. This analysis of the Oil Code is part of that process. There are, however other reasons why reviewing the Oil Code is important at this time. The oil production industry is experiencing a particularly dynamic period. The price of oil is continually escalating. The federal government has taken steps to decontrol the prices of certain domestic supplies (including significant reserves in the Huntington Beach field). New technologies are being developed to extract residual oil in old fields and the federal government is providing incentives for oil companies to experiment with these technologies. The effects of these events on Huntington Beach are significant. Oil production activities, which many people felt would "phase-out" soon, will probably continue for some time (beyond the year 2000). OIL CODE REVIEW Page 2 A water flood project in the Townlot area appears increasingly attractive to oil companies and will probably be undertaken if the companies can sort out their various lease agreements. Enhanced oil recovery (EOR) technologies are already being tried in the field. FOR includes different techniques involving steam, the use of chemicals to help flush-out oil and the injection of gases to help collect and extract residual oil. All of these will be tried in Huntington Beach.* At the some time that oil activities increase, the pressures on available open space for other uses is also increasing. Residences,.parks and commercial activities are located near oil facilities. These different uses can be accommodated near oil production sites if some sensible guidelines are established which limit possible adverse impacts. Thus, a review of the Oil Code is appropriate at this time not only to satisfy LCP requirements but also to ensure that the potential impacts from new technologies are adequately addressed. In addition, several issues related to the impacts from continued oil production activities in the community need to be assessed, such as noise, aesthetics and continued access to underground oil pools. Some of these issues are discussed again shortly. Oil Committee The Oil Code provides for the formation of an "Oil Committee" to advise the staff and the City Council on revisions to the code: 15.04.040 Oil_ Committee--Authorization and Duties. The council may from time to time appoint, on an ad hoc basis, an oil committee composed of the following: a member of the city council, a member of the planning commission, the city attorney, fire chief, director.of planning and environmental resources, director of building and community development, or the duly authorized agents of these parties, a representative of the Western Oil and Gas Association, and a member of the Independent Oil Producers Association. The committee shall serve as an advisory body to the department .and city council with regard to the content of.the oil code and revisions thereof. (Ord. 2228, 19 Oct 77; Ord. 2186, 1 June 77) (Note that the planning and building departments have since been combined into a single Department of Development Services.) Staff recommends that the Council appoint this ad hoc committee as soon as possible so that work on the oil code review can proceed in a timely manner. Staff also recommends that a representative from the DOG be invited to participate on the committee as an "ex official' member. Tentatively, the committee would meet about once a month, unless the committee felt more frequent meetings would be useful. Work on the review will, hopefully, be completed by the fall. *Other parts of the Coastal Commission's grant will include an analysis of these FOR techniques, and a study of the pilot programs occurring now, and anticipated for, Huntington Beach, their possible impacts, and ways to mitigate any deleterious effects. OIL CODE REVIEW Page 3 Oil Code Up-Dates in Other Jurisdictions. Many other jurisdictions are also reviewing and revising their oil ordinances at this time as part of LCP process. Ventura County, Santa Barbara County, Los Angeles County and the City of Signal Hill are all in the process of updating their oil codes. Long Beach approved a new oil code, in conjunction with their LCP, just last month. Staff will continue to monitor these other jurisdictions as they work on their codes to see how they cope with problems relevant to Huntington Beach. Work-to-Date City staff has done some preliminary work on the Oil Code review and has obtained and reviewed the oil codes of several other jurisdictions (although, as noted above, most are out-dated and are not very useful models). In addition, staff has analyzed Coastal Commission permits related to oil operations to understand how the State has implemented the Coastal Act in these cases. The State Division of Oil and Gas (DOG) has reviewed our existing code and discussed possible improvements with City staff. As a result of this work, the staff has identified the following areas where improvements to the code might be made: Possible Changes to the Huntington Beach Oil Code I., No major rewriting is necessary--Our preliminary assessment finds that the Oil Code is, generally speaking, more comprehensive than other existing codes. It addresses most of the major concerns related to oil production in the City. Nonetheless, some improvements can be made. 2. Improving awkward language and improving the precision of existing sections—Parts of the code are awkwardly written and are confusing. Some sections are contradictory and include irrelevant items. The code can be "cleaned-up" by clarifying these confusing sections. 