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Home My WebLink About10/14/14 From: F.O. Huebscher [mailto:fred@politicalscientists.com] Sent: Monday, October 13, 2014 11:02 AM To: Nanette Barragan; Peter Tucker; Carolyn Petty; Hany Fangary; Michael DiVirgilio; Ann Yang; Elaine Doerfling Subject: For written communication for October 14, 2014 council meeting I thought I was having an aural hallucination when I heard Hermosa Beach Councilmember Carolyn Petty publicly give advice to E&B Oil about how E&B could prevail in the March 2015 election. At the September 30 city council meeting, during the discussion about E&B’s development agreement, Ms. Petty interjected on several occasions saying something like “if you want to persuade voters to vote for your oil drilling project, then make this change.” If Ms. Petty doesn’t support the E&B Oil Project, then why is she publicly giving advice about how E&B can win the election? Bravo Ms. Petty for finally taking a stand on the E&B Oil Drilling Project! At least you have the guts to take a stand unlike two of your other colleagues. Fred Huebscher Hermosa Beach October 11, 2014 Dear Hermosa City Ofﬁcials, On Saturday morning, October 11th at 12:30 am my two children ages 22 and 21 years of age, and their ﬁve friends ranging in ages 23 to 25 years old, were leaving the Pier in Hermosa Beach after a night of fun at Waterman’s on the Pier. They were walking down the Strand toward 10th St., to pick up a ride from Uber. As they were walking toward the Uber pick up area, where they had been dropped off earlier that evening, they were approached by a girl on a bicycle who had lost her purse. She appeared to be highly intoxicated. The kids described her to around 24 years old. The girl on the bike started giving my daughter’s girlfriend a hard time by calling her names, and hassling her for no apparent reason. As the girl on the bike came closer, to my daughter’s friend, one of the boys put his hand out to stop her from getting any closer. Within seconds, twenty boys came out from behind the alley around 10th st and proceeded to punch, kick and jump on the boys with my daughter. They came from behind my son, put him in a headlock, threw him to the ground and proceeded to kick him. My daughter and one of the other girls called 911 and stayed on the phone with the police until they arrived. There were four to ﬁve guys on each of the boys with my daughter, including my son. Most of the boys suffered bruises and lacerations, some of which required stitches, however, one of the boys was taken to Harbor-UCLA Medical Center for emergency surgery for his teeth. Seven of these kids live in Redondo Beach and Palos Verdes. My daughter lives in Berkeley, where she recently graduated from, but was home visiting family and friends to celebrate her 23rd birthday. Six of these kids have graduated college and are working professionals, while two are in their ﬁnal year of college. As a thirteen year resident of PV and a four year resident of Redondo, I am appalled and disgusted to discover, after this macabre event, that Hermosa Beach has had a problem with “punk gangs” for the past several years. I myself, my kids and their friends, were not aware that this situation existed or remotely existed. When the police arrived, they were less than surprised. They told the father of one of the kids that “this stuff happens all the time down here”, and were unfazed by the gravity and severity of what happened. Since my children and their friends have only been of legal drinking age for under four years, they have not had the experience and lacked the knowledge that this type of behavior existed so close to their homes. They were out for a night of fun, left the Pier with complete responsibility and common sense, by getting a ride home from Uber, so they did not have to drive back to their perspective homes, under the inﬂuence of alcohol. These are good, fun spirited kids, out on a Friday night doing what kids their age like to do. To be violently attacked by a young woman and twenty men for absolutely no reason whatsoever, is perplexing to say the least and appalling at best. The fact that the police described the perpetrators as “South Bay kids with attitude”, made my my jaw drop. After living in the South Bay for seventeen years, raising three children and around hundreds of other children, I have never seen outwardly aggressive, violent nor hostile behavior. The fact that the Hermosa Beach Police Dept. is well aware that this behavior exits around the Pier, as well as the business owners, and have done nothing to protect the innocent, and the community at large from these random acts of violence, is shocking and extremely disturbing to me. The girl on the bike came back to the crime scene when the police were there, looking for her lost purse. She denied her involvement, but all eight kids identiﬁed her as the antagonist and perpetrator. She was arrested and taken into custody; after which was discovered she was currently on probation. One of the other “thugs” dropped his wallet while attacking my son. The police were able to get his name and information. The kids have pressed charges on the two above mentioned. In closing, I am asking and demanding the Residents, business owners and police department to seriously address this problem before someone else’s child is attacked, or worse yet, stabbed or killed. For the record, my kids as well as their friends, will never be going out for a “night out” in Hermosa Beach, for they now fear their own safety. The revenue the bars will lose from my kids not spending their money there may only be “pocket change” for the business owners, however the severity and enormity of this problem will forever exist until this community stands up for what is right. I promise I will be relentless in following through the proper channels to see that this serious issue of public safety is addressed. Several of us parents will be in attendance Tuesday night, October 14th at the Hermosa Beach City Council meeting to voice our concerns. Respectfully, Alisa Stein 09/17/2014 Check Register CITY OF HERMOSA BEACH 1 8:50:37AM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75174 9/17/2014 06233 LA CO DEPT OF HEALTH SERV 04887 Paramedic Lic Reaccreditation/ Osekowsky 001-2201-4315 87.00 Total : 87.00 Bank total : 87.00 1 Vouchers for bank code :boa 87.00Total vouchers :Vouchers in this report 1 "I hereby certify that the demands or claims covered by the checks listed on pages 1 to 1 inclusive, of the check register for 9/17/14 are accurate funds are available for payment, and are in conformance to the budget." . . . By ______________________________________________ Finance Director . . Date: October 7, 2014 1Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 1 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75175 9/18/2014 00321 A T AND T 248 134-9454 462 8 Circuit Billing - Sep 14 001-2101-4304 26.85 Total : 26.85 75176 9/18/2014 00138 ADAMSON INDUSTRIES INV149930 Academy Supplies/ M Franco 001-2101-4317 200.61 INV150107 Academy Supplies/ A Taylor 001-2101-4314 399.39 Total : 600.00 75177 9/18/2014 11437 ADMINISTRATIVE SERVICES CO OP 319359 TAXI VOUCHER PROGRAM - JUL 14 145-3404-4201 5,694.93 Total : 5,694.93 75178 9/18/2014 06290 AIR SOURCE INDUSTRIES INC 00626786 Oxygen Refill/ Aug 14 001-2201-4309 396.60 Total : 396.60 75179 9/18/2014 13361 AT AND T MOBILITY 287016141723 Cell Phone Usage - PW/ Jul 14 001-4202-4304 233.09 Total : 233.09 75180 9/18/2014 15141 BAYSIDE MEDICAL CENTER 4749 Blood Alcohol Draws/ # 14-2703, 14-2744 001-2101-4201 127.20 Total : 127.20 75181 9/18/2014 06409 BLUE DIAMOND MATERIALS 250583 RI Asphalt/ Apr 14 001-2024 279.19 253823 RI Asphalt/ Apr 14 001-2024 389.41 Total : 668.60 75182 9/18/2014 09614 BROMBERG, GEORGE 90514 300'/500' Noticing-Plan Comm Mtg/ Sep 14 001-4101-4201 2,497.00 Total : 2,497.00 75183 9/18/2014 17424 BROWNELLS INC 10177830-00 Range Equipment/ Jun 14 1Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 2 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75183 9/18/2014 (Continued)17424 BROWNELLS INC 001-2024 109.61 10177830-01 Range Equipment/ Jun 14 001-2024 299.99 Total : 409.60 75184 9/18/2014 09632 CDWG NX57510 40" LED TV - Chief's Office 001-2101-4305 512.20 NZ26693 Toners/ Aug 14 715-1206-4305 464.94 NZ40217 Toners/ Aug 14 715-1206-4305 703.34 PB57470 Toners/ Aug 14 715-1206-4305 214.62 Total : 1,895.10 75185 9/18/2014 17777 CHITTENDEN, DAVID 258618 Gym Security Deposit Refund 001-2111 100.00 Total : 100.00 75186 9/18/2014 00480 CPCA, CA POLICE CHIEFS ASSOC 04916 Regis/ Women in Law Enforce-3 Attendees 001-2101-4317 615.00 Total : 615.00 75187 9/18/2014 08855 D AND D SERVICES INC 52766 Dead Animal Disposal/ Jul 14 001-3302-4201 319.00 Total : 319.00 75188 9/18/2014 11355 DE LOS SANTOS, JIMMY 04854 Travel Expense Reimb/ Ground Survival 001-2201-4317 144.83 Total : 144.83 75189 9/18/2014 00122 DUNCAN PARKING TECHNOLOGIES DPT019165 AutoTrax Wireless Mgmt/ Aug 14 001-3302-4201 47.00 001-3305-4201 188.00 001-3304-4201 423.00 2Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 3 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75189 9/18/2014 (Continued)00122 DUNCAN PARKING TECHNOLOGIES DPT019184 Liberty AutoTrax Wireless Mgmt/ Aug 14 001-3302-4201 1,105.00 DPT019223 Wireless Service - Handhelds/ Aug 14 001-3302-4201 680.00 Total : 2,443.00 75190 9/18/2014 01962 FEDERAL EXPRESS CORP 2-619-38585 Express Mail - PW/ Apr 14 001-2024 25.96 2-685-16041 Express Mail - Parking/ Jun 14 001-2024 3.21 Total : 29.17 75191 9/18/2014 01320 GALLS LONG BEACH UNIFORM CO BC0097221 Academy Uniforms & Equip/ M Franco 001-2101-4314 455.83 BC0097222 Uniforms & Equip/ R Taylor 001-2101-4314 785.39 Total : 1,241.22 75192 9/18/2014 13330 HAJOCA CORP S144114143-001 Galvanized Pipe/ Aug 14 001-3104-4309 235.09 S144134136-001 Galvanized Pipe/ Aug 14 001-3104-4309 235.09 S144185006-001 Plumbing Supplies/ Aug 14 001-4204-4309 451.04 Total : 921.22 75193 9/18/2014 03131 HDL COREN AND CONE 0020578-IN Property Tax Audit Services/ 1st Quarter 001-1202-4201 1,375.00 Total : 1,375.00 75194 9/18/2014 07547 HINDERLITER DE LLAMAS AND ASSC 0022649-IN Sales Tax Audit Services/ 1st Quarter 001-1202-4201 900.00 0022649-INa Audit Services - Sales Tax 001-1202-4201 498.60 Total : 1,398.60 3Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 4 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75195 9/18/2014 10089 IAFC MEMBERSHIP 90638 Membership/ D Lantzer 001-2201-4315 304.00 Total : 304.00 75196 9/18/2014 00204 IDENTI-KIT COMPANY, INC.104594 Annual License Agreement 001-2101-4201 490.50 Total : 490.50 75197 9/18/2014 00372 INDEPENDENT CITIES ASSOCIATION 04917 Regis/N Barragan-ICA Installation Dinner 001-1101-4317 40.00 Total : 40.00 75198 9/18/2014 16742 INDEPENDENT STATIONERS IN-000449457 Jail & Office Supplies/ Aug 14 001-2101-4305 9.89 001-2101-4306 75.10 IN-000449574 Office Supplies/ Aug 14 001-1101-4305 53.39 Total : 138.38 75199 9/18/2014 17441 INTELLIBRIDGE PARTNERS LLC 200488 Temp Services/ Aug 14 001-1202-4201 6,490.00 Total : 6,490.00 75200 9/18/2014 15574 LANDPORT SYSTEMS INC 2014-8113 Service Request System Support/ Sep 14 715-1206-4201 195.00 Total : 195.00 75201 9/18/2014 15442 LANTZER, DAVE 04864 Parking Exp Reimb/ League Conf 001-2201-4317 45.00 Total : 45.00 75202 9/18/2014 18735 MAC DONALD, BRIAN 258603 - 604 Gym Security Deposit Refund 001-2111 200.00 Total : 200.00 75203 9/18/2014 18122 MARINE RESEARCH SPECIALISTS 514-2014-14 EIR Serv - Oil Project/ Jul 14 001-2109 30,503.39 4Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 5 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 30,503.39 75203 9/18/2014 18122 MARINE RESEARCH SPECIALISTS 75204 9/18/2014 15912 MARTIN CHEVROLET 696712 Auto Parts Purchased/ Jun 14 715-2024 58.74 CM695297 Auto Parts Returned/ May 14 715-2024 -32.70 Total : 26.04 75205 9/18/2014 10681 MAYNOR, DONALD H.DHM6495 Legal Services - UUT Audits/ 4th Quarter 001-2024 1,250.00 Total : 1,250.00 75206 9/18/2014 10324 MUNI SERVICES COMPANY 33996 UUT Audit/ 4th Quarter 001-2024 1,250.00 Total : 1,250.00 75207 9/18/2014 13114 OFFICE DEPOT 725751125001 Office Supplies/ Aug 14 001-1202-4305 79.13 726741848001 Office Supplies/ Aug 14 001-1121-4305 16.55 726742453001 Office Supplies/ Aug 14 001-1121-4305 59.45 726863761001 Office Supplies/ Aug 14 001-4601-4305 78.26 Total : 233.39 75208 9/18/2014 18580 OGS TECHNOLOGIES INC 190746 Class A Uniform Buttons - PD 001-2101-4314 115.22 Total : 115.22 75209 9/18/2014 00608 PEP BOYS 08141024399 Auto Parts Purchased/ Jul 14 715-2101-4311 21.78 08141024400 Auto Parts Purchased/ Jul 14 715-4202-4311 32.69 08141024464 Auto Parts Returned/ Jul 14 715-2101-4311 -21.78 5Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 6 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75209 9/18/2014 (Continued)00608 PEP BOYS 08141024465 Auto Parts Purchased/ Jul 14 715-3104-4311 15.24 08141024549 Auto Parts Purchased/ Aug 14 715-4202-4311 32.69 08141024962 Auto Parts Purchased/ Aug 14 715-3302-4311 37.57 08141025050 Auto Parts Purchased/ Aug 14 715-2201-4311 7.17 Total : 125.36 75210 9/18/2014 11574 PHILLIPS, LANDON TR 358 Per Diem/ Training Managers Workshop 001-2101-4312 84.00 Total : 84.00 75211 9/18/2014 13838 PITNEY BOWES INC 49096100 Postage 001-1208-4305 2,037.03 Total : 2,037.03 75212 9/18/2014 11539 PROSUM TECHNOLOGY SERVICES 148275 IT Support Service/ Aug 14 715-1206-4201 12,659.00 Total : 12,659.00 75213 9/18/2014 17676 PRUDENTIAL OVERALL SUPPLY 40818001 Mat & Shop Towel Rentals/ Jul 14 001-2201-4309 27.18 40818002 Mat Rentals/ Jul 14 001-4204-4309 46.28 40818003 Mat Rentals/ Jul 14 001-3302-4309 26.78 40818004 Mat Rentals/ Jul 14 001-4204-4309 33.68 40818005 Shop Towel Rentals/ Jul 14 715-4206-4309 19.68 40818006 Uniforms/ Jul 14 001-4202-4314 40.06 40818007 Mat Rentals/ Jul 14 001-2101-4309 33.08 6Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 7 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75213 9/18/2014 (Continued)17676 PRUDENTIAL OVERALL SUPPLY 40818008 Mats & Shop Towel Rentals/ Jul 14 001-3104-4309 24.18 40820320 Uniforms/ Aug 14 001-4202-4314 41.39 40822673 Mat & Shop Towel Rentals/ Aug 14 001-2201-4309 27.18 40822674 Mat Rentals/ Aug 14 001-4204-4309 46.28 40822675 Mat Rentals/ Aug 14 001-3302-4309 26.78 40822676 Mat Rental/ Aug 14 001-4204-4309 33.68 40822677 Shop Towel Rentals/ Aug 14 715-4206-4309 19.68 40822678 Uniforms/ Aug 14 001-4202-4314 40.06 40822679 Mat Rental/ Aug 14 001-2101-4309 33.08 40822680 Mat & Shop Towel Rentals/ Aug 14 001-3104-4309 24.18 40824992 Uniforms/ Aug 14 001-4202-4314 40.06 Total : 583.29 75214 9/18/2014 13255 REDMOND, GEORGE DAVID 31387 Locksmith Services/ Jun 14 001-2024 145.00 31498 Bathroom Signage - Pier Restrooms 001-4204-4309 331.09 31571 Locksmith Services/ Aug 14 001-4204-4309 190.00 31599 Locksmith Service/ Jul 14 001-4204-4309 497.23 31685 Locksmith Service/ Jul 14 001-4204-4309 77.50 7Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 8 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 1,240.82 75214 9/18/2014 13255 REDMOND, GEORGE DAVID 75215 9/18/2014 14934 ROBERTSON, KEN 04873 Meeting Exp Reimb/ General Plan Aug 14 001-4104-4305 142.25 Total : 142.25 75216 9/18/2014 03726 RUSHER AIR CONDITIONING 204111 AC Maint - City Hall/ Jun 14 001-2024 390.00 Total : 390.00 75217 9/18/2014 16425 SAFEWAY INC VONS 805110-062414-2110 PARK Program Supplies/ Jun 14 001-2024 17.42 Total : 17.42 75218 9/18/2014 03353 SBCU VISA 04614 CC Training Software License Renewal 001-2201-4315 90.00 04670 CC HDMI Cables/ Chief's Office TV 001-2101-4305 76.28 1030385942 CC EPCR System Printers 001-2201-5405 517.98 17887442 CC National Night Out Postcards/ Credit 001-2101-4201 -93.66 2745761MC45 CC Publications/ FLSA 14 001-2201-4317 56.63 2825673-1 CC First Aid Kit 001-3302-4305 55.99 7042648 CC Publications/ Leadership on the Line 001-2201-4317 115.85 8100426569 CC EPCR Chargers 001-2201-5405 163.44 P18918 CC Paramedic License Renewal/ G Dale 001-2201-4315 250.00 TR 377 CC Regis/S Papa - IACP Conf 001-2101-4317 350.00 TR 380 CC Lodging/L Phillips-Supervisory Institute 001-2101-4312 2,627.33 8Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 9 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75218 9/18/2014 (Continued)03353 SBCU VISA W291214540 CC Freezer - Base 3 Returned 001-3302-4305 -813.25 Total : 3,396.59 75219 9/18/2014 07228 SHAAL, ROBERT 04866 2013 Assessment Tax Rebate 105-3105 24.61 Total : 24.61 75220 9/18/2014 10960 SOUTH BAY AUTO UPHOLSTERY 2371 Seat Repairs/ A12 715-2024 139.50 Total : 139.50 75221 9/18/2014 10532 SOUTH BAY FORD 426460 Auto Parts Purchase - Aug 14 715-6101-4311 116.63 42659 Auto Parts Purchase - Jul 14 715-2101-4311 32.64 FXCS881668 Replacement Key & Programming/ HB11 715-2101-4311 177.69 FXCS881701 Replacement Key and Programming/ HB12 715-2101-4311 177.69 FXCS881741 Replacement Key & Programming/ HB10 715-2101-4311 177.69 Total : 682.34 75222 9/18/2014 10098 SPRINT NEXTEL COMMUNICATIONS 269424317-153 Wireless Modems - PD/ Aug 14 153-2106-4201 420.00 397572146-097 Cell Phone Usage - CD/ Aug 14 001-4201-4304 95.67 551834312-153 Cell Phone Usage - CR/ Aug 14 001-4601-4304 86.76 Total : 602.43 75223 9/18/2014 17795 SURF CITY THEATRE COMPANY 258600 Theatre Security Deposit Refund 001-2111 210.00 Total : 210.00 9Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 10 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75224 9/18/2014 18456 SURFSIDE RESTORATION AND WATER 3697R Parking Structure Repairs/Retention 001-8663-4201 1,709.00 3699R Parking Structure Repairs/Retention 001-8663-4201 253.50 3704R Parking Structure Repairs/Retention 001-8663-4201 342.73 3706R Parking Structure Repairs/Retention 001-8663-4201 708.50 Total : 3,013.73 75225 9/18/2014 08207 UNDERGROUND SERVICE ALERT 820140313 Underground Service Alert/ Aug 14 160-3102-4201 52.50 Total : 52.50 75226 9/18/2014 14148 UPS 000023R146364 Express Mail - PD/ Sep 14 001-2101-4305 37.17 Total : 37.17 75227 9/18/2014 00015 VERIZON CALIFORNIA 310 372-6186 890831 Phone Charges/ Aug 14 001-1101-4304 7.22 001-1121-4304 7.22 001-1141-4304 7.22 001-1201-4304 7.22 001-1202-4304 7.22 001-1204-4304 7.21 001-1208-4304 7.22 Total : 50.53 75228 9/18/2014 18738 WEST COAST BEACH TENNIS 04875 Instructor Pymt/ Beach Tennis Tourney 001-4601-4221 420.00 Total : 420.00 75229 9/18/2014 18740 WOOLDRIDGE, ALAN 04039 2013 Assessment Tax Rebate 105-3105 24.61 Total : 24.61 75230 9/18/2014 17569 ZGRAY SPORTS LLC 04810 Instructor Pymt/ # 19971 10Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 11 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75230 9/18/2014 (Continued)17569 ZGRAY SPORTS LLC 001-4601-4221 455.00 Total : 455.00 75231 9/18/2014 10505 ZOLL MEDICAL CORP 90013042 Extended Warranty - ECG Monitors 001-2201-4201 6,151.00 Total : 6,151.00 149856 9/18/2014 14691 ADMINSURE AS AGENT FOR THE 09152014 Liability Claims Reimb - Aug'14 705-1209-4324 24,898.92 Total : 24,898.92 1490705 9/18/2014 14008 YORK SCRMA 09152014 W/Comp Claims - 9/12/14 705-1217-4324 14,808.08 Total : 14,808.08 9182014 9/18/2014 00243 HERMOSA BEACH PAYROLL ACCOUNT 09182014 PAYROLL 9/1/2014 TO 9/15/2014 160-1103 4,571.73 705-1103 2,855.72 715-1103 4,197.18 001-1103 486,057.38 105-1103 3,491.12 115-1103 742.73 117-1103 1,845.07 145-1103 87.89 147-1103 742.72 152-1103 109.75 Total : 504,701.29 Bank total : 639,364.40 60 Vouchers for bank code :boa 639,364.40Total vouchers :Vouchers in this report 60 11Page: 09/18/2014 Check Register CITY OF HERMOSA BEACH 12 5:47:40PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount "I hereby certify that the demands or claims covered by the checks listed on pages 1 to 12 inclusive, of the check register for 9/18/14 are accurate funds are available for payment, and are in conformance to the budget." . . . By ______________________________________________ Finance Director . . Date : October 7, 2014 12Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 1 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 56096 9/24/2014 00170 SOUTHERN CALIFORNIA GAS CO 09790459003 Gas Bill/ Aug 14 001-4204-4303 93.12 Total : 93.12 56241 9/24/2014 00170 SOUTHERN CALIFORNIA GAS CO 10210459003 Gas Bill/ Aug 14 001-4204-4303 37.14 Total : 37.14 56745 9/24/2014 00170 SOUTHERN CALIFORNIA GAS CO 11540469001 Gas Bill/ Aug 14 001-4204-4303 29.02 Total : 29.02 57609 9/24/2014 00170 SOUTHERN CALIFORNIA GAS CO 13910446007 Gas Bill/ Aug 14 001-4204-4303 18.83 Total : 18.83 57700 9/24/2014 00170 SOUTHERN CALIFORNIA GAS CO 14120446001 Gas Bill/ Aug 14 001-4204-4303 15.78 Total : 15.78 75232 9/25/2014 04715 ADMINSURE 7032 LIABILITY & AUTO CLAIMS ADMIN/ JUL 14 705-1209-4201 1,300.00 7092 LIABILITY & AUTO CLAIMS ADMIN/ AUG 14 705-1209-4201 1,300.00 7146 LIABILITY & AUTO CLAIMS ADMIN/ SEP 14 705-1209-4201 1,300.00 7202 LIABILITY & AUTO CLAIMS ADMIN/ OCT 14 705-1209-4201 1,300.00 7202a Workers Comp Claims Admin/ Oct 14 705-1217-4201 5,795.00 Total : 10,995.00 75233 9/25/2014 08741 ANGULO, ANSELMO 2014/9 POLYGRAPH/ AUG 14 001-2101-4201 150.00 Total : 150.00 1Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 2 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75234 9/25/2014 05179 AT AND T 0193608382001 Long Dist Charges/ Jul 14 001-2101-4304 13.01 Total : 13.01 75235 9/25/2014 16510 AT AND T 5574389 Long Dist Charges/ Jun 14 001-1121-4304 0.04 001-1132-4304 0.05 001-1141-4304 0.13 001-1201-4304 0.54 001-1202-4304 0.26 001-1203-4304 0.18 001-1208-4304 0.04 001-2101-4304 3.34 001-2201-4304 0.78 001-4101-4304 0.19 001-4201-4304 0.91 001-4202-4304 0.68 001-4601-4304 0.31 001-1204-4304 0.64 001-3302-4304 0.12 715-1206-4304 0.07 001-4204-4321 0.09 2Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 3 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75235 9/25/2014 (Continued)16510 AT AND T 5663270 Long Dist Charges/ Jul 14 715-1206-4304 0.07 001-1121-4304 0.04 001-1132-4304 0.03 001-1141-4304 0.03 001-1201-4304 0.54 001-1202-4304 0.27 001-1203-4304 0.21 001-1208-4304 0.04 001-2101-4304 2.49 001-2201-4304 0.69 001-4101-4304 0.19 001-4201-4304 0.86 001-4202-4304 0.76 001-4204-4321 0.09 001-4601-4304 0.31 001-1204-4304 0.67 001-3302-4304 0.12 Total : 15.78 75236 9/25/2014 13361 AT AND T MOBILITY 287247228942 Cell Phone Usage - Aug 14 001-2101-4304 590.83 001-3302-4304 304.20 Total : 895.03 75237 9/25/2014 16660 ATHENS SERVICES HB4040180614-3 Extra Steam Cleaning&Porter Ser/ Jul 14 001-3301-4201 2,507.71 HB4040180714-1 CITYWIDE SWEEPING & CLEANING/ JUL 14 001-3104-4201 12,024.23 001-3301-4201 5,924.01 001-3304-4201 1,247.83 001-6101-4201 1,330.49 3Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 4 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75237 9/25/2014 (Continued)16660 ATHENS SERVICES HB4040180714-2 CITYWIDE SWEEPING & CLEANING/ JUL 14 001-3104-4201 2,692.96 001-3301-4201 5,040.83 001-3304-4201 190.00 001-6101-4201 190.26 Total : 31,148.32 75238 9/25/2014 16413 B AND H FOTO ELECTRONICS CORP 87181005 3 HP Envy 120 all in one 001-2201-5405 674.67 Total : 674.67 75239 9/25/2014 16992 BRANDMAN UNIVERSITY 04901 Grad conferral fee - Jimmy De Los Santos 001-2201-4317 100.00 Total : 100.00 75240 9/25/2014 18645 BRENDLE GROUP 2250 Econ Analysis & Assess Aug 14 001-1201-4201 4,227.50 Total : 4,227.50 75241 9/25/2014 10612 CALIF. FIRE CHIEFS ASSOC.TR 368 Regis/ D Lantzer - CFCA Annual Conf 001-2201-4317 200.00 TR 369 Regis/ J Crawford - CFCA Annual Conf 001-2201-4317 200.00 TR 370 Regis/ M Garofano - CFCA Annual Conf 001-2201-4317 200.00 TR 371 Regis/ B Grebbien - CFCA Annual Conf 001-2201-4317 200.00 Total : 800.00 75242 9/25/2014 10838 CANON BUSINESS SOLUTIONS, INC 4013528715 Copier Maintenance - GA/ 4-10 to 7-9-14 715-2024 1,722.65 Total : 1,722.65 75243 9/25/2014 09632 CDWG PD51449 Ink Toner 715-1206-4305 716.31 4Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 5 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75243 9/25/2014 (Continued)09632 CDWG PL76392 5 HP Color Printers 715-3302-5402 1,128.15 715-2101-5402 752.10 Total : 2,596.56 75244 9/25/2014 16167 CIVIL SOURCE INC 1017-0403-6 Temp Staffing Serv Aug 14 001-4202-4201 10,057.00 Total : 10,057.00 75245 9/25/2014 18253 COASTWALK, INC 184 CCTA Membership dues 14-15 001-4101-4315 500.00 Total : 500.00 75246 9/25/2014 18070 COME LAND MAINTENANCE CO INC 79503 JANITORIAL SERVICES/ JUL 14 001-4204-4201 8,385.00 79661 JANITORIAL SERVICES/ AUG 14 001-4204-4201 8,385.00 Total : 16,770.00 75247 9/25/2014 12279 CONSOLIDATED DISPOSAL SERVICES 04911 Refuse Lien Collections - FY 001-2024 23,992.00 Total : 23,992.00 75248 9/25/2014 00022 COPY SHOP, THE 40168 Business cards 001-2201-4305 495.95 Total : 495.95 75249 9/25/2014 02823 CRAWFORD, JAMES TR 369 Per Diem/ CFCA Conf 001-2201-4317 50.00 Total : 50.00 75250 9/25/2014 18401 CRYSTAL LIGHTING CORP 10008 4 wall pack security lights- So Park 105-2601-4309 640.00 Total : 640.00 75251 9/25/2014 18641 CTR PRIORITY BASED BUDGETING FH 0914.5 Fiscal health diagnostic tool 5Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 6 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75251 9/25/2014 (Continued)18641 CTR PRIORITY BASED BUDGETING 001-1202-4201 6,000.00 001-2024 1,500.00 Total : 7,500.00 75252 9/25/2014 16332 ECMS INC 326147-00 Turnout Cleaning & Repairs 001-2201-4350 812.62 Total : 812.62 75253 9/25/2014 13075 ESRI 81711238 ArcGIS Server & Licenses 715-4201-4201 16,350.00 Total : 16,350.00 75254 9/25/2014 01962 FEDERAL EXPRESS CORP 2-779-53727 Express Mail - AUG 14 001-1203-4305 86.89 001-4202-4201 28.25 Total : 115.14 75255 9/25/2014 13353 FINISH MASTER 69202081 Sandpaper, Spray gun tools 715-3102-4311 37.62 Total : 37.62 75256 9/25/2014 06344 FIRST CALL STAFFING SERVICES 0709-144776 Temp Services/ 001-4601-4112 684.00 Total : 684.00 75257 9/25/2014 04685 FIRST CHOICE FIRE PROTECTION 52821 Annual Fire Extinguisher Service/ 001-4204-4309 1,494.96 Total : 1,494.96 75258 9/25/2014 15573 FONTIS SOLUTIONS INV199838 Notice of IIlegal Parking postcards 001-1204-4305 819.94 Total : 819.94 75259 9/25/2014 08652 GAROFANO, MICHAEL TR 370 Per Diem/ CFCA Conf 001-2201-4317 50.00 Total : 50.00 6Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 7 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75260 9/25/2014 11379 GREBBIEN, BRIAN TR 371 Per Diem/ CFCA Conf 001-2201-4317 50.00 Total : 50.00 75261 9/25/2014 00387 HANSON AGGREGATES INC 1490386 Washed concrete sand 001-3104-4309 705.60 Total : 705.60 75262 9/25/2014 13932 HB CHAMBER OF COMMERCE 9/9/14 Chamber Sept networking luncheon 001-1201-4317 15.00 Total : 15.00 75263 9/25/2014 05595 HORIZON COACH LINES 88582 Valley Park Day Camp Excursion Soak 145-3409-4201 1,549.80 88595 Excursion transportation Hollywood Bowl 145-3409-4201 774.90 Total : 2,324.70 75264 9/25/2014 16742 INDEPENDENT STATIONERS IN-000452043 Office Supplies/ SEP 14 001-2101-4305 90.22 IN-000453437 Office Supplies/ SEP 14 001-2101-4305 59.30 IN-000455184 Office Supplies/ SEP 14 001-2101-4305 89.43 IN-000457088 Office Supplies/ SEP 14 001-2101-4305 96.29 IN-000458366 Office Supplies/ SEP 14 001-2101-4305 97.00 Total : 432.24 75265 9/25/2014 18289 INDUSTRIAL SAFETY SUPPLY 1006877 10 gas mask adapters 001-2101-4350 376.13 Total : 376.13 75266 9/25/2014 02458 INGLEWOOD WHOLESALE ELECTRIC 246277-00 Electrical Supplies - 001-4204-4309 196.20 7Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 8 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 196.20 75266 9/25/2014 02458 INGLEWOOD WHOLESALE ELECTRIC 75267 9/25/2014 09139 IRON MOUNTAIN KRT1306 Off Site Storage/ Sep 14 001-1121-4201 9.43 Total : 9.43 75268 9/25/2014 10820 JENKINS AND HOGIN LLP 22727 Legal, RE: General/ Aug 14 001-1131-4201 16,862.34 22728 Legal, RE: E & B Oil/ Aug 14 001-2109 10,450.32 22729 Legal, RE: Land Use/ Aug 14 001-1131-4201 2,618.00 22730 Legal, RE: Prosecution Services/ Aug 14 001-1132-4201 27,584.00 Total : 57,514.66 75269 9/25/2014 01165 JOBS AVAILABLE 1419019 AD for Sr Acct Clerk 001-1203-4201 273.00 Total : 273.00 75270 9/25/2014 17780 KATHERINE SPITZ ASSOCIATES INC 14-3723 Consultant-PCH/Aviation Improve/ May 14 115-2024 846.40 146-2024 3,385.60 Total : 4,232.00 75271 9/25/2014 18137 KOSMONT COMPANIES 0012 Fiscal&Econom Assess-Oil Project/Jun 14 705-2024 15,592.50 0013 Fiscal&Econom Assess-Oil Project/Jul 14 705-4105-4201 17,625.00 Total : 33,217.50 75272 9/25/2014 10930 KOSSUTH, GABOR 04933 Assessment Tax Rebate 105-3105 24.61 Total : 24.61 75273 9/25/2014 06233 LA CO DEPT OF HEALTH SERV P 7579 Reaccreditation for Greg Dale 001-2201-4315 45.00 8Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 9 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 45.00 75273 9/25/2014 06233 LA CO DEPT OF HEALTH SERV 75274 9/25/2014 15574 LANDPORT SYSTEMS INC 2014-6905 Service Request System Support/ APR 14 715-1206-4201 195.00 2014-7630 Service Request System Support/ JUL 14 715-1206-4201 195.00 Total : 390.00 75275 9/25/2014 15442 LANTZER, DAVE TR 368 Per Diem/ CFCA Conf 001-2201-4317 100.00 Total : 100.00 75276 9/25/2014 18743 LOPEZ, AURELIO 04909 Training Exp Reimb/ Report Writing 001-2101-4317 1,549.31 Total : 1,549.31 75277 9/25/2014 07060 MARKS, AARON TR 373 Per Diem/ Motion Picture/TV Fire Safety 001-2201-4317 150.00 Total : 150.00 75278 9/25/2014 18071 MERCHANTS LANDSCAPE SERVICES 43262 LANDSCAPE SERVICES/ JUL 14 001-6101-4201 16,190.00 43263 LANDSCAPE SERVICES/ JUL 14 105-2601-4201 3,306.00 Total : 19,496.00 75279 9/25/2014 18437 MOORE IACOFANO GOLTSMAN INC 0037537 Design Ser - South Park, Phase 1/ Apr 14 121-8537-4201 5,672.50 0037810 Design Ser - South Park, Phase 1/ May 14 121-8537-4201 9,890.90 0038104 Design Ser - South Park, Phase 1/ Jun 14 121-8537-4201 5,179.99 0038306 Desing Ser - South Park, Phase 1/ Jul 14 121-8537-4201 22,024.49 Total : 42,767.88 75280 9/25/2014 13114 OFFICE DEPOT 727310355001 Office Supplies/ SEP 14 9Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 10 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75280 9/25/2014 (Continued)13114 OFFICE DEPOT 001-1121-4305 56.02 727391519001 Office Supplies/ AUG 14 001-2101-4306 468.66 728758435001 Office Supplies/ SEP 14 001-4601-4305 75.77 728758602001 Office Supplies/ SEP 14 001-4601-4305 10.79 Total : 611.24 75281 9/25/2014 00093 OLYMPIC AUTO CENTER 13296 Auto paint repair 715-2101-4311 139.90 13310 Auto Body Repair 2005 Ford Ambulance 715-2201-4311 756.04 Total : 895.94 75282 9/25/2014 14693 PARS PUBLIC AGENCY RETIREMENT, US BANK29675 PARS/ARS Admin - 6746022400/ 001-1101-4185 4.40 001-1202-4185 30.75 001-1204-4185 34.09 001-2201-4185 54.93 001-3302-4185 18.81 001-4101-4185 26.72 001-4201-4185 19.75 001-4601-4185 110.55 Total : 300.00 75283 9/25/2014 00608 PEP BOYS 08141024678 Latex Gloves 715-4206-4311 39.18 Total : 39.18 75284 9/25/2014 15103 PLUMBERS DEPOT INC PD-25641 Misc parts to repair 2 plumbling snakes 160-3102-4309 814.02 Total : 814.02 75285 9/25/2014 18747 PONDELLA II, DANIEL 04671 Refund Bus Lic #01134231 001-3115 101.00 10Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 11 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 101.00 75285 9/25/2014 18747 PONDELLA II, DANIEL 75286 9/25/2014 17676 PRUDENTIAL OVERALL SUPPLY 41015694 Uniform Shirt - PW 001-2024 39.20 41015695 Uniform Shirt - PW 001-2024 47.92 41015696 Uniform Shirt - PW 001-2024 39.20 41015697 Uniform Shirt - PW 001-2024 58.79 41015698 Uniform Shirt - PW 001-2024 58.79 Total : 243.90 75287 9/25/2014 18223 RAIMI AND ASSOCIATES INC 14-821 Gen & Coastal Plan Update/ May 14 150-2024 20,774.85 001-2024 3,860.00 14-840 Gen & Coastal Plan Update/ Jun 14 150-2024 13,171.92 001-2024 32.70 14-859LCP Gen & Coastal Plan Update/ Jun 14 150-2024 3,550.00 14-860LCP Gen & Coastal Plan Update/ May 14 150-2024 1,125.00 Total : 42,514.47 75288 9/25/2014 18530 RALPH ANDERSON ASSOCIATES 11545 PROFESSIONAL SERV - JULY 2014 001-1203-4251 8,500.00 Total : 8,500.00 75289 9/25/2014 13255 REDMOND, GEORGE DAVID 32204 Duplicate keys 715-4206-4311 6.54 Total : 6.54 75290 9/25/2014 15582 ROADLINE PRODUCTS INC 10951 Paint Truck Hoses 001-3104-4309 123.36 11Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 12 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 123.36 75290 9/25/2014 15582 ROADLINE PRODUCTS INC 75291 9/25/2014 14934 ROBERTSON, KEN 04944 Travel Reimbursement 001-2109 598.72 Total : 598.72 75292 9/25/2014 03726 RUSHER AIR CONDITIONING 204097 AC Maint - Comm Center/ Jun 14 001-2024 400.00 2045040 Service call for air conditioner 001-4204-4201 145.50 2045288 Service call for air conditioner 001-4204-4201 283.00 2045297 Service call - air conditioner 001-4204-4201 228.00 Total : 1,056.50 75293 9/25/2014 09870 RYDIN DECAL 299682 Parking Decals & Permits 001-1204-4305 1,389.69 Total : 1,389.69 75294 9/25/2014 16521 S AND S PORTABLE SERVICES RI309234 Equip Rental/ Portables - Summer Concert 001-3301-4201 523.20 RI314580 Equip Rental/ Portables - Summer Concert 001-3301-4201 1,046.40 Total : 1,569.60 75295 9/25/2014 03428 SAFETY KLEEN CORPORATION 64314116 30G Parts Washer 715-4206-4201 226.72 Total : 226.72 75296 9/25/2014 00839 SAXE CLIFFORD PH D, SUSAN 14-0909-1 Pre-employment Exam/ 001-2101-4201 450.00 Total : 450.00 75297 9/25/2014 03353 SBCU VISA 04912 CC Employment Ad/ Police Capt 001-1203-4201 210.00 12Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 13 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75297 9/25/2014 (Continued)03353 SBCU VISA 04967 CC Regis/ T Bakaly - Annual Conf Lunch 001-1201-4317 55.00 04968 CC Regis/ Annual Conf Lunch - H Fangary 001-1101-4317 55.00 04969 CC Regis/ Annual Conf Lunch - N Barragan 001-1101-4317 55.00 061372509 CC Office Chairs - 2nd Floor Conf Rm 001-1214-4322 1,843.74 084698 CC Custom Framing - City Map, Artwalk 001-1201-4305 738.59 08714 CC Credit/ Item Chrgd to City Card in Error 001-1203-4305 -9.83 10323 CC Subscription/ SCN Magazine 001-1201-4305 32.00 1049480 CC Encrypted Offsite Storage/ Aug 14 715-1206-4201 450.00 176078 CC Storage Box Labels 001-1202-4305 57.85 201172 CC Decision Making Tool Meeting 001-1201-4305 153.42 208937 CC Oral Board Lunch 001-1203-4201 107.00 211037 CC Employee Party Committee Thank you 001-1201-4305 119.19 47515710 CC Furniture - 2nd Floor Conf 715-1206-4201 602.44 773297 CC Study Session Refreshments 001-1101-4305 127.53 80114 CC Item Charged to City Card in Error 001-1203-4305 10.26 81114 CC All Hands Meeting Refreshments/ Aug 14 001-1203-4305 76.54 81314 CC Accountability Training Refreshments 001-1201-4201 36.44 13Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 14 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75297 9/25/2014 (Continued)03353 SBCU VISA 82014 CC CM Meeting with MB City Mrg 001-1201-4305 36.08 82414 CC Office Chairs - 2nd Floor Kitchen/Break 715-1206-5401 518.84 001-1121-4305 129.71 8514 CC Oral Board Refreshments/ Aug 14 001-1203-4201 18.67 8714 CC Oral Board Refreshments/ Aug 14 001-1203-4201 6.99 8833802 CC Glass Board/ 2nd Floor Conf Room 715-1206-5401 653.88 IC30411-0714 CC Teleconferencing Ser/E&B Oil - Jul 14 001-2109 31.14 Total : 6,115.48 75298 9/25/2014 18749 SIGN SPECIALISTS CORPORATION 04674 Refund Bus Lic #01134324 001-3115 286.00 001-6851 1.00 Total : 287.00 75299 9/25/2014 13761 SOURCE GRAPHICS INC 66310 Plotter Inks & Paper 001-4202-4305 259.41 66346 Plotter Inks & Paper 001-4202-4305 595.98 Total : 855.39 75300 9/25/2014 08812 SOUTH BAY REGIONAL PUBLIC COMM 02434 Portable MDC for EOC 715-2024 3,452.72 02441 Radio Headsets - FD 001-2201-5401 1,437.00 02449 Vehicle Tracking Computer - Dispatch/ PD 001-2024 1,593.07 02450 Outfit/ LA Impact Unit 715-2024 895.13 14Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 15 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75300 9/25/2014 (Continued)08812 SOUTH BAY REGIONAL PUBLIC COMM 02451 Vehicle Setup/ Detectives Car 715-2024 2,965.32 02452 Outfit/ Ford Fusions - PD 715-2024 3,750.13 02453 Outift Ford Explorers/ Detectives 715-2024 2,942.85 02454 Outfit Chevy Impala/ Dectective Vehicle 715-2024 582.46 02477 Viper LED Lights - PD 715-2101-4311 320.81 02485 Dispatch Services/ 2nd Quarter 001-2101-4251 131,312.00 001-3302-4251 16,414.00 001-2201-4251 16,414.00 Total : 182,079.49 75301 9/25/2014 00159 SOUTHERN CALIFORNIA EDISON CO 2-00-989-6911 Electrical Billing - Aug 14 105-2601-4303 162.64 2-00-989-7315 Electrical Billing - Aug 14 105-2601-4303 13,938.90 2-01-836-7458 Electrical Billing - Aug 14 105-2601-4303 18.11 2-02-274-0542 Electrical Billing -Aug 14 001-6101-4303 28.57 2-08-629-3669 Electrical Billing - Aug 14 001-4204-4303 122.88 2-09-076-5850 Electrical Billing - Aug 14 105-2601-4303 175.43 2-19-024-1604 Electrical Billing - Aug 14 001-4204-4303 3,552.46 2-20-128-4825 Electrical Billing - Aug 14 001-3304-4303 1,626.08 2-20-128-5475 ` 001-4204-4303 244.54 15Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 16 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75301 9/25/2014 (Continued)00159 SOUTHERN CALIFORNIA EDISON CO 2-20-984-6369 Electrical Billing - Aug 14 105-2601-4303 112.56 2-21-400-7684 Electrical Billing - Aug 14 105-2601-4303 38.82 2-21-964-8003 Electrical Billing - Aug 14 105-2601-4303 24.72 2-23-687-8021 Electrical Billing - Aug 14 001-3104-4303 70.73 2-23-725-4420 Electrical Billing - Aug 14 001-4204-4303 8,128.29 2-26-686-5930 Electrical Billing - Aug 14 105-2601-4303 540.20 2-31-250-3303 Electrical Billing - Aug 14 001-4204-4303 34.52 2-33-095-1989 Electrical Billing - Aug 14 105-2601-4303 26.00 Total : 28,845.45 75302 9/25/2014 06511 SOUTHWEST SERVICE SOLUTIONS 15788 Office Equip Maint Agreement 001-1141-4201 30.26 001-1202-4201 102.88 001-1204-4201 105.30 001-1203-4201 69.59 001-1208-4201 15.13 001-3302-4201 15.13 001-4601-4201 15.13 001-4202-4201 247.50 001-2201-4201 39.33 001-2101-4201 108.94 Total : 749.19 75303 9/25/2014 10232 SPICERS PAPER INC 978786 40 cases 110-112 8 1/2 copier paper 001-1208-4305 1,357.70 Total : 1,357.70 75304 9/25/2014 09532 STAPLES ADVANTAGE 8029825313 Office Supplies/ May 14 16Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 17 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75304 9/25/2014 (Continued)09532 STAPLES ADVANTAGE 001-2024 4.95 Total : 4.95 75305 9/25/2014 18660 STOEL RIVES LLP 3762259 Oil project legal services July 2014 001-2109 24,054.69 3767754 Oil project legal services Aug 2014 001-2109 17,477.81 Total : 41,532.50 75306 9/25/2014 14019 SUNSTATE EQUIPMENT COMPANY 5767157-001 Equip Rental/ Light Tower - Clark Field 001-2024 311.72 Total : 311.72 75307 9/25/2014 17540 SUPERIOR ALLIANCE ELEVATOR 52566 Replace circuit board in elevator 001-4204-4201 2,640.00 52567 Replace circuit board in elevator. 