The Tidelands Trust is a restricted fund which is limited by the state to spending according to our 1919 land grant for navigation, harbors and fisheries. Our city attorney provided his opinion that we could also spend to keep pollution from getting into the ocean.
This is such a big deal because the vast majority of the oil in Redondo Beach was found in the tidelands under the ocean, and geologists expect the same to be true in Hermosa Beach.
So with most of the oil under the water, it helps to understand that all the oil dollars are split 81.3 percent to E&B, 3.33 percent to Macpherson Oil and only 3.66 percent to the city. The remainder is tidelands dollars, 11.7 percent and obligated to the restricted Tidelands Trust.
Seven to 22 percent of the oil may be under the land. The uplands revenue is unrestricted and is split the same as the tidelands but instead of the Tidelands Trust deposit, the city also receives a small amount of royalty dollars ($0.60 per barrel) from under the city-owned land in the southwest fifth of the city.
The Hermosa project is for the same number of wells and over the same period of time as the Redondo oilfield on our border. If Hermosa equals Redondo production, Hermosa would put $23.3 million into the unrestricted general fund. At this rate, the city loses $24.2 million because the city must pay for the known expenses of $46.5 million in lost rents and financed costs to move the existing city yard. For the city to break-even, it would take two to three times the Redondo volume depending on the location of the oil.
WHAT CAN WE DO IN HERMOSA BEACH?
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