3. Resolving the confusion about which City departments regulate oil operations--The code now places much of the responsibility for enforcing and implementing its provisions in the Planning and Building Departments (now combined into the Department of Development Services). Yet, in practice, much of these activities have since passed from those departments to the Fire Department. The code should be changed to acknowledge this. If certain responsibilities are to be retained in Development Services, this should be clarified. 4. Revise.sections .to cover FOR technologies—Where the code addresses possible impacts from oil operations, language should be included which covers FOR as well as conventional extraction technologies. 5. Require more information on new well permit applications--Applications for new wells and redrills should include: a a "plot plan" showing the relation of wells and other equipment to buildings and public roads; b) information related to FOR (if applicable), including information on types of chemicals used, if any; location and type of storage, transportation, separation and disposal facilities related to chemicals; location of steam lines, compressors, generators, etc. (an FOR plan, approved by the DOG, could probably be submitted in fulfillment of this requirement); c) evidence that the operator has a spill clean-up plan as required by DOG regulations. OIL CODE REVIEW Page 4 6. Eliminate code provisons which are preempted or duplicated by DOG--The code can be simplified and streamlined by deleting sections which address issues adequately covered or preempted by the DOG or by simply adopting the DOG regulations by reference in those instances. 7. Allowing for DOG discretion in certain emergencies--Under several provisions of the code, the City can order the cessation of certain operations. DOG staff suggested that in certain circumstances prohibition of these operations could result in costly loss of property or resources or could jeopardize public safety. Thus, these provisions of the oil code should include measures which allow the operations to continue if the DOG deems them necessary to protect resources, property or safety. 8. Revise abandonment and oil parcel "recycling" sections--The current code requires wells which do not meet a certain production limit to be declared . "non-productive." Such wells are to be.phased-out except under certain conditions. This provision does not explicitly recognize that several types of wells are non-producing (injection and disposal wells) and that many enhanced recovery techniques require producing wells to be shut down for months, even years, before being reactivated. (This allows the steam or chemicals to work on the oil before recovery is attempted.) Sections should be changed to accommodate non-producing wells involved in various recovery projects, (although perhaps requiring the removal of some surface equipment while not being used). 9. Requiring "reabandonment" to current regulations--DOG staff noted that wells which were abandoned years ago sometimes leak gas or oil, even if they were plugged to State standards in effect at that time. Thus, before new development on old oil fields is allowed,.the City should require the developer to locate all old well bores and to plug them according to the most current DOG standards. The wording in the code will have to be changed to this effect. A related section could address the identification, removal or plugging of old pipelines underlying oil parcels before permitting new development on the parcel. 10. Differentiating between "rework" and "redrilling"--The latter is similar to drilling a new well; the former is maintenance of an existing well bore. Conditions placed on redrilling should be more strict than on "rework." These two activities seem to be confused in parts of the code. . OIL CODE REVIEW Page 5 11. Regulating noise—Noise from drilling operations and compressors is a major problem when other land uses are located near oil production sites. The Huntington Beach Oil Code requires soundproofing oil operations (except minimum maintenance and surveillance) within 300 feet of a dwelling unit, church, hospital, school, etc., between the hours of. l 1:00 p.m. and 7:00 a.m. and allows the "director" to require soundproofing for operations beyond 300 feet if necessary. The City's noise ordinance (Chapter 8.40) also sets noise standards for different "noise zones" during different times of the day. Oil operations could probably meet even the strictest of these if certain equipment (electric motors) and soundproofing were employed. Thus, the problem may be one of monitoring and enforcement. The City's Municipal Code does not explain how the City is to know if its noise standards have been violated. Further work by the staff, in cooperation with the DOG and the oil industry, will be necessary to better understand the nature and extent of noise problems from oil operations and to develop further mitigation strategies, if necessary. 12. Improve aesthetics and landscaping--There are virtually no provisions in the oil code regarding the appearance of oil facilities. Both Long Beach and Santa Fe Springs have such requirements in their codes. Santa Fe Springs requires all oil parcels fronting on a public street to be landscaped in a way prescribed by the city manager. The city (Santa Fe Springs) can also require screening material like wooden slats in chainlink fencing to improve the compatibility of oil parcels with surrounding land uses. The Long Beach code is particularly strict. All new wells in any non-industrial area must be surrounded by a wood and masonry wall. The site must conform to setback requirements and the . setback area must be landscaped with at least one 15-gallon tree, three shrubs per 100 square feet, and adequate ground cover.. An automatic sprinkler system must be installed on the landscaped area. Existing well sites in the Long Beach coastal-zone must also conform to these standards by January 1981. This last regulation was included in recognition of the special value of coastal visual resources. Huntington Beach will probably want to adopt some regulations and guidelines for improving the appearance of oil sites, especially in the coastal zone. Again, the staff is currently working with the State and with the oil companies to find options which would lead to'the improved appearance of these operations in ways that are economically acceptable to the companies. 