001-3304-4309 6,435.00 Total : 9,075.00 75308 9/25/2014 15279 T R PRINTING CO 7375 Dog License Renewal Forms 001-1204-4305 293.21 Total : 293.21 75309 9/25/2014 15277 TIME WARNER CABLE 8448300021108789 Fiber Optic - SBRPCA/ Aug 14 153-2106-4201 661.00 8448300300049969 Cable - PD/ Aug 14 001-2101-4201 171.20 8448300300241673 Internet/Broadband - CR/ Aug 14 715-1206-4201 11.00 8448300300241681 Internet/Broadband - Yard/ Sep 14 715-1206-4201 40.33 8448300300319222 Fiber Optics - PD/ Aug 14 153-2106-4201 664.12 8448300300319230 Fiber Optic - Parking Structure/ Sep 14 153-2106-4201 332.06 17Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 18 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 1,879.71 75309 9/25/2014 15277 TIME WARNER CABLE 75310 9/25/2014 00841 TORRANCE POLICE DEPT 04910 Drivers training update for 4 persons 001-2101-4317 800.00 Total : 800.00 75311 9/25/2014 16634 TOWNSEND, PAMELA 04927 Travel Reimbursement 001-2109 440.20 Total : 440.20 75312 9/25/2014 04768 UPTIME COMPUTER SERVICE 23861 Printer Maintenance 715-1206-4201 704.60 Total : 704.60 75313 9/25/2014 01938 V AND V MANUFACTURING 39888 Police Officer hat Piece 001-2101-4314 151.77 Total : 151.77 75314 9/25/2014 17331 VALLEY POWER SYSTEMS INC I17282 Diagnose engine damage 715-2201-4311 1,330.00 I18092 Repairs/ E11 715-2201-4311 1,959.80 I18169 Repairs/ E12 715-2201-4311 1,105.00 I18242 Pick up & Delivery/ R11 from Dealer 715-2201-4311 595.00 Total : 4,989.80 75315 9/25/2014 00015 VERIZON CALIFORNIA 310 197-3683 Phone Charges/ Aug 14 18Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 19 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75315 9/25/2014 (Continued)00015 VERIZON CALIFORNIA 715-1206-4304 230.89 001-3302-4304 66.95 001-2101-4304 821.16 001-4204-4321 188.78 001-2201-4304 43.38 001-4601-4304 86.80 001-4202-4304 132.40 001-4201-4304 136.15 001-3304-4304 53.54 001-1204-4304 43.37 310 3476-6984 720712 Phone Charges/ Aug 14 001-1121-4304 29.20 001-1132-4304 4.87 001-1141-4304 7.30 001-1201-4304 66.92 001-1202-4304 64.48 001-1203-4304 13.38 001-1208-4304 4.87 001-2101-4304 390.56 001-2201-4304 135.05 001-4101-4304 65.70 001-4201-4304 58.40 001-4202-4304 124.10 001-4601-4304 96.12 001-1204-4304 90.03 001-3302-4304 42.58 715-1206-4304 23.12 19Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 20 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75315 9/25/2014 (Continued)00015 VERIZON CALIFORNIA 310 376-6984 720712 Phone Charges/ Jul 14 001-1121-4304 30.00 001-1132-4304 5.00 001-1141-4304 7.50 001-1201-4304 68.75 001-1202-4304 66.25 001-1203-4304 13.75 001-1208-4304 5.00 001-2101-4304 401.24 001-2201-4304 138.75 001-4101-4304 67.50 001-4201-4304 60.00 001-4202-4304 127.50 001-4601-4304 98.75 001-1204-4304 92.50 001-3302-4304 43.75 715-1206-4304 23.75 Total : 4,270.09 75316 9/25/2014 16609 VERSATILE INFORMATION 3528 4 digital voice recorders 001-2101-4305 224.99 Total : 224.99 75317 9/25/2014 01029 WALTER F STEPHENS, INC.0078330-IN 12 mattresses for jail 001-2101-4306 677.77 Total : 677.77 75318 9/25/2014 18748 WELLS FARGO ADVISORS LLC 04673 Refund business license 001-3115 203.00 Total : 203.00 75319 9/25/2014 02873 WESTERN GRAPHIX 44103 Employee ID cards 001-1203-4305 184.21 Total : 184.21 75320 9/25/2014 17675 WISE INC 1103883-01 parts for chisel 20Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 21 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75320 9/25/2014 (Continued)17675 WISE INC 001-3104-4309 61.43 Total : 61.43 75321 9/25/2014 13359 WITTMAN ENTERPRISES LLC 1406062 Amb Transport Billing Ser/ Jun 14 001-2024 2,732.09 Total : 2,732.09 75322 9/25/2014 17543 WORKFORCE SAFETY HBPD-17-2014 Annual Respiratory Protection Prog. 001-2101-4201 8,000.00 Total : 8,000.00 75323 9/25/2014 14181 YORK 500010843 Worker's Comp Claims Admin/ 1st Quarter 705-1217-4201 13,750.00 Total : 13,750.00 75324 9/25/2014 01206 ZUMAR INDUSTRIES 0154493 Street Sign Maint Material 001-3104-4309 433.29 0154495 Street Sign Maint Material 001-3104-4309 499.72 0154539 Street Sign Maint Material 001-3104-4309 224.54 0154547 Street Sign Maint Material 001-3104-4309 292.45 0154581 Street Sign Maint Material 001-3104-4309 159.67 Total : 1,609.67 1499401 9/25/2014 14008 YORK SCRMA 92214 W/Comp Claims - 9-22-14 705-1217-4324 57,432.54 Total : 57,432.54 6052786 9/24/2014 00170 SOUTHERN CALIFORNIA GAS CO 01100457009 Gas Bill/ Aug 14 001-4204-4303 23.36 Total : 23.36 Bank total : 726,854.09 100 Vouchers for bank code :boa 21Page: 09/25/2014 Check Register CITY OF HERMOSA BEACH 22 4:27:43PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 726,854.09Total vouchers :Vouchers in this report 100 "I hereby certify that the demands or claims covered by the checks listed on pages 1 to 22 inclusive, of the check register for 9/25/14 are accurate funds are available for payment, and are in conformance to the budget." . . . By ______________________________________________ Finance Director . . Date: October 7, 2014 22Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 1 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75325 10/2/2014 06349 ACTIVE NETWORK INC, THE 1009001 ACTIVEGo Project 001-4601-4102 1,800.00 Total : 1,800.00 75326 10/2/2014 11437 ADMINISTRATIVE SERVICES CO OP 319932 Taxi Voucher Program - Aug 14 145-3404-4201 5,075.89 Total : 5,075.89 75327 10/2/2014 18770 ANTHONY, PATRICIA 04999 Refund Citation #200118507 001-3302 338.00 Total : 338.00 75328 10/2/2014 05179 AT AND T 019 360 8382 001 Long Dist Charges/ Sep 14 001-2101-4304 6.47 Total : 6.47 75329 10/2/2014 16510 AT AND T C602224321777 Long Dist Charges Aug 13 - Sep 12 14 001-1202-4304 5.15 001-1203-4304 2.34 Total : 7.49 75330 10/2/2014 16660 ATHENS SERVICES HB4040180814-1 Citywide sweeping/cleaning - Aug 14 001-3301-4201 5,924.01 001-3104-4201 12,024.23 001-6101-4201 1,330.49 001-3304-4201 1,247.83 HB4040180914-4 Extra clean-up - Labor Day Fiesta 001-3301-4201 856.21 Total : 21,382.77 75331 10/2/2014 14952 BAY CITIES RADIATOR 23828956 2008 Jeep radiator 715-3302-4311 159.14 Total : 159.14 75332 10/2/2014 18761 BOUMAN, KRISTIN 04827 Cash Key Deposit #135450 & #135452 001-2117 71.00 1Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 2 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 71.00 75332 10/2/2014 18761 BOUMAN, KRISTIN 75333 10/2/2014 09614 BROMBERG, GEORGE 91214 300' Noticing - Sep 14 001-4101-4201 725.00 Total : 725.00 75334 10/2/2014 18758 BROWN RYAN, KATHERINE 04836 Cash Key deposit/bal #130927, #130930 001-2117 174.25 Total : 174.25 75335 10/2/2014 00034 BUSINESS SYSTEMS CORP 297373 2000 Property Report Forms 001-2101-4305 760.49 297385 Blank NO PARKING SIGNS 001-4202-4305 349.45 Total : 1,109.94 75336 10/2/2014 00602 CA PARKS AND RECREATION, INC.002276 Membership dues 001-4601-4315 480.00 Total : 480.00 75337 10/2/2014 00262 CALIFORNIA MARKING DEVICE 4461 2 color pad - plans approved 001-4201-4305 17.44 Total : 17.44 75338 10/2/2014 00016 CALIFORNIA WATER SERVICE 4286211111 Water Usage - Aug 14 105-2601-4303 2,914.43 001-4204-4303 1,050.55 001-3304-4303 198.24 001-6101-4303 25,134.57 Total : 29,297.79 75339 10/2/2014 05970 COLLINS, DENNIS 04892 Insructor payment - Beach Volleyball 001-4601-4221 1,456.00 Total : 1,456.00 75340 10/2/2014 00879 COUNTY OF LOS ANGELES RE-PW-14090801956 Traffic Signal maintenance Jul - Aug 14 001-3104-4251 1,098.84 2Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 3 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 1,098.84 75340 10/2/2014 00879 COUNTY OF LOS ANGELES 75341 10/2/2014 18771 COX, KEVIN 03899 Parking Permit Refund # 15-08006 001-3843 40.00 Total : 40.00 75342 10/2/2014 11449 DEWEY PEST CONTROL 8826621 Pest Control Services/ Sep 14 001-4204-4201 651.00 Total : 651.00 75343 10/2/2014 12735 DOOLEY ENTERPRISES INC 50536 Supplies 001-2101-4317 4,064.04 Total : 4,064.04 75344 10/2/2014 00122 DUNCAN PARKING TECHNOLOGIES CSBAP000101 AutoCITE Parking Citations - Jul 14 001-1204-4201 6,124.93 CSBAP000119 AutoCITE Parking Citations - Aug 14 001-1204-4201 5,676.12 DPT019463 Wireless Fees - Sep 14 001-3302-4201 680.00 DPT019487 AutoTRAX - Sep 14 001-3302-4201 47.00 001-3305-4201 188.00 001-3304-4201 423.00 DPTO19506 Autotrax Liberty - Sep 14 001-3302-4201 1,105.00 Total : 14,244.05 75345 10/2/2014 18772 EMAMI, SARAH 03900 Prkng Permit Refund #15-2823, #15-08020 001-3843 80.00 Total : 80.00 75346 10/2/2014 08422 FIRE INFORMATION SUPPORT SERV 1060 EMS special report and query tool 001-2201-4201 860.00 Total : 860.00 75347 10/2/2014 06344 FIRST CALL STAFFING SERVICES 0709-144908 Temp Services/ Sep 14 001-4601-4112 912.00 3Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 4 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 912.00 75347 10/2/2014 06344 FIRST CALL STAFFING SERVICES 75348 10/2/2014 18756 GAINES, PATRICK 04830 Cash Key Deposit/balance #219450 001-2117 45.00 Total : 45.00 75349 10/2/2014 18774 GALLI, KENT 04661 Cash Key Deposit # 162118 001-2117 21.00 Total : 21.00 75350 10/2/2014 14713 GEOSYNTEC CONSULTANTS 1414610 Municipal Storm Water Maint Prog - Jul 150-3106-4201 3,432.08 Total : 3,432.08 75351 10/2/2014 18762 GLOBE Receipt # 104048 Theatre Security Deposit/Extra Fee 001-2111 637.50 Total : 637.50 75352 10/2/2014 13330 HAJOCA CORP S144375070.001 30 gal water heater 001-4204-4309 409.61 Total : 409.61 75353 10/2/2014 09130 HRBOKA, DENNIS 04896 Instructor payment for Men's Basketball 001-4601-4221 840.00 Total : 840.00 75354 10/2/2014 18757 HUDSON, MICHAEL 04837 Parking permit refund # 15-6152 001-3302 40.00 Total : 40.00 75355 10/2/2014 10256 ICMA 04845 Performance measurement subscription 001-1201-4201 1,097.50 Total : 1,097.50 75356 10/2/2014 16742 INDEPENDENT STATIONERS IN-000460604 Office Supplies/ Sep 14 001-2101-4305 82.62 Total : 82.62 4Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 5 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75357 10/2/2014 18438 KATIE CASEY PUBLIC RELATIONS 000041 General City PR Jul 14 705-1209-4201 4,181.25 000042 Oil Project - Jul 14 001-2109 2,175.00 000043 Oil project - Aug 14 001-2109 37.50 000044 General City PR - Aug 14 705-1209-4201 6,375.00 Total : 12,768.75 75358 10/2/2014 09696 LA AREA FIRE CHIEFS ASSOC 385 Registration fee for B Grebbien 001-2201-4317 750.00 Total : 750.00 75359 10/2/2014 15782 LA CO METRO TRANSPORTATION 800059057 TAPS Bus Pass Sales/ Jul 14 145-3403-4251 176.00 800059283 TAPS Bus Pass Sales/ Aug 14 145-3403-4251 190.00 Total : 366.00 75360 10/2/2014 15673 LIDELL, CAROL A 04958 2013 Assessment tax rebate 105-3105 24.61 Total : 24.61 75361 10/2/2014 18775 LITTRELL, DANIEL OR ELIZABETH 04847 Cash Key Deposit/balance # 219333 001-2117 59.00 Total : 59.00 75362 10/2/2014 18765 LONGACRE, MIKE Receipt #1000263.003 Reserved picnic table refund 001-2111 60.00 Total : 60.00 75363 10/2/2014 16648 MANDELL, REBECCA 04895 Instructor payment for Dog's Best Friend 001-4601-4221 98.00 Total : 98.00 75364 10/2/2014 18312 MANIACI INSURANCE SERVICES 578 Benefits Connect Services/ JUl 14 5Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 6 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75364 10/2/2014 (Continued)18312 MANIACI INSURANCE SERVICES 001-1203-4201 566.10 Total : 566.10 75365 10/2/2014 18122 MARINE RESEARCH SPECIALISTS 514-2014-15 EIR Serv - Oil Project/ Aug 14 001-2109 4,950.73 Total : 4,950.73 75366 10/2/2014 18764 MARK, EDWARD 04633 Parking Citation Refund #200120993 001-3302 38.00 Total : 38.00 75367 10/2/2014 10681 MAYNOR, DONALD H.DHM 6599 Legal Services Jul - Sep 14 001-1202-4201 1,250.00 Total : 1,250.00 75368 10/2/2014 18138 MC DANIEL LAMBERT INC 46973 Health Impact - Oil Project/ Sep 14 001-2109 1,956.59 Total : 1,956.59 75369 10/2/2014 18759 MCCARROLL, MARY 04826 Cash Key Deposit/balance #219502 001-2117 65.75 Total : 65.75 75370 10/2/2014 18767 MORRO, HENRY OR AMY 04636 Parking Citation Refund 109945 001-3302 48.00 Total : 48.00 75371 10/2/2014 10324 MUNI SERVICES COMPANY 0000034841 UUT Audit/ Jul - Sep 14 001-1202-4201 1,250.00 Total : 1,250.00 75372 10/2/2014 17516 NATIONAL BAND & TAG COMPANY 386611 1200 Aluminum dog tags 001-1204-4305 328.76 Total : 328.76 75373 10/2/2014 18768 NELSON, DIANA Receipt #1000084.001 Scheduling conflict refund Class #5139 001-2111 160.00 6Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 7 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 160.00 75373 10/2/2014 18768 NELSON, DIANA 75374 10/2/2014 13114 OFFICE DEPOT 1716295995 Office Supplies/ Sep 14 001-4204-4309 75.91 1719193442 Office Supplies/ Sep 14 001-4204-4309 76.29 731744033001 Office Supplies/ Sep 14 001-1203-4305 60.72 Total : 212.92 75375 10/2/2014 13309 PEREZ, SHAWN 04890 Instructor payment for ET Skate class 001-4601-4221 249.90 Total : 249.90 75376 10/2/2014 15399 PERUGINO, DINO 1331 Engineer's Exam 001-2201-4201 827.53 Total : 827.53 75377 10/2/2014 01911 PROVIDENCE MEDICAL INSTITUTE 600000285 Pre employment Exams 001-1203-4320 2,648.00 Total : 2,648.00 75378 10/2/2014 02715 PUBLIC SAFETY CENTER INC 5540844 Transport hood, Sani cloth 001-2101-4305 257.46 Total : 257.46 75379 10/2/2014 08364 PVP COMMUNICATIONS INC 20072 Echo Quick release clip 715-2101-4311 17.44 Total : 17.44 75380 10/2/2014 18773 RANSOM, NICOLE C 03898 Parking Permit Refund # 15-07969 001-3843 40.00 Total : 40.00 75381 10/2/2014 18760 RAU, TIFFANY 04816 Cash Key Deposit/balance #208506 001-2117 33.75 Total : 33.75 7Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 8 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75382 10/2/2014 13255 REDMOND, GEORGE DAVID 32209 New door and hardware for South School 001-1214-4322 874.79 Total : 874.79 75383 10/2/2014 18754 RESPONSIBLE HOSPITALITY HB-01 Social City Assessment 001-1201-4201 5,216.29 Total : 5,216.29 75384 10/2/2014 16425 SAFEWAY INC VONS 728839-091014-2110 Staff Meeting supplies 001-4601-4305 48.55 806837-082214-2110 Valley Park Day Camp Supplies 001-4601-4308 23.97 807308-082314-2110 Senior Center BBQ 001-4601-4328 151.17 807726-082014-2110 Staf meeting supplies 001-4601-4305 27.33 Total : 251.02 75385 10/2/2014 04595 SAN BERNARDINO CO SHERIFF DEPT EVC52706 Fire Update training on 10/8/2014 001-2201-4317 1,040.00 Total : 1,040.00 75386 10/2/2014 09737 SOLYMOSI, MARIE 731704 Bee Removal Sep 14 001-3302-4201 120.00 731708 Bee Removal Sep 14 001-3302-4201 120.00 860929 Bee Removal Jul 14 001-3302-4201 120.00 860932 Bee Removal Jul 14 001-3302-4201 120.00 860933 Bee Removal Jul 14 001-3302-4201 120.00 860941 Bee Removal Aug 14 001-3302-4201 120.00 860942 Bee Removal Jul 14 001-3302-4201 120.00 8Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 9 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75386 10/2/2014 (Continued)09737 SOLYMOSI, MARIE 860946 Bee Removal Aug 14 001-3302-4201 120.00 Total : 960.00 75387 10/2/2014 10764 SOUTH BAY CENTER FOR September 30 2014 Dispute Resolution/ Jul - Sep 14 001-1132-4201 2,150.00 Total : 2,150.00 75388 10/2/2014 11471 SOUTH BAY FOUNDRY, INC 0145652-IN 10 Manhole covers and frames 160-3102-4309 3,324.50 Total : 3,324.50 75389 10/2/2014 08812 SOUTH BAY REGIONAL PUBLIC COMM 02425 MDC Modem repairs 001-2101-4305 225.00 02475 Voter radio receivers installation. 153-2106-5402 7,141.07 Total : 7,366.07 75390 10/2/2014 10314 SOUTHERN CALIF EDISON CO.2-20-984-6179 Service 8/8/14 - 09/09/14 105-2601-4303 30.44 2-29-332-0750 Service Aug 20 - Sep 19 14 105-2601-4303 263.92 Total : 294.36 75391 10/2/2014 08092 SPINGARN, KARL 04959 2013 Assessment tax rebate 105-3105 24.61 Total : 24.61 75392 10/2/2014 18755 STERN, JULIAN 04828 Cash Key Deposit #133602 001-2117 14.50 Total : 14.50 75393 10/2/2014 14019 SUNSTATE EQUIPMENT COMPANY 5613152-012 Backup Generator rental for four weeks 001-4204-4201 1,238.72 5750497-007 Backup generator rental for four weeks 001-8651-4201 1,146.47 9Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 10 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 2,385.19 75393 10/2/2014 14019 SUNSTATE EQUIPMENT COMPANY 75394 10/2/2014 11102 TORRANCE WHOLESALE NURSERY 628970 Landscape Materials Sep 14 105-2601-4309 458.89 Total : 458.89 75395 10/2/2014 18766 TORRES, JONATHAN 04546 Refund for extra July monthly sticker 001-3302 31.00 Total : 31.00 75396 10/2/2014 14148 UPS 000023R146384 Express Mail/ Sep 14 001-2201-4305 66.52 Total : 66.52 75397 10/2/2014 18763 VER BURG, JUSTIN Receipt # 103819 Theatre security deposit/rental fee 001-2111 900.00 Total : 900.00 75398 10/2/2014 00015 VERIZON CALIFORNIA 1183956810 01 Phone Charges Sep 13 - Oct 12 14 001-2201-4304 1,885.34 310 PLO-0346 Phone Charges Sep 16 - Oct 15 14 001-2101-4304 45.14 310 PLO-0347 Phone Charges Sep 19 - Oct 18 14 001-2101-4304 45.14 310 RTO-0181 Phone Charges Sep 1 - Sep 30 14 001-2101-4304 60.81 310 UHO-3618 Phone Charges Sep 22 - Oct 21 14 001-2101-4304 438.63 310 VM6-6158 Phone Charges Sep 22 - Oct 21 14 001-2101-4304 47.93 310-167-1756 Phone Charges Sep 16 - Oct 15 14 001-2101-4304 324.58 10Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 11 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75398 10/2/2014 (Continued)00015 VERIZON CALIFORNIA 310-197-3683 Phone Charges Sep 14 715-1206-4304 227.94 001-3302-4304 65.87 001-2101-4304 809.43 001-4204-4321 186.62 001-2201-4304 42.26 001-4601-4304 84.52 001-4202-4304 129.49 001-4201-4304 135.32 001-3304-4304 52.46 001-1204-4304 42.26 310-318-8751 Phone Charges Sep 1 - Sep 30 14 001-1204-4304 51.49 310-372-6186 Phone Charges - Sep 16 - Oct 15 14 001-1101-4304 7.10 001-1121-4304 7.16 001-1141-4304 7.16 001-1201-4304 7.16 001-1202-4304 7.16 001-1203-4304 7.15 001-1208-4304 7.16 310-372-6373 Phone Charges Sep 7 - Oct 6 14 001-1204-4304 47.39 11Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 12 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75398 10/2/2014 (Continued)00015 VERIZON CALIFORNIA 310-3766984 Phone Charges Sep 16- Oct 15 14 001-1121-4304 29.66 001-1132-4304 4.94 001-1141-4304 7.42 001-1201-4304 67.98 001-1202-4304 65.50 001-1203-4304 13.60 001-1208-4304 4.94 001-2101-4304 396.76 001-2201-4304 137.19 001-4101-4304 66.74 001-4201-4304 59.32 001-4202-4304 126.06 001-4601-4304 97.64 001-1204-4304 91.46 001-3302-4304 43.26 715-1206-4304 23.48 310-406-2421 Phone Charges Sep 1 - Sep 30 14 001-2101-4304 52.46 310-406-2462 Phone Charges Sep 4 - Oct 3 14 001-2101-4304 47.40 Total : 6,108.48 75399 10/2/2014 03209 VERIZON WIRELESS LA 9732146808 Cell Phone Usage - Sep 17 - 10 16 14 001-2201-4304 95.77 9732146809 Cell Phone Usage - Sep 17 - Oct 16 14 001-1201-4304 106.48 Total : 202.25 75400 10/2/2014 16294 VISION INTERNET PROVIDERS INC 28308 Web Hosting Fee - Sep 14 715-1206-4201 200.00 Total : 200.00 75401 10/2/2014 16729 ZAPPIA LAW FIRM APC, THE 14-06-30 Supplement Legal, RE: Personnel Matters/ Jun 14 001-1203-4201 115.46 12Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 13 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75401 10/2/2014 (Continued)16729 ZAPPIA LAW FIRM APC, THE 14-07-30 Legal, RE: Personnel Matters/ Jul 14 001-1203-4201 693.00 Total : 808.46 1401595 10/2/2014 14008 YORK SCRMA 09292014 W/Comp Claims - 9/26/14 705-1217-4324 56,524.37 Total : 56,524.37 10022014 10/2/2014 00243 HERMOSA BEACH PAYROLL ACCOUNT 10022014 PAYROLL 9/15/14 TO 9/30/14 001-1103 645,994.55 105-1103 4,662.83 115-1103 906.60 117-1103 2,580.00 145-1103 95.21 147-1103 906.60 152-1103 57.38 160-1103 6,445.72 705-1103 3,878.51 715-1103 8,044.64 Total : 673,572.04 Bank total : 882,457.05 79 Vouchers for bank code :boa 882,457.05Total vouchers :Vouchers in this report 79 13Page: 10/02/2014 Check Register CITY OF HERMOSA BEACH 14 5:17:21PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount "I hereby certify that the demands or claims covered by the checks listed on pages 1 to 14 inclusive, of the check register for 10/2/14 are accurate funds are available for payment, and are in conformance to the budget." . . . By ______________________________________________ Finance Director . . Date : October 7, 2014 14Page: October 7, 2014 Honorable Mayor and Members Regular Meeting of of the Hermosa Beach City Council October 14, 2014 TENTATIVE FUTURE AGENDA ITEMS WEDNESDAY, OCTOBER 22, 2014 ONSITE VISIT TO NORTH SCHOOL @ 5:30PM JOINT MEETING WITH HBCSD @ 7:00PM OCTOBER 28, 2014 @ 5:00PM STUDY SESSION: PRIORITY BASED BUDGETING OCTOBER 28, 2014 CONSENT CALENDAR Recommendation to receive and file the action minutes of the Public Works Commission meeting of September 17, 2014 Public Works Director Recommendation to receive and file the action minutes of the Parks, Recreation and Community Resources Advisory Commission meeting of October 7, 2014 Assistant to the City Manager Recommendation to receive and file the action minutes of the Planning Commission meeting of October 21, 2014 Community Development Director MOU for Surf Memorial Assistant to the City Manager Undersea Fiber Optic Cable Consultant Senior Planner MUNICIPAL MATTERS Carbon Neutral Municipality: A. SCE Street Light Energy Efficiency: Update Report B. Municipal GHG Emissions Inventory: Update Report (SBCCOG) C. Community Policy, Direction on Plan Development D. Economic Comparison E. Solar Report – Early Actions and Overall Report Community Development Director Fee Discussion – EV Chargers Public Works Director MISCELLANEOUS ITEMS AND REPORTS - CITY MANAGER Pier Safety Update City Manager Update on Free Parking Management Analyst Update on General Plan City Manager MISCELLANEOUS ITEMS AND MEETING ATTENDANCE REPORTS - CITY COUNCIL Board/Commission Expiration of Terms – Appoint Public Works Commissioners City Clerk NOVEMBER 13, 2014 @ 5:30PM CLOSED SESSION: CITY MANAGER PERFORMANCE REVIEW THURSDAY, NOVEMBER 13, 2014 CONSENT CALENDAR Strand/Pier EIR Contract Community Development Director MUNICIPAL MATTERS Cypress Avenue – Direction on Zoning Changes for Manufacturing Uses Community Development Director Compensation Study and Policy Direction Assistant to the City Manager Downtown Core Revitalization Strategy: Catalyst Projects/Use of City Assets Community Development Director MISCELLANEOUS ITEMS AND REPORTS - CITY MANAGER Living Streets Update Report Public Works Director City Attorney Services City Manager 2 PENDING ITEMS Consideration of reduction of business license fee request from Carol G. Weiss, Ph.D. Finance Director Green Zone Recommendations and the Installation of Silver and Green Meters Downtown Police Chief Procurement Policies – RFP City Manager Ethics Policy City Manager & Finance Director SCE Update City Manager Food Truck Community Development Director Pier Plaza Smoking Enforcement & Underage Ordinance Police Chief California Energy Commission – City Codes Update Community Development Director Video Cameras – Pier Plaza Police Chief DECEMBER 2014 Comprehensive City Facilities Master Plan – Award Contract Public Works Director Carbon Neutral Municipality: A. Final SCAG Report: Setting Target, Action Plan, Funding – Employee Commute Program B. Net Zero Carbon Policy for City Facilities and Service Delivery Analysis C. Renewable Energy Policy for City Facilities and Service Delivery Community Development Director Strategic Plan – Quarterly Update City Manager Public Information and Communications Plan Adoption City Manager Storm Drain Maintenance Contract Public Works Director Events Policy Discussion (Continued) Assistant to the City Manager National Citizen Survey Overview Assistant to the City Manager Fiesta Discussion Assistant to the City Manager JANUARY 2015 None FEBRUARY 2015 Employee Salaries/Benefits Funding Assistant to the City Manager Page 1 of 3 MINUTES EMERGENCY PREPAREDNESS ADVISORY COMMISSION MONDAY, MAY 19, 2014 - 7:00 P.M. CALL TO ORDER Chairwoman Katz called the meeting to order at 7:05 p.m. PLEDGE OF ALLEGIANCE Guest from SBCCOG led the Pledge of Allegiance ROLL CALL Gila Katz, Alan Benson, Ken Hartley, Bill Hallett, George Schmeltzer, Dave Buckland STAFF: Captain Tom Thompson, Chief Sharon Papa and Chief David Lantzer ANNOUNCEMENTS  Beach Cities Health District is sponsoring a hands only CPR class at Adventure Plex on 6/14/14 from 10-2:30. Details for this event are on their website.  Chief Lantzer announced that HBFD is also sponsoring a hands only CPR class June 6.  Commissioner Benson and Chairwoman Katz were reappointed. PUBLIC PARTICIPATION None PRESENTATIONS 1. APPROVAL OF MINUTES FROM THE MEETING OF MAY 19, 2014. Commissioner Schmeltzer made a motion to approve the minutes. Commissioner Hartley wanted to note that $3-500 should be $300-500. The Commission voted unanimously to Approve the minutes. 2. ACKNOWLEDGEMENT OF SERVICE BY CAROL RUSSELL. Chairwoman Katz informed the Commission that Carol Russell had experienced a death in her family and that was why she could not attend. Commissioner Schmeltzer motioned that this acknowledgement be move to the next agenda. The Commission voted unanimously to move this item to the next agenda. 3. SOUTHBAY CITIES COUNCIL OF GOVERNMENTS (SBCCOG) Ron Wildermouth was present and representing West Basin Municipal Water District. The message was that the drought will probably end after the summer. Page 2 of 3 4. AMERICAN RED CROSS - UPDATES. Their representative, George Butz is very interested in setting up shelter in HB. He was not available tonight because his services were needed in San Diego due to the wildland fires. Chairwoman Katz passed out the latest guide for Disaster Recovery. 5. THE GREAT CALIFORNIA SHAKEOUT. The event is scheduled for 10/16 at 10:16am. Captain Thompson said that this year, we were focusing on how well prepared is the City of Hermosa Beach. It will be more like a test of our Emergency Plan(s). The Neighborhood Watch and Disaster Service Workers will have a drill later that day or that weekend. 6. MONTHLY E-NEWSLETTER ARTICLE - TIP OF THE MONTH. The following eNewsletter tips will be posted on the City's website: a. Financial Preparedness b. Helping Children Cope with Disaster 7. EPAC GOALS & OBJECTIVES. a. Business Plan – No Report b. Residential Mailer – Commissioner Schmeltzer informed us that he has a date tomorrow with Police & Fire to review the brochure. The goal is to distribute in October. Commissioner Hartley reminds us all that in the process of editing, we must confirm each phone number that is listed. The Chamber is making a donation towards this mailer. c. Capital Improvement – The room adjacent to the EOC is now in the process of being cleared out. The inventory is complete and the form to dispose of its contents is being processed. Several ideas for improvement include restrooms, breakout rooms and emergency food storage. d. Promotion of Nixel (formerly CodeRed) – The Antenna Project will complete the cabling for our new radios, etc. e. Work with Local Papers – schedule for advertising: 8. REPORTS a. HERMOSA BEACH DISASTER SERVICES WORKERS (HBDSW) Shelter Drill was held at the tennis courts on Tuesday, 3/18. 11 DSW + 11 guests attended. Next one will be scheduled in October at View School. Disaster SW is receiving a donation of Chevy Blazer, which is currently following the City’s process. Page 3 of 3 CERT Training is scheduled for June 6, 7 & 8. b. HERMOSA BEACH AMATEUR RADIO ASSOCIATION (HBARA REPORTAND EMERGENCY OPERATIONS CENTER (EOP UPDATE. Oral report from Commissioner Hartley, Founder HBARA. c. OFFICE OF DISASTER MANAGEMENT - AREA G REPORT (South Bay Area of Los Angeles County). - Oral Report from Jeff Robinson, Executive Director. $2400 spent on new equipment. Verizon still has a punch list of items that need to be corrected as their installation reduced the professional appearance of the EOC that had been prepared in part by the HBARA, i.e. Verizon used surface mounting instead of the cable boxes that were installed. d. FIRE CHIEF REPORT Each department at the City is developing their own Emergency Action Plan will be ‘tested’ during the Great Shakeout. The City’s Emergency Operations Plan should be completed by the beginning of June. The Fire Department’s Pancake Breakfast Open House is this Sunday, 5/25 e. POLICE CHIEF REPORT Three Sergeants observed the Police Operations at the Long Beach Grand Prix to review another department’s procedures. Good practice and it will be fresh in their minds when July 4 occurs. 7. COMMISSION MEMBER REOUESTS FOR FUTURE AGENDA ITEMS. Carol Russell – Acknowledgement of her service 8. ADJOURNMENT Motion to adjourn to the meeting of May 19, 2014; voted unanimously. Meeting adjourned at 8:40pm. Page 1 of 3 MINUTES EMERGENCY PREPAREDNESS ADVISORY COMMISSION MONDAY, JULY 7, 2014 - 7:00 P.M. CALL TO ORDER Commissioner Benson called meeting to order at 7:02pm PLEDGE OF ALLEGIANCE Led by Commissioner Benson ROLL CALL Alan Benson, Ken Hartley, Bill Hallett, George Schmeltzer, Dave Buckland, Tracy Hopkins Gila Katz, absent STAFF Chief David Lantzer, Captain Tom Thompson and Jeffrey Robinson ANNOUNCEMENTS  Commissioner Hopkins attended the Gardena CERT fair made up primarily of faith-based organizations; they had 250 participants. Commissioner Hopkins reports it as a great opportunity to develop relationships with organizations who are emergency responders. Next year, her church and other South Bay organizations will be partner with Gardena CERT.  Ken reported (added at end of meeting) mosquitos to Vector Control, who located the problem at the catch basins at Valley & Ardmore. They have already treated from 15th Street to 30th. PUBLIC PARTICIPATION None PRESENTATIONS None 1. APPROVAL OF MINUTES FROM THE MEETING OF MAY 19, 2014. Commission agreed to postpone until next meeting since members did not receive the draft. 2. ACKNOWLEDGEMENT OF SERVICE BY COMMISSIONER CAROL RUSSEL Commission agreed to postpone until the next meeting 3. MONTHLY E-NEWSLETTER ARTICLE - TIP OF THE MONTH. a. Drop, Cover, Hold On b. True or False 4. REPORT BY WEBSITE SUBCOMMITTEE Oral report from Commissioner Benson Commissioner Benson is compiling a list of PDFs to be posted on our website in an effort to centralize information related to emergencies. Commissioner Benson will be emailing those documents to the Commission so that their posting can be approved at the September meeting. 5. EPAC GOALS & OBJECTIVES a. Business Plan – Commissioner Hopkins Commissioner Hopkins - searching for docs to help businesses be better prepared. 7 Steps is a supplemental guide to Putting Down Roots and is provided by Earthquake Country Alliance. If the Commission agrees, then Commissioner Hopkins can start by sharing the information at business lunches, Chamber of Commerce events, etc... Commissioner Hartley suggested that it be incorporated with our Residential mailer; PDF can be emailed to Chamber and Commissioner Benson suggested that the PDF be posted on our website. Page 2 of 3 b. Residential Plan – Commissioners Schmeltzer & Hartley i. Mailer update: Commissioner Hartley spoke with the company that will be printing the booklet. Only the front & back can be changed, but an insert could be added to localize it. ii. Commissioner Hartley received a quote for 15,000 packets – 10,000 to residents and 5,000 in bulk to the City. He will inquire with the City Manager about using the City’s bulk rate service to keep costs down. c. Capital Improvement – Police & Fire Chief confirmed that funds have been approved for the EOC which are not specified for but can be used for a new roof. Commissioner Hartley inquired about the skylights and asked if the City would try to keep those intact. A member from the public stated that the skylights weren’t actually providing any light since they were ½ covered by a drop ceiling and actually did not light anything up that was practical. d. Promotion of Nixel (formerly CodeRed) Captain Thompson reported that the Nixel messages are ten-fold compared to CodeRed. It’s a great way of corresponding with residents. Commissioner Schmeltzer reiterated his thought that he liked the idea of only getting a message when it is an actual emergency. He expressed concern that the public will begin to react to Nixel messages like junk mail, which would be defeating the purpose. e. Use of eNews This item could be deleted from agenda, as EPAC is utilizing its capabilities. f. Work with local newspapers – schedule for advertising EPAC should have a list of announcements scheduled for each quarter or perhaps the whole year. For instance, October’s Great Shakeout and the residential mailer could be published in the paper in advance to alert our residents of those events. 6. REPORTS a. HERMOSA BEACH DISASTER SERVICES WORKERS (HBDSW). Oral report from Commissioner Buckland An anonymous donor purchased "uniform" shirts that have been delivered. (Commissioner Buckland showed us the one he was wearing). Commissioner Buckland informed us that DSW has developed a rapport with many emergency response organizations, as Commissioner Hopkins mentioned with regard to the Gardena CERT fair and agreed that these relationships are key. DSW is planning a shelter drill at the same time of the shakeout on 10/16 - location TBD. Meetings are on 3rd Tuesday of the month at EOC. http://www.hbdsw.org b. HERMOSA BEACH AMATEUR RADIO ASSOCIATION (HBARA REPORT AND EMERGENCY OPERATIONS CENTER EOP UPDATE). Oral report from Commissioner Hartley, Founder HBARA New equipment was delivered, 1 radio installed and a new antenna will be installed on roof over the next 2 weeks after the antenna that is not being used is removed. Commissioner Hartley answered Commissioner Schmeltzer’s question about a back-up system, which is that it’s not cost effective to have another vendor like Time Warner or Verizon. They do not have a special rate for government entities. The Fios is connected and a possible back up system is D-star which is built into the radio system. It would be for text only and probably very slow. At one point, there was discussion about the City sharing a satellite plan with surrounding cities; Commissioner Hartley suggested we revisit that possibility. http://www.hbara.org Page 3 of 3 c. OFFICE OF DISASTER MANAGEMENT – AREA G REPORT (South Bay Area of Los Angeles County). Oral Report from Jeff Robinson, Executive Director Jeff is organizing an Emergency Volunteer Center Training and the date is TBD. The drought is getting worse and the waterfall predicted for El Nino will probably not occur until Oct – December and that is not guaranteed. Jeff participated in a unique Hurricane exercise with National Hurricane and National Weather Service. The National Hurricane Center will not confirm or deny that hurricanes are a direct result from El Nino. National Weather Service in Oxnard did a Presentation on Tsunamis. Jeff is assisting with their process review regarding their policies on meeting the Tsunami Watch Center requirements. More Prepared, located in Hawthorne, sells earthquake detectors and Commissioner Hopkins said by using the code, "HB2013,” you receive free delivery. The website is MorePrepared.com. d. FIRE CHIEF REPORT Chief Lantzer updated us on the Emergency Management Coordinator position. The City received a very good response to the recruitment and he’s narrowed it down to 20 candidates. This position will be coordinating all emergency planning, including CERT Training and training to City staff. Chief Lantzer reported that July 4 was very busy. In addition to the medical response calls, RB had a 2 alarm fire during their firework show and there was rescue call right after that. HB did a lot of assistance to RB & MB. Stats are still being reviewed; he will have final for council meeting tomorrow. They’re estimating 110,000 in attendance, which is less than last year. Chief Lantzer gave credit to Community Development, Police, Public Works and Fire Departments for doing an outstanding job and stated that he thought there was a direct correlation between public attendance and the presence of safety personnel. e. POLICE CHIEF REPORT Captain Thompson reported that there were fewer citations/arrests for drunk in public or alcohol related incidents other than DUI's, which increased. There were more families, and the people were spread out from N-S. The Police kept an eye on a particular group by using social media and in the end, they did not show up. Someone wanted to donate a 53' trailer for CERT, but it would not fit, so the City respectfully declined. Commissioner Hopkins suggested that she contact the church that previously offered storage unit for CERT. Ordered and received emergency water and supplemental food. Chief Lantzer/Capt. Thompson reiterated the team effort it took to keep July 4 under control. 7. COMMISSION MEMBER REOUESTS FOR FUTURE AGENDA ITEMS. a. Commissioner Benson suggested that the 7 Steps should be revisited with regard to getting the brochure/information to our community. b. Commissioner Hartley suggested that EPAC discuss the content of the inserts for the residential mailers. 8. ADJOURNMENT. Motion by Commissioner Hartley to adjourn to the meeting of July 7, 2014; voted unanimously. Meeting adjourned at 8:20pm. PUBLIC INFORMATION OFFICER: OVERVIEW OF ROLE & RESPONSIBILITIES City of Hermosa Beach Communications Management The City of Hermosa Beach is committed to providing first class services as part of its mission to be a high performing city. This is accomplished by each member of the City staff contributing to building the foundation for delivering these services. A top-performing communications professional is a vital part of this team. While often overlooked due to the behind-the-scenes nature of the position, the Public Information Officer has a finger on the pulse for all aspects of the City, and is involved in the communications planning and execution of items which include, but yet are not limited to, the following: ¨ Improving Community Relations & Communications Processes ¨ Policy Decisions / Community Implementation ¨ Business News and City Partnerships ¨ Regional Trends/Neighboring City News & Its Impact on Hermosa Beach ¨ Strengthening Media Relationships ¨ Integrating Efforts of City Staff & News from Consultants; Communicating Updates to the General Public Publicist: ¨ A publicist is a person whose job is to manage and promote a client’s image. Publicists typically represent celebrities, authors or other public figures ¨ With a focus on personal brand management, the central role of a publicist often includes creating hype about upcoming films or working to get ad sponsorships or other promotions/revenue- generating opportunities for their client ¨ The majority of press coverage generated by a publicist serves to secure positive stories in newspapers, magazines and TV stations surrounding their client and drive audiences to see their upcoming film or increase awareness about the related project Publicist vs. Public Relations Public Relations: ¨ Is the practice of managing the communication of information between an organization, such as the City of Hermosa Beach, and the general public ¨ This role includes broad responsibilities such as managing in-depth communication channels both within an organization and throughout the greater community (I.e. Internal staff including City Hall, HBFD, and HBPD, Hermosa Beach residents, local businesses, City partners, event managers, South Bay organizations, media, etc.) ¨ A PR professional develops comprehensive strategies to communicate issues, public health and safety updates, events and other important City news and policies as they develop in a timely manner, while also looking meet the organization’s long-term strategic goals ¨ PR Professionals cultivate beneficial relationships between the City and the community; serve as a valuable resource for creating positive experiences for residents, partners and community organizations that live and work alongside the City The Public Information Officer’s Role Within the Community of Hermosa Beach OVERVIEW AUDIENCES RESIDENTS / REGIONAL GROUPS INTERNAL COMMUNICATIONS MEDIA PROFESSIONAL COMMUNITY ORGANIZATIONS PARTNERS / BUSINESSES Oversees the planning, development, creation of key messages and execution of strategy, while also managing communications and serving as a Communications lead throughout the following channels: A snapshot of the Public Information Officer’s role within the community: • Emphasizing Core City values • Integrated Communications Messaging • Synergized PR Efforts City Manager • Serves as daily contact for all PR ini3a3ves; reviews and approves communica3ons • Provides strategic direc3on, communicates feedback and aligns priority task items during weekly PR status and planning calls • Expert resource for media interview requests • Approves all budget items and es3mates for marke3ng collateral Mayor Mayor Pro Tem • Reviews and approves press release communica3ons issued on behalf of the City of Hermosa Beach • Expert resource for media interview requests • Provides strategic point of view / insights for items rela3ng to Hermosa Beach Strategic Goals for communica3ons purposes; works with PIO in reviewing these messages for distribu3on to press Asst. to the City Manager Economic Dev. Officer • Diane Strickfaden and Shelli Margolin-‐Mayer will work alongside the PIO to iden3fy public rela3ons opportuni3es, create messaging and generate posi3ve media outreach surrounding events and related business news/developments / community resources in Hermosa Beach Hermosa Beach Police Dept. Hermosa Beach Fire Dept. • Police Chief Sharon Papa and Fire Chief David Lantzer will con3nue to work with the PIO to coordinate strategy, key messages and community outreach for various safety ini3a3ves as well as emergency updates City Planning Dept. • Ken Robertson and Pam Townsend will con3nue to work with the PIO on items rela3ng to the Proposed Oil Project, City Planning & Development; update the community with news regarding EIRs while also crea3ng key messages / updates / advisories Additional City Staff • Terri Dinubilo and Nico De Anda-‐Scaia will con3nue to work with the PIO to coordinate all website, e-‐newsleTer and other online communica3on ini3a3ves The Public Information Officer’s Role Within the City Case Study: Discovery Channel’s FinFest Overview In preparation for FinFest, the City of Hermosa Beach worked with Discovery Channel executives to create a free, family-friendly event to celebrate all things shark-related in anticipation of the network’s debut of Shark Week 2014. Leading up to the event, items that were sensitive in nature were discussed in advance between the Discovery Channel staff and the City’s PIO, and messaging was developed to address the following: q The recent shark attack in Manhattan Beach; public debate about fishing rules & regulations q The use of Discover Channel staff to serve as independent third party experts to speak about the incident and the importance of education surrounding sharks q Talking points were created for both Discovery Channel and the City of Hermosa Beach to use that emphasized the need for continued marine animal education throughout beach cities, and Discovery Channel’s support of this through events like FinFest q Connected Steve Robles, the recent shark attack victim, with Discovery Channel staff and integrated him into the festival in showcase for support of sharks Case Study: Discovery Channel’s FinFest Overview, cont’d The City’s PIO also managed community relations surrounding the leak of surprise musical guest Jimmy Buffett. While City staff had been working with the Discovery staff since April to help in preparation for this event, the City made a verbal commitment to not reveal the surprise guest for the independent event managed by the Discovery Channel. When the news was leaked that Jimmy Buffett was the special guest performer, both the City and Discovery staff worked quickly and efficiently to provide the following: q Increased security efforts from 39-70 security guards q Deployed a traffic management plan with HBPD assessing street closures as needed; Public Works has pre-positioned barricades at key intersections. Utilized PIO to update community on these items q Had the Jimmy Buffett news removed from websites where possible q Worked in tandem with media to emphasize limited parking; this included the local KLOS radio station making the announcement to walk or ride your bike to FinFest three times; other media were updated as well Case Study: Discovery Channel’s FinFest Results The coordinated efforts of the City, Discovery Channel staff and partner organizations resulted in a truly memorable experience for the community that participated in the inaugural FinFest. News reports and social media were flooded with family photos and friends enjoying the weekend along the shores of Hermosa Beach. q Media coverage was extremely positive and noted the family- friendly aspects of the festival. A proactive communications approach ensured that the city was not viewed as being insensitive to recent events that have occurred in the local waters, but was rather a community leader in showcasing its celebration of marine life in the community with Discovery Channel q Hermosa Beach was viewed by Discovery Channel staff as a first- rate partner as the host for the inaugural event. Discovery Channel staff made multiple comments about how great it was to work with the City of Hermosa Beach and noted that they look forward to working with the City on future events q The City’s staff and their proven expertise with managing details and communications efforts has distinguished Hermosa Beach as a leader in the South Bay for hosting world-class outdoor events From: Lucy Maurer [mailto:lucymmaurer@gmail.com] Sent: Monday, September 22, 2014 4:45 PM To: Peter Tucker; Nanette Barragan; Carolyn Petty; Hany Fangary; Michael DiVirgilio Cc: Elaine Doerfling; Tom Bakaly Subject: City Public Relations Dear City Councilmembers, I am writing to you about Item 2 (g) on the agenda for the city council meeting tomorrow. I do not understand why a city needs a public relations company. The city is not a major company like Yahoo or Exxon/Mobil nor is it a film company. Since why does a city need a publicist? Hermosa Beach is a simple and small city that does not need publicity. If you were giving $72,000 to our schools or to improve a street, I could understand that. But giving $72,000 to a public relations company is a real waste of taxpayers' dollars. I hope you will decide to eliminate this unsound expenditure. Sincerely, Lucy Maurer October 9, 2014 Honorable Mayor and Members of Regular Meeting of The Hermosa Beach City Council October 14, 2014 E&B’S PROPOSED OIL DRILLING AND PRODUCTION PROJECT PART A Public Hearing on placement of a measure on the March 3, 2015 ballot to present to the electorate for its consideration a Ballot Measure Ordinance proposing various legislative changes, a Development Agreement, and an oil and gas pipeline franchise and making CEQA findings in order to lift the ban on oil drilling and allow the Proposed E&B Oil Drilling & Production Project at the site of the current City Maintenance Yard at 555 Sixth Street, Hermosa Beach, CA, 90254 Recommendation: PART A: Hold a public hearing to consider placing a measure on the March 3, 2015 ballot to allow the Proposed E&B Oil Drilling & Production Project at the site of the current City Maintenance Yard at 555 Sixth Street, Hermosa Beach, CA, 90254. The public hearing also serves as an opportunity for the public to raise objections to the oil and gas pipeline franchise before being placed on the ballot. Should the Council elect to place the Project on the March 3, 2015 ballot, the Council should: (1) Adopt the following resolution attached this report: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, CALLING AND GIVING NOTICE OF THE HOLDING OF A SPECIAL MUNICIPAL ELECTION ON TUESDAY, MARCH 3, 2015, FOR SUBMISSION OF AN ORDINANCE TO THE ELECTORATE RELATING TO A PROPOSED OIL AND GAS DRILLING AND PRODUCTION PROJECT PROPOSED BY E&B NATURAL RESOURCES MANAGEMENT CORPORATION FOR THE CITY MAINTENANCE YARD AT 555 SIXTH STREET; and (2) Proceed to Part B of this agenda item to consider four additional resolutions pertaining to submitting to the voters a measure on the proposed E&B oil drilling/production project at a Special Municipal Election on March 3, 2015 Should the Council determine that the item is not yet ready to be placed on the ballot, it is recommended that Council continue this hearing to its regular meeting of October 28, 2014 to allow additional time to address remaining open issues. Background: Consideration by the electorate of the proposed E&B Oil Drilling & Production Project implements a 2012 Settlement Agreement between the City of Hermosa Beach, E&B Resources Management Corporation (“E & B”) and Macpherson Oil Company (for itself and Windward Associates) to resolve a lawsuit brought by Macpherson Oil Company against the City for breach of contract regarding oil drilling at the site of the existing City Maintenance Yard at 555 Sixth Street. The litigation stems in part from adoption of Proposition E, a 1995 decision by the Hermosa Beach voters to restore a ban on oil drilling in the City. This ban is still in effect and can only be lifted by another vote of the people. The Settlement Agreement obligates the City, at the Applicant’s request, to ask the voters whether or not to approve an oil drilling and production project at the proposed Project site. Thirty-four years remain on the lease that the City entered into with Macpherson Oil Company in 1992, which was assigned to the E&B, allowing the Project to occur on the City Maintenance Yard. The Applicant proposes to develop the 1.3-acre Project site at 555 Sixth Street, Hermosa Beach, currently used as the City Maintenance Yard, as an onshore oil drilling and production site using directional drilling to access oil and gas reserves in the tidelands and uplands within the Torrance Oil Field, with 30 production wells, 4 water injection wells, liquid and gas separating equipment, and gas processing unit. In addition, the proposed Project would result in the installation of offsite underground pipelines for the transportation of the processed crude oil and gas from the Project Site within the Valley Drive right-of-way to and within the Cities of Redondo Beach and Torrance to refineries. The Applicant proposes a laydown site for supply staging/storage within the basement level of the industrial building at 601 Cypress Avenue during the construction phases. The Applicant also proposes to construct a parking lot at 636 Cypress Avenue for use by some of its construction employees/contractors on weekdays and by the public at other times; this would replace public parking eliminated by the project on the Project site and along Sixth Street. The Proposed Oil Project would occur in the following four phases:  Phase 1: Site Preparation, including relocation of the City Maintenance Yard to the temporary facility;  Phase 2: Drilling and Testing of three oil wells and one water disposal/injection well;  Phase 3: Final Design and Construction of both the oil and gas facility and the permanent City Maintenance Yard; and  Phase 4: Development and Operations, including drilling of the remaining wells over 30 months and re-drill of wells periodically through the life of the project. The Applicant proposes a facility designed for a maximum capacity of 8,000 barrels per day (bpd) of crude oil and 2.5 million standard cubic feet per day (scfd) of produced gas at completion of the drilling stage of the Proposed Oil Project in Phase 4. The timeframe from commencement of the proposed Project until the permanent oil and gas facility would be operational is estimated to be approximately 3.25 years. All aspects of the proposed project are fully described in the Final Environmental Impact report (FEIR) dated June 2014. The FEIR is available on the City’s website at http://www.hermosabch.org/index.aspx?page=755 or by contacting the Community Development Department at (310) 318-0242. The Project site is the City’s Maintenance Yard at 555 Sixth Street, which E&B will utilize pursuant to a lease for development of its Project should the voters approve a ballot measure lifting the ban on oil drilling. In 1993, the City also approved a Conditional Use Permit on the site for oil drilling and production. The CUP itself will be superseded by the Development Agreement for this project; however, the still relevant CUP conditions will be binding on the project as conditions in the Development Agreement, to the extent not inconsistent with the mitigation measures recommended in the FEIR. The proposed project has also been designed consistent with the still relevant 1993 CUP conditions, which are included in the Project Description as integral elements of the project. The CUP conditions incorporated in the Development Agreement remain unchanged, except for the deletion of a few conditions that have been superseded by stricter Mitigation Measures in the EIR. The City Council certified the Final EIR for this Project on July 8, 2014. The Settlement Agreement between the City and E&B requires the City Council to submit to the voters at a special election the question whether to amend the Hermosa Beach Municipal Code to allow E&B’s oil and gas drilling and production project to proceed at the City maintenance yard located at 555 Sixth Street and to approve a development agreement that would afford E&B a vested right to proceed with its project. The Agreement to Implement the Settlement Agreement entered into between the City and E&B on July 23, 2014 calls for the special election to take place on March 3, 2015. The Planning Commission held a public hearing and considered the legislative changes, development agreement and findings that have been prepared for presentation to the Hermosa Beach voters on June 23, 2014. The Commission found that legislative changes would be necessary for the E&B Oil Project to be approved and to be consistent with the General Plan, Coastal Land Use Plan and Hermosa Beach Municipal Code, and recommended that the City Council submit the Ballot Measure to the Hermosa Beach voters. The Ballot Question The form of the ballot question was presented to the City Council at its September 8 and 30, 2014 study sessions. The question is limited to 75 words, must be impartial (and not misleading), precise and must include mention of each of the separate actions being asked of the voters. The question must start with the word “shall” and solicit a “yes” or “no” answer. It seems important for the sake of clarity to identify the project by name (i.e. E&B) and to identify the location of the proposed project by its address. Several alternative versions of the ballot question were submitted at the September 30 , 2014 study session by members of the public, two organizations and Councilmember Barragan. Several Councilmembers expressed a desire to include some of the information contained in the alternative versions. Council asked that staff return with a single ballot question for consideration. A revised ballot question is included in the Resolution calling the election; it is responsive to the Council direction to include additional information and in the City Attorney’s judgment, meets the above requirements. The Ballot Measure Ordinance The Ballot Measure Ordinance, Attachment A to the Resolution calling the election, would: 1. Amend the Hermosa Beach Coastal Land Use Plan (part of the City’s General Plan) to change the land use designation for the City Maintenance Yard and to adopt energy policies consistent with E&B’s Project; 2. Amend various provisions of the City’s Municipal Code to allow E&B’s Project to proceed, but continue to prohibit oil drilling elsewhere in the City, and to remove the restriction on the City’s use of Project royalties for open space and parkland; 3. Approve a Development Agreement between the City and E&B in order to provide E&B with a statutory vested right to proceed with its Project and to set forth all conditions of approval and mitigation measures that will govern the Project; 4. Approve an oil pipeline franchise allowing E&B to construct and operate subterranean pipes for the transmission of oil and gas from the drill site to a location outside the City; and 5. Adopt a legally-required statement that the Project is the most desirable, feasible alternative and that its benefits outweigh its significant unavoidable impacts. The Ordinance has four attachments: A. New Chapter to the Coastal Land Use Plan with policies for coastal oil and gas development; B. Diagram of the Coastal Land Use Plan Map Amendment reflecting the change in designation from Open Space to Industrial (IND); C. Diagram of the oil and gas pipelines for the pipeline franchise; and D. The Development Agreement. Legislative Changes The Ballot Measure Ordinance includes all of the legislative changes needed for the project to proceed. These changes would make the Project consistent with the Hermosa Beach Municipal Code and General Plan. More specifically, E&B’s project requires the following land use actions in order to proceed, which are reflected the Ballot Measure Ordinance.1 1 A strikethrough version of the various amendments is available as part of the Planning Commission’s July 23, 2014 staff report. http://hermosabeach.granicus.com/DocumentViewer.php?file=hermosabeach_24a8cfbf40344fcef200765d3946ea cd.pdf&view=1. The strikethrough was also presented to the City Council as part of its July 8, 2014 agenda packet. • Amendment to Section 17.28.020 (Permitted uses, Light Manufacturing M-1 Zone) of the Hermosa Beach Municipal Code to allow oil and gas production and processing as a permitted use, subject to Section 17.42.140. (Ordinance Section 2) • Addition of Section 17.42.140 to Chapter 17.42 (General Provisions, Conditions and Exceptional Uses) of the Hermosa Beach Municipal Code to permit oil production and processing on City-owned property located at 555 Sixth Street in the M-1 Zone subject to approval of a Development Agreement and without a precise development plan. (Ordinance Section 4) • Amendment to 17.28.030(D) (Standards and Limitations, Light Manufacturing M-1 Zone) to specify oil and gas operations may exceed the 35 foot building height for a temporary period of time to a height as set forth in an approved Development Agreement. (Ordinance Section 3) • Amendment to Section 5.56.010 to Chapter 5.56 of the Hermosa Beach Municipal Code to continue to prohibit allow oil and gas wells in the city except as provided above. (Ordinance Section 5) • Repeal of Section 5.56.020 of the Hermosa Beach Municipal Code which restricted disposition of city funds derived from hydrocarbon recovery for acquisition, maintenance, and improvement of available excess school or other properties for open space and parkland purposes. (Ordinance Section 6) • Amendment to Title 21 Oil Production Code of the Hermosa Beach Municipal Code to amend the definition of Grade and Process Operations. (Ordinance Section 8) The Ballot Measure Ordinance also changes the Hermosa Beach Coastal Land Use Plan- Land Use Map designation for the Project site at 555 Sixth Street from Open Space to Industrial (IND) consistent with the proposed use. (Ordinance Section 9) The Ordinance includes a new chapter to the Hermosa Beach Coastal Land Use Plan entitled Coastal Industrial (Oil and Gas) Development. This chapter sets forth the policies that govern oil and gas drilling and production in the City and have been prepared in consultation with, and require approval by, the California Coastal Commission. The policies can be found at Attachment A to the ballot measure ordinance. (Ordinance Section 7) Franchise for Oil and Gas Pipelines A pipeline franchise for oil and gas pipelines is required from the City to allow the oil and gas pipelines within the City. The pipelines will run underground in the right-of-way of Southbound Valley Drive to the City of Hermosa Beach border with Redondo Beach at Herondo Street. Even if the voters approve the franchise, the pipeline will still require a ministerial encroachment permit setting forth appropriate conditions as required by the Municipal Code and implementing the mitigation measures set forth in the Final Environmental Impact Report (“EIR”) and conditions incorporated in the Development Agreement. The term of this franchise shall be co- terminus with the term of the Lease. The franchise also includes an annual franchise fee, payable to the City as follows: Pipelines with an Internal Diameter of: Base Rate Per Lineal Foot 0-4 inches .590 4-6 inches .895 6-8 inches 1.197 The dimensions of the pipelines would be an 8" crude oil pipeline and two 4" gas pipelines. The portion of the pipelines within the City of Hermosa Beach will each run for approximately 0.43 miles. The initial annual fee calculates to roughly $7647.79 per year. The applicable base rate will be adjusted annually by any increase in the CPI. The franchise also provides that the surface of City roads shall be placed in a condition that is as good and as serviceable as existed at the beginning of this work and must be to the satisfaction of the City Engineer. State law provides procedures to be followed when the City Council grants a franchise. While it is not entirely clear that the procedures apply to this situation where the voters will approve a franchise, the Council determined that it would be prudent to follow the procedures by adopting a resolution of intention and providing an opportunity for the public to object to the franchise before placing the franchise on the ballot. The City Council adopted a resolution declaring its intention to submit the proposed franchise for oil and gas pipelines to the electorate on September 23, 2014. The public hearing tonight also serves as a time to receive any objections to placing the franchise before the voters for approval. The Ballot Measure Ordinance includes a provision awarding the pipeline franchise on the above terms. (Ordinance Section 10) Development Agreement The Project includes a Development Agreement and provides E&B with a vested right to proceed with the Project as required by the Settlement Agreement in exchange for a package of public benefits. In addition to the lengthy contractual obligations between the parties, the agreement incorporates the EIR mitigation measures, the updated 1993 CUP conditions and additional conditions of approval drafted specifically for this Project. The DA was drafted in accordance Government Code Section 65865, and as required by state law and the HBMC Hermosa Beach Municipal Code includes the duration of the agreement; the permitted uses of the property; the density and intensity of use; the maximum height and size of proposed buildings; and the permissive content allowed by Section 65865.2. The Development Agreement can be found as Attachment D to the Ballot Measure Ordinance. (Ordinance Section 11) The provisions of the Agreement highlighted in yellow are still under discussion as of the writing of this staff report; any new developments regarding those provisions will be provided to the Council as a supplemental. A redline version of the Development Agreement also included as an attachment to this agenda item shows the changes made to the Development Agreement since it was presented to the City Council on September 30, 2014. The Development Agreement also has multiple attachments: Exhibit A-1: Legal Description for 555 6th Street Exhibit A-2: Legal Description for 601 Cypress Avenue Exhibit A-3: Legal Description for 636 Cypress Avenue Exhibit B: Project Description from the Final EIR Exhibit C: Explanation of Public Benefits Exhibit D1: Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, Exhibit D2: Additional Project Conditions Exhibit D3: Mitigation Measures/Mitigation Monitoring Plan- from Section 8.0 of Final Environmental Impact Report The focus of the Council’s discussions of the Development Agreement has been on the public benefits being proposed by E&B, which are enumerated in Exhibit C to the Agreement. Below is a summary of the negotiations on public benefits being conducted by the Council Subcommittee (Councilmembers DiVirgilio and Fangary). In bold is the status of each item as of the writing of this staff report. a) Expenditure of Oil Revenues by the City: E & B initially suggested that the City consider a public process to determine what revenues from the lease would be used for, to occur following a successful ballot measure. The City subcommittee expressed that this should occur through normal City processes rather than a contractually required process. The Development Agreement no longer includes this language. b) Supplemental School Funding: E & B proposed additional funds for the schools to supplement the lease royalties to be provided by way of a separate agreement with the Education Foundation or other non-profit organization that would cover or offset the revenues from the lease that would go to the State. E & B has continued to assert that this benefit is an important part of the Development Agreement. The City Council has previously given direction that it not be included in the DA; that notwithstanding, E&B has continued to insist that it be included in the Agreement due to the fact that schools are not receiving as much funding as originally contemplated due to State distribution issues. Councilmember Fangary has been clear in negotiation discussions with E&B that his position is that it not be in the Agreement. Councilmember DiVirgilio has stated that he would be agreeable to including E&B’s proposed additional contribution (1% of gross revenues) if it was clear that the School District had the discretion to accept the funds if the oil ban was lifted. If the School District did not accept the additional contribution, then the funds would go to the Hermosa Beach Education Foundation if approved by them. If the School District and the Education Foundation both declined the additional contribution, then E&B would be relieved of the obligation. E&B still prefers that the contribution go directly to the Education Foundation. Since the City’s negotiation team is divided on this issue, Council should provide input on this item. Exhibit C includes both E&B’s proposed language and Councilmember DiVirgilio’s preferred language. c) Remedial Action Plan: E & B will pay the entire cost of soils remediation at the maintenance yard should the oil ban be lifted and the project move forward to Phase 3 – full production. If the ban is lifted and the oil project does not go forward past Phase 2, E & B will clean up the site to be used for industrial and commercial purposes. E&B will not be responsible for remediation of the Ballot Measure fails. The Subcommittee is in agreement with this proposal. d) Temporary and Permanent Relocation of City Maintenance Yard: E & B initially proposed to advance more funds than the $50,000 (temporary) and $500,000 (permanent) called for in the lease. E & B clarified that would entail converting the figures above into current dollars. At the May 27, 2014 City Council meeting, the suggestion was made that E & B pay the entire cost of permanent and temporary relocation of the maintenance yard. The City subcommittee made this request at the June 2nd meeting. The subcommittee also clarified that E & B could also suggest a viable option for the temporary relocation of the City yard. E&B has proposed that if the ban is lifted and it decides to proceed with Phase 3 of the project, it will advance $6,500,000 to the City for the permanent relocation of the City Maintenance Yard. E & B has further agreed to forgive the City’s $3.5 million obligation if the project does not go to Phase 3. These funds could be used for projects at the discretion of the City such as a temporary or permanent relocation of the City Maintenance Yard. The City’s projected cost of the temporary relocation ($3 million) and permanent relocation ($10 million) comes to a total of $13 million. The City had planned on doing a temporary facility due to the uncertainty of whether or not E&B would continue the project after Phase 3. This proposal reduces this uncertainty and is supported by the Subcommittee. e) Timing of Revenues: E & B initially proposed that the minimum royalty to the City be paid after 1 year of drilling, rather than in the 4th year as is provided in the lease. E & B clarified that the minimum payment would be $500,000 per each year, nonrefundable. At City Council meetings, the suggestion was made to increase the amount of the accelerated Minimum Royalty from $500,000 to $4 million per year, to be available for City general fund purposes. The City Subcommittee made this request with the caveat that it would be an advance from uplands revenue. E & B has agreed to provide an additional unrestricted contribution to the City in the amount of $500,000. E&B has stated that both payments totaling $1 million would now occur at the 4th year. The Subcommittee should confirm its position on this item at the meeting. f) E & B Matching Funds to Achieve City Goals: E & B proposed additional funds to the City, beyond the royalties, on a 50/50 matching basis for “off-set” projects such as converting the City fleet to be carbon neutral and undergrounding of utilities. On September 30, 2014, Council directed the Subcommittee to remove this section from the DA. E&B has now proposed that it would provide $30 million in matching funds for the undergrounding of utilities citywide. Undergrounding utilities has not been a priority of the City and is not included in the City’s 5-year Capital Improvement Program. The Subcommittee should confirm its position on this item at the meeting. g) Benefits to Nearby Property Owners: Similar to its project in Huntington Beach, E & B proposed setting up and funding an account that would stabilize proven impacts to property values for 5 years (during drilling) for properties in close proximity to the project. E & B clarified that the timeframe was undecided at this time. It further clarified that the residents would need to voluntarily apply for this program. A more detailed program proposal was promised. In response to comments from Council on May 27, 2014, the City subcommittee clarified that the term “proven impacts” would need to be precisely defined. A summary of the Residential Property Trust program is included in Exhibit C to the Development Agreement. E & B has now proposed that the program will be available to properties within 600 feet of the project and the fund have a minimum balance of $1 million and payments on claims will be capped at $20 Million. E&B has agreed to place another $4 million in the fund over time. Any funds left over in the fund will be distributed to properties within 300 feet of the project. The Subcommittee is in conceptual agreement with this proposal. Proposals by the City for inclusion in the Development Agreement: a) Acceptable limits of insurance coverage. New insurance language has been incorporated into the Agreement and is still under review by the parties’ insurance advisors. b) An explicit ban on the practice of fracking. Language included in the Development Agreement. c) Inclusion of all mitigation measures from the FEIR and other conditions of approval- see notes above. Language included in the Development Agreement. d) At the City Council meeting of May 27, 2014, it was suggested that if the ballot measure passes, E & B agree to forgive the $17.5M debt, even if E & B ultimately does not obtain other required approvals or proceed with the project. The City subcommittee made this request at the June 2nd meeting. E & B has rejected this request. e) At the City Council meeting of May 27, 2014, it was suggested that E & B pay a street damage fee to compensate for asphalt wear and tear due to the anticipated truck traffic. The City subcommittee made this request at the June 2nd meeting. Language included in the Development Agreement. f) The City’s legal counsel suggested that the City negotiate a condition requiring that upon expiration of the lease, the maintenance yard site be returned to the City in a specified condition. The City subcommittee made this request at the June 2nd meeting. Language is included in the Development Agreement. g) Expiration of Lease – the City’s subcommittee requested that if the voters did not lift the oil ban, then E&B would agree that the lease would expire. This would require a separate agreement with E & B if the oil ban is not lifted by the voters. E & B rejected this offer. The City Attorney provided an update on this issue at the September 30, 2014 meeting. h) Recommendations in the reissued HIA dated July 2014. Language Included in the Development Agreement. Other Development Agreement Issues: a) Introduction Language – E & B would like to include language in the introduction of the Public Benefits Section (Exhibit C) that shows a range of potential oil royalties to the City. The low amount of the range would be the estimate from the City’s Cost Benefit Analysis and the high amount would be E & B’s estimate of $500 million. The City DA Subcommittee has stated that this should not be in the agreement. E&B and the Subcommittee have discussed the concept of including Figure 1 from the Cost Benefit Analysis (CBA) in the Statement of Overriding Considerations Figure 1 shows the CBA estimates and E&B’s estimates. Staff is unclear whether both members of the subcommittee support this plan. b) Technical Legal issues: Councilmember Fangary submitted language changes for the Agreement. Those that are agreeable to the parties have been included in the Agreement; provisions where there is still disagreement have been highlighted in yellow. Councilmember Fangary has also proposed adding a provision that would require E&B to provide the City with notice of any litigation in which it is a defendant party that relates to oil drilling operations, and/or any enforcement orders/cleanup and abatement orders that any governmental agency issues to it during the term of the Agreement. Page 1 of 3 14-xxxx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 RESOLUTION NO. 14-xxxx A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, CALLING AND GIVING NOTICE OF THE HOLDING OF A SPECIAL MUNICIPAL ELECTION ON TUESDAY, MARCH 3, 2015, FOR SUBMISSION OF AN ORDINANCE TO THE ELECTORATE RELATING TO A PROPOSED OIL AND GAS DRILLING AND PRODUCTION PROJECT PROPOSED BY E&B NATURAL RESOURCES MANAGEMENT CORPORATION FOR THE CITY MAINTENANCE YARD AT 555 SIXTH STREET WHEREAS, the Settlement Agreement between the City and E&B Natural Resources Management Corporation (“E&B”) requires the City Council to submit to the voters at a special election the question whether to amend the Hermosa Beach Municipal Code to allow E&B’s oil and gas drilling and production project to proceed at the City maintenance yard located at 555 Sixth Street and to approve a development agreement that would afford E&B a vested right to proceed with its project. WHEREAS, the Agreement to Implement the Settlement Agreement entered into between the City and E&B on July 23, 2014 calls for the special election to take place on March 3, 2015. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That pursuant to the requirements of the laws of the State of California relating to general law cities, including but not limited to Elections Code Section 9222, there is called and ordered to be held in the City of Hermosa Beach, California, on Tuesday, March 3, 2015, a Special Municipal Election for the purpose of submitting to the voters the following ordinance: Shall E&B Corporation’s 34-well oil and gas drilling/production project at the City’s 555 Sixth Street maintenance yard be approved by 1) amending the General Plan and Municipal Code to exempt the project from the City’s oil drilling ban and repeal the restriction on City’s use of project royalties, 2) awarding a pipeline franchise to transport oil/gas underground, 3) approving a 34-year development agreement, and 4) determining that project benefits outweigh its nine unavoidable environmental impacts? YES NO Page 2 of 3 14-xxxx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 SECTION 2. That the proposed complete text of the Ordinance submitted to the voters is attached as Exhibit A. SECTION 3. That the vote requirement for the measure to pass is a majority (50% + 1) of the votes cast. SECTION 4. That the ballots to be used at the election shall be in form and content as required by law. SECTION 5. That the City Clerk is authorized, instructed and directed to procure and furnish any and all official ballots, notices, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 6. That the polls shall be open at seven o’clock a.m. (7 a.m.) of the day of the election and shall remain open continuously from that time until eight o’clock p.m. (8 p.m.) of the same day when the polls shall be closed, pursuant to Election Code Section 10242, except as provided in Section 14401 of the Elections Code of the State of California. SECTION 7. That pursuant to Election Code Section 12310, a stipend for services for the persons named as precinct board members is fixed at the sum of $100 for each inspector and $80 for each clerk for the election. In addition, the sum of $25 will be given to each precinct board member to attend a training class and the sum of $50 will be given to each inspector to pick up the precinct supplies. The rental for each polling place, where a charge is made, shall be the sum of $25 for the election. When required, the compensation of the Custodian of a building shall be $30 for the election. SECTION 8. That in all particulars not recited in this resolution, the election shall be held and conducted as provided by law for holding municipal elections. SECTION 9. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law. SECTION 10. That the City Council authorizes the City Clerk to administer said election and all reasonable and actual election expenses shall be paid by the City upon presentation of a properly submitted bill, of which up to $50,000 shall be reimbursed by E&B to the City pursuant to the Settlement Agreement. Page 3 of 3 14-xxxx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 SECTION 11. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions, and shall make minutes of the passage and adoption thereof in the records of the proceedings of the City Council at which the same is passed and adopted. PASSED, APPROVED and ADOPTED this 14th day of October, 2014. ______________________________________________________________________________________________ PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, California ATTEST: APPROVED AS TO FORM: City Clerk City Attorney 1 AN ORDINANCE OF THE CITY OF HERMOSA BEACH AMENDING THE HERMOSA BEACH COASTAL LAND USE PLAN (PART OF THE CITY’S GENERAL PLAN) AND MUNICIPAL CODE TO ALLOW AN OIL AND GAS DRILLING AND PRODUCTION PROJECT AT 555 SIXTH STREET (CITY MAINTENANCE YARD) AND REPEALNG A RESTRICTION ON THE USE OF PROJECT ROYALTIES, AMENDING THE OIL PRODUCTION CODE, AWARDING A PIPELINE FRANCHISE FOR OIL AND GAS, AND APPROVING A DEVELOPMENT AGREEMENT WITH E&B NATURAL RESOURCES MANAGEMENT CORPORATION AND MAKING CEQA FINDINGS The People of the City of Hermosa Beach hereby ordain as follows: Section 1. The People of the City of Hermosa Beach do hereby find as follows: A. The purpose of this Ordinance is to modify City law in order to allow an oil and gas drilling and production project with 30 production wells, 4 water injection wells, liquid and gas separating equipment, and a gas processing unit (“Project”) to be developed by E&B Natural Resources Management Corporation (“E&B”) on City-owned land located at 555 Sixth Street (the City maintenance yard) in accordance with Oil and Gas Lease No. 2 (the “lease”) entered into in January, 1992 between the City and Macpherson Oil Company (“Macpherson”), E&B’s predecessor-in-interest. B. This Ordinance proposes to: 1) amend the Hermosa Beach Coastal Land Use Plan (part of the City’s General Plan) to change the land use designation for the City Maintenance Yard and to adopt energy policies consistent with E&B’s Project; 2) amend various provisions of the City’s Municipal Code to allow E&B’s Project to proceed, but continue to prohibit oil drilling elsewhere in the City, and to remove the restriction on the City’s use of Project royalties; 3) approve a Development Agreement between the City and E&B in order to provide E&B with a statutory vested right to proceed with its Project and to set forth all conditions of approval and mitigation measures that will govern the Project; 4) approve an oil pipeline franchise allowing E&B to construct and operate subterranean pipes for the transmission of oil and gas from the drill site to a location outside the City; and 5) adopt a legally-required statement that the Project is the most desirable, feasible alternative and that its benefits outweigh its significant unavoidable impacts. 2 Section 2. The matrix set forth in Section 17.28.020 of Title 17, Chapter 17.28 of the Hermosa Beach Municipal Code is amended by adding the following new category in alphabetical order: Oil and gas production and processing P 17.42.140 Section 3. Section 17.28.030(D) of Title 17, Chapter 17.28 of the Hermosa Beach Municipal Code is amended to read as follows: D. Building Height. Any building may have a maximum of thirty-five (35) feet in height and have a maximum of two stories. Oil and gas operations may exceed this height for a temporary period of time to a height as set forth in an approved Development Agreement. Section 4. A new section 17.42.140 is added to Title 17, Chapter 17.42 of the Hermosa Beach Municipal Code to read as follows: 17.42.140 Oil and Gas Production and Processing. Oil production and processing is permitted on City-owned property located at 555 Sixth Street in the M-1 Zone subject to approval of a Development Agreement. No precise development plan is required. Section 5. Section 5.56.010 of Title 5, Chapter 5.56 of the Hermosa Beach Municipal Code is amended to read as follows: 5.56.010 Oil Drilling. Except as provided in Sections 17.28.020 and 17.42.140, the drilling, boring or otherwise sinking of an oil or gas well, or oil or gas wells, or the maintenance, pumping or operation of any oil well or oil wells or gas well or gas wells in the City is declared to be a nuisance and is declared to be unlawful. Except as provided in Sections 17.28.020 and 17.42.140, it is unlawful for any person to drill, bore or otherwise sink or maintain, pump or operate or cause to be drilled, bored or otherwise sunk, or maintained, pumped or operated, or to aid in the drilling, boring or otherwise sinking, or maintaining, pumping or operating of any gas or oil well or wells for the purpose of procuring oil, gas or other hydrocarbon substances within any portion of the City. Except as provided in Sections 17.28.020 and 17.42.140, it is unlawful for any person to commence the construction or to construct or maintain any derrick, or any oil well apparatus in the City for the purpose of drilling for or maintaining any oil or gas well in the City. Section 6. Section 5.56.020 of Title 5, Chapter 5.56 of the Hermosa Beach Municipal Code is hereby repealed. 3 Section 7. The Hermosa Beach Coastal Land Use Plan, part of the City’s General Plan, is amended to add a new chapter entitled Coastal Industrial (Oil and Gas) Development as set forth in Attachment A to this ordinance and incorporated herein by reference. In the event that the Coastal Commission proposes modifications to the amendment, such modifications will be incorporated into the Hermosa Beach Coastal Land Use Plan without a further vote of the electorate provided they are consistent with the Lease and the Settlement Agreement entered into by and between the City, Macpherson, and E&B dated March 2, 2012. Section 8. Title 21 Oil Production Code of the Hermosa Beach Municipal Code is amended as follows: A. Sec. 21A-1.20 Definition of “Grade” is amended to read as follows: “Grade” (adjacent ground elevation) means the lowest point of elevation of the finished surface level of the ground, paving or sidewalk, excluding excavations for well cellars and storage tanks within the enclosed area of the privacy wall and for the privacy wall described in Section 21A-2.9(C). For the purpose of determining the height of privacy walls and other structures for oil projects, this definition supersedes the definition of grade in Chapter 17.04 and Section 17.46.130 of Title 17 of the Municipal Code. B. Sec. 21A-2.10(E) Process Operations is amended to read as follows: E. Process Operations. No process operations shall be permitted at any well site excluding oil and gas processing and treatment activities involving the chemical separation of oil and gas constituents and the removal of impurities. Processing activities would include oil stripping; hydrogen sulfide and carbon dioxide removal systems; depropanizers, debutinizers, or other types of fractionation; sulfur recovery; wastewater treatment; and separation and dehydration of oil/gas/water. Section 9. The Hermosa Beach Coastal Land Use Plan - Land Use Map (Appendix J), part of the City’s General Plan, is amended to modify the designation for the project site at 555 6th Street in Hermosa Beach from Open Space to Industrial (IND), as set forth in Attachment B to this Ordinance. In the event that the Coastal Commission proposes modifications to the amendment, such modifications will be incorporated into the Coastal Land Use Plan without further vote of the electorate provided they are consistent with the Lease and Settlement Agreement entered into by and between the City, Macpherson, and E&B dated March 2, 2012. 4 Section 10. An oil and gas pipeline franchise is hereby granted to E&B Natural Resources Management Corporation for placement of pipelines to serve its oil production facility at 555 6th Street as set forth and described in the Project Description contained in Exhibit B to the Development Agreement. The location of the pipelines approved by this franchise shall be as described in the map attached hereto as Attachment C to this ordinance and incorporated herein by reference (limited to the portion of the pipeline shown within the territorial boundaries of the City of Hermosa Beach), specifically for the placement of oil and gas pipelines constructed underground in the right of way of Southbound Valley Drive to the City of Hermosa Beach border with Redondo Beach at Herondo Street. Construction of the pipeline authorized by this franchise shall be preceded by approval by the City, which approval shall not be unreasonably denied, of a ministerial encroachment permit setting forth appropriate conditions as required by the Municipal Code and implementing the mitigation measures set forth in the Final Environmental Impact Report (“EIR”) and conditions incorporated in the Development Agreement. The term of this franchise shall be co-terminus with the term of the lease. Beginning at such time as the oil and gas pipelines are installed and become operational (i.e. are transporting oil and/or gas) and as consideration for the franchise, E&B Natural Resources Management Corporation shall pay to the City of Hermosa Beach an annual franchise fee. The annual fee shall be due until such time as the pipelines are abandoned in accordance with the Development Agreement and no longer operational. The base annual fee shall be paid within 30 days after the end of each calendar year including the year that one or both pipelines become operational and a penalty at the rate of two percent (2%) per month or fraction thereof beyond the payment date shall be charged, but in no event shall said penalty exceed fifty percent (50%). The City may also withhold permits or any pending authorization to proceed with phases of the project if any payment is delinquent. All such payments shall be made payable to the City, and shall be supported by the Grantee’s verified statement concerning the computation thereof. The payments due to the City shall be computed as follows: The length of the pipe expressed in feet located within the City’s territorial boundaries, rounded to the nearest foot shall be multiplied by the applicable base rate, as adjusted below, in accordance with the following schedule: Pipelines with an Internal Diameter of: Base Rate Per Lineal Foot 0-4 inches .590 4-6 inches .895 6-8 inches 1.197 The applicable base rate shall be adjusted annually by any increase in the CPI for the preceding 12 months. The term "CPI" as used herein shall mean the Consumer Price 5 Index All Urban Consumers (all items less food and energy; base year 1982-84 = 100) for the Los Angeles-Riverside-Orange County area published by the United States Department of Labor, Bureau of Labor Statistics. The work of laying, constructing, maintaining, operating, renewing, repairing, changing and moving any of the pipeline system contemplated by this franchise and all other work in exercise of this franchise shall be performed in compliance with all applicable provisions of the City’s Municipal Code pertaining to street excavations and restoration, including but not limited to the City’s encroachments ordinance, and other applicable laws (in accordance with the Development Agreement) and shall be conducted with the least possible hindrance or interference to the use of City roads by the public or by the City Hermosa Beach, and E&B shall provide all necessary warning, safety and traffic control devices as are or may be required by City, County, State or Federal regulations. All excavations shall be back filled and adequately compacted. The surface of City roads shall be placed in a condition that is as good and as serviceable as existed at the beginning of this work and must be to the satisfaction of the City Engineer. Section 11. An application for a Development Agreement was filed in accordance with Hermosa Beach Municipal Code Chapter 17.64 and California Government Code section 65864 et seq. on November 14, 2012 by E&B Natural Resources Management Corporation to develop an oil production and processing project on a City-owned parcel located at 555 Sixth Street pursuant to the lease, City Council Resolution No. 93-5632 (Conditional Use Permit) and the Settlement Agreement entered into by and between the City, Macpherson and E & B dated March 2, 2012. The application was deemed complete on April 18, 2013. A. A public hearing was duly noticed for consideration by the Planning Commission meeting on June 23, 2014. At that meeting the Commission reviewed the staff report, considered all the pertinent testimony, and adopted a resolution (No. 14-9) making its recommendations to the City Council. B. A duly noticed public hearing was conducted by the City Council on______, 2014 at which the Council considered all pertinent testimony and adopted Resolution No. _____ incorporating the Development Agreement into this ordinance to be considered by the electorate. C. The People of the City of Hermosa Beach hereby find and declare: 1. With approval of the Coastal Land Use Plan amendments and zoning ordinance and other Municipal Code text amendments proposed in this ordinance, the Development Agreement is consistent with all applicable provisions of the General Plan and the Municipal Code. 6 2. The Development Agreement contains all the mandatory provisions required and permissive content allowed by Government Code Section §65865.2. D. Based on the above findings, the People of the City of Hermosa Beach hereby approve the Development Agreement, which is attached hereto as Attachment D to this ordinance and incorporated herein by reference. E. The City Manager is authorized to execute the Development Agreement and fill in the blanks in the introductory sections and in the signature blocks. F. In the event that the Coastal Commission proposes any modifications to the Development Agreement pursuant to Government Code section 65869, such modifications will be automatically incorporated into the Development Agreement without a further vote of the electorate provided they are consistent with the Lease and the Settlement Agreement entered into by and between the City, Macpherson and E&B dated March 2, 2012. G. The Development Agreement may be amended by mutual agreement of City and E&B as provided for in the terms of the Development Agreement and without further vote of the electorate provided the amendment is not inconsistent with or as may be necessary to implement the Project. Section 12. Pursuant to the requirements of the California Environmental Quality Act (“CEQA”), Public Resources Code section 21000 et seq. and the Guidelines promulgated thereto in 14 Cal. Code Regs section 15000 et seq., the People find as follows: A. As contemplated in the Settlement Agreement entered into by and between the City, Macpherson, and E&B dated March 2, 2012, the City caused to be prepared an EIR evaluating the environmental impacts of the discretionary approvals approved by this ordinance. The City Council reviewed and considered the Final EIR and certified on July 8, 2014 that the Final EIR was prepared in accordance with the requirements of CEQA, reflects the independent judgment of the City Council, and constitutes an accurate and complete statement of the environmental impacts of the proposed project. B. The record for the Project demonstrates that the Applicant incorporated design features and operational practices into the Project that implement the modern technology and operational advancements related to air quality, odors, noise, 7 hazards, and water quality to reduce the potential impacts on the adjacent community and the environment. C. The record for the Project demonstrates that changes or alterations have been required in the Project that, to the extent feasible, substantially lessen some of the significant environmental effects identified in the Final EIR. The Final EIR recommends imposition of various mitigation measures to mitigate the significant adverse environmental impacts expected to be caused by the Project. Those mitigation measures have been incorporated into the Project entitlements in the Development Agreement and are implemented by way of a Mitigation Monitoring and Reporting Program set forth in Exhibit D-3 to the Development Agreement. D. The EIR identifies significant adverse environmental impacts that cannot be mitigated to a level of insignificance, significant impacts that can be mitigated to a level of insignificance, and impacts that would be less than significant. Those impacts are summarized below: Impacts 1 &2: Aesthetics and Visual Resources An 87-foot electric drill rig with three-sided acoustical shield would be installed at the Project Site at the beginning of Phase 2 for about 4 months, then during Phase 4 for 30 months, then periodically thereafter for re-drills for up to an maximum average of 30 days per year or a maximum of 150 days once every 5 years. The rig would introduce, primarily into the foreground and middleground environments, a visually dominant vertical feature which is distinct in form, mass, height, material and character from structures in the viewshed of locations which are considered to have high sensitivity. The effects of light, shade and shadow would produce contrasting geometric vertical planes and would project into a typically uniform (or otherwise naturally varied) sky backdrop. Night views of the open (illuminated) side of the drill rig, with the pattern and scale of this illuminated feature, would be out of character with existing nighttime views. Similar to day time impacts, this vertical feature would project above the horizontal plane of the existing illuminated environment and would become a focal element. The duration of exposure, number of sensitive viewers, and nature of the visual change would result in impacts that would be significant. During periods of Phase 4, a 110-foot workover rig could be present on site for up to 90 days per year. The open truss structure of the workover drill rig introduces a focal element of industrial character into viewsheds of primarily residential and light industrial character. The workover rig would not operate at night (after 6 pm). 