13. Encouraging consolidation and providing future access to underground zones—The oil zones under the Townlot have not yet been "water flooded" and consequently reserves in this area are probably very significant. Extraction of these reserves in ways that do not impact nearby uses is a particularly difficult problem. Consolidation of oil operations into a few "islands" and unitization of the operations of several companies into a joint effort would probably lead to the most efficient extraction with the least adverse impacts. This kind of arrangement must be initiated by the private sector. However, the City can take steps which would accommodate such a project and which encourage consolidation of-facilities. Again, more work on this problem needs to be done. % r OIL CODE REVIEW Page 6 14. Reviewing rates -The City charges the o.il companies for inspection permits, drilling permits and sewer hook-ups. The City should investigate whether these fees are adequate to cover costs and if they are competitive with those of other jurisdictions. The City also charges a tax on the oil extracted here and receives revenues from "franchises" on pipelines running over public lands. Again, the City should evaluate its current rates to ensure they are competitive. Potential Benefits to the City from the Oil Code Review In summary, the review and up-dating of the Oil Code should result in several benefits to the City of Huntington Beach: I. Assurance that projects involving new technologies are reviewed and evaluated so that public health, safety and welfare are adequately protected. 2. Assurance that impacts associated with oil operations are mitigated to the maximum extent practicable; potential issue areas include noise reduction, oil spill protection and safe abandonment practices. 3. Improved appearance of some oil operations.. This will make.the.City a more pleasant place in which to live and recreate. Also, if the coastal zone and beaches.are more attractive, the tourist-related sector of the local economy. may be enhanced. 4. Streamlining City involvement in oil regulation.by eliminating or reducing parts of the code where the State preempts the City or is simply more strict than the City. 5. Simplifying the permit process by clarifying which departments are charged with different aspects of oil regulation. 6. Encouraging consolidation and unitization while accommodating future oil recovery projects. These practices reduce adverse impacts from oil operations while increasing oil production. The results are lower costs to the City and more revenues generated from the increased production. 7. Assurance that current .fees and taxes are competitive with other jurisdictions. 8. Helping.to bring land use control in the coastal zone back to the City by expediting timely completion of the LCP. The staff is continuing work on this project. After further work with the State and the oil companies, and with the advice and assistance of the oil committee,.the staff will prepare recommended improvements to the Oil Code for consideration by the Council. As noted above, these are tentatively expected in the fall. During the project the staff will periodically report to the Council on the progress of the review. JP:MM:de • I i i I i • i I j ! 5.0 The City's Role in Promoting. Geothermal Use The City is in a position to encourage perceived. In particular, government development of oil-related hot water participation can address and diminish resources here and should do so 'through uncertainties about- the nature of the cooperation with private sector developers, resource, capital- availability, technical formulation of favorable policy, and expertise and regulatory disincentives. perhaps financial involvement in the initiation of projects or feasibility studies. The general public has little knowledge of The community can benefit from possible direct-use applications, and the geothermal development in a number of attendant problems are often greatly j ways, and from a greater-than-local exaggerated: The City can work to inform perspective, the conservation of the community about the nature of the hot non-renewable resources (i.e. oil and water resource here, and the benefits that natural gas) represents an important could be accrued from its use. benefit to the greater public. City support for geothermal development is critical, Geothermal projects will not be seriously particularly for initial "demonstration" considered until they are shown to be projects that could set the stage for feasible from both an engineering and additional geothermal development. economic standpoint. The City is presently receiving funding for these types of 5.1 Public/Private Partnership analyses from the Geothermal Development Grant Program administered An effective public/private partnership can by the California Energy Commission. truly be a major factor in achieving Additional. grants. from. this or other successful project implementation: An agencies could enable the City to continue intensive, cooperative effort between its efforts at examining potential projects business and government can mitigate in Huntington Beach and demonstrating many impediments and disincentives to engineering and economic viability to geothermal use, both actual and private sector developers. 33