8 The mitigation measures provided in the Final EIR reduce these impacts to the extent feasible. However, these impacts (with the drill rig or workover rig on the Project Site) have the potential to remain significant adverse impacts after mitigation. The Mitigation measures include: the selection of colors and materials for the drill rig acoustical cover that are of a neutral sky color and fully opaque; the installation of a permanent 35-foot wall at the end of Phase 3 to provide for the stability of views and opportunities for positive visual elements (i.e., articulations of the façade) for the duration of Phase 4; landscape plantings installed at the end of Phase 3 that respond to the design of the walls; and the selection of colors and finishes and lighting to minimize glare and reflectivity. The impacts when the drill rig or workover rig are not present on the project site would be less than significant with mitigation. Impact 3: Air Quality and Odors Due to the close proximity of the Project site to neighbors, businesses and the public (within 100 feet of businesses, 160 feet of residences, 55 feet of the Greenbelt and 20 feet of the public sidewalks), certain scenarios could cause odors offsite. These could include various maintenance activities such as line, tank or vessel openings; workovers removing well hole equipment (pumps or tubing), thereby exposing the well equipment to the atmosphere; minor accident scenarios; and drilling activities including muds handling that could cause short-duration, intermittent odors, or pump leaks. Because odor thresholds for certain compounds found in the oil and gas industry are very low, in the parts per billion range, release of these compounds can cause odor impacts off-site. Therefore, due to the close proximity of neighbors, odor impacts could impact surrounding areas and would be a significant impact. The Mitigation measures provided in the Final EIR reduce the potential impacts related to odors to the extent feasible. However, the impacts related to odors have the potential to remain significant adverse impacts after mitigation. The mitigation measures proposed that would reduce the frequency of odor events include: the implementation of systems that direct odor-causing releases to flare-type systems; the implementation of a compressor seal vent collection system; implementation of an Odor Minimization Plan and an Air Monitoring Plan that include buffer areas, signage, monitoring, and alarms when certain levels of H2S and hydrocarbons are reached as well as notification protocol and remedies if releases occur; the use of an odor suppressant system; and increased vigilance associated with South Coast Air Quality Management District (SCAQMD) Rule 1173 (related to controlling "leaker" components) to further reduce emissions from fugitive components that could cause odors. The air quality impacts related to construction and long-term operational 9 emissions, health risk, and greenhouse gas (GHG) emissions would be less than significant with mitigation. Impact 4: Biological Resources Oil spills and ruptures from the installed off-site oil pipelines could result due to geologic hazards, mechanical failure, structural failure, corrosion, or human error during operations. During a storm event, a spill of crude oil from the pipeline near the corner of Herondo Street and Valley Drive could be directed into the storm drain system, which from that point drains about 1,500 feet through storm drain piping onto the beach, near the high tide line. The amount of oil that would enter the ocean would depend on how much sand was on the beach at that particular time. This would have the potential to result in impacts to the numerous sensitive habitats and species present in the Pacific Ocean. Oil spills and cleanup activities could potentially result in impacts to biological resources. Direct impacts on wildlife from oil spills include physical contact with the oil, ingestion of oil, and loss of food and critical nesting and foraging habitats. The mitigation measures provided in the Final EIR reduce the potential impacts to biological resources to the extent feasible. However, these impacts have the potential to remain significant adverse impacts after mitigation. The mitigation measures include development of an Emergency Response Plan in compliance with the California State Oil Spill Contingency Pan. The plan shall include provisions for containment and cleanup measures and responsibilities. In addition, the Final EIR provides for mitigation measures for potential impacts to Hydrology and Water Quality discussed below, including implementing infrastructure preventative maintenance, conducting structural integrity tests, and routine inspections, would reduce the likelihood and severity of potential oil spills and exposure impacts to sensitive biological resources; but, impacts would remain significant and unavoidable. The fully enclosed drain systems proposed by E&B for the Project site would retain any spills on-site. Therefore, potential spills at the Project Site would not result in a significant impact to biological resources. Impact 5: Hydrology and Water Quality As described for Biological Resources above and in the Final EIR, during a storm event, a release from the off-site pipeline near the corner of Herondo Street and Valley Drive could produce a worst-case oil spill of 16,000 gallons that could drain directly into subsurface soils and/or to the ocean through storm drains. The probability for this impact to occur during a 0.50 inch rain event would be reduced from 0.40% to 0.087% over the Project life time after applying the mitigation measures described below. The mitigation measures provided in the Final EIR related to Biological Resources and Hydrology and Water Quality would reduce the potential 10 impact to water quality to the extent feasible. However, this impact to water quality has the potential to remain a significant adverse impact after mitigation. The mitigation measures, in addition to the measures listed above for Biological Resources, include implementing infrastructure preventative maintenance (i.e., smart-pigging) and routine visual inspections, the installation of a leak detection system and check valve into the crude oil pipeline at Herondo Street, the installation of an oil separator in storm drain systems of Herondo Street, and the use of pipeline design measures , which include the use of impact resistant coating, the installation of a slurry above the pipe to the base of the pavement or ground surface, and the laying of strips of warning tape over the top of the pipeline to prevent third-party damage. These mitigation measures would reduce the frequency or severity of an oil spill reaching the ocean; but, impacts would remain significant and unavoidable. Impact 6: Land Use The drilling, construction, and potential future operations would be in close proximity to land uses zoned as open space (parks, baseball fields and the Greenbelt) and residential. Project activities during all phases may generate significant noise, odor, and visual impacts that have the potential to be incompatible with these adjacent land uses. The mitigation measures provided for Noise and Vibration below would reduce the potential noise impacts during the concurrent drilling and production, as well as production only, in Phases 2 and 4 to a less than significant level. The mitigation measures in the Final EIR provided above for odors and aesthetics and below for noise during demolition and construction would reduce the land use compatibility impacts to the extent feasible. However, the land use impacts have the potential to remain significant adverse impacts after mitigation. Impact 7: Noise and Vibration The predicted noise impact during demolition and construction activities in Phase 1 and 3 of the Project has the potential to be significant at the homes to the northwest and west of the Project Site where Project-related noise could result in an increase in daytime noise levels over existing noise levels. The mitigation measures provided in the Final EIR reduce the potential noise impacts to the extent feasible. However, these impacts during demolition and construction have the potential to remain significant adverse impacts after mitigation. The mitigation measures include the provision of 24-foot high noise barriers along the project perimeter and gates at the access points to the project site with all acoustical barriers required to meet the specified performance standards. 11 Predicted noise impacts during the concurrent drilling and production in Phase 2 and Phase 4 drilling stages and during Phase 4 re-drills would be reduced to less than significant with mitigation. Noise levels when drilling is not occurring during Phase 4 would be less than significant. During re-drills, noise levels would be the same as those during drilling and, therefore, less than significant after mitigation. Predicted noise levels due to increases in traffic would be less than significant. Predicted vibration impacts would be less than significant after mitigation. Impact 8: Recreation As discussed for Biological Resources and Hydrology and Water Quality above, during a rain event, a potential oil spill from the oil pipeline near the corner of Valley Drive and Herondo Street could drain directly into the storm drains and flow to the ocean. An oil spill along the coastline could affect beach areas, leading to beach closures and boating restrictions in contaminated areas during and potentially after cleanup. Public perception of the recreational quality of the areas beaches (Hermosa, Manhattan, Redondo, etc.) could also be affected, causing a reduction in beach recreational activities for a substantial period of time. The mitigation measures provided for Biological Resources and Hydrology and Water Quality would reduce the frequency and severity of an oil spill reaching the ocean to the extent feasible. However, the impacts have the potential to remain significant adverse impacts after mitigation. Impact 9: Safety, Risk of Upset, and Hazards The potential for a blowout to result from drilling activities could produce off- site risks if they encounter pressurized areas of the reservoir. Although it is not known at this time which reservoir areas, if any, are pressurized to the extent that pressures could produce a blowout, historical data from drilling in Redondo Beach indicates that such potential does exist. Pressurization once the wells are placed into production (after drilling) would last for only a short period of time (estimated at 30 days based on the Redondo Beach wells), but could still result in a blowout during drilling. E&B indicated in the Planning Application that wells would be pressurized for a short period after drilling. The mitigation measures provided in the Final EIR reduce the potential impacts related to a well blowout during drilling to the extent feasible. However, these impacts during drilling have the potential to remain significant adverse impacts after mitigation. E&B proposed design features, including the use of an off-shore equivalent-style blow out preventer equipment (BOPE), venting to a flare, and non-cascading shutdown systems that would be incorporated into the design of the Project to address this potential impact. In addition, the mitigation measures provided in the Final 12 EIR would include: preparation of an independent third-party audit with all audit items implemented immediately and the audit updated annually; and the design of crude oil spill containment areas as Class Division I areas according to NFPA and NEC or the isolation of spark producing equipment from the containment area. The potential for risks from a pipeline rupture would be less than significant with mitigation. The potential for impacts from risks associated with spark- producing equipment resulting in the chances of igniting a crude oil spill would be reduced to less than significant with mitigation. In addition, the potential for risks during operations without drilling would be a less than significant impact. E. As to the significant adverse environmental impacts that cannot be mitigated to a level of insignificance, the People hereby adopt the following findings and statement of overriding considerations: The EIR examined alternatives to the proposed Project. Although the No Project/No Development Alternative is considered environmentally superior, the alternative does not achieve any of the project objectives. Of the other alternatives considered, the next best alternative is the AES Site, which reduces the greatest number of the Project’s significant and unavoidable impacts to less than significant with mitigation. Nevertheless, use of the AES site also does not meet most of the project objectives to the extent the objectives are tailored for the City Yard site and the 1993 Conditional Use Permit for that site and the March 2012 Settlement Agreement. The use of the AES site also has a number of potential legal and land use issues, related to Redondo Beach Charter Article 27 and would most likely require a vote of the people of Redondo Beach and a re-zoning. These issues are similar to those presented by the Proposed Project. The EIR recognizes that while both the Proposed Project and the AES Site Alternative have similar challenges, E&B has no control over the AES site. Due to these considerations, it cannot be considered a feasible alternative. After examining the alternatives, adoption and implementation of the Proposed Project is the most desirable, feasible, and appropriate action. The development agreement includes all feasible mitigation measures as part of the Mitigation Monitoring and Reporting Program and significant conditions of approval for the Project in Exhibit D to the Development Agreement. Even with implementation of those mitigation measures, the Final EIR and the record of proceedings for the Project identify potentially significant and unavoidable environmental impacts from the Project in the areas of Aesthetics and Visual Resources (with drill rig and workover rig on- site), Air Quality (odors), Biological Resources (from potential off-site oil 13 pipeline rupture), Hydrology and Water Quality (water quality from potential off-site oil pipeline rupture), Land Use, Noise (construction and demolition), Recreation (from potential off-site pipeline rupture), and Safety, Risk of Upset and Hazards (from potential well blowout during drilling). The proposed project would provide public benefits described below. 1. E&B will provide additional funds for schools to supplement the lease royalties; 2. E & B will pay the entire cost of soils remediation at the maintenance yard should the oil ban be lifted and the Project move forward to Phase 3 – full production. If the ban is lifted and the Project does not go forward past Phase 2, E & B will clean up the site to be used for industrial and commercial purposes; 3. If the oil ban is lifted and E&B decides to proceed with Phase 3 of the Project, E&B will advance $6,500,000 to the City for the permanent relocation of the City Maintenance Yard. E & B has further agreed to forgive the City’s $3.5 million obligation if the Project does not go to Phase 3. These funds could be used for projects at the discretion of the City such as a temporary or permanent relocation of the City Maintenance Yard; 4. In addition to the minimum royalty payments required under the Lease, E & B has agreed to provide an additional unrestricted contribution to the City in the amount of $500,000; 5. E&B will provide $30 million in matching funds for the undergrounding of utilities citywide; 6. E & B will create and fund an account that would stabilize proven impacts to property values for 5 years (during drilling) for properties in close proximity to the Project. The program will be available to properties within 600 feet of the Project and the fund will have a minimum balance of $1 Million, with payments on claims capped at $20 Million. E&B will place another $4 million in the fund over time. Any funds left over in the fund will be distributed to properties within 300 feet of the project. After balancing these specific economic, legal, social, technological, and other benefits of the proposed project, the voters of the City of Hermosa Beach have hereby determined that the nine significant and unavoidable adverse environmental impacts identified may be considered acceptable in light of the benefits listed above which offset these unavoidable, adverse environmental impacts that will be caused by the Project. Having adopted all feasible mitigation measures and recognized all unavoidable significant impacts, each of the separate benefits of the proposed project, as stated herein, is hereby determined to be unto itself an overriding consideration, independent of other 14 benefits, that warrants approval of the proposed Project and outweighs and overrides its unavoidable significant effects, and thereby justifies the approval of the E&B Oil Project. Based on the foregoing findings and the information contained in the record, it is hereby determined that: a. All significant Cultural Resources, Energy, Environmental Justice, Fire Protection and Emergency Response, Geology and Soils, Noise impacts during drilling and production, Public Services, Transportation/Traffic, and Water Resources effects on the environment due to approval of the Project have been eliminated or substantially lessened where feasible; and b. Any remaining significant Aesthetic and Visual Resources (with drill rig and workover rig on-site), Air Quality (odors), Biological Resources (from potential off-site oil pipeline rupture), Hydrology and Water Quality (water quality from potential off-site oil pipeline rupture), Land Use, Noise (construction and demolition), Recreation, and Safety, Risk of Upset, and Hazards (from potential well blowout during drilling) effects on the environment found to be unavoidable are acceptable due to the factors described above. Thus on balance, the economic and other benefits accruing to the City and the community from the Project outweigh the risk of potential impacts to the community. Section 13. If any provision of this ordinance, or the application of any such provision to any person or circumstances, shall be held invalid, the remainder of this ordinance to the extent it can be given effect, or the application of those provisions to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby, and to this end the provisions of this ordinance are severable. The people hereby declare that they would have adopted each section, subsection, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable. Section 14. This Ordinance shall be considered adopted immediately upon the date that this Ordinance is confirmed and approved by the voters of Hermosa Beach at the Special Municipal Election of March 3, 2015 and shall become effective on March 13, 2015. Section 15. The City Manager is hereby directed to submit to the California Coastal Commission the amendment to the Hermosa Beach Coastal Land Use Plan, part of the City’s General Plan, and the Development Agreement adopted herein. 15 PASSED, APPROVED AND ADOPTED by the People of the City of Hermosa Beach at a special municipal election on March3, 2015. 16 BALLOT ORDINANCE ATTACHMENT A Amendment to the City of Hermosa Beach Coastal Land Use Plan Amend the Coastal Land Use Plan by adding a new section titled “Coastal Industrial (Oil and Gas) Development” as follows: COASTAL INDUSTRIAL (OIL AND GAS) DEVELOPMENT A. Statement of Philosophy The City of Hermosa Beach recognizes that while emphasizing protection, enhancement, and restoration of coastal resources is critical to the achievement of community goals, certain types of industrial and energy developments, such as oil and gas, may be appropriate in the coastal zone when consistent with the Coastal Act and policies established by this plan, as well as relevant initiatives passed by the voters of the City of Hermosa Beach. In November 1995, the Hermosa Beach electorate passed Proposition E, an initiative that re-established a citywide ban on any oil or gas well or wells for the purpose of procuring oil, gas or other hydrocarbon substances. On __________, Measure ___ adopting Ordinance ________ was passed by the electorate allowing an Oil and Gas Development Project proposed by E&B Natural Resources Management Corporation on a 1.3 acre City-owned property at 555 6th Street in Hermosa Beach. The ban on oil and gas development otherwise remains in effect within the City. Until the City has a certified Local Coastal Program, the legal standard of review for consideration of a coastal development permit by the Coastal Commission is whether a proposed project is consistent with the Chapter 3 policies of the Coastal Act, will not prejudice the City’s ability to prepare a Local Coastal Program, and is consistent with the requirements of the California Environmental Quality Act. B. Coastal Act Policies Coastal-Dependent and Coastal-Related Development Criteria The Coastal Act policies which guide industrial development distinguish between coastal-dependent development, coastal-related development, and other types of 17 industrial developments. According to Section 30101 and 30101.3 of the Act: 30101. “Coastal-dependent development or use” means any development or use which requires a site on, or adjacent to, the sea to be able to function at all. 30101.3 “Coastal-related development” means any use that is dependent on a coastal-dependent development or use. The exploration, development and production of oil and gas reserves located offshore may qualify as a coastal-dependent development. However, not all activities or facilities associated with such developments are necessarily coastal- dependent uses. Processing and storage facilities that support development of offshore oil and gas reserves may not require a site on or adjacent to the sea or within the coastal zone within the meaning of Section 30101. Such facilities may therefore be considered coastal-related developments. Whether or not exploration, development and production of offshore or onshore oil and gas and its associated facilities is appropriate in the coastal zone is a determination to be made on a case-by-case basis. Under Section 30255 of the Act, coastal-dependent developments or uses, whether industrial or not, are given priority over other development on or near the shoreline: Coastal-dependent developments shall have priority over other developments on or near the shoreline. Except as provided elsewhere in this division, coastal-dependent developments shall not be sited in a wetland. When appropriate, coastal-related developments should be accommodated within reasonable proximity to the coastal-dependent uses they support. In addition, Section 30260 of the Act establishes special criteria for allowing coastal-dependent industrial facilities: Coastal-dependent industrial facilities shall be encouraged to locate or expand within existing sites and shall be permitted reasonable long-term growth where consistent with this division. However, where new or expanded coastal-dependent industrial facilities cannot feasibly be accommodated consistent with other policies of this division, they may nonetheless be permitted in accordance with this section and Sections 30261 and 30262 if (1) alternative locations are infeasible or more environmentally damaging; (2) to do otherwise would adversely affect the public welfare; and (3) adverse environmental effects are mitigated to the maximum extent feasible. This section anticipates that coastal-dependent industrial and energy development may not be consistent with the Chapter 3 policies of the Coastal 18 Act, yet it may be necessary for the public welfare. Accordingly, Section 30260 allows the permitting of coastal-dependent oil and gas development that is not consistent with the Chapter 3 policies, provided that the proposed development complies with provisions of the Coastal Act in Sections 30261 and 30262. Specific sections of the Coastal Act that address energy (oil and gas) development are: Coastal Act, Section 30250(a) and (b) state in part: (a) New residential, commercial, or industrial development, except as otherwise provided in this division, shall be located within, contiguous with, or in close proximity to, existing developed areas able to accommodate it or, where such areas are not able to accommodate it, in other areas with adequate public services and where it will not have significant adverse effects, either individually or cumulatively, on coastal resources. In addition, land divisions, other than leases for agricultural uses, outside existing developed areas shall be permitted only where 50 percent of the usable parcels in the area have been developed and the created parcels would be no smaller than the average size of surrounding parcels. (b) Where feasible, new hazardous industrial development shall be located away from existing developed areas. Section 30108 (definitions) defines feasible: "Feasible" means capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social, and technological factors. Section 30262 excluding parts (a)(3) and (a)(4) provides guidance for oil and gas development: (a) Oil and gas development shall be permitted in accordance with Section 30260, if the following conditions are met: (1) The development is performed safely and consistent with the geologic conditions of the well site. (2) New or expanded facilities related to that development are consolidated, to the maximum extent feasible and legally permissible, unless consolidation will have adverse environmental consequences and will not significantly reduce the number of producing wells, support facilities, or sites required to produce the reservoir economically and with minimal environmental impacts. (5) The development will not cause or contribute to subsidence hazards unless it is determined that adequate measures will be undertaken to prevent damage from such subsidence. 19 (6) With respect to new facilities, all oilfield brines are reinjected into oil- producing zones unless the Division of Oil and Gas, Geothermal Resources of the Department of Conservation determines to do so would adversely affect production of the reservoirs and unless injection into other subsurface zones will reduce environmental risks. Exceptions to reinjections will be granted consistent with the Ocean Waters Discharge Plan of the State Water Resources Control Board and where adequate provision is made for the elimination of petroleum odors and water quality problems. (7)(A) All oil produced offshore California shall be transported onshore by pipeline only. The pipelines used to transport this oil shall utilize the best achievable technology to ensure maximum protection of public health and safety and of the integrity and productivity of terrestrial and marine ecosystems. (B) Once oil produced offshore California is onshore, it shall be transported to processing and refining facilities by pipeline. (C) The following guidelines shall be used when applying subparagraphs (A) and (B): (i) "Best achievable technology," means the technology that provides the greatest degree of protection taking into consideration both of the following: (I) Processes that are being developed, or could feasibly be developed, anywhere in the world, given overall reasonable expenditures on research and development. (II) Processes that are currently in use anywhere in the world. This clause is not intended to create any conflicting or duplicative regulation of pipelines, including those governing the transportation of oil produced from onshore reserves. (ii) "Oil" refers to crude oil before it is refined into products, including gasoline, bunker fuel, lubricants, and asphalt. Crude oil that is upgraded in quality through residue reduction or other means shall be transported as provided in subparagraphs (A) and (B). (iii) Subparagraphs (A) and (B) shall apply only to new or expanded oil extraction operations. "New extraction operations" means production of offshore oil from leases that did not exist or had never produced oil, as of January 1, 2003, or from platforms, drilling island, subsea completions, or onshore drilling sites, that did not exist as of January 1, 2003. "Expanded oil extraction" means an increase in the geographic extent of existing leases or units, including lease boundary adjustments, or an increase in the number of well heads, on or after January 1, 2003. (iv) For new or expanded oil extraction operations subject to clause (iii), if the crude oil is so highly viscous that pipelining is determined to be an infeasible mode of transportation, or where there is no feasible access to a pipeline, shipment of crude oil may be permitted over land by other modes of transportation, including trains or trucks, which meet all applicable rules and regulations, excluding any waterborne mode of transport. 20 (8) If a state of emergency is declared by the Governor for an emergency that disrupts the transportation of oil by pipeline, oil may be transported by a waterborne vessel, if authorized by permit, in the same manner as required by emergency permits that are issued pursuant to Section 30624. (9) In addition to all other measures that will maximize the protection of marine habitat and environmental quality, when an offshore well is abandoned, the best achievable technology shall be used. b) Where appropriate, monitoring programs to record land surface and near-shore ocean floor movements shall be initiated in locations of new large- scale fluid extraction on land or near shore before operations begin and shall continue until surface conditions have stabilized. Costs of monitoring and mitigation programs shall be borne by liquid and gas extraction operators c) Nothing in this section shall affect the activities of any state agency that is responsible for regulating the extraction, production, or transport of oil and gas. Section 30232 requires protection against oil and hazardous substance spills: Protection against the spillage of crude oil, gas, petroleum products, or hazardous substances shall be provided in relation to any development or transportation of such materials. Effective containment and cleanup facilities and procedures shall be provided for accidental spills that do occur. In Section 30265(a) the California legislature finds with regard to offshore oil transportation: (a) Transportation studies have concluded that pipeline transport of oil is generally both economically feasible and environmentally preferable to other forms of crude oil transport. Oil and gas exploration, development and production must also be consistent with the public access, recreation, environmentally sensitive habitat, visual, cultural, air quality, water quality, and marine resource protection policies, among others, of the Coastal Act stated in other sections of this Plan. C. Goals and Objectives 1. To ensure that oil and gas exploration, development and production is conducted in a manner that is consistent with the City’s beach culture, high quality of life, and environmental values. 2. To ensure that oil and gas exploration, development and production is consistent with Measure ___ passed by the electorate on _______________ allowing an Oil and Gas Development Project at 555 6th Street. 21 D. Policies and Programs Policy 1. Oil and gas development is permitted in the coastal zone if found to be consistent with the policies in Chapter 3 of the Coastal Act and this Plan, and as authorized by Measure ___ passed by the electorate on _______________ . Policy 2. Oil and gas drilling sites, including well heads, processing, storage and accessory facilities are permitted only within the Industrial designation on the Land Use Map. Program 2.1. Pursuant to Measure ____ , oil, gas and reinjection well heads and related processing, storage and accessory facilities, excluding pipelines, shall be confined to the 1.3 acre site at 555 6th Street, and shall not be relocated or expanded unless and until an amendment to this Plan is approved by the voters of the City of Hermosa Beach and certified by the Coastal Commission. Policy 3. Pipelines are permitted within the Industrial designation on the Land Use Map and public rights-of-way regardless of land use designation. Program 3.1. Pipelines to convey produced oil and gas within the City of Hermosa Beach shall be confined to the corridor defined by Measure ____ located within the Valley Drive right-of-way from 555 6th Street to Herondo Street to the City of Redondo Beach. Upon completion of pipeline construction, the corridor shall be recontoured, reseeded, landscaped or surfaced, to conform with the surrounding topography and vegetation or surfacing. Any new or replacement pipelines shall be located within the designated pipeline corridor. Program 3.2 All oil and gas products shall be transported by pipeline to processing and refining facilities. Produced resources may be transported by vehicles designed for this purpose only during exploration and construction phases of minimum duration necessary to confirm the petroleum resource, construct facilities on the project site, and construct pipelines. Oil and gas produced from production wells shall be conveyed by pipeline. Policy 4. Processing of oil and gas resources is limited to facilities and activities required for compliant and safe well stream separation of crude oil, gas and formation water, conveyance of unrefined products offsite to a purchaser or refinery, and disposal of waste byproducts. Policy 5. Monitoring and oversight of oil and gas exploration, development and production projects in compliance with this Plan and Coastal Commission requirements may be undertaken by the California State Lands Commission, a 22 trustee agency, or other qualified agency pursuant to agreement of the Coastal Commission, City of Hermosa Beach and the subject agency. Policy 6. Oil and gas exploration, development and production shall use the best achievable control technology to ensure maximum protection of public health and safety and of the integrity and productivity of terrestrial and marine ecosystems. Policy 7. Oil and gas exploration, development and production shall be designed and operated in a manner that minimizes the potential for subsidence hazards and impacts to groundwater aquifers. Policy 8. Oil and gas exploration, development and production shall protect water quality and coastal resources and prevent runoff or discharges. Program 8.1. Oil and gas operators shall submit an oil spill prevention, control and countermeasure plan and an emergency response plan for review and approval by the City and other appropriate agencies as required by law. Policy 9. Oil and gas exploration, development and production shall minimize air emissions and their impacts on the enjoyment of coastal resources, human health and land uses in the surrounding community. Policy 10. Greenhouse gas emissions generated by oil and gas exploration, development and production should be reduced or offset to achieve net zero carbon emissions. Policy 11. Oil and gas exploration, development and production shall be designed, constructed, operated and the site restored in a manner that does not adversely affect coastal access and the enjoyment of recreational resources and activities. Policy 12. Oil and gas exploration, development and production shall be designed, constructed, operated and the site restored in a manner that protects the enjoyment of coastal resources, views and scenic areas and corridors, and maximizes compatibility with the character of surrounding areas. Policy 13. No well stimulation treatment (i.e. acid well stimulation or hydraulic fracturing), consistent with the definitions in Public Resources Code Sections 3150-3160, shall be permitted unless and until an amendment to this Plan is approved by the City of Hermosa Beach voters and certified by the Coastal Commission, after consideration of short- and long-term environmental impacts, and a coastal development permit or amendment as applicable is approved. 23 Policy 14. If onsite and in-kind mitigation are infeasible, offsite mitigation and/or in-lieu fees or programs approved by the City and applicable agencies may be used to mitigate for adverse impacts. Policy 15. Upon completion of exploration, development and production, oil and gas facilities shall be dismantled and removed, and the site cleaned of contamination and reclaimed to natural conditions, or conditions to accommodate reasonably foreseeable development, in an orderly and timely manner that avoids impacts to the health, safety, and welfare of the public and environment. Program 15.1. Upon the completion of exploration, development and production or intentional abandonment of operations, permittee shall obtain all applicable permits to remove, alter or retain facilities, structures, and other improvements, and reclaim the site to natural conditions, or other conditions as may be approved by the City in compliance with applicable laws and permits. In the event the permitee desires to temporarily idle or defer abandonment of operations, the permittee shall obtain City approval pursuant to a review process including consideration of short- and long-term environmental impacts and comply with all laws and regulations. In the event that conditions exist evidencing that the use has been abandoned, the City may pursue remedies allowed by law and compel proper site closure. Program 15.2. The City shall conduct a review process to permit the removal, retention, or abandonment in-place of facilities, structures, and improvements associated with oil and gas facilities determined to be abandoned, and to reclaim the sites to natural conditions, or other conditions as may be approved by the City in compliance with applicable laws and permits. This process shall be independent of any development permits associated with future use of the land, but may be processed concurrently with development permits. 24 BALLOT ORDINANCE ATTACHMENT B Amend the Hermosa Beach Coastal Land Use Plan – Land Use Map (Appendix J) from Open Space to Industrial (IND) on that portion of the property located at 555 6th Street as follows: Project site: Amend from Open Space to Industrial (IND) 25 BALLOT ORDINANCE ATTACHMENT C DIAGRAM OF OIL AND GAS PIPELINES FOR PIPELINE FRANCHISE 26 BALLOT ORDINANCE ATTACHMENT D- DEVELOPMENT AGREEMENT 27 Development Agreement between City of Hermosa Beach and E&B Natural Resources DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF HERMOSA BEACH AND E&B NATURAL RESOURCES MANAGEMENT CORPORATION THIS DEVELOPMENT AGREEMENT (“Development Agreement” or “Agreement”) is entered into as of the ____ day of ______________, _____, by and between the CITY OF HERMOSA BEACH, a California municipal corporation ("City"), and E&B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation (“E&B”). RECITALS A. The City is the owner of that certain real property in the City of Hermosa Beach, County of Los Angeles, and State of California described in Section 2.4 of this Agreement (Exhibit A to this Agreement), and also known informally as the City Maintenance Yard (“Property” or “City Maintenance Yard”). B. On or about January 14, 1992, the City entered into Oil and Gas Lease No. 2 (“Lease”) with Macpherson Oil Company, a California corporation, for itself and for Windward Associates, a California limited partnership, of which it is the general partner (collectively “Macpherson”). The Lease was approved by the California State Lands Commission (“CSLC”). The Lease authorized Macpherson to perform oil and gas extraction activities in the tidelands granted to the City by the State of California, and also authorized Macpherson to utilize the Property for oil and gas drilling activities (“Macpherson Project”). C. During the 1990s, Macpherson sought and obtained approvals for the Macpherson Project from the City, the CSLC, the California Coastal Commission and the South Coast Air Quality Management District. In 1995, the voters of the City passed Proposition E, an initiative to ban oil drilling in the City. During this time, and subsequently, Macpherson, the City, the CSLC, and opponents to the Macpherson Project were parties to several lawsuits regarding the 28 Development Agreement between City of Hermosa Beach and E&B Natural Resources Macpherson Project, including an action by Macpherson against the City regarding whether Proposition E constituted a breach of the Lease (“Macpherson Lawsuit”). The trial court in the Macpherson Lawsuit determined that the adoption of Proposition E constituted a breach of the Lease, subject to certain City defenses, and scheduled a trial in April 2012 to determine Macpherson’s damages. D. E&B, who had no prior relationship with Macpherson, investigated the Macpherson Project and approached the City and Macpherson with a proposal to settle the Macpherson Lawsuit and to provide E&B with a potential opportunity to proceed with “a state- of-the-art directional well oil drilling project conducted from an urban drill site located on the City’s maintenance yard” and “an opportunity to persuade the City’s electorate that a state-of- the-art directional well oil drilling project conducted from the City’s maintenance yard can be accomplished safely and with financial beneifts to all of the parties.” (Settlement Agreement, p. 2.) On March 2, 2012, the City, Macpherson and E&B entered into a Settlement Agreement and Release (“Settlement Agreement”). E. The Settlement Agreement, among other consideration, provided for the dismissal of the Macpherson Lawsuit, certain payments to Macpherson, and the assignment to E&B of Macpherson’s rights under the Lease and all other permits for the Macpherson Project which would allow E&B to proceed with a redesigned oil development project (“Project”) under certain conditions. Under the terms of the Settlement Agreement, the City is required to place on the ballot, in a manner that comports with all applicable law, a measure that asks the voters whether to approve, among other things, “a development agreement that would afford E&B a vested right to proceed with the Project . . . .” (Settlement Agreement, p. 7.) F. The California Elections Code sets forth the procedures for a local legislative body to submit a measure to the voters of the City. As contemplated in the Settlement Agreement, the City elected to undertake environmental review of the Project referenced in paragraph E above in accordance with the requirements of the California Environmental Quality Act (“CEQA”). On July 8, 2014, the City Council of City certified an Environmental Impact Report in compliance with CEQA by its adoption of Resolution No. 14-6908. 29 Development Agreement between City of Hermosa Beach and E&B Natural Resources G. The California Legislature enacted Section 65864 et seq. of the Government Code, which provides that cities and counties may enter into development agreements with persons having legal or equitable development interests in real property. Section 65867.5 of the Government Code states that a development agreement is a “legislative act” to be approved by ordinance, and the California Constitution establishes the right of voters to approve legislative acts. Elections Code section 9222 authorizes the City Council to submit any ordinance to the voters for their approval. Section 65869 of the Government Code mandates Coastal Commission approval for any development agreement in an area where a local coastal program has not been certified. H. The City has adopted rules and regulations for consideration of development agreements, pursuant to Government Code Section 65865, in Chapter 17.64 of the City’s Municipal Code. I. In compliance with the Settlement Agreement and all other applicable law, the City submitted the [insert title of Ballot Measure] (“Ballot Measure”) to the voters of the City on [insert date] in compliance with California Elections Code Section 9222. The Ballot Measure includes the following legislative approvals: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). These legislative approvals are referred to in this Agreement as “Ballot Measure Approvals.” J. By approving the Ballot Measure and this Agreement, the voters of the City have determined that the public interest is served by entering into this Agreement because the Project, described in Exhibit B to this Agreement, will provide for the remediation of the City Maintenance Yard, and will provide substantial economic benefits to the City and to the Community in the form of royalties as described in the Lease and as further set forth in Exhibit C to this Agreement. 30 Development Agreement between City of Hermosa Beach and E&B Natural Resources K. This Agreement will bind future City Councils to the terms and obligations specified in this Agreement and limit, to the degree specified in this Agreement, the future exercise of the City's ability to regulate development on the Property. L. Upon approval by the voters of the Ballot Measure Approvals, this Agreement and the Project will be consistent with, and will serve to implement the policies, objectives, and standards of the elements of the City of Hermosa Beach General Plan and will be consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code). M. This Agreement and the Project is consistent with, and will serve to implement, the provisions of Article 3 of the California Coastal Act. N. This Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property and generally serve the public interest. AGREEMENT NOW THEREFORE, in consideration of the above recitals, the mutual covenants and conditions herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agrees as follows: 1 DEFINITIONS For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Agreement" means this Development Agreement by and between the City and E&B. "Approval Date" means the date on which the Ordinance approving this Development Agreement becomes effective under Elections Code Section 9217, specifically ten days after the date the vote is declared by the City Council [INSERT DATE]. 31 Development Agreement between City of Hermosa Beach and E&B Natural Resources “Ballot Measure” means the measure that was approved by the voters on the Election Date. “Ballot Measure Ordinance” or “Ordinance” means the ordinance that accomplishes the Ballot Measure Approvals. “Ballot Measure Approvals” means the: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). "CEQA" means the California Environmental Quality Act, Section 21000, et seq., of the California Public Resources Code. "City" means the City of Hermosa Beach, California. "City Council" means the City Council of the City of Hermosa Beach. "Code" or “HBMC” means the Municipal Code of the City of Hermosa Beach. "Commencement Date" means that date when the Commission approves the Development Agreement under Government Code Section 65869; provided, however, if litigation challenging the validity of this Agreement including any Project Approvals and/or environmental review pursuant to CEQA should be brought against the City or the Coastal Commission, the Commencement Date shall be the date such litigation is concluded in a manner that permits the commencement or continuation of the parties' rights and obligations under this Agreement. “Commission” means the California Coastal Commission. “Conditional Use Permit” means the Conditional Use Permit for Oil Development at 32 Development Agreement between City of Hermosa Beach and E&B Natural Resources the City Maintenance Yard, approved by the City in Resolution No. 93-5632, and the validity of which was confirmed by the Settlement Agreement, which is to be abandoned and superseded pursuant to the terms of this Agreement. "Current Land Use Regulations" means the ordinances, resolutions, rules, regulations, requirements and official policies of the City in force as of the date on which the City Council calls the election on the Ballot Measure, as amended by the Ballot Measure Approvals. "Development Agreement Act" means Section 65864 et seq., of the California Government Code. “E&B” means E & B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation in the business of exploring for and producing oil and gas and each of its respective successors and assigns to all or any portion of its interests in the Property during such time as such portion is subject to this Agreement. “Election Date” means March 3, 2015. "Event of Default" is defined in Section 5.1.1. "Exactions" means any requirement imposed by the City in connection with or pursuant to any land use regulation or land use approval process for the dedication of land, construction or improvement of public improvements or amenities, payment of development fees, or other mitigation measures required to mitigate the impacts of the development including, without limitation, all development impact fees or linkage fees, utility capacity fees, service or connection fees, major facilities fees, park fees, flood control fees, environmental impact mitigation fees, affordable housing fees, arts fees, transportation fees, child care fees and any similar governmental fees, charges and exactions required for the development of projects or property. "Force Majeure Delay" is defined in Section 6.23. "Future Ministerial Permits" is defined in Section 3.2.1. "General Plan" means the General Plan of the City as of the Effective Date. “Off-site Project Components” or “Off-site Components” means the Project 33 Development Agreement between City of Hermosa Beach and E&B Natural Resources components in the City of Hermosa Beach outside of the Property as described in Exhibit B to this Agreement, including (1) oil and gas pipelines along Valley Drive, Hermosa Beach, California, (2) supply staging/storage at 601 Cypress Avenue, Hermosa Beach, California, (3) a parking lot at 636 Cypress Avenue, Hermosa Beach, California, and (4) various locations outside the jurisdiction of Hermosa Beach. The location of (2) is more particularly described in Exhibit A-2 and the location of (3) is more particularly described in Exhibit A-3. “Oil Code” means the Hermosa Beach Oil Code, Chapter 21A (Oil Production), approved by the City with Ordinance No. 85-803. "Processing Fees" means all routine and generally applicable City-wide fees required by the City for processing applications and permits including, but not limited to, fees for land use applications, project permits, building applications, building permits, grading permits, maps and certificates of occupancy in effect at the time paid. Expressly exempted from Processing Fees are all Exactions. "Project" means the proposed oil and gas drilling and production project as described in the Project Description contained in Exhibit B. "Project Approvals" means the approvals for the Project as set forth in Section 2.6 of this Agreement. "Public Benefits" means those improvements to be constructed, services to be provided and/or amounts to be paid by E&B to the City as consideration for this Agreement pursuant to Section 2.1 and Exhibit C. "Term" means the term of this Agreement, as provided in Section 6.1 of this Agreement. "Zoning Ordinance" means the comprehensive Zoning Ordinance of the City, found in Chapter 17 of the Code of the City of Hermosa Beach as it exists on the Effective Date. 2 THE DEVELOPMENT AGREEMENT PROCESS 2.1 Statement of Benefits and Consideration. The voters of the City have determined that the 34 Development Agreement between City of Hermosa Beach and E&B Natural Resources Project is a development for which a development agreement is appropriate. Development of the Project in accordance with a development agreement will provide for the orderly development of the Property in accordance with the objectives set forth in the General Plan, including the Land Use Plan of the Local Coastal Program, as amended. Moreover, a development agreement for the Project will eliminate uncertainty in planning for and securing orderly development of the Property, ensure attainment of the maximum efficient utilization of resources within the City at the least economic cost to its citizens, and achieve the provision of public services, public uses, urban infrastructure and other goals and purposes for which the Development Agreement Act was enacted, all in the promotion of the health, safety and general welfare of the City of Hermosa Beach and its residents. In exchange for these and other benefits to the City, E&B will receive the assurance that E&B may develop the Project during the Term of this Agreement, subject to the terms and conditions herein contained. By approving Ballot Measure ___, the voters of the City have found and determined that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and have approved this Agreement. This Agreement does not (1) grant density or intensity in excess of that otherwise established in the Project Approvals, (2) supersede, nullify or amend any condition imposed in the Project Approvals, (3) guarantee to E&B any profits from the Project, or (4) prohibit or, if legally required, indicate E&B’s consent to, the Property's inclusion in any public financing district or assessment district. The City will receive substantial benefits as a result of the development of the Property in accordance with this Agreement, as set forth in Exhibit C, in recognition of and in exchange for this Agreement and the benefits provided to E&B pursuant to this Agreement. The voters of the City acknowledge the adequacy of the consideration provided by E&B to the City pursuant to this Agreement. In consideration of the benefits, commitments and consideration to be provided by E&B pursuant to this Agreement and in order to strengthen the public planning process and reduce the economic costs of development, the voters of the City hereby provide E&B assurance that it can proceed with the development of the Property for the Term of this Agreement pursuant to the land use, density and intensity specified in the Current Land Use 35 Development Agreement between City of Hermosa Beach and E&B Natural Resources Regulations, the Project Approvals and this Agreement. E&B would not enter into this Agreement or agree to provide the public benefits, commitments and consideration described in this Agreement if it were not for the certainty provided by this Agreement that the Property can be developed during the Term of this Agreement in accordance with the Current Land Use Regulations and the Project Approvals including the land use, density and intensity set forth in the Project Approvals. 2.2 Public Hearings. On June 23, 2014, the Planning Commission of the City, after providing notice as required by law, held public hearings on the legislative elements of the Project, including this Agreement and the amendments to the Hermosa Beach Municipal Code and Coastal Land Use Plan and the EIR. The City Council, after providing public notice as required by law, similarly held public hearings on the Project, including this Agreement [insert dates and specific code provisions]. 2.3 City Council and Voter Findings. The City Council adopted findings that review of the environmental impacts of this Agreement and the Project Approvals has been conducted in accordance with the provisions of CEQA and the State and local guidelines adopted thereunder, and the City Council has given consideration to such environmental review prior to placing the Ballot Measure on the ballot and has undertaken all actions necessary to comply with CEQA. In approving the Ballot Measure and this Agreement, the voters of the City have determined and found that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and all other applicable City plans, policies and regulations, and is consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code), all as amended by the Ballot Measure Approvals. 2.4 Property. The Property includes all real property that is subject to this Agreement. The Property as of the Election Date is commonly known as City Maintenance Yard, as more fully described in Exhibit A-1 incorporated herein by reference. 2.5 The Project. The Project consists of the development, construction and operations on the Property permitted under this Agreement and the Project Approvals. The description of the Project and its uses are more fully described in the Project Description set forth in Exhibit B which is incorporated herein by reference. The Project includes Off-site 36 Development Agreement between City of Hermosa Beach and E&B Natural Resources Components within the City of Hermosa Beach, and other elements located outside of the City. 2.6 Project Approvals. The Project includes, without limitation, all items described in the Project Description contained in Exhibit B and incorporated herein by reference and the following Project Approvals: (a) Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93- 5632 (as set forth in Section 2.7 below, to be abandoned per HBMC Section 17.70.030 and superseded pursuant to the terms of this Agreement); (b) Environmental Impact Report, dated June 2014, prepared pursuant to CEQA and certified by the City Council on July 8, 2014 (with revisions identified in City Council Resolution No. 14-6908); (c) Amendments to the Land Use Plan and Land Use Plan Map of the Local Coastal Program (a component of the City’s General Plan), approved by Ballot Measure __ on ________________, and by Commission [insert Commission action] on ______________________; (d) Amendment to the Municipal Code, approved by Ballot Measure __ on _________________; (e) Franchise for Oil and Gas Pipelines, approved by Ballot Measure __ on _______________; (f) Amendment to the Oil Code, approved by Ballot Measure __ on _______________; and (e) Development Agreement, approved by Ballot Measure __ on _________________, and by Commission [insert Commission action] on _________________. 37 Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.7. Abandonment of Conditional Use Permit. With adoption of the Ballot Measure, oil drilling and production is permitted on the Property subject to a development agreement. The relevant conditions of approval from the 1993 Conditional Use Permit (CUP) for oil development at the Property (Resolution No. 93-5632) are incorporated into this Development Agreement as Exhibit D-1 herein, and E&B shall comply with said conditions as required herein. Thus, upon the Commencement Date, this agreement will supersede the 1993 CUP, which shall no longer serve a regulatory purpose. Hermosa Beach Municipal Code Section 17.70.030 allows for voluntary abandonment of a Conditional Use Permit. This Agreement at the Commencement Date shall serve as both a written request to abandon the CUP and the City’s declaration that the 1993 CUP is abandoned. 3 VESTED DEVELOPMENT RIGHTS 3.1 Vested Rights to Develop. Subject to the terms, conditions, and covenants of this Agreement, including the Reservations of Power in Section 3.4, and the conditions of approval and mitigation measures attached hereto and incorporated herein as Exhibit D, E&B shall, as of the Approval Date, have a vested right to develop the Property and Project, including Off-site Components, in accordance with, and to the extent of, the Project Approvals, and the Current Land Use Regulations. The approved use of the Property, the density and intensity of use, the maximum height, footprint, and square footage of proposed buildings and structures, and provisions for reservation and dedication of land or public purposes shall be those set forth in the Project Approvals and the attached Exhibits. Nothing in this Agreement shall be deemed to obligate E&B to initiate development of the Project or any portion thereof within any period of time or at all. 3.1.1 Certain Changes Prohibited Without Consent of E&B. Except as otherwise provided in this Agreement, during the Term, the City shall not, as to the Property and the Project, including Off-site Components, without the prior written consent of E&B, which may be withheld in E&B’s sole and unfettered discretion: (a) change the Current Land Use Regulations, or Project Approvals as they apply to the Property or Project so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals; or (b) apply to the Property or the Project any new or 38 Development Agreement between City of Hermosa Beach and E&B Natural Resources amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals, so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals, or prevent or adversely affect the operation of the Project as contemplated hereby in accordance with the Current Land Use Regulations or Project Approvals; or (c) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that requires additional discretionary review or approval not otherwise required for the Project by the Current Land Use Regulations or Project Approvals; or (d) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that materially, adversely affects the timing or phasing of construction or development, or which limits the availability of utilities or other infrastructure for the Project. For the purposes of this Section 3.1, “prevent or adversely affect development or construction of the Project” shall include, without limitation, any changes which fundamentally affect the ability of any of the permitted uses to operate within the Project (e.g. prohibit any of the uses in the Project Approvals, change parking standards for any of the uses, etc.). 3.1.2 Rights are Vested. Unless amended or terminated in the manner specified in this Agreement (and subject to the provisions of this Agreement), E&B shall have the rights and benefits afforded by this Agreement and this Agreement shall be enforceable by E&B and the City notwithstanding any growth control measure, initiative, proposition or any development moratorium adopted after the Approval Date, or any change in the General Plan, zoning, or subdivision regulations adopted by the City which alter or amend the Current Land Use Regulations or Project Approvals or the adoption of any new or amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals and so as to prevent or adversely affect development or construction of the Project in accordance with the Current Land Use Regulations or Project Approvals. This Section shall be construed to prohibit the City from applying to the Property or the Project, including any Off-site Components, any development moratorium or growth control measure that is adopted specifically to prohibit the construction or operation of the Project, or as an interim measure pending contemplated General Plan, Specific Plan or zoning changes, or as a general growth control management measure except as provided for pursuant to Section 3.4. 39 Development Agreement between City of Hermosa Beach and E&B Natural Resources 3.1.3 Future Changes to Current Land Use Regulations. Following the Approval Date, if the City modifies the Current Land Use Regulations in a manner that E&B, in its sole discretion, determines is more beneficial than the Current Land Use Regulations, then E&B may choose in its sole discretion to be governed by the modified land use regulations rather than the Current Land Use Regulations, without E&B being deemed to have waived or limited any rights, remedies or privileges under this Agreement. 3.2 Other Rights. 3.2.1 Future Ministerial Permits. E&B will seek additional ministerial permits as required by the City, including, without limitation, excavation only permits, grading permits, demolition permits, building permits, well permits, drilling permits and public works permits, as needed to implement the Project Approvals and to construct and operate the Project. Collectively, these ministerial permit applications are called the "Future Ministerial Permits". The City agrees that it will not unreasonably withhold or unreasonably condition any of the Future Ministerial Permits which must be issued by the City in order for the Project to proceed, provided that E&B reasonably and satisfactorily complies with all preliminary procedures, actions, payment of Processing Fees and criteria generally required for processing such Future Ministerial Permits, and provided further that such Future Ministerial Permits comply with this Agreement, the Current Land Use Regulations and the Project Approvals and approvals of other governmental agencies with jurisdiction over the Project. The City further agrees that no discretionary permits, other than the Project Approvals, are required from the City to construct and operate the Project. 3.3 Reservations of Power. 3.3.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the following subsequent land use regulations shall apply to the development of the Property: (a) Processing Fees (but not Exactions) imposed by the City to cover the estimated actual costs to the City of processing applications for Project Approvals, fees for monitoring compliance with any Project Approvals, inspection fees, or fees for monitoring 40 Development Agreement between City of Hermosa Beach and E&B Natural Resources compliance with environmental mitigation measures. (b) Procedural regulations applied on a City-wide, nondiscriminatory basis relating to City entities required to review petitions or applications, forms of petitions and applications, notice requirements, information requested with petitions or applications, conduct of hearings, form of staff reports, nature and type of recommendations by City entities, appeal procedures and any other similar matters of procedure. (c) Regulations governing building codes and similar construction standards and specifications including, but not limited to, the California and International Codes, as they may be changed from time to time. (d) Regulations that are necessary to protect the public health and safety, including without limitation, development moratorium or limitation on the delivery of City-provided utility services, which meet each of the following requirements: (a) are based on genuine health, safety and general welfare concerns (other than general growth management issues); (b) which arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (c) are based upon its terms or its effect as applied, does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such regulations shall be applied and construed so as to provide E&B with the rights and assurances provided under this Agreement. This subsection governs generally applicable emergencies in the area not specifically related to or caused by the Project. (e) Regulations that are not in conflict with the Project Approvals, Current Land Use Regulations or this Agreement. Any regulation, whether adopted by initiative or otherwise, limiting the rate, timing, phasing or sequencing of development of the Property shall be deemed to conflict with the Project and shall therefore not be applicable to the development of the Property. Any regulation limiting the permitted uses of the Property, limiting the density or intensity of use of the Property, or limiting the size, height or location of improvements on the Property shall be deemed to conflict with the Project Approvals and shall therefore not be applicable to the development of the Property. (f) Regulations that are in conflict with the Project, but as to which the 41 Development Agreement between City of Hermosa Beach and E&B Natural Resources E&B has given its prior written consent for such regulations to be applied to the Property or to the development of the Property. (g) Regulations applied on a City-wide, non-discriminatory basis that do not prevent or adversely affect development or construction of the Project. 3.3.2 Modification or Suspension by State or Federal Law. In the event that state or federal laws or regulations, or those of any regional authority having jurisdiction over the Project or Property, enacted after the Approval Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement or the Project conditions, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state, federal, or regional authority laws or regulations and to effectuate to the extent possible the terms of this Agreement. 3.3.3 Police Power. The parties acknowledge and agree that City is restricted in its authority to limit its police power by development agreement and that the foregoing limitations, reservations and exceptions are intended to reserve to City all of its police power which cannot be so limited. This Agreement shall be construed to reserve to City all such power and authority which cannot be restricted by development agreement. 3.3.4 Taxes, Assessments and Fees. Anything herein to the contrary notwithstanding, City may impose on the Project any new non-discriminatory, City-wide taxes, assessments and fees, including but not limited to business license taxes or franchise fees, but not including any Exaction or other fee designated to mitigate the impact of development of the Project. 3.4 Regulation by Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of the City may possess authority to regulate aspects of the development of the Property separately from or jointly with City, and this Agreement does not limit the authority of such other public agencies. Changes to the project mandated by such regulatory agencies shall be automatically included into this Development Agreement as authorized in Section 10.F of the Ballot Measure and shall supersede any inconsistent provisions herein. 3.5 Agreement and Assurances on the Part of E&B. Without in any way limiting E&B’s 42 Development Agreement between City of Hermosa Beach and E&B Natural Resources rights under Section 5.2.2 not to proceed with development of the Project and, in such an event, to terminate this Agreement in its sole and subjective business judgment, if E&B proceeds with the Project, E&B agrees that it will use commercially reasonable efforts, in accordance with its own business judgment and taking into account market conditions and economic considerations, to develop the Project, in accordance with the terms and conditions of this Agreement, the Current Land Use Regulations, the Lease and the Project Approvals. 3.6 Public Benefits. 3.6.1 The parties acknowledge and agree that development of the Project will result in public benefits as set forth in Exhibit C. The voters of the City acknowledge the adequacy of the consideration, including the Public Benefits, provided by E&B pursuant to this Agreement. 3.6.2 Exactions and Processing Fees. 3.6.2.1 Exactions. No Exaction may be imposed on this Project except as specifically articulated in this Agreement, and except as required by the conditions of approval and the Mitigation Monitoring and Reporting Program contained in Exhibit D. 3.6.2.2 Processing Fees. E&B shall pay to the City all applicable Processing Fees regularly charged by the City and the amount of such Processing Fees may be increased from time to time on a non-discriminatory City-wide basis. 3.7 Public Improvements and Utilities 3.7.1 Installation Obligations. The parties hereby agree that the obligations to install public improvements and utilities necessary for the development of the Property shall be as provided for in the Project Approvals. 3.7.2 City-Provided Utilities: Reservation of Sufficient Capacity. To the extent that it is within the control of the City, the City shall use its best efforts to ensure that there shall be sufficient capacity, facilities and services with respect to City-provided utilities to complete construction of the Project, provided that E&B bear all costs incurred by the City in doing so. 43 Development Agreement between City of Hermosa Beach and E&B Natural Resources The City agrees that if limitations in the provision of utilities become necessary due to the existence of an emergency situation, they shall be applied only to the extent necessary to respond to such emergency, and shall not be applied against the Property or the Project in a discriminatory manner. 3.7.3 City-Provided Utilities: Nondiscriminatory Rates and Provision of Service. The City agrees that rates and charges for City-provided utilities for the Property and Project shall not be set or imposed in a discriminatory manner, but shall be those rates and charges that are or would be generally applicable to any user of a comparable quantity and quality of the utility use in the City (i.e., any other entity whose use or consumption of the utility is comparable to that of E&B), and that the City shall not discriminate against the Property or the Project in the provision of any City-provided utilities (such as potable and reclaimed water, sewer and drainage). 3.7.4 Dedications, Reservations and Conditions of Development. The portions of Property to be reserved or dedicated for public purposes pursuant to this Agreement, if any, shall be that property described in the Project Approvals. Unless otherwise indicated herein, the property described in the Project Approvals to be reserved or dedicated for public use shall be dedicated by E&B as provided in the Project Approvals. The City shall take such actions as may be necessary to vacate any prior dedications, offers to dedicate and grants of easements that are no longer necessary for the development of the Project in accordance with this Agreement. 3.8 Mitigation Measures and Conditions of Approval. E&B shall at its own expense timely perform all mitigation measures identified in the environmental documentation for the Project and conditions of approval identified in the Project Approvals as set forth in Exhibit D. E&B shall have no duty to complete the mitigation measures or conditions of approval, except as otherwise set forth in this Agreement, if the contemplated development fails to occur. 4 ASSIGNMENT, AMENDMENT AND REVIEW 44 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.1 Assignment 4.1.1 Right to Assign. E&B shall have the right to sell, transfer or assign its rights or interests in the Property in whole or in part (provided that no such partial transfer shall be permitted to cause a violation of the Subdivision Map Act, Government Code Section 66410 et seq.) to any person, partnership, joint venture, firm or corporation at any time during the Term, subject to the City’s consent, as provided in Subsection 4.1.2. The conditions and covenants set forth in this Agreement and incorporated herein shall run with the land and the benefits and burdens shall bind and inure to the benefit of the parties. Any such sale, transfer or assignment shall include the assignment and assumption of the rights, duties and obligations arising under or from this Agreement with respect to the property transferred and shall be made in strict compliance with the following requirements: (a) Except as provided in Section 6.17 of this Agreement, no sale, transfer or assignment of any right or interest under this Agreement shall be made unless made together with the sale, transfer or assignment of all or a part of the Property and then, only in accordance herewith. (b) Concurrently with the closing of such sale, transfer or assignment, E&B shall provide the City with an executed agreement by the purchaser, transferee or assignee and providing therein that the purchaser, transferee or assignee expressly and unconditionally assumes the duties and obligations of E&B under this Agreement to the extent of such transfer or assignment, in a form satisfactory to the City Attorney. (c) The purchaser, transferee or assignee shall provide the City with security equivalent to any security previously provided by E&B to secure performance of its obligations hereunder, if any, or under any of the Project Approvals. Any sale, transfer or assignment under Section 4.1 of this Agreement not made in strict compliance with the foregoing conditions shall constitute a default by E&B under this Agreement and any such assignment shall be void and of no effect. Notwithstanding the failure of any purchaser, transferee or assignee to execute the agreement required by subparagraph (b) of this Subsection 4.1.1, the burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the benefits of this Agreement shall not inure to 45 Development Agreement between City of Hermosa Beach and E&B Natural Resources such purchaser, transferee or assignee until and unless such agreement is executed. 4.1.2 City’s Reasonable Consent Required. E&B may sell, transfer or assign its rights or interests in the Property in whole or in part and this Agreement to any other person, partnership, joint venture, firm, corporation, trust or other lawful entity with the City’s consent, which consent shall not be unreasonably withheld or conditioned (“Transfer”). In the event E&B desires to make such Transfer, E&B shall submit to the City a request for approval at least forty- five (45) days prior to such Transfer, which approval shall not be unreasonably withheld, conditioned or delayed by the City. The City may withhold, condition or delay its approval upon finding of any of the following: (a) The proposed purchaser, transferee or assignee lacks the financial ability to perform the obligations of this Agreement; (b) The proposed purchaser, transferee or assignee lacks the necessary qualifications, competence, experience or capability to implement the development plan contemplated by the Project Approvals with the skill, expertise and quality equivalent to that of E&B; provided, however, if the proposed purchaser, transferee or assignee is a nationally or regionally recognized, or regionally known in Southern California, as an owner or developer of oil and gas facilities, such proposed purchaser, transferee or assignee shall be deemed to have met this requirement; or (c) An Event of Default by E&B as defined in Section 5.1.1 has occurred and is continuing under this Agreement. E&B shall provide to the City such information that the City reasonably requests in order for the City to make any determinations provided for by this Subsection 4.1.2. E&B agrees to provide such information on a timely basis sufficient to permit the City to make its determinations within the forty-five (45) day time period. 4.1.3 Applicability. The provisions of Sections 4.1.1 and 4.1.2 shall not be applicable to a Transfer as a result of which E&B retains at least a fifty (50) percent interest in the Property. or as a result of which E&B retains at least twenty-five (25) percent interest in the Property and maintains effective management control of the Project. 4.2 Changes and Amendments to Project 46 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.2.1 In the event E&B reasonably finds that a change or amendment in the Project Approvals is reasonably necessary or appropriate, E&B shall apply for any required changes to the Project Approvals. Any such application that does not require an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the Current Land Use Regulations, except as otherwise provided by this Agreement, including the Reservations of Power. Any application that requires an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the land use regulations in effect at the time the application is filed. 4.2.2 Minor Changes to Project - No Amendment of Agreement The parties acknowledge that refinements or modifications of the Project may be required during the Term. The parties agree that refinements and modifications which constitute a "Minor Change” in the Project or Project Approvals shall not require an amendment to this Agreement or public notice and a hearing. For any such Minor Change, the City shall not impose as a condition to approval any Exaction, except as authorized in this Agreement. The City Manager, subject to the City Council’s approval, shall be authorized to make the determination on behalf of the City whether a requested refinement or modification may be effectuated pursuant to this Section 4.2.2 or whether the requested refinement or modification is of such a character to require an amendment hereof pursuant to Section 4.2.3. The City Manager, subject to the City Council’s approval, shall be authorized to approve any Minor Changes hereunder on behalf of the City. If and when the parties find that Minor Changes are necessary or appropriate, they shall, unless otherwise required by law, effectuate such changes or adjustments through a letter prepared by the City Manager and approved by the City Council, which, after execution, shall be attached hereto as addenda and become a part hereof. The City Manager may consult with technical experts in making the determination that a requested refinement or modification is a “Major” or “Minor Change.” The City Manager shall not unreasonably withhold or delay its determination that a requested refinement or modification is a “Minor Change” as that term is used herein. The changes described below shall not be deemed Minor Changes; however, the examples listed below are listed for reference only, and are not intended to provide a complete list of changes that may not be deemed as Minor Changes: (a) Alters the permitted uses of the Property as a whole; 47 Development Agreement between City of Hermosa Beach and E&B Natural Resources (b) Requires an amendment to the Zoning Ordinance, or General Plan, or other legislative acts not contemplated in this Agreement; (c) Increases the density or intensity of use of the Property as a whole; (d) Constitutes a project requiring a subsequent or supplemental environmental impact report pursuant to Public Resources Code Section 21166; (e) Creates a situation adverse to public health or safety. 4.2.3 Other Changes. Any change in the Project which does not qualify as a "Minor Change" as defined herein shall require an amendment to this Agreement as provided in Section 6.9, and compliance with CEQA as applicable. 4.3 Annual/Special Review. 4.3.1 Annual Review. The City shall, at least every twelve (12) months during the Term of this Agreement, review the extent of good faith substantial compliance by E&B with the terms of this Agreement. Subject to the notice and cure procedure set forth in Section 5.1.2, such a periodic review may result in amendment or termination of this Agreement, provided a default has been established under the terms of this Agreement. Pursuant to Government Code Section 65865.1, as amended, E&B shall have the duty to file an annual review request with the City, pay any applicable Processing Fees for such annual review and demonstrate its good faith compliance with the terms of this Agreement at such periodic review. Processing fees for such review are to include, but are not limited to, all costs incurred by the City in retaining the necessary professionals and experts to provide the City with the necessary input regarding the annual review, including but not limited to City Attorney, consultant and other third parties the City deems necessary to conduct the annual review. Upon request by the City, E&B shall provide such information as may be necessary or appropriate in order to ascertain compliance with this Agreement. 4.3.1.1 Any party may address any requirement of this Agreement during the review. However, ten (10) days’ written notice of any requirement to be addressed shall be made by the requesting party. If at the time of review an issue not previously identified in 48 Development Agreement between City of Hermosa Beach and E&B Natural Resources writing is required to be addressed, the review at the request of either party shall be continued to afford sufficient time for analysis and preparation. 4.3.2 Special Review. The City Council may order a special review of compliance with this Agreement at any time. The Director of Community Development or City Council, as determined from time to time by the City Council, shall conduct such special reviews. Any special review shall comply with the procedural provisions and Processing Fees of an annual review as provided by Section 4.3.1. 4.3.3 Opportunity to be Heard. Upon written request to the City by E&B, E&B shall be permitted an opportunity to be heard orally and/or in writing at a hearing before the City Council regarding its performance under this Agreement. E&B shall also be heard before the City Council at any required public hearing concerning a review of action on the Agreement. Such hearings requested by E&B shall be subject to the Processing Fees provision of Section 4.3.1. 4.3.4 Information to be Provided E&B. The City shall, to such an extent as is practical, deposit in the mail to E&B a copy of staff reports and related exhibits concerning contract performance a minimum of seven (7) business days prior to any such review or action upon this Agreement by the Planning Commission or the City Council. 5 DEFAULT, REMEDIES AND TERMINATION 5.1 Enforceability. 5.1.1 Default. Subject to Sections 5.1.2 and 5.1.3, failure by any party to perform any term or provision of this Agreement required to be performed by such party shall constitute an event of default ("Event of Default”). In the event that E&B files for reorganization or other relief under any Federal or State bankruptcy or insolvency law, whether voluntarily or by involuntary bankruptcy or insolvency action, all provisions of this Agreement shall remain in full force and effect unless E&B engages in an Event of Default. For purposes of this Agreement, a party claiming another party is in default shall be referred to as the "Complaining Party", and the party alleged to be in default shall be referred to as the "Party in Default". 49 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5.1.2 Procedure Regarding Defaults. 5.1.2.1 Notice of Default. The Complaining Party shall give written notice of default to the Party in Default, specifying the default complained of by the Complaining Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. The Party in Default shall diligently endeavor to cure, correct or remedy the matter complained of, provided the such cure, correction or remedy shall be completed within the applicable time period set forth herein after receipt of written notice (or such additional, time as may be deemed by the Complaining Party to be reasonably necessary to correct the matter). Any failures or delays by a Complaining Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by a Complaining Party in asserting any of its rights and remedies shall not deprive the Complaining Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. If an Event of Default occurs, prior to exercising any remedies, the Complaining Party shall give the Party in Default written notice of such default. Without limitation, evidence of default may arise in the course of the regularly scheduled annual review or a special review described in Section 4.3. 5.1.2.2 Cure Periods. If the default is reasonably capable of being cured within thirty (30) days, the Party in Default shall have such period to effect a cure prior to exercise of remedies by the Complaining Party. If the nature of the alleged default is such that it cannot practicably be cured within such thirty (30) day period, the cure shall be deemed to have occurred within such thirty (30) day period if (i) the cure is commenced at the earliest practicable date following receipt of the notice; (ii) the cure is diligently prosecuted to completion at all times thereafter; (iii) at the earliest practicable date (in no event later than thirty (30) days after the curing party's receipt of the notice), the curing party provides written notice to the other party that the cure cannot practicably be completed within such thirty (30) day period; and (iv) the cure is completed at the earliest practicable date. In no event shall the Complaining Party be precluded from exercising remedies, subject to the preceding sentence if a default is not cured within sixty (60) days after the first notice of default is given. Subject to the foregoing, if a party fails to cure a default in accordance with the foregoing, the Complaining Party, at its option, may terminate this Agreement pursuant to this Agreement and California Government Code Section 65868, and/or institute legal proceedings pursuant to this Agreement. 50 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5.1.2.3 Procedures Regarding City Termination. Notice of intent to terminate shall be by certified mail, return receipt requested. Upon delivery by the City of notice of intent to terminate, the matter shall be scheduled for consideration and review by the City Council within thirty (30) days in accordance with Government Code Sections 65867 and 65868. Upon consideration of the evidence presented in said review and a determination by the City Council based thereon, the City may give written notice of termination of this Agreement to E&B. Any determination of default (or any determination of failure to demonstrate good faith compliance as a part of annual review) made by the City against E&B, or any person who succeeds to E&B with respect to any portion of the Property, shall be based upon written findings supported by substantial evidence in the record. Any purported termination of this Agreement for alleged default shall be subject to review in the Superior Court of the County of Los Angeles pursuant to Code of Civil Procedure § 1094.5(c). 5.1.3 Institution of Legal Action. Subject to notice of default and opportunity to cure under Section 5.1.2, and subject further to the limitation on remedies set forth in Section 5.1.4, in addition to any other rights or remedies, any party to this Agreement may institute legal action to cure, correct or remedy any default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation hereof, or to obtain any other remedies consistent with this Agreement. If a legal action or proceeding is brought by any party to this Agreement because of an Event of Default under this Agreement, or to enforce a provision hereof, the prevailing party shall be entitled to reimbursement of all costs and expenses, including reasonable attorneys’ fees, incurred in prosecuting such legal action or proceeding. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement. Additionally, in the event of a court finding (1) a violation of this development agreement or the conditions of approval in Exhibit D to this agreement, or (2) a violation of an order issued under Hermosa Beach Oil Code Section 21-A-10.1, a court may impose civil penalties up to $10,000/per day for each day in which E&B is determined to be non- compliant. 5.1.4 Remedies. 5.1.4.1 E&B’s Remedies. It is acknowledged by the parties that the City would not have entered into this Agreement if it were liable in damages under or with respect to this Agreement or the application thereof. In addition, the parties agree that monetary damages 51 Development Agreement between City of Hermosa Beach and E&B Natural Resources are not an adequate remedy for E&B if the City should be determined to be in default under this Agreement. The parties further agree that specific performance shall be E&B’s only remedy under this Agreement and E&B may not seek monetary damages in the event of a default by City under this Agreement. E&B covenants not to sue for or obtain monetary damages for the breach by City of any provision of this Agreement. 5.1.4.2 City's Remedies. The parties agree that the City shall have limited remedies for monetary damages and specific performance as specifically provided for in this Section 5.1.4.2. The City shall not have any right to compel specific performance with respect to the construction of the Project, or any obligation to construct the Project, including without limitation Section 3.7. Further, the City shall have no right to monetary damages as a result of E&B's failure to construct the Project or its failure to comply with Section 3.7. The City shall have the right to sue for monetary damages for failure by the E&B to pay any amounts owing under this Agreement including without limitation any amounts owing pursuant to Section 6.5.1. In no event shall the City be entitled to consequential damages or punitive damages for any breach of this Agreement. City also shall have the right to seek monetary damages for reimbursement of the actual cost to the City incurred by the City to construct, complete, demolish, remove or restore any physical infrastructure improvement in the public right of way which E&B commences construction of but fails to complete. If E&B’s failure or refusal to perform any provision of this Agreement causes an immediate and serious threat to life, health, property or natural resources, the City may pursue all remedies including but not limited to remedies available under the Hermosa Beach Oil Code Chapter 21-A (including the provisions of Article X, which allow for immediate cessation of operations) and Section 21 of the Lease. 5.1.4.3 Other Actions. Nothing in this Agreement shall be deemed to waive or limit any rights and remedies that the parties would otherwise have against the other relating to matters not covered by this Agreement. 5.2 Termination of Agreement. 5.2.1 As to the Property and all of the rights of E&B hereunder, and except as otherwise provided in this Agreement, this Agreement shall be deemed terminated and of no further effect upon the expiration of the Term of this Agreement unless earlier terminated pursuant to this Agreement. Subject to the notice and cure provisions set forth in Section 5.1.2, 52 Development Agreement between City of Hermosa Beach and E&B Natural Resources the City shall have the right to terminate this Agreement as to the Property and the rights of E&B hereunder, in the event E&B defaults and fails to cure such default within the respective cure period. Subject to the notice and cure provisions set forth in Section 5.1.2, E&B shall have the right to terminate this Agreement and the rights of the City hereunder in the event the City defaults and fails to cure such default within the respective cure period. Upon the termination of this Agreement, neither party shall have any further right or obligation with respect to the Property hereunder except with respect to any obligation to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination (other than commencement of construction of either phase) or with respect to any obligations which are specifically set forth as surviving this Agreement. Termination of this Agreement pursuant to this Section 5.2 shall cause the rights and benefits afforded by this Agreement to no longer be vested (subject to planning and zoning law) and as a result, the City shall no longer be limited from taking any action which may adversely affect the Property or the Project. 5.2.2 Termination by E&B Prior to Development. E&B is free, in its sole and subjective business judgment, not to proceed with development of the Project and, in such an event, to terminate this Agreement. The City acknowledges that such a right is consistent with the intent, purpose and understanding of the parties to this Agreement. In the event E&B decides not to proceed with development of the Project and to terminate this Agreement, E&B shall provide written notice to the City of that decision and of the final, irrevocable termination of this Agreement. Immediately upon the giving of such written notice to the City, the parties’ rights and obligations under this Agreement shall cease, except with respect to any obligations which are specifically set forth as surviving this Agreement. In the event of such written notice to the City terminating this Agreement, all Project Approvals (but not the Lease, Settlement Agreement and those included in the City’s General Plan and/or the Municipal Code), shall terminate and be extinguished. Termination by E&B shall not affect any of E&B’s obligations to pay assessments, liens or taxes incurred prior to the effective date of termination. 6 GENERAL PROVISIONS 6.1 Term. 6.1.1 Term. The Term of this Agreement shall commence upon the 53 Development Agreement between City of Hermosa Beach and E&B Natural Resources Commencement Date and shall be coterminous with the term of the Lease, unless terminated, modified or extended pursuant to the provisions of this Agreement or by the voters of the City. The Term of this Agreement shall be tolled during any period of time in which a Force Majeure Delay exists. 6.1.2 Additional Rights. Expiration or termination of this Agreement shall not affect any right vested under law independent of this Agreement. 6.2 Approval, Execution and Recordation Procedure. The following procedure shall govern approval of this Agreement: (a) The voters shall have approved Ballot Measure __ approving this Agreement; (b) Following voter approval, the Hermosa Beach City Council shall declare the vote in accordance with Elections Code Section 9217 and execute the Development Agreement; (c) As provided in Section 65868.5 of the Development Agreement Act, following execution by the City, the City shall cause a copy of this Agreement to be recorded with the County Recorder within ten (10) days. Any recording costs shall be paid by E&B; and (d) Following execution and recordation, the Coastal Commission shall have approved this Agreement (which shall include any revisions to this Agreement authorized by Section 10.F of the Ballot Measure Ordinance); 6.3 Cooperation and Implementation. City represents that it will cooperate with E&B to the extent reasonable and feasible to implement this Agreement. Upon satisfactory completion by E&B of all of its preliminary actions and payments of appropriate fees, City shall promptly commence and proceed with reasonable diligence to complete all steps necessary for the implementation of this Agreement and the development of the Property in accordance with the terms of this Agreement, including, but not limited to, the processing and checking of any and all Project Approvals, agreements, covenants and related matters required under the conditions of this Agreement, building plans and 54 Development Agreement between City of Hermosa Beach and E&B Natural Resources specifications, and any other plans necessary for the development of the Property, requests for inspections and certificates of occupancy, filed by or on behalf of E&B. E&B shall, in a timely manner, provide City with all documents, plans and other information necessary for the City to carry out its obligations hereunder, and pay for all necessary fees, costs, and expenses incurred by the City to facilitate implementation of this agreement that are not identified as the City’s responsibility. 6.4 Legal Challenges. 6.4.1 Defense. If any legal action or other proceeding is instituted by a third party or parties, other governmental entity or official challenging the validity of any provision of the Project Approvals, of the EIR or of this Development Agreement, E&B and the City shall cooperate in defending any such action. The City shall notify E&B of any such legal action against City within ten (10) days after the City receives service of process, except for any petition for a Temporary Restraining Order, in which case the City shall notify E&B immediately upon receipt of notice thereof. 6.4.2 Continued Processing. The filing of any lawsuit(s) by a third party (not a party to this Agreement) after the Approval Date against the City and/or E&B relating to this Agreement or to other development issues affecting the Project shall not delay or stop the processing or issuance of any permit or authorization necessary for development of the Project, unless required by court order. 6.5 Indemnity. 6.5.1 E&B Indemnity. To the fullest extent permitted by law, and notwithstanding the indemnification provisions set forth in the Lease and notwithstanding the limits of the insurance policies required herein, E&B hereby agrees, at its sole cost and expense, to defend, protect, indemnify, and hold harmless the City and its elected officials, officers, attorneys, agents, employees, consultants, volunteers, successors, and assigns (collectively "Indemnitees") from and against any and all third party damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens, and losses of any nature whatsoever, including reasonable fees of accountants, attorneys, engineers, consultants or other professionals and all costs associated therewith, arising or claimed to arise, 55 Development Agreement between City of Hermosa Beach and E&B Natural Resources directly or indirectly, out of, in connection with, resulting from, or related to any act, failure to act, error, or omission of E&B or any of its officers, agents, servants, lessees, employees, contractors, subcontractors, materialmen, suppliers or their officers, agents, servants, lessees, or employees, or arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to this Agreement or Project Approvals, or any approval subsequently granted by the City for the development of the Property, any construction permitted pursuant to this Agreement or Project Approvals, or any subsequent use of the Property, or any portion thereof, permitted by this Agreement or Project Approvals except for any actions resulting from the gross negligence or intentional acts of an Indemnitee. The City may elect to participate in the litigation, in which case E&B agrees to reimburse the City for its litigation costs and fees, including the retention of outside counsel to be selected by the City at the City’s sole discretion. Neither party shall settle any such lawsuit without the consent of the other party. 6.5.2 Survival of Indemnity. The indemnity provisions contained in Sections 6.4 and 6.5 shall survive the termination of the Agreement and are in addition to any other rights or remedies which Indemnitees may have under the law. Payment is not required as a condition precedent to an Indemnitee's right to recover under these indemnity provisions, and an entry of judgment against an Indemnitee shall be conclusive in favor of the Indemnitee's right to recover under these indemnity provisions. E&B shall pay Indemnitees for any reasonable attorneys’ fees and costs incurred in enforcing these indemnification provisions. 6.6 Notices. All notices or other communications required hereunder shall be in writing and shall be personally delivered (including by means of professional messenger service), or sent by registered or certified mail, postage prepaid, return receipt required, or by electronic mail (provided the email transmission is followed by delivery of a "hard" copy), and shall be deemed received on the date of receipt personally, by registered or certified mail or by facsimile. Unless otherwise indicated in writing, such notice shall be sent addressed as follows: If to the City: City Manager 56 Development Agreement between City of Hermosa Beach and E&B Natural Resources City of Hermosa Beach 1315 Valley Drive Hermosa Beach, CA 90254 With a copy to: Michael Jenkins, Esq. Jenkins & Hogin 1230 Rosecrans Avenue, Suite 110 Manhattan Beach, CA 90266 Telephone: (310) 643-8448 Fax: (310) 643-8441 If to E&B: E & B Natural Resources Management Corporation 1600 Norris Road Bakersfield, CA 93308 Telephone: (661) 679-1797 Fax: With a copy to: [name] Telephone: Fax: 6.7 No Third Party Beneficiaries. This Agreement is made and entered into for the sole 57 Development Agreement between City of Hermosa Beach and E&B Natural Resources protection and benefit of the parties to this Agreement and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 6.8 Time of Essence. Time is of the essence for each provision of this Agreement of which time is an element. 6.9 Modification, Amendment or Extension. Subject to any notice and hearing requirements imposed by law, this Agreement may be modified, amended and/or extended from time to time by mutual written consent of the City Council and E&B as set forth in Government Code Sections 65867, 65867.5 and 65868 and as authorized by Section 10.G of the Ballot Measure Ordinance and Chapter 19.66 of the Municipal Code. 6.10 Conflicts of Law. In the event that state, regional or federal laws or regulations enacted after the Approval Date or the action or inaction of any other affected governmental jurisdiction prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, the parties shall (a) provide the other party with written notice of such state, regional or federal restriction, provide a copy of such regulation or policy and a statement of conflict with the provisions of this Agreement, and (b) E&B and the City staff shall, within thirty (30) days, meet and confer in good faith in a reasonable attempt to modify this Agreement, but only to the minimum extent necessary to comply with such federal, regional or state law or regulation. Thereafter, regardless of whether the parties reach an agreement on the effect of such federal, regional or state law or regulation upon this Agreement, the matter shall be scheduled for hearings before the Council. Ten (10) days’ written notice of such hearing shall be given, pursuant to Government Code Sections 65090 and 65867. The Council, at such hearing, shall determine the exact modification or suspension which shall be necessitated by such federal, regional or state law or regulation. E&B, at the hearing, shall have the right to offer oral and written testimony. Any modification or suspension shall be taken by the affirmative vote of not less than a majority of the authorized voting members of the Council. Any suspension or modification may be subject to judicial review. The City shall cooperate with E&B in the securing of any permits which may be required as a result of such modifications or suspensions, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this agreement), and the indemnity provisions in Section 6.5 of this agreement. If E&B and the 58 Development Agreement between City of Hermosa Beach and E&B Natural Resources City do not agree on the modification or suspension, either party may elect to terminate this Agreement pursuant to the provisions of Section 5.2 of this Agreement. 6.11 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought and referring expressly to this Section. No waiver of any right or remedy in respect of any occurrence or event shall be deemed a waiver of any right or remedy in respect of any other occurrence or event 6.12 Successors and Assigns. Except as expressly provided to the contrary in this Agreement, the burdens and obligations of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement and all successors in interest to the Property or any portion thereof or any interest therein, and shall be covenants running with the land. 6.13 Governing State Law. This Agreement shall be construed in accordance with the laws of the State of California. 6.14 Constructive Notice and Acceptance. Every person who now or hereafter owns or acquires any right, title or interest in or to any portion of the Property is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Property. 6.15 Statement of Compliance. Within thirty (30) days following any written request, in accordance with the notice provisions of this Agreement, which either party may make from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, the other party shall execute and deliver to the requesting party a statement certifying that: (a) this Agreement is unmodified and in full force and effect or, if there have been modifications hereto, that this Agreement is in full force and effect, as modified, and stating the date and nature of such modifications; (b) that this Agreement is in full force and there are no current uncured defaults under this Agreement or specifying the dates and nature of any such defaults, and manner of cure; (c) any other information reasonably requested. The failure to deliver such statement within 59 Development Agreement between City of Hermosa Beach and E&B Natural Resources such time shall be conclusive upon the party which fails to deliver such statement that this Agreement is in full force and effect without modification except as may be represented by the requesting party and that there are no uncured defaults in the performance of the requesting party. Said statement(s) shall be in the form reasonably satisfactory to the City, E&B and to any purchaser, lender, title company, governmental agency, or other person reasonably requesting such statement(s) in connection with sale, use, development, construction, financing or marketing of the Property. The City and E&B, for their own respective uses, shall also be entitled to obtain a statement of compliance at any reasonable time. 6.16 Insurance. 6.16.1 E&B shall obtain and maintain insurance required by this Section 6.16, which shall also serve to satisfy the insurance requirements of section 18(b) and Exhibit C to the Lease. All insurance required to be carried by E&B shall be with companies rated A:X or better, in the then most recent edition of Best’s Insurance Guide, and licensed to provide the relevant insurance in the State of California. Certificates of Insurance required to be delivered by this Section 6.16 shall contain liability limits not less than those set forth in this Section 6.16, and shall list the City and the California State Lands Commission as an additional insured. E&B shall give the City an unqualified thirty (30) day notice of cancellation, non-renewal or material amendment thereof. E&B shall deliver the required Certificates of Insurance evidencing the insurance required by this Section 6.16 promptly upon obtaining the same. In the event any insurance (including the limits that are required to be obtained and maintained by E&B pursuant to this Section 6.16 and/or naming the City as an additional insured), other than insurance required to be obtained and maintained by applicable law, shall not be available and commercially feasible to obtain and maintain in the commercial insurance market, E&B shall provide written notice of that occurrence to the City. Said written notice shall be accompanied by a written report prepared by an independent insurance advisor of recognized national standing and reasonably acceptable to City, certifying that such insurance is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, or in the case where any required insurance amount is not so available, certifying as to the maximum amount that is so available, and in each case explaining in detail the basis for such conclusions. [UNDER DISCUSSION] Should this occur, E&B shall have the right to self-insure in order to obtain additional policy limits and/or coverage as long as the 60 Development Agreement between City of Hermosa Beach and E&B Natural Resources financial capability of E&B is sufficient to obtain self-insurance coverage that would be equivalent that required by this Section 6.16. Should E&B be unable to satisfy this requirement for financial capability in order to self-insure, E&B and the City shall negotiate in good faith and attempt to agree upon alternative adequate means of financial assurance to substitute for the insurance or the portion of the insurance that is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, taking into consideration the type and amount of insurance which has become unavailable, the potential magnitude of any loss not covered by insurance. E&B may self-insure and/or provide other alternative adequate means of financial assurance to the City only for so long as and to the extent that any insurance required by this Section 6.16 is not then reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. Said differently, E&B will again be required to obtain and maintain all of the insurance required by this Section 6.16 once the same is reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. 6.16.2 Required Insurance. LESSEE shall procure, pay for and keep in full force and effect during the term of this Agreement each and all of the following insurance. 6.16.2.1 Commercial General Liability Insurance. Commercial General Liability, including: Bodily Injury; Property Damage; Personal Injury; Blanket Contractual Liability, or equivalent; Broad Form Property Damage; Premises and Operations; Fire Legal Liability; Sudden and Accidental Pollution Liability; Products and Completed Operations; Explosion, Collapse and Underground Hazard; and Advertising/Personal Injury Coverage, and pollution occurring from the same in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate. 6.16.2.2 (Loss Of) Control Of Well And Pollution Liability Coverage. (Loss Of) Control of Well insurance and Operators Extra Expense Coverage with total of Forty Million Dollars ($40,000,000.00) limited liability for Sections 1A (Well Out Of Control Insurance), 1B (Redrill/Extra Expense), and 1C (Seepage, Pollution, Cleanup and Contamination) and a total of Five Million Dollars ($5,000,000.00) limited liability for Section 2 (Care, Custody and Control) and coverage for bodily injury, property damage, including cleanup costs and defense costs resulting from a Well Out Of Control incident. Notwithstanding the foregoing, E&B shall be obligated to maintain the specified Control of Well coverages only during actual drilling of a well, which includes drilling, completing and/or testing of the well. E&B shall provide the City with a copy of E&B’s Control of Well policy prior to commencing any actual drilling, along with the Certificate of Insurance, and such policy shall be maintained throughout the entire course of each actual drilling operation. 6.16.2.3 Worker’s Compensation Insurance. Worker’s 61 Development Agreement between City of Hermosa Beach and E&B Natural Resources Compensation insurance as required by law, together with Employer’s Liability coverage with limits of not less than One Million Dollars ($1,000,000.00). Such coverage shall include a Waiver of Subrogation in favor of the City and an “alternate employer” endorsement. 6.16.2.4 Owned, Non-Owned Or Hired Auto Insurance. Owned, Non-Owned or Hired Auto insurance with limits of not less than One Million Dollars ($1,000,000.00) per occurrence or accident. 6.16.2.5 Following Form Excess Or Umbrella Liability Insurance. Following Form Excess or Umbrella Liability insurance in an amount of not less than Twenty- Five Million Dollars ($25,000,000.00) per occurrence and aggregate per policy period to apply as excess coverage over coverage required by Subsections 6.16.2.1, 6.16.2.3 and 6.16.2.4. 6.16.2.6 Additional Insurance Required To Comply With Law. If the amounts of minimum insurance coverage as specified above in this Section 6.16.2 are insufficient or become insufficient to meet in any respect the minimum insurance coverage requirements set forth in or required by any applicable legal requirements of any governmental entity or regulatory body or agency by statute, case law, rules and/or regulations, then in such event E&B shall procure and maintain sufficient amounts of insurance coverage to satisfy any such minimum insurance coverage requirements in addition to the insurance required by Subsections 6.16.2.1, 6.16.2.2, 6.16.2.3, 6.16.2.4 and 6.16.2.5. 6.16.2.7 [Review of Insurance Amounts During Term of Development Agreement] [UNDER DISCUSSION] 6.16.3 Drilling or Other Contractors. Exhibit C to the Lease states: “Each drilling or other contractor performing work for the joint account shall be required to maintain in force, with respect to the work performed by such contractor, to the extent applicable and possible, the same insurance as specified above.” E&B also agrees to require each contractor to include the City as an additional insured to any such insurance maintained by the contractor. 6.17 Mortgagee Protection. The parties hereto agree that this Agreement shall not prevent or limit the right of E&B at its sole discretion, to encumber its leasehold interest in the Property or any portion thereof or any improvement thereon by any mortgage or other security device (collectively "Mortgage") securing financing of the purchase, development or operation of the Property or any portion thereof (including, without limitation, any combination of purchase financing, construction financing, bridge loans, take-out and 62 Development Agreement between City of Hermosa Beach and E&B Natural Resources permanent financing), as provided in this Agreement; provided, however, that any such Mortgage shall be subordinate to the rights and obligations under this Agreement. The City acknowledges that prospective lenders providing such financing may request certain acknowledgements, estoppels, interpretations and/or modifications of this Agreement, and agrees upon request, from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, to meet with E&B and representatives of such lenders to discuss in good faith any such request for acknowledgements, estoppels, interpretations and/or modifications. The City shall not unreasonably withhold its consent to and/or execution of any such requested acknowledgements, estoppels, interpretations and/or modifications which the City determines is consistent with the intent and purposes of this Agreement and reasonably protects the interests of the City under this Agreement. If the City timely receives a request from a Mortgagee requesting a copy of any notice of default given to E&B under the terms of this Agreement, the City shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of default to E&B, as the case may be. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement. Any Mortgagee who comes into possession of E&B’s interests in the Property, or any part thereof, pursuant to foreclosure of the mortgage, shall take the Property, or part thereof, subject to the terms of this Agreement; in no event shall any such Mortgagee or its successors or assigns be entitled to a building permit or occupancy certificate until all fees and other obligations due by E&B under this Agreement have been performed and/or paid to the City, all defaults have been cured, and all otherwise applicable conditions to such permit or certificate have been satisfied. 6.18 Covenant of Good Faith and Fair Dealing. No party shall do anything which shall have the effect of harming or injuring the right of the other parties to receive the benefits of this Agreement. 6.19 Covenant of Cooperation. E&B and the City shall cooperate with and assist each other in the performance of the provisions of this Agreement, including assistance in obtaining 63 Development Agreement between City of Hermosa Beach and E&B Natural Resources permits for the development of the Property or the Project which may be required from public agencies other than the City, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this Agreement), and the indemnity provisions in Section 6.5 of this Agreement. E&B reserves the right to challenge any ordinance, measure, moratorium or other limitation in a court of law if it becomes necessary to protect the development rights vested in the Property pursuant to this Agreement. 6.20 Justifiable Reliance. The City acknowledges that, in investing money and planning effort in and to the Project and all public improvements and dedication offers required hereunder, and in undertaking commencement of the Project, E&B will be doing so in reliance upon the City's covenants contained in this Agreement and upon the enforceability of this Agreement, and the City agrees that it will be reasonable and justifiable for E&B to so rely. 6.21 Project Is Private Undertaking. It is specifically understood and agreed to by and between the parties hereto that: (1) the subject development is a private development; (2) except for the obligations of the City described herein, if any, the City has no responsibilities for or duty to third parties concerning any public improvement until such time and only until such time that the City accepts the same pursuant to the provisions of this Agreement; (3) E&B shall have full power over and exclusive control of the development of the Project herein described subject only to the limitations and obligations of E&B under this Agreement and the Project Approvals; and (4) the contractual relationship between the City and E&B is such that E&B is not an agent of the City nor is City an agent of E&B. Notwithstanding the foregoing, nothing contained in this Agreement shall be deemed to waive or modify any otherwise applicable obligations the City, acting in its governmental capacity and not as a party to this Agreement, may have to E&B or any other party, under and in accordance with all applicable laws. 6.22 Further Actions and Instruments. The parties to this Agreement shall cooperate with and provide reasonable assistance to the other parties to the extent contemplated in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of any party, the other parties shall promptly execute, 64 Development Agreement between City of Hermosa Beach and E&B Natural Resources with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. 6.23 Section Headings. All Article and Section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 6.24 Enforced Delay (Force Majeure). (a) In addition to specific provisions of this Agreement, performance by any party hereunder, including making payments, shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, casualties, acts of God, litigation not commenced by a Party to this Agreement claiming the enforced delay (including without limitation, third party legal challenges to the Project, the Project Approvals or the environmental clearance for the Project Approvals and the Project), unavailability of materials, unforeseeable events beyond the control of E&B, governmental restrictions including moratoria imposed or mandated by other governmental entities (as City is prohibited from imposing moratoria under Section 3.1.2) (but only as to delays or defaults on the part of E&B), enactment of conflicting state or federal laws or regulations (but only if the party claiming delay complies at all times with the provisions of this Agreement pertaining to such conflicting laws), delays caused by the delay or failure by any entity other than the party claiming such delay to provide financing for or construction of needed public facilities or infrastructure as contemplated or required by this Agreement, delays due to the enforcement of environmental regulations, litigation brought by third parties, or similar bases for excused performance. Any period of enforced delay provided for in this Section shall run concurrently with any period of enforced delay under the Lease. E&B shall only be required to provide one notice claiming such extension for enforced delay under both this Agreement and the Lease. (b) An extension of time for any such cause including an extension of the Term (a "Force Majeure Delay") shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party 65 Development Agreement between City of Hermosa Beach and E&B Natural Resources claiming such extension is sent to the other parties within thirty (30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within thirty (30) days after it obtains actual knowledge of the event. The time for performance due to a Force Majeure Delay will be extended for such period of time as the cause of such delay exists (whether or not it extends beyond the Term or the Extended Term) but in no event for longer than for such period of time. (c) Notwithstanding the first sentence of paragraph (b), above, the following shall apply: (i) E&B shall be entitled to a Force Majeure Delay for a period longer than the period of enforced delay if the City Council determines that such longer period is reasonably required; and (ii) E&B shall be entitled to a Force Majeure Delay notwithstanding the fact that E&B may not have given timely notice to the City, if the City Council determines that such Force Majeure Delay is reasonably required. (d) A Force Majeure Delay shall not include the existence of any adverse or difficult market or economic conditions. 6.25 Emergency Circumstances. (a) If, as the result of specific facts, events or circumstances, the City believes that a severe and immediate emergency threat to the health or safety of the City or its residents, meeting the requirements of subparagraph (b), below, requires the modification, suspension or termination of this Agreement, the City will, after reasonable notice to E&B (in light of all the circumstances), hold a hearing on such facts, events or circumstances, at which E&B shall have the right to address the City Council. The City shall have the right to modify, suspend or terminate this Agreement, in whole or in part, if, following such hearing, the City Council determines that such modification, suspension or termination is required in order to protect the health and safety of the City and its residents. (b) This Section 6.25 governs generally applicable emergencies in the area not 66 Development Agreement between City of Hermosa Beach and E&B Natural Resources specifically related to or caused by the Project. For purposes of this Section 6.25, an emergency must meet each of the following criteria: (i) it must be based on genuine health, safety and general welfare concerns (other than general growth management issues); (ii) it must arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (iii) based upon its terms or its effect as applied, it does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such action by the City shall be taken in a manner so as to provide E&B with the rights and assurances provided under this Agreement. 6.26 Severability. Invalidation of any of the provisions contained in this Agreement, or of the application thereof to any person, by judgment or court order, shall in no way affect any of the other provisions hereof or the application thereof to any other person or circumstance, and the same shall remain in full force and effect, unless enforcement of this Agreement, as so invalidated, would be unreasonable or inequitable under all the circumstances or would frustrate the purposes of this Agreement and/or the rights and obligations of the parties hereto. 6.27 Interpretation. The language in all parts of this Agreement shall in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against any party. The parties hereto acknowledge and agree that this Agreement has been prepared jointly by the parties and has been the subject of arm's length and careful negotiation over a considerable period of time, that each party has independently reviewed this Agreement with legal counsel, and that each party has the requisite experience and sophistication to understand, interpret and agree to the particular language of the provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement shall not be interpreted or construed against the party preparing it, and instead other rules of interpretation and construction shall be utilized. 6.28 Counterparts. This Agreement may be executed in duplicate counterpart originals, each of which is deemed to be an original and all of which when taken together shall constitute one and the same instrument. 67 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.29 Entire Agreement. This Agreement consists of __ pages and ______________ exhibits (designated __ through __), which constitute the entire understanding and agreement of the parties, and, with the exception of (1) the Lease; (2) the Settlement Agreement; (3) the Agreement to Implement the Settlement Agreement dated July 23, 2014; and (4) the Reimbursement Agreement dated May 17, 2012 shall supersede any prior agreements, discussions, commitments, representations or agreements, written or oral, between the parties hereto with respect to this Agreement. IN WITNESS WHEREOF, the parties have each executed this Agreement on the date first written above. CITY OF HERMOSA BEACH E&B NATURAL RESOURCES MANAGEMENT CORPORATION By:____________________________ By:___________________________________ Mayor President ATTEST: By: _____________________________ City Clerk APPROVED AS TO FORM: 68 Development Agreement between City of Hermosa Beach and E&B Natural Resources By: ____________________________ By: _________________________________ City Attorney Attorneys for E&B Natural Resources Management Corporation Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-1” LEGAL DESCRIPTION 555 6TH STREET, HERMOSA BEACH, CALIFORNIA 90254 That portion of APN 4187-031-900 described as: That portion of Lot A lying south of a line commencing at the northeasterly corner of Lot 11, Block U, Tract 2002, as per Map recorded in Map Book 22, Pages 154 and 155, in the Office of the Recorder of the County of Los Angeles, and continuing along the easterly prolongation of the northerly line of said Lot 11, to the easterly line of Lot A; Lots 11 through 18, Block R, Tract 2002; Lots 11 through 18, Block U, Tract 2002; and the vacated portion of Bard Street adjoining said lots. Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-2” LEGAL DESCRIPTION 601 CYPRESS AVENUE , HERMOSA BEACH, CALIFORNIA 90254 APN 4187-030-037 Lots 11 Through 14, Block H, Tract 1686, M.B. 20- 188, City Of Hermosa Beach Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-3” LEGAL DESCRIPTION 636 CYPRESS AVENUE, HERMOSA BEACH, CALIFORNIA 90254 APN 4187-031-022 Lots 5 And Lot 6, Block I, Tract # 1686, M.B. 20- 188, City Of Hermosa Beach . Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “B” PROJECT DESCRIPTION (From Section 2.0 of FEIR) Revised with removal of City maintenance yard discussion The Proposed City Maintenance Yard Project described herein is a separate project that the City will undertake if the voters approve the Proposed Oil Project. This Development Agreement only applies to the Proposed Oil Project described below, and except for any obligations explicitly assigned to E&B herein and payments from E&B for the City Maintenance Yard Project, the Proposed City Maintenance Yard Project is not governed by this Agreement. To the extent feasible, references to the Proposed City Maintenance Yard have been removed from the Project Description. Project Description E&B Natural Resources Management Corporation (E&B), the Applicant, is proposing the E&B Oil Drilling & Development Project (Proposed Oil Project) on a 1.3-acre site located in the City of Hermosa Beach (City). The site for the Proposed Oil Project (Project Site), as shown in Figure 2.1, would be located at 555 6th Street, bounded on the east by Valley Drive and on the south by 6th Street, approximately seven blocks east of the beach and the Pacific Ocean. Oil and gas pipelines constructed and used by the Project would extend from the Project Site to one of four potential valve box locations for the oil line and to a Southern California Gas (SGE) metering station for the gas line. The Project Site is owned by the City and is currently used as the City (Public Works) Maintenance Yard. The Applicant has leased the Project Site from the City for the implementation of the Proposed Oil Project. The Proposed Project is composed of two parts: 1) the relocation of the City Maintenance Yard (called the Proposed City Maintenance Yard Project); and 2) the development of an oil and gas facility on the current City Maintenance Yard site (called the Proposed Oil Project). In order to clear the current City Maintenance Yard site (called the Project Site) for the construction of the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Directional Drilling Drilling wells at multiple angles to better reach and produce oil and gas reserves. Directional drilling allows for multiple wells from the same drilling location. proposed oil and gas facility, the City Maintenance Yard would be temporarily relocated during Phase 1 of the Proposed Project. If it is determined that the production of oil and gas on the Project Site would be economically viable (Phase 2 of the Proposed Project), construction of the permanent City Maintenance Yard would be completed once Phase 3 of the Proposed Project begins. The permanent Proposed City Maintenance Yard Project has two options: a Parking Option, which would add a net 97 parking spaces with a below grade parking garage, and a No Added Parking Option, which would have the same amount of parking as is currently available. This Project Description reflects information contained in the Project Application submitted to the City of Hermosa Beach by the Applicant, along with supporting information provided in conjunction with the Project Application (E&B Natural Resources, Planning Application and Appendices, Volumes 1 – 3, November 14, 2012; Response to Planning Application Completeness Review, April 11, 2013; Response to Requested Clarifications, June 24, 2013; Quantitative Risk Analysis, July 3, 2013; Errata, July 22, 2013).1Information related to the relocation of the City Maintenance Yard and construction and operation of the Proposed City Maintenance Yard is derived from information provided by the City of Hermosa Beach Public Works Department. The description of the Proposed Project incorporates the essential elements of the Project as it is proposed, including all phases and major components as well as the locations of all proposed offsite activities (in addition to those occurring on the Project Site). More detailed information related to some aspects of the Proposed Project (including proposed operational parameters and design features) may be found within individual sections of the Final Environmental Impact Report (EIR), where considered relevant to the discussion of specific environmental issues and/or effects. In addition, a description of the environmental setting and current conditions related to the environmental issues is presented in the Environmental Setting subsection of the individual sections of the Final EIR. 1 Information submitted by the Project Applicant is available for public review at the City of Hermosa Beach Community Development Department. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This section discusses the Project objectives, historical operations on the Proposed Project Sites, the four phases of the Proposed Oil Project, scheduling, vehicle trip and employee requirements, and necessary permitting associated with the Proposed Project. A number of technical drawings related to the Proposed Project design and layout are included in Appendix A to the Final EIR. 2.1 Project Overview The Applicant proposes the development of an onshore drilling and production facility site that would utilize directional drilling of 34 wells (30 oil wells, four wells for water disposal/injection) to access the oil and gas reserves in the tidelands (pursuant to a grant by the State of California to the City) and in an onshore area known as the uplands. Both of these areas are located within the Torrance Oil Field within the jurisdiction of the City. In addition, the Proposed Project would result in the installation of offsite underground pipelines for the transportation of the processed crude oil and gas from the Project Site to purchasers, extending through the Cities of Redondo Beach and Torrance. The Applicant proposes a laydown site for supply staging/storage within the basement level of the industrial building at 601 Cypress Avenue during the construction phases. The Applicant also proposes to construct a parking lot at 636 Cypress Avenue for use by some of its construction employees/contractors on weekdays and by the public at other times. The City Maintenance Yard is proposed to be relocated to a temporary facility to be established on the rear (westerly) portion of the City Hall site (1315 Valley Drive) prior to and during the initial phase of the Proposed Oil Project so that the maintenance operations could be moved when the existing City Maintenance Yard is demolished as part of Proposed Oil Project activities. The construction of the permanent City Maintenance Yard would be undertaken on the site now occupied by the Hermosa Self-Storage (552 11th Place) after the Applicant completes the testing phase of the Proposed Oil Project in Phase 2. As indicated below, the permanent City Maintenance Yard and the oil and gas facility on the Project Site would be constructed at the same time during Phase 3 of the Proposed Project. The timeframe from commencement of the Proposed Project until the permanent oil and gas facility would be operational is estimated to be approximately 3.25 years. The existing lease (Oil and Gas Lease No. 2) allowing drilling into the tidelands provides for a 35-year period. Table 2.1 summarizes events in the Proposed Project timeline. Specifics of each of the Proposed Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Project components are described in the following sections. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.1 Proposed Project Location Source: Project Application, Amendments and Appendices Hermosa Beach Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.1 Proposed Project Schedule Summary Phase Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Temporary City Yard Oil Project Phase 1 Oil Project Phase 2 Drill Test Permanent City Yard Oil Project Phase 3* Oil Project Phase 4* Drill Operate Continuously for 30+ years Re-drills Average 30 days/year, max 150 days/yr** Note: * If the test phase is determined to be successful, Phase 3 and 4 would occur. For construction only. Does not include permitting timeframe. ** These are the maximum proposed by the Applicant. The 150 days per year would occur once every 5 years. Most likely re-drill activity would be lower. 2.2 Proposed Project Objectives Pursuant to Section 15124(b) of the California Environmental Quality Act (CEQA) Guidelines, the description of the Proposed Project is to contain “a clearly written statement of objectives” that would aid the lead agency in developing a reasonable range of alternatives to evaluate in the EIR and would aid decision makers in preparing findings and, if necessary, a statement of overriding considerations. The City is the lead CEQA agency which prepared the EIR, considered the EIR for certification and is placing the Proposed Project on the ballot. Project approvals will be made by the electorate of the City of Hermosa Beach. As part of the Project Application, the Applicant provided its stated objectives for the Proposed Oil Project, which consist of the following: 1. Develop the Proposed Oil Project consistent with the 1993 Conditional Use Permit and the March 2, 2012 Settlement Agreement, with the utilization of directional drilling Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources techniques from the Project Site, which is the current City Maintenance Yard; 2. Maximize oil and gas production from the Torrance Oil Field within the City’s jurisdiction, thereby maximizing the economic benefits to the City; 3. Provide an oil and gas development project on the Project Site that utilizes the latest technology and operational advancements related to safety and production efficiency in order to provide a project that would be safe and would meet the applicable environmental requirements; 4. Conduct construction and drilling activities on the Project Site incorporating technological advancements, operational practices, and design features related to air quality, odors, noise, hazards, and water quality to minimize the potential impacts on the adjacent community and the environment; 5. Provide landscaping, hardscape, signage, lighting, and other design features to minimize the visual effects of the Proposed Oil Project on the adjacent community; and 6. Implement operational practices and incorporate design features to provide safe vehicular ingress and egress during temporary construction activities and the ongoing operation of the Proposed Oil Project. Pursuant to the March 2, 2012 Settlement Agreement between the City of Hermosa Beach, E&B, and Macpherson Oil Co., the City’s primary objective is to comply with the California Environmental Quality Act and place on the ballot a measure allowing the City of Hermosa Beach electorate to decide whether or not to approve the Applicant’s Proposed Oil Project and a Development Agreement to vest the Project so that, if approved, the Project cannot later be invalidated by a vote of the people. In the event that voters approve the Proposed Oil Project, the City would need to relocate the City Maintenance Yard. Under those conditions, the City's objectives for relocation of the City Maintenance Yard would be to: 1. Provide City Yard Maintenance facilities that support provision of high-quality City services in an integrated and cost-efficient manner; 2. Consolidate City facilities and functions for maximum efficiency and flexibility; 3. Minimize disruption of City functions during relocation of the City Maintenance Yard; 4. Ensure the relocated City Maintenance Yard is compatible with surrounding uses; and 5. Ensure there is no net loss of public and employee parking spaces as a result of both the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Proposed Oil Project and the relocation of the City Maintenance Yard consistent with the Preferential Parking Program approved by the Coastal Commission. 2.3 Historical and Current Operations Oil drilling and production in the Los Angeles Basin has a long history. According to the California Division of Oil, Gas, and Geothermal Resources (DOGGR) database, almost 30,000 oil wells have been drilled in the Los Angeles Basin in the last 100 to 150 years. Figure 2.2 shows the location of these wells. The Proposed Oil Project would drill into the western edge of the Torrance Oil Field (see Figure 2.2). Most of the production from the Torrance Oil Field has been generated from wells drilled in the City of Torrance, with some drilling in the Cities of Redondo Beach and Hermosa Beach. There have been approximately 1,500 wells drilled in the Torrance Oil Field historically. Although the Project Site is relatively flat, it is underlain by windblown sand dunes that previously covered the region, resulting in uneven ground due to natural conditions. In the 1920s and 1930s, the northeastern portion of the Project Site had a large depression that was mined for sand. Around 1927, the City’s dump and refuse burner were located on the Project Site, and, by 1947, the depression was filled. The resulting former landfill is approximately 45 feet deep and is filled with glass, porcelain, and ceramic towards the bottom and soils containing miscellaneous metals, wires, glass, and other materials toward the top (i.e., closer to the ground surface). Between the depths of 3 feet and 25 feet below ground surface (bgs), the former landfill contains some soil with lead at concentrations above the Environmental Protection Agency (EPA) Region 9 Industrial Regional Screening levels. In addition, soils impacted with total petroleum hydrocarbons (TPH) were found at depths of 25 to 44 feet bgs within the central portion of the landfill. For a detailed discussion of the soil conditions on the Project Site, refer to Section 4.7, Geological Resources/Soils, of the Final EIR. Figure 2.2 Historical Wells Drilled in the Los Angeles Basin Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: DOGGR In 1930, an oil well (Stinnett Oil Well No. 1) was drilled in the western portion of the Project Site. The oil well was abandoned in 2005, consistent with the then-current standards of the DOGGR. During the mid-1940s, the first building was constructed on the Project Site for City maintenance uses, with the last building constructed in the 1980s. Since the 1990s, with the exception of the addition of trailers, storage containers, and sheds, the Project Site has generally remained unchanged. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The Project Site is currently developed as the City Maintenance Yard, and the Proposed Oil Project would require the relocation of the City Maintenance Yard. As indicated in Figure 2.3, existing development on the Project Site consists of three buildings, two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing, and masonry walls. In addition, within the boundaries of the Project Site, there is an asphalt parking area in the southern portion of the City Maintenance Yard that provides 15 parking spaces for employees (Monday through Thursday between the hours of 6:00 a.m. and 6:00 p.m.) and for the public after hours (6:00 p.m. to 6:00 a.m.) and on weekends and holidays. Existing site contamination from historical site uses is also shown in Figure 2.3. According to an Environmental Site Assessment prepared in 2012 (Brycon 2012), 10 of the 73 soil samples taken exceeded Regional Water Quality Control Board guidelines for total petroleum hydrocarbons, all within the mid range hydrocarbons (C13-C22). Volatile organic carbons were not present in any of the samples at concentrations above the EPA Region 9 Industrial Regional Screening Levels. Six of the samples exceeded the EPA Region 9 Industrial Regional Screening Levels for lead. In addition, a series of groundwater borings conducted in 2013 (Brycon 2013) found the presence of total petroleum hydrocarbons, lead, barium, and arsenic in the groundwater below the City Maintenance Yard that exceeded the Maximum Contaminant Levels (MCLs) established for drinking water by the Regional Water Quality Control Board. The immediately adjoining properties were sparsely developed into the 1940s, with a few residential units located to the northwest of the Project Site. Post 1940s, significant development occurred with industrial buildings being constructed to the south and west of the Project Site by 1953 and to the north of the Project Site by the 1960s. By 1960, the buildings to the west of the Project Site were identified as containing a building material warehouse, a boat repair shop, and a contractor’s storage yard. By 1960, the building to the south was being utilized as a planter mix manufacturing site. Since the 1960s, the various adjoining buildings have been utilized for multiple small businesses as industrial/commercial uses. To the east, from the late 1800s, there was a railroad right-of-way (ROW) that was utilized by the Santa Fe Railway. During the 1960s, the railroad ROW was converted to a greenbelt/park (Veterans Parkway - Hermosa Valley Greenbelt (Greenbelt)), followed by a Council initiative in 1987 directing the City of Hermosa Beach to acquire the Railroad ROW for public use as parkland and open space in perpetuity; the property is zoned Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources O-S-1 Restricted Open Space. Currently, other land uses adjacent to the Project Site (on the same block between 8th and 6thStreet and Cypress Avenue and Valley Drive) are commercial/industrial (Cypress Auto Body, A&B Heating, JB Plumbing, McGivern Surfboard Manufacturing, Buddhist Meditation Center, NUWORK, a recording studio and other various small commercial/industrial businesses), with some residential uses along 8th Street to the north. Adjacent blocks include residential uses located 150 feet to the north of the Project Site, 250 feet to the west and 180 feet to the east (east of the Greenbelt), with small commercial/industrial uses and the Beach Cities Self Storage facility located to the immediate south across 6th Street with its required parking lot abutting the southwest corner of the Project Site. Figure 2.4 shows the southern area of the City of Hermosa Beach along with land uses. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.3 Existing Site Conditions Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant Project Application, DOGGR well database, Phase 2 Environmental Site Assessments Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.4 Project Site and Area Land Uses (Zoning Map) Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: City of Hermosa Beach Zoning Map, November 2013 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 1 Site Preparation 6-7 Months 2.4 Proposed Oil Project Phases The Proposed Oil Project would occur in the following four phases:  Phase 1: Site Preparation;  Phase 2: Drilling and Testing;  Phase 3: Final Design and Construction; and  Phase 4: Development and Operations. Each phase is discussed in the following sections. The Applicant proposes a facility designed for a maximum capacity of 8,000 barrels per day (bpd) of crude oil and 2.5 million standard cubic feet per day (scfd) of produced gas at completion of the drilling stage of the Proposed Oil Project in Phase 4. The operational parameters of the Proposed Oil Project are summarized in Table 2.2. Prior to the initiation of the Proposed Oil Project, it would be required that plans be submitted by the Applicant to the City and other permitting authorities for review and approval. These would include coastal development permits, oil and gas well permits, demolition plans, grading plans, utility and electrical plans, cement/foundation plans, landscaping plans, street and ROW improvement/modification plans, and construction plans, amongst others. Figure 2.5 shows the Project Site along with the electrical and pipeline connections and the Cypress Avenue parking lot. 2.4.1 Phase 1 Site Preparation The purpose of Phase 1 would be to prepare the Project Site for drilling and testing as well as for the subsequent phases of the Proposed Oil Project. It is anticipated that Phase 1 would occur for approximately six months. Prior to Phase 1 activities, the temporary City Maintenance Yard would be installed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.1.1 Phase 1 Construction Activities Phase 1 would consist of the following construction activities:  Underground existing overhead utilities;  Construction of modifications to intersection of 6th Street and Valley Drive;  Relocation of City Maintenance Yard to the temporary site;  Clearance of Project Site;  Construction of retaining walls and rough grading;  Installation of perimeter fencing;  Construction of well cellar;  Installation of offsite electrical conduit and onsite electrical equipment;  Completion of onsite surface and entrance/exit;  Installation of temporary landscaping; and  Installation of 35-foot sound attenuation wall.(per Mitigation Measure NV-3a) Table 2.2 Proposed Oil Project Design Parameters Parameter Value Crude oil production Phase 2: Up to 800 bpd Phase 4: Up to 8,000 bpd Crude oil properties 18 API Natural gas production Phase 2: Up to 250,000 scfd Phase 4: Up to 2.5 million scfd Produced water disposal/injection Phase 2: Up to 1,600 bpd Phase 4: Up to 16,000 bpd Maximum number of wells Phase 2: 4 wells (3 production, 1 water disposal/injection) Phase 4: 34 total (30 production, 4 water disposal/injection) NGL production Up to 1 bpd mixed with crude oil Pipeline length and tie-in, gas Approx. 0.43 miles + 1.4 miles Pipeline length and tie-in, crude Approx. 3.55 miles Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water use, during construction Approx. 2,000 gallons per day during grading and earthwork (potable) Approx. 10,000 gallons per day during pipeline installation (potable) Approx. 20,000 gallons per month during facility construction (potable) Water use, during drilling 130,000 gallons per well (reclaimed water) (Approx. 4,500 gallons per day) Water use, during operations and maintenance (Landscaping- Reclaimed Water) (Domestic-Potable Water) 1,300 gallons per day (1,000 gallons per day for landscaping) (300 gallons per day for domestic use) Electrical use, Phase 2 4.5 megawatts (including drill rig) Electrical use, Phase 3 0.3 megawatts Electrical use, Phase 4 7.0 megawatts (including drill rig) 3.0 megawatts during normal ongoing operations Onsite electrical generation of 1 MW Well workovers, annually 90 days/year Well re-drills (full sized drilling rig, peak annually Up to 5 per year, up to 30 re-drills for the life of the Project Notes:bpd = barrels per day; kW = kilowatts; scfd = standard cubic feet per day; NGL = natural gas liquids; API = American Petroleum Institute; estimated peak values and maximums shown Source: Project Application, Amendments and Appendices. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.5 Project Site and Pipeline/Electrical Connections Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: E&B Supplemental Application materials, January 2014 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is discussed in the following subsections. Figure 2.6 shows the proposed arrangement of the Project Site under Phase 1. Appendix A of the Final EIR provides the conceptual grading plan, site plan, elevations, and landscape concept plan for the Proposed Oil Project at the completion of Phase 1. The laydown area (equipment and supply storage/staging) for the Proposed Oil Project would be in the basement of the building located at 601 Cypress Street on the northwest corner of Cypress Street/6th Street (See Figure 2.3). Underground Existing Overhead Utilities There are currently overhead power lines and communication lines on poles that run overhead through the existing trees along Valley Drive. These existing lines would be removed along the Project frontage and relocated underground adjacent to the Project Site in a location determined by the utility companies and the City. Appendix A of the Final EIR provides drawings showing the general location where the utility lines would be placed underground. Construction of Modifications to Intersection of 6th Street and Valley Drive The Proposed Oil Project would include the construction of modifications to the intersection of 6th Street/Valley Drive to provide the necessary turning radius for Project-related trucks. Appendix A of the Final EIR provides drawings showing the conceptual design of the proposed intersection modifications. These modifications would result in:  Removal of a portion of the landscaped area and entry driveway to the Beach Cities Self Storage facility;  Redesign of the sidewalk on the southwest corner of the intersection;  Relocation of the stop sign and striping for the northbound lanes on Valley Drive to address the redesign of the southwest corner;  Removal of a utility pole and underground utilities on the southwest corner of the intersection;  Removal of a utility pole and underground the utilities on 6th Street; and  The removal of two on-street parking spaces on 6th Street. As a part of the intersection modifications, the stop sign and striping for the southbound lanes on Valley Drive would be relocated to improve the line of sight to and from the intersection with 6th Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Street. This modification would be made concurrently with the addition of the perimeter fencing on the Project Site (See Figure 2.6). In addition, the curb on the northwest corner along 6th Street adjacent to the Project Site would be temporarily provided as a rolled asphalt curb for Phases 1 and 2. The two on-street parking spaces removed from 6th Street would be provided as part of the Project’s overall parking replacement program discussed further below. Relocation of the City Maintenance Yard Prior to Phase 1, a temporary City Maintenance Yard would be built at the New City Maintenance Yard location to the rear of City Hall at 1315 Valley Drive. At this point, the maintenance operations would be moved into the temporary City Maintenance Yard. Clearance of the Project Site Prior to the initiation of the site clearance activities, temporary 24-foot sound attenuation walls (per Mitigation Measure NV-1a) would be erected at the Project Site to reduce noise impacts related to construction. These sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise associated with Phase 1 demolition and construction activities. The temporary sound walls would be removed from the Project Site after the onsite construction activities in Phase 1 are completed. Following the relocation of the City Maintenance Yard , the Project Site would be cleared. The site clearance activities would include the removal of three existing buildings (one of which would be moved to the temporary site), two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing and masonry walls. In addition, the asphalt parking area to the west of the City Maintenance Yard would be removed, resulting in the removal of 15 parking spaces. The building located at 636 Cypress Avenue would also be demolished at this time to clear the parcel for the off-site temporary parking area. Prior to the demolition of both buildings, building materials would be assessed for asbestos content and presence of lead based paint, consistent with the requirements of the South Coast Air Quality Management District (SCAQMD). If asbestos containing materials or lead based paint are detected, the appropriate abatement process would be implemented. The building materials removed from the Project Site would be transported by truck to the recycling facility at Southern Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water Injection Pumping produced water back down the well hole into the oil reservoir from which it was originally extracted. California Disposal in Santa Monica, the recycling facilities at Hanson Aggregates in Long Beach, or another certified facility for recycling or disposal. The Proposed Oil Project would include an overall parking replacement program that meets the intent of the City’s Preferential Parking Program and Coastal Development Permit requirements. Section 2.4.5 discusses the parking plan for the Proposed Oil Project. Three of the four existing mature trees along the frontage of the Project Site on Valley Drive would be retained to help screen construction activities. The Applicant has concluded that the fourth tree should be removed because it is in poor health, and it would limit access to the Project Site (See Figure 2.6). The three remaining trees would be trimmed to keep branches from hanging over onsite equipment and to help prevent trespassing. Construction of Retaining Walls and Rough Grading Once the Project Site is cleared, retaining walls would be constructed along the western boundary of the Project Site and set back 10 feet along the western portion of the southern property boundary (See Figure 2.6). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.6 Proposed Oil Project Phase 1 Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources [need to fix this image] Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Rough grading would occur to allow for:  The construction of a well cellar for three test oil wells and a water disposal/injection well;  Surface drainage towards a temporary retention basin, which would contain a 100-year flood event;  A level area for the set up and movement of the drill rig; and  The installation of temporary production equipment. It is anticipated that the rough grading would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the retaining wall locations and rough grading at the completion of Phase 1. Installation of Perimeter Fencing Following the rough grading, the Project Site would be enclosed by a six-foot temporary perimeter chain link fence covered with green fabric. The fence would include secured gates for the entrance off Valley Drive and the exit to 6th Street. The Applicant proposes to include the appropriate signage consistent with the requirements of the City. Figure 2.6 shows the location of the fencing and gates at the completion of Phase 1, and Appendix A of the Final EIR shows an elevation of the fencing. Construction of Well Cellar A cement well cellar approximately 8 feet wide by 40 feet long by 12 feet deep would be constructed for three test wells and one water disposal/injection well to allow for the drilling of the wells in Phase 2. The well cellar would provide containment of any potential oil spillage during Phase 2. Figure 2.6 shows the location of the well cellar. Installation of Offsite Electrical Conduit and Onsite Electrical Equipment Electrical service for the Proposed Oil Project would be provided by Southern California Edison (SCE). The electrical conduit and onsite electrical equipment for all phases of the Proposed Oil Project would be installed in Phase 1. The electrical load during Phase 2 and Phase 3 would be 4.5 Megawatts (MW) and 0.3 MW, respectively. During Phase 4, the electrical load during Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources drilling would be 7.0 MW and during ongoing operations would be 3.0 MW. According to the Applicant, SCE has determined that the existing 16 kilovolt (kV) circuit running along 8th Street to the north of the Project Site has the necessary capacity to serve the Proposed Oil Project. To receive electrical service from SCE, the Proposed Oil Project would provide for the installation of an underground conduit for a linear distance of 280 feet under Valley Drive from 8th Street to the northeast corner of the Project Site (see Figure 2.6) Electrical equipment consisting of step down transformer(s), switchgear, and variable frequency drive units would be installed in the northeast corner of the Project Site designated as the New SCE Yard in Figure 2.6. The electricity would be used to provide power for well pumps, the temporary production equipment, the temporary construction trailer, safety system controls, onsite lighting, and the drill rig used in Phase 2 and Phase 4 (both drilling and re-drills). An uninterruptable power supply would be installed for critical systems such as the temporary production equipment safety systems and security lights. An emergency generator would be installed to provide power for the safe shutdown of the drilling operation in the event of a loss of power from SCE. Appendix A of the Final EIR provides the general location of the offsite underground conduit. Completion of Onsite Surface and Entrance/Exit The surface of the Project Site would be covered with crushed aggregate base material to serve as a dust inhibitor and driving surface. Temporary berms would be constructed around the areas where the drill rig and associated equipment would be set up and the temporary production equipment installed to provide secondary containment. In addition, a temporary berm would be provided around the well cellar to avoid surface flows from entering the well cellar. The existing driveway access from Valley Drive and 6th Street would be used. On both sides of the driveway on 6th Street, a rolled asphalt curb would be provided. Installation of Temporary Landscaping Landscaping would be provided along the eastern and southern perimeter of the Project Site to provide a visual buffer. The plant materials and irrigation would be consistent with the requirements of the City. The trees and other plant materials would be planted in a manner that Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources allows for their replanting as a part of the permanent landscaping provided in Phase 3. Reclaimed water supplied by West Basin Municipal Water District would be used for irrigation. The reclaimed water line serving the Greenbelt east of Valley Drive would be tapped and extended to the Project Site. Appendix A of the Final EIR includes a conceptual landscape plan and plant materials for the temporary landscaping provided at the completion of Phase 1. Installation of 32-Foot Sound Attenuation Wall Upon completion of the Phase I improvements, a 35-foot sound attenuation wall (per Mitigation Measure NV-3a) would be erected inside the chain link construction fence in order to attenuate noise generated during Phase 2 drilling and testing. The 35-foot sound wall would stay installed through the duration of Phase 2. 2.4.1.2 Phase 1 Site Preparation Detailed Schedule It is anticipated that Phase 1 would occur for a period of approximately six months as indicated in the schedule provided in Table 2.3. As required by the previous Conditional Use Permit and as proposed by the Applicant, the construction activities on the Project Site, including the operation of earthmoving equipment, would be conducted between the hours of 8:00 a.m. and 6:00 p.m. Monday through Friday (except holidays) and 9:00 a.m. and 5:00 p.m. on Saturdays. Offsite construction activities within the public ROW would occur between the hours of 8:00 a.m. and 3:00 p.m. Monday through Friday in the City of Hermosa Beach. Truck deliveries to the Project Site would be limited to the hours between 9:00 a.m. and 3:00 p.m. Monday through Friday, except in the case of an emergency and with the prior approval of the Director of Public Works. The Project-related truck trips would be limited to 18 round trips per day and limited to the designated truck routes. 2.4.1.3 Phase 1 Site Preparation Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 1 are provided in the detailed Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources listing in Appendix A of the Final EIR. Vehicle trips are summarized in Table 2.4. The Project- related personnel would utilize parking spaces in an offsite parking area provided consistent with the proposed parking plan described in detail in Appendix A. Table 2.3 Phase 1 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Construction of Temporary City Yard Underground overhead utilities 6thStreet & Valley intersection Relocation of Yard Remove buildings Remove other site structures Construct retaining walls Grade, well cellar, aggregate Construct chain link fence Construct well cellar Install electrical service Install landscaping Install 32-foot sound wall Note: relocation of Yard would only include moving of shop materials and equipment. The Temporary City Maintenance Yard would be construction prior to the start of Phase 1 and would take approximately 9 months. See section 2.5. 2.4.1.4 Phase 1 Truck Routes Truck trips would be required in order to deliver and remove construction-related materials and equipment to and from, respectively, the Project Site. Trucks would utilize roads designated as truck routes by the cities of Hermosa Beach, Redondo Beach, Manhattan Beach and Torrance. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Truck routes are shown in Figures 2.13 and 2.14. The routes identified by the Applicant as those utilized for all phases of the Project are as follows: Inbound Trucks 1. Inbound trucks from westbound Artesia Boulevard 2. Left on to southbound Pacific Coast Highway 3. Right on to westbound Pier Avenue 4. Left on southbound Valley Drive 5. Right into the Project driveway on Valley Drive Or 6. Inbound trucks from westbound 190th Street (which becomes Anita Street) 7. Right on northbound Pacific Coast Highway 8. Left on to westbound Pier Avenue 9. Left on to southbound Valley Drive 10. Right into the Project driveway on Valley Drive Outbound Trucks 11. Outbound trucks on to eastbound 6th Street 12. Right on to southbound Valley Drive 13. Left on to eastbound Herondo Street 14. Continue onto Anita Street, then 190th Street to the Interstate 405 (I-405)/ Crenshaw interchange Or 15. Outbound trucks on to eastbound 6th Street 16. Right on to southbound Valley Drive 17. Left on to eastbound Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 2 Drilling and Testing: Drilling for 3-4 Months Testing for 7-9 Months More 18. Left on to northbound Pacific Coast Highway 19. Right on to Artesia Boulevard. 2.4.2 Phase 2 Drilling and Testing The purpose of Phase 2 would be to conduct the drilling and testing of wells in order to determine the potential productivity and economic viability of the Proposed Oil Project. During this phase, up to three test wells and one water disposal/injection well (a total of four wells) would be drilled. These wells would be drilled utilizing directional drilling technology, which enables the wells to be drilled laterally for long distances, so that the bottom-hole locations may be located several thousand feet from the surface location of each wellhead on the Project Site (see Figure 2.7 and 2.8). 2.4.2.1 Phase 2 Site Geology and Drilling Objectives The Proposed Oil Project would utilize directional drilling techniques to access the crude oil and gas reserves in the tidelands (offshore) and uplands (onshore) in the portions of the Torrance Oil Field within the City’s jurisdiction. The Project Application states that "no hydraulic fracturing (or “fracking”) of wells will occur because the geologic zones for the Proposed Project are permeable and capable of yielding oil and gas without hydraulic fracture stimulation." Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.4 Phase 1 Vehicle Trip Summary Activity Trucks, Maximum RT/day* Autos/PU, Maximum RT/day Total, Maximum RT/day Underground overhead utilities 4 10 14 Construct 6th& Valley intersection 3 8 11 Remove buildings 10 8 18 Remove other existing site structures 15 6 21 Construct retaining walls 5 14 19 Grade, well cellar and aggregate 15 10 25 Construct chain link fence 1 4 5 Construct well cellar 4 8 12 Install electrical service 6 15 22 Install landscaping 1 2 3 Install 32-foot sound attenuation wall 3 12 14 Greatest number of trips in one day 18 (during week 9) 31 (during week 12) 43 (during week 10) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during week 9 with the installation of electrical service and the removal of existing structures. Maximum auto activity occurs during week 12 with the installation of electrical service and construction of the retaining wall. Maximum activity trucks and autos combined occur during week 10. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices The approximate extent of the City’s jurisdiction within the Torrance Oil Field is provided in Figure 2.7. Figure 2.8 provides a typical well cross section illustrating how wells can reach the oil reserves, within the tidelands, from the Project Site. The Project Application states the primary target zones are the Upper Main, Lower Main, and Del Amo Zones with some production potential within the Schist Conglomerate. As shown in Figure 2.8, the Upper Main Zone is the uppermost part of the Puente Formation. The Project Application states that it is expected to be the shallowest oil productive zone in the City. Of the three known producing horizons in the Torrance Oil Field, the Upper Main Zone is the most prolific. The Upper Main Zone beneath the Hermosa Beach tidelands and uplands is expected to be 300 feet thick and composed of inter-bedded thin sands and shales. The shales are currently fractured and provide both fractured porosity and permeability. The fractures are Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources critical to the performance of the reservoir in the area due to the fine-grained and thin-bedded nature of the sands. The Lower Main Zone lies below the Upper Main Zone in the Puente Formation. The Project Application states that similar to the Upper Main Zone, the shales of the Lower Main Zone are currently fractured and important for oil production. However, the Lower Main Zone has fewer interbedded fine-grained sands and is over 500 feet thick. Figure 2.7 Proposed Oil Project Lease Areas (below) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Final Environmental Impact Report 2-113 E&B Oil Drilling & Production Project Figure 2.8 Applicant Proposed Oil Project Lease Areas Cross Section Source: Project Application. Representative figure not to scale or reflective of the exact geology of the region. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The Del Amo Zone lies beneath the Lower Main Zone. It contains the least amount of thin- bedded sandstone in the Puente Formation. The Project Application states that similar to the other two zones, the shales of the Del Amo Zone are currently fractured and important for oil production. The Del Amo Zone varies the most in thickness and could be from 200 feet up to 700 feet thick. The Schist Conglomerate underlies the Del Amo Zone and is resting on metamorphic basement rock (Catalina Schist). The Schist Conglomerate could be as much as 400 feet thick and is composed of reworked fragments derived from erosion of the underlying Catalina Schist. The Project Application states that although it is unknown if the Schist Conglomerate is productive beneath the City, it is still a viable exploration target. The production test wells would target areas to the south-west, the north-west and the north areas of the lease (see Figure 2.7). The wells for the Proposed Oil Project would be at a true vertical depth of approximately 3,000 feet and a measured depth of approximately 9,000 feet. The actual well depth would vary depending on the area targeted. The Applicant indicates that the wellhead pressures anticipated during and immediately after drilling would be 0.0 pounds per square inch (psi) and that the wells are not anticipated to be free-flowing. DOGGR must review and approve an engineering study conforming to CCR Section 1724.6 and 1724.7 for operations. No Class II injection wells will be permitted prior to review and approval of the study. A Notice of Intent will need to be submitted for each proposed well. The Notice of Intent will be reviewed for accuracy and completeness and, if appropriate, a drilling permit issued. 2.4.2.2 Phase 2 Construction and Drilling Activities Phase 2 construction and drilling would consist of the following activities and improvements:  Installation of Temporary Construction Trailer  Delivery and Set Up of Drill Rig  Installation of Temporary Production Equipment Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources  Drilling of Wells  Testing and Operational Systems These activities are discussed in the following subsections. Phase 2 Installation of Temporary Construction Trailer A temporary construction trailer would be installed in the northeast portion of the Project Site (see Figure 2.9). In addition, the associated utilities, including potable water and sewer, would be extended from the existing lines currently located along 6th Street that serve the City Maintenance Yard. Water and sewer service would be provided by the California Water Service Company and the City, respectively. Electricity would be provided by Southern California Edison (SCE) as discussed above under Phase 1 construction activities. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.9 Proposed Conceptual Site Plan - Project Phase 2 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Automated Drilling Rig Ground Flare Phase 2 Delivery and Set Up of Drill Rig An electric drilling rig and its associated equipment would be brought to the Project Site on large trucks with trailers to be permitted by the City and the California Highway Patrol (CHP). The drilling rig would be an "automated drill rig" (ADR), which means that many of the drill rig procedures (loading pipe, etc,) would be done by mechanical means automatically. The approximately 87- foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, a generator, which would be a non-road portable diesel-fuel generator certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. Phase 2 Installation of Temporary Production Equipment Temporary oil, water, and gas production equipment would be installed on the Project Site. This temporary equipment would include a well test station, an induced gas flotation/filter skid, a gas combustor (enclosed ground flare), fluid handling tanks, piping, vapor recovery unit, pumps, and vessels. The production equipment would be delivered by trucks to the Project Site. The temporary production equipment would be installed in the eastern portion of the Project Site within an area enclosed by a containment berm as shown in Figure 2.9. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Phase 2 of the Proposed Oil Project would be designed as a closed-loop system, with pressure relief valves venting to a flare and tanks venting to a vapor recovery system. The control system would be computerized and would monitor the closed-loop system, providing warnings, corrective actions, and shutdowns, if necessary. Corrective actions could be closing valves, sounding alarms, shutting down wells or other process related functions. In addition, according to the Applicant, redundancy would be built into the system to provide an extra level of protection, ensuring there would be a backup for each safety device. All safety devices would be tested on a regular basis as per applicable codes and standards. Operators would be onsite 24 hours per day, seven days per week, to monitor all aspects of the Proposed Oil Project’s production process. Phase 2 Drilling of Wells Once the drill rig and associated equipment set up is complete, up to three test wells would be drilled utilizing directional drilling technology. This would enable the wells to be drilled laterally for long distances so that the bottom-hole locations may be located horizontally several thousand feet from the surface location of the well head on the Project Site. All wells would be permitted, drilled and cemented in accordance with the State Division of Oil, Gas, and Geothermal Resources (DOGGR) regulations. Drilling would proceed in the following manner:  Installation of conductor casing;  Drilling of wells;  Placement of casing and cementing of wells (in stages at various depths); and  Completion of the well, including installation of down-hole pumps and tubing. Installation of Conductor Casing The conductor casing is the initial hole drilled into the ground with a large diameter pipe installed to maintain integrity. The subsequent drilling of the well would take place through the conductor casing. Conductor casing would be installed with a small drilling rig, referred to as a dry-hole digger, which would be used to set the conductor casing for all of the intended wells in the Project Site. A large diameter hole, about 18 inches in diameter, would be drilled to an approximately 80-foot depth. This type of drilling is similar to boring a hole with an auger. Usually, no drilling fluid is needed to drill the hole, hence the name dry-hole digger. A large Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources diameter casing, commonly referred to as “conductor pipe”, typically 13-3/8 inches in diameter, is lowered to the bottom of the hole and is cemented in place with construction concrete. This forms the first seal of the near-surface formations and also serves as a steel conduit to allow the drilling fluid used in the next stage of the well drilling to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project test phase would be set at this time and the dry-hole digger moved off before the drilling rig would be mobilized and brought to the Project Site. Drilling, Casing and Completion of Wells The components of the drill rig and all necessary equipment would then be moved onto the Project Site with large specially equipped trucks. The drill rig height would be 87 feet. The drilling setup would include three main parts; the drilling structure (i.e., mast, substructure, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources catwalk, silicon-controlled rectifier (SCR) house, top drive, back-up generator, crown block, traveling block, iron rough neck, drill pipe, control cabin), the blow out preventer (BOP) system (i.e., BOP Stack, Shear Ram, BOP Controller, and Accumulator), and the mud system (i.e., mud tanks, mud shakers, mud pumps, mud return line). The drilling rig would also require other equipment such as a spare parts house, other tanks, and storage areas as needed to support the drilling operation. The substructure of the drill rig would be located over the first well conductor casing, the mast would be raised, and the other equipment would be aligned and connected. The drill pipe would be laid out on racks convenient to the rig floor so they may be used when needed. Water tanks would be filled, and drilling fluid additives would be stored on site. The drill rig for the Proposed Oil Project would be run on electric utility power, so an electrical hookup would be made at this time. Drilling operations would then begin. The initial mobilization and rigging up operation is expected to last about seven to ten working days. “Spudding in” is the term used to begin drilling operations. A large (12 ¼-inch diameter) drill bit is attached to the first joint of drill pipe (usually 30 feet long) and lowered into the conductor casing. As the first length of pipe is completely lowered in, another length of pipe is attached to the end, thereby increasing the length of the drill “string”. When the drill string reaches the bottom of the conductor casing at a depth of 80 feet, the drilling begins. In order to drill downwards through soil and rock, the drill bit requires rotation and downward force, which is provided by the weight of thick-walled pipe on top of the drill bit. A single, 30-foot long drill pipe for a larger diameter drill bit weighs approximately three tons. As the drill bit drills deeper, more drill pipe is placed on top, thereby increasing the downward force; this is collectively known as the drill string. The drill bit turns clockwise as the weight of the drill pipe column forces it downward. Drilling fluid, called mud, is pumped down the inside of the hollow drill pipe, through a hole in the drill bit, and flushes the drilled rock cuttings away from the bit and up the space between the wall of the borehole and the outside of the drill pipe, which is referred to as the “annulus.” When the mud reaches the surface, it circulates to a mud tank where the rock cuttings are separated out of the fluid by using a shaker, and the clean mud is pumped back down the hole in a continuous circuit, constantly circulating the drilled rock cuttings up and away from the drill bit as it penetrates deeper into the earth. The cuttings are analyzed, stored in 20 cubic yard bins, and then hauled offsite. Initially, a large diameter bit is used to drill to a predetermined depth. When the specified depth Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources is reached, drilling is stopped, the drilling string is removed and a large diameter pipe (a casing string) is assembled in 40-foot lengths and lowered to the bottom of the well bore. Cement is then pumped down the inside of the casing, around the bottom of the hole, and up the annulus between the casing and the well bore. When the cement hardens, it ensures that the entire casing and well bore are encased in cement, protecting the fresh water aquifers and surrounding subsurface areas from the production fluids inside of the casing. See Figure 2.10 for a schematic of the well bore and casing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.10 Typical Well Bore and Casing Source:Project Application Next, a piece of equipment known as a blowout preventer (BOP) is attached to the well head. The BOP is a safety system used during drilling operations in oil and gas fields to prevent the uncontrolled release of reservoir fluids and to immediately shut off the flow in the event that abnormal pressure is encountered in the well bore that cannot be controlled by the hydrostatic head of the drilling fluid when drilling resumes beneath the surface casing. Blow out prevention equipment shall conform to DOGGR’s publication M07 “Blowout Prevention in California, Equipment Selection and Testing 2006 edition. If the subsurface pressure begins to cause the well to flow, the BOP is activated, closing in the well and trapping the pressure until it can be bled off safely and drilling can continue. A BOP would be placed on each wellhead during the drilling and removed after the well is completed. A BOP utilizing Blind Shear Rams would be utilized. Blind Shear Rams are a type of BOP common in the offshore environment that allow for the shutting off of flow through the well even if drill pipe is in the wellbore. Pursuant to the requirements of the Code of Federal Regulation on Oil and Gas and Sulphur Operations in the Outer Continental Shelf(30 CFR part 250), the Applicant indicates that the BOP would be certified that the shear rams can actually shear the drill pipe prior to drilling. The surface casing serves three primary functions: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources  It isolates fresh water formations from contact with any fluids coming from deeper in the earth;  It serves as a mounting place for the blowout preventer; and  It serves as the support for the production casing that would be placed in the well if oil is found. Once the surface casing is cemented in, drilling operations resume with a smaller drill bit. This smaller hole is drilled to the total depth decided upon by the Applicant’s geologic and engineering staff. Usually, the only interruptions to drilling operations would be to remove the drill pipe (also known as tripping pipe) from the well to replace a dull drill bit, and then lowering the pipe back to the bottom of the well. In order to achieve the directional aspect of the drill hole, the well bore is bent. The act of “bending” a well out of the vertical axis typically begins after vertical drilling has progressed several hundred feet beneath the surface. Although the specifics of each well proposed for this Project have not been established, it is not uncommon to begin to deviate from vertical at a depth of about 600 feet and still reach a target formation located at a depth of 4,000 feet, but also almost 4,000 to 6,000 feet sideways from the surface spot location. This system would be used on virtually all of the wells drilled for the Proposed Oil Project. When the well reaches total depth (TD), drilling operations are halted and the drill pipe is removed from the well leaving mud in the hole to contain any potential production fluids located at the reservoir depth. A logging tool is then lowered into the hole to record petrophysical data of the formations through which the rig has drilled. If the well looks like it would produce oil, production casing is installed in a similar fashion to the installation of the surface casing. Production casing for the Proposed Oil Project is planned to be 7inches in diameter. Production casing would be cemented similarly to how the surface casing is cemented, as previously described. Once the cement has been allowed to fully harden, another electric logging tool, called a cement bond log, is lowered to the bottom of the well to evaluate the completeness and effectiveness of the cement on the outside of the production casing. If the cement is found to have defects, the casing can be perforated and cement forced into the well at a specific location or the casing can be removed and the well re-drilled. Devices are inserted to ensure any perforations are sealed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The well is then “completed”, which is a series of activities that allow for the production fluids to flow into the well bore inside the casing and to the surface. Table 2.5 shows a list of chemicals that would be used during drilling operations. The amounts listed are the estimated quantities consumed per well drilled. These materials are packaged by the manufacturer for shipping and would be delivered to the job site by conventional delivery or flatbed trucks. Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District from an existing reclaimed water line serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in Baker tanks (enclosed tanks that are approximately 12 feet tall by 40 feet long and hold up to 500 barrels each). Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed of each day by truck at an approved disposal site at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. In addition, all other waste generated by the test drilling would be transported by truck to the appropriate disposal site at Clean Harbors Buttonwillow Landfill, or a similar facility if closer to the Project Site. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.5 Phase 2 Drilling Chemicals Common/Trade Name Use Container Amount per Well Gel Wyoming Bentonite Used to enhance mud viscosity 100-pound sack 525 sacks DMA Sodium Polyacrylate Water absorbent mud additive 50-pound sack 82 sacks Benex Anionic Acrylamide Mud additive 2-pound sack 75 sacks GEOZan Xanthan Gum Mud viscosifier 25-pound sack 40 sacks Omniopol Sodium Polyacrylate Liquid Water absorbent mud additive - 380 gallons CFR Fatty Acid Liquid Mud additive to enhance lubricity - 600 gallons Bicarb Sodium Bicarbonate Mud additive for pH control 50-pound sack 40 sacks Citric Acid Mud additive for pH control 50-pound sack 11 sacks Walnut Hulls Filter medium, used to reduce torque and drag of drill pipe and for plugging of fractures and high porosity formations 50-pound sack 48 sacks Cement Bulk-Truck Used for well sealing - 3 bulk trucks Biotreat 8415 Treatment of water before injection into the oil reservoir Hydrochloric Acid 15%, used for acid washing during completion Bin varies Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Hydrofluoric Acid 3%, used for acidizing muds Bin varies Source: Project Application, Amendments and Appendices The Proposed Oil Project would comply with the 1993 CUP conditions of approval, proposed operational practices, and proposed design features. The noise reduction methods would include the following:  An electric drill rig would be utilized, reducing the need for diesel engines;  The drill rig would have no draw works or cables resulting in less noise;  A 35-foot-high acoustical barrier wall (per Mitigation Measure NV-3a) would be erected around the perimeter of the Project Site during all drilling activities. The wall would have a sound transmission class (STC) rating of at least 32;  The air inlets and vents of the hydraulic power unit would be fitted with silencers;  An acoustical shroud would enclose three sides of the rig mast to reduce the top drive noise (if applicable);  The mud pumps would be enclosed with acoustical barriers having a sound transmission class (STC) rating of at least 25;  An 8-foot high acoustical barrier with an STC rating of at least 25 would be installed around the shaker tables;  Drilling Quiet Mode Plan would be implemented at the drill site between 7:00 p.m. and 8:00 a.m., a plan which would provide for the following: disablement of all audible mobile equipment and truck backup alarms; minimization of pipe handling; cessation of cementing operations, maintenance, and tripping pipe; and limits within the delivery schedule; and  An automated and remotely managed system to connect/disconnect pipe (Iron Roughneck) would be used, which would reduce pipe handling; No processing of gas would occur during Phase 2. The gas separated from the oil and water would be directed to a gas combustor (enclosed ground flare), where disposal of it would occur through burning. The Applicant indicates that low levels of potential “native” hydrogen sulfide (H2S), in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources underlying oil reservoir. Because the produced fluids may contain some H2S, fixed H2S detection systems would be installed around the drilling site and continuous monitoring would be present during all drilling, workover, and well servicing operations. Sensors would be located in areas that are frequently used by personnel, selected drilling area locations, areas where H2S may accumulate, and any other areas determined by hazard analysis to pose a potential risk. Personnel would also carry personal H2S monitors attached to their clothing for immediate H2S detection during drilling. Figures 2.12 and 2.13 provide an outline of the City’s designated truck route for construction trucks through the cities of Hermosa Beach, Redondo Beach and Torrance. Phase 2 Testing and Operational Systems After the completion of the first test well and the water disposal/injection well, the extracted oil would go through production and testing. The temporary production equipment on the Project Site would be used to process the production fluid. The oil would be processed to a standard that would be suitable for sale. The produced water would be processed and re-injected back into the oil-producing reservoir below the oil water contact. Disposal of the gas produced during Phase 2 would occur through burning in the enclosed ground gas flare. Figure 2.11 shows the steps involved in processing the oil, water, and gas produced from the test wells in Phase 2. Processing of Production Fluids During Phase 2, the Proposed Oil Project is designed to handle up to 800 barrels of oil per day and up to 250,000 standard cubic feet of gas per day. After the oil is processed, it would be trucked from the Project Site to an offsite oil receiving facility at 2650 Lomita Boulevard in Torrance. The route used for crude haul trucks is detailed in Appendix A of the Final EIR. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.11 Phase 2 Process Flow Diagram Source: Applicant application The produced fluids would be sent from the wells to a three-phase separator, which would separate the fluid into gas, oil and water streams. The gas exits the top of the separator, the oil exits the middle, and the water exits the bottom of the separator. Each one of these fluids enters a specific system of treatment as follows. Oil Treatment System The produced oil would enter a series of stock tanks after leaving the three-phase separator. The stock tanks would be used if the oil needs to be further processed to remove excess water. The water removed from the oil and water mixture would be sent back to the three-phase separator through a drain system. Once the oil is processed to a standard suitable for sale, the oil from the stock tank would be loaded into a tanker truck and transported to the purchaser. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Gas Treatment System The produced gas would be sent directly to a compressor and then to the gas flare for combustion after leaving the three-phase separator. A vapor recovery system attached to the temporary Baker tanks would be utilized to capture vapors and to direct them to a vapor recovery compressor and to the gas system and flare. The vapor recovery, tank and flare system would be subject to Southern California Air Quality Management District (SCAQMD) permit requirements. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.12 Truck Routes from Highway 405 to Project Site Source:Project Application, Amendments and Appendices Figure 2.13 Truck Routes to Highway 405from theProject Site Source:Project Application, Amendments and Appendices The Proposed Project provides for the disposal of treated stormwater runoff and produced water from the drilling and production process back into the oil reservoir using water disposal/injection Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources wells. The injection of untreated water can result in the creation of H2S concentrations in the oil reservoir above preexisting levels (referred to as the “native” condition). Prior to the injection of produced water from the oil extraction process, or the injection of surface runoff from precipitation that collects on the Project Site, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff water and any other injected water, would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Facility Storm Drain System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for disposal/injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Safety Systems Operators would be onsite 24 hours per day, seven days per week, to monitor the Proposed Oil Project’s production process during Phase 2. A fire protection system as required by Federal, State, and local codes, ordinances and regulations would be installed by the Applicant prior to the drilling and testing activities on the Project Site. The Fire Protection Plan for Phase 2 of the Proposed Oil Project would be provided to the City of Hermosa Beach Fire Department for review and approval prior to the initiation of Phase 2. The design and operation of the Proposed Oil Project would be required to meet provisions Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources within the California Fire Code (CFC) and standards of the National Fire Protection Association (NFPA), including the requirements for the storage of hazardous materials, the installation and use of fire protection systems and devices, and the implementation of safety measures for employees and emergency responders. Onsite personnel and a site security program, including a closed circuit television system, a gate access system, and an intrusion and motion detection system, would control all access to and from the Project Site during Phase 2. In addition, temporary lighting would be provided. The lighting would be shielded/hooded and directed downward, as is consistent with City requirements. All tanks would have containment equal or greater in capacity than at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Water Treatment System The produced water would be pumped into a treatment system, including a gas flotation unit and a filter unit, to remove excess oil after leaving the three-phase separator. The primary objective of both units would be to clean the water of oil and solids such as sand. The water would then enter a water surge tank after leaving the filter unit and would be sent to the water disposal/injection pumps for disposal/injection into the oil-producing reservoir through the disposal/injection well. If determined to be needed, before it enters the water surge tank, the water would be injected with a biocide to eliminate any bacteria that may be in the produced water. Electrical Requirements Approximately 75 kilo-watt hours of electricity would be required to drill each well. Chemicals Project operations would require the use of chemicals. These chemicals would be documented in a required Hazardous Materials Business Plan. Typical chemicals utilized in the temporary production facility are shown in Table 2.6. Table 2.6 Phase 2 Testing Chemicals Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Common/Trade Name Use Maximum Quantity (Gallons) Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter/Cor 7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Source: Project Application, Amendments and Appendices Noise Abatement The Proposed Project would be implemented in compliance with the 1993 Conditional Use Permit conditions of approval. In addition, the applicant proposes to incorporate several operational practices and design features intended to abate noise. The conditions of approval, operational practices and design features that would be incorporated into the production operations include the following:  Heavy/large reciprocating equipment would be mounted on vibration isolators;  Pipe tripping would be restricted to daylight hours only;  Loudspeaker paging systems would be prohibited;  Well workover rigs or any other workover-type rig (not the main drilling rig) that is used would be operated only between 8:00 am and 6:00 pm during daytime weekday hours only, excluding holidays, except in an emergency as defined in the Conditional Use Permit (CUP) and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) would be muffled to reduce noise to an acceptable limit. The operator would use whatever means necessary, including, but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing; Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources  All oil maintenance equipment, vehicles and non-electrical motors would be equipped with manufacturer approved mufflers or housed in a sound-proofing device;  Noise monitoring would be conducted under the supervision of an independent certified acoustical engineer;  Each well pump would produce a sound power level no greater than 83 dBA. This may be achieved by fitting sound attenuating enclosures that provide an insertion loss of at least 15 dB;  The produced oil pumps, produced water pumps, water booster pumps and variable frequency drive electrical (VFD) cabinets would produce a sound power level no greater than 77 dBA;  The water injection pumps would produce a sound power level no greater than 83 dBA.  The vapor recovery compressors would produce a sound power level no greater than 83 dBA; and  The cooler for the compressors would produce a sound power level no greater than 85 dBA. Decision not to Proceed -Abandonment If it is determined that the production of oil and gas on the Project Site would not be economically viable, the Applicant would remove the sound attenuation walls, the temporary production equipment, and the temporary construction trailer and abandon the three test wells and the water disposal/injection well in accordance with the requirements of DOGGR. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. As the temporary City Maintenance Yard would already be constructed under the Proposed Project, the current City Maintenance Yard Site would be empty and would be available for development within the M-1 Light Manufacturing zoned area of Hermosa Beach. The Project Site would then be available for City or other development proposals, or for the temporary City Maintenance Yard to be relocated back to this site. However, any future use would need to be consistent with the lease agreement with the Applicant. Current site contamination would remain as part of the abandonment process and would be removed in accordance with the requirements of any future site use. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.2.3 Phase 2 Drilling and Testing Schedule It is anticipated that Phase 2 would occur for approximately 12 months as indicated in the schedule provided in Table 2.7. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take 120 days for drilling activities, 24 hours a day, which is approximately 30 days per well for four wells. After the drilling of the three oil wells and one water disposal/injection well is complete, the drill rig would be removed from the Project Site. As each well is drilled, the produced fluids from that well would go thorough production and testing, as described above. 2.4.2.4 Phase 2 Drilling and Testing Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 2 are provided in detail in Appendix A of the Final EIR. A summary of the vehicle trips is shown in Table 2.8. Parking for the employees would be provided in an adjacent parking area as previously discussed for Phase 1. Since Phase 1 prepares the Project Site for Phase 2, the conceptual landscape plan and elevations provided above for Phase 1 would also be applicable to Phase 2. Table 2.7 Phase 2 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 thru 54 Install trailer and associated utilities Deliver and set up drill rig/equipment Install oil, water, and gas equipment Drill 3 test wells and water well Testing of wells Remove drill rig and equipment Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.8 Phase 2 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day* 2-axle trucks, Autos, Maximum RT/day Total, Maximum RT/day Install trailer and associated utilities 2 5 7 Deliver and set up drill rig/equipment 7 20 27 Install oil, water, and gas equipment 6 15 21 Drill 3 test wells and water well 9 10 19 Testing of wells 13 5 18 Remove drill rig and equipment 5 20 25 Greatest number of trips in one day 18 (during weeks 15, 17, 19, 21-24) 25 (during weeks 7- 12 ) 37 (during week 7) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during drilling and testing of wells. Maximum auto activity occurs during weeks 7-12 with the installation of oil, water and gas equipment and the drilling of wells. Maximum activity trucks and autos combined occurs during week 7. Testing of wells would involve crude transportation by truck, by way of an average of 7 trucks per day/5 days per week or up to 12 trucks in one day (round trip). Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix A. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources each week. Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 3 Final Design and Construction: 16 Months 2.4.3 Phase 3 Final Design and Construction If it is determined that the production of oil and gas on the Project Site would be economically viable, the Applicant would begin Phase 3 of the Proposed Oil Project. The purpose of Phase 3 would be to utilize the production information from Phase 2 to prepare the final design of the facility, prepare the onsite area for facility installation, install the permanent oil and gas production facilities, and construct offsite Pipelines. 2.4.3.1 Phase 3 Onsite Construction Phase 3 onsite activities would involve the following construction activities:  Preparation of final engineering design;  Removal of temporary production equipment;  Removal of three remaining trees;  Removal of 35-foot sound attenuation wall and perimeter fencing (per Mitigation Measure NV-3a);  Installation of 24-foot sound attenuation wall (per Mitigation Measure NV-4a);  Implementation of remedial action plan;  Construction of remaining retaining walls and final grading;  Completion of construction of well cellars;  Construction of 35-foot block wall (per Mitigation Measure NV-6a);  Removal of 24-foot sound attenuation wall (per Mitigation Measure NV-4a);  Construction of small office building;  Installation of permanent production equipment;  Construction of final site improvements;  Construction of final street improvements along Project frontage;  Installation of final landscaping;  Installation of 32-foot sound attenuation wall;  Setting of conductor pipe; and  Installation of lighting systems. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is detailed in the discussion that follows. A site plan for Phase 3 is shown in Figure 2.14. The conceptual grading plan, site plan, elevations (with the 32-foot sound attenuation wall), and conceptual landscape plan for the Proposed Oil Project at the completion of Phase 3 are shown in Appendix A of the Final EIR. Prepare Final Engineering Design The final design of the permanent oil and gas production facilities, to be implemented during the first few months of Phase 3, would be based on the oil and gas analysis and production results from Phase 2 activities. Final design would include the sizing and development of the exact specifications for the oil, gas, and water separation production equipment and the detailed engineering to prepare the required final construction drawings. Remove Temporary Production Equipment The temporary oil, water, and gas production equipment installed on the Project Site during Phase 2 would be removed. The wells drilled during Phase 2 would be shut in, and steel plating would be placed on top of the well cellar. Remove Remaining Trees The three remaining mature trees along the frontage of the Project Site along Valley Drive would be removed to allow for the construction of final site improvements including a perimeter wall and the installation of permanent landscaping. Remove 32-Foot Sound Attenuation Wall and Perimeter Fencing The 35-foot sound attenuation wall (per Mitigation Measure NV-6a) and the 6-foot perimeter chain link fencing would be removed from the Project Site. Install 16-Foot Sound Attenuation Wall Prior to the initiation of earthmoving activities, a temporary 24-foot sound attenuation wall (per Mitigation Measure NV-4a) would be brought to the Project Site. The sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise and dust associated with the earthmoving activities needed for the implementation of the Remedial Action Plan and the final grading of the Project Site. The temporary sound walls Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources would be removed from the Project Site after the onsite earthmoving and grading activities are completed. Implementation of Remedial Action Plan The Remedial Action Plan would be implemented to address lead, barium, arsenic and total petroleum hydrocarbon (TPH) contaminated soil and groundwater within and beneath the former landfill area in the northeastern portion of the Project Site. It is anticipated that approximately 9,000 cubic yards of lead contaminated soil would be removed from the Project Site in accordance with the Remedial Action Plan and hauled to a Class 1 landfill at the Kettleman Hills Facility, approximately 190 miles from the Project Site. The TPH contaminated soil (approximately 4,500 cubic yards located deeper than 25 feet) would be treated onsite via vapor extraction. For a detailed discussion of the soil remediation that would occur prior to final grading of the Project Site, refer to the Remedial Action Plan provided in Appendix A of the Final EIR. Groundwater contamination attributed to historic use of the site has been documented (Brycon 2013). The RWQCB have indicated that the Regional Water Quality Control Board Site Cleanup Program reviewed the Report on Groundwater Assessment and indicated the matter would go on its large backlog of low priority cases. Construction of Remaining Retaining Walls and Final Grading Retaining walls (up to 6 feet high) would be constructed 10 feet back from the Valley Drive and 6th Street property lines, along the eastern boundary of the Project Site and along the eastern portion of the southern boundary of the Project Site (see Figure 2.14). In addition, retaining walls would be constructed within the Project Site for the containment area associated with the production equipment. After the completion of the retaining walls, the Project Site would be graded to allow for the installation of Project equipment and to allow for proper site drainage. The final grading of the Project Site would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the location of the retaining wall locations and the final grading of the Project Site. Complete Construction of Well Cellars The cement well cellar constructed in Phase 2 would be extended, and a second well cellar would be constructed to allow for the drilling of the remaining wells in Phase 4. At completion, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources the well cellars would be approximately 8 feet wide by 120 feet long by 12 feet deep, with stairs at each end and covered with expanded metal grating. The well cellars would be equipped with storm water collection sumps and pumps to direct the storm water to the drain sump. From the drain sump, water would be directed into the processing system and injected, by the water disposal/injection wells drilled in Phase 4, into the oil-producing reservoir below the oil water contact. Figure 2.14 shows the location of the well cellars. Construction of 16-Foot Split-Face Block Wall A 16-foot split-face block wall would be constructed around the perimeter of the Project Site. The wall would be set back 10 feet from the Valley Drive and 6th Street property lines to allow for a landscape area. The wall would have a gated entrance off Valley Drive (set back 70 feet from the sidewalk) and a gated exit to 6th Street. The gates would be metal and motor operated. The appropriate signage would be provided, as is consistent with City requirements. Remove 16-Foot Sound Attenuation Wall After the completion of the Remedial Action Plan, final site grading, and construction of the well cellars and perimeter wall, the 16-foot temporary sound attenuation wall would be removed from the Project Site. Construction of Small Office Building A small office building approximately 650 square feet in size would be constructed in the northeast portion of the Project Site to house employee offices and control and monitoring equipment. The building would have a restroom and break room. The improvements extended to the Project Site in Phase 1 would provide for associated utilities, including water, sewer, natural gas, and telephone. The California Water Service Company and the City would provide water and sewer service, respectively. Southern California Gas Company (SCGC) would provide natural gas, and electricity would be provided by Southern California Edison (SCE). Verizon would provide telephone service. Office related solid waste services would be provided by Athens Services or a future city franchisee. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.14 Phase 3 Proposed Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Installation of Permanent Production Equipment Permanent oil, water, and gas production equipment would be installed on the Project Site. The permanent oil production facilities would include tanks, vessels, piping, pumps, filters, and supporting metering equipment. These are listed in Table 2.9. A retaining wall around all of the vessels, tanks and other equipment containing oil would provide secondary containment. The design capacity of the secondary containment would exceed the fluid capacity of the largest tank by 110 percent plus the precipitation from a 100-year storm event. In Phase 4, the oil production facility would be used to separate gas, water, and solids from the oil, after which the oil would be stored in tanks prior to transport via pipeline from the Project Site. The separated water would be accumulated in tanks, filtered, and then injected into the oil- bearing reservoir by the four water disposal/injection wells. Gas from each well would be treated on the Project Site and then sold to the SCGC. The permanent gas production facilities would have compressors, vessels, a H2S and carbon dioxide (CO2) removal system, a moisture removal system, and an odorizing system. The use of this equipment is discussed in Section 2.4.4, Phase 4 Development and Operations. Table 2.9 Phase 3 and 4 Processing Equipment Listing Equipment Size and Number Oil Shipping Tanks 40 foot diameter by 16 feet high, 2900 BBLS, 2 tanks Water Clarifier 40 foot diameter by 16 feet high, 2900 BBLS, 1 tank Water Surge 30 foot diameter by 16 feet high, 1120 BBLS, 2 tanks Gas compressors 30 foot by 40 foot - 3 compressors DEA Skid (acid gas removal) 12 foot by 40 foot, 1 skid Low Temperature Separation (LTS) skid (propane refrigerant) 12 foot by 40 foot, 1 skid Flare/Gas Combustor 10 foot diameter by 22 feet high Vapor Recovery Compressor 17 foot by 28 foot IGF Skid 18 foot by 8 foot, 1 skid Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Filter Skid 25 foot by 18 foot, 1 skid Micro Turbines (five turbines) 200 kw each, 30 foot by 40 foot 3-Phase Separator 7 foot diameter by 35 feet long Lease Automatic Custody Transfer (LACT) Skid 5 foot by 12 foot Source: Project Application, Amendments and Appendices. BBLS=barrels (42 gallons), skid=a pre- fabricated unit. Construction of Final Site Improvements In addition to the areas where the concrete well cellar, the containment area, and the oil and gas production equipment have been constructed, the ground surface of the Project Site would be paved with concrete or asphaltic concrete and designed so that no fluids, including rain water up to a 100-year storm event, would leave the Project Site. Liquids, including rainwater, would be captured in the containment areas or in the well cellars, processed through the production facility, and injected into the oil-bearing reservoir via four water disposal/injection wells. Construction of Final Street Improvements Along Project Frontage The Proposed Oil Project would include the construction of street improvements along the frontage of the Project Site on 6th Street and Valley Drive. The improvements would include the installation of new curbs, gutters, and sidewalks. Installation of Final Landscaping Permanent landscaping would be provided along the perimeter of the Project. To the extent feasible, plant materials used in the temporary landscape plan installed in Phase 1 would be reused in the permanent landscaping. Reclaimed water supplied by the West Basin Municipal Water District would be used for irrigation. Appendix A provides the conceptual landscape plan and plant materials for the permanent landscaping that would be provided at the completion of Phase 3. Installation of 32-Foot Sound Attenuation Wall At the completion of the improvements in Phase 3, a 32-foot sound attenuation wall would be Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources erected inside the 16-foot block wall to provide for noise attenuation during Phase 4 drilling. Appendix A of the Final EIR provides the elevations of the Project Site, including the sound attenuation walls with the block walls, from Valley Drive and 6th Street at the completion of Phase 3. Set Conductor Pipe Prior to drilling in Phase 4, a dry-hole digger/auger would be used to set the conductor casing in the well cellars for all of the intended wells on the Project Site in a manner similar to the setting of the conductor pipe in Phase 2. A hole approximately 18 inches in diameter would be drilled to a depth of approximately 80 feet. A conductor pipe would be lowered to the bottom of the hole and cemented in place. This would form the seal of the near-surface formation and serve as a steel conduit to allow the drilling fluid used in the next stage of the well to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project would be set, and the dry hole digger/auger would be moved off the Project Site. Lighting Systems The permanent lighting for the Proposed Oil Project would be installed as a part of Phase 3. The lighting,as proposed in the Applicant’s Lighting Plan, would be designed to be directed downward and shielded in order to avoid obtrusive light spillage beyond the Project Site, reflective glare, and illumination of the nighttime sky. 2.4.3.2 Phase 3 Offsite Pipeline Construction During Phase 3, offsite pipelines for oil and gas would be constructed to transport the oil and gas to markets. Each route is discussed in the following subsections. Gas Pipeline Route As it leaves the Project Site, the offsite underground pipeline for the transport of gas would be constructed for a distance of 0.43 miles in the ROW of southbound Valley Drive (which is a one way street south of 2nd Street) in the City of Hermosa Beach to a tie-in to a SCG gas line in the Southern California Edison(SCE) Utility Corridor east of N. Francisca Avenue in the City of Redondo Beach. See Figure 2.15 for the proposed pipeline routes. Appendix A contains Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources detailed drawings of the route and valve box options. This portion of the gas pipeline would consist of two parallel pipelines, 4 inches in diameter, and located at a depth of approximately 3.5 to 4 feet below ground surface (bgs) within the road ROW until it ties into the SCG line at a proposed metering station immediately to the east of N. Francisca Avenue. The pipeline would be a loop system that allows for the gas to be returned to the Project Site for further treatment in the event that the produced gas does not meet SCG standards. The metering station site, which would be provided as a part of the Proposed Oil Project and is owned by SCG, would be approximately 40 by 60 feet in size and surrounded by an 8-foot high block wall. As shown in Figure 2.15, this first portion of the gas pipeline is bounded to the east by the Greenbelt and Ardmore Park and, further to the east, by Ardmore Avenue and residential development in the City of Hermosa Beach; to the west by the Beach Cities Self Storage facility, light manufacturing land uses, South Park, and residential development in the City of Hermosa Beach; and to the west in the City of Redondo Beach by facilities associated with the AES Power Plant. The gas line is designed for a maximum operating pressure of 465 pounds per square inch gauge (psig), but would typically operate at approximately 225 psig of pressure. Once the proposed gas pipeline from the Project Site ties into the SCG point of receipt at the proposed metering station, SCG would construct a six-inch gas pipeline that extends northeast for approximately 1.4 miles to connect to an existing SCG pipeline transmission facility (Line 1170) located on the south side of 190th Street near its intersection with Green Lane, between Flagler Lane and Beryl Street, in the City of Redondo Beach. After the first portion of the new six-inch gas pipeline leaves the proposed metering station and continues northeast, it would be located in an existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway. The new pipeline would exit the SCE Utility Corridor on the south side of the intersection of Herondo Street/Anita Street with Pacific Coast Highway, extend across Pacific Coast Highway, and continue northeast within the ROW of Anita Street/190th Street to its point of connection with the existing SCG pipeline transmission facility (Line 1170). If for some reason the first portion of the new pipeline could not be located within the existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway, it would leave the proposed metering station and continue for a short distance north within the ROW of N. Francisca Avenue and turn northeast at Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Pigging Passing a device through a pipeline that cleans or inspects the pipeline. A pig is usually a small rubber device slightly smaller in diameter than the pipeline. The pig is forced through it by product flow. Usually cylindrical or spherical, pigs sweep the line by scraping the sides of the pipeline and pushing debris ahead within the ROW until it reaches the intersection of Herondo Street/Anita Street with Pacific Coast Highway. At that point it would continue to the northeast as described previously. Although SCG would obtain the necessary permits and construct the new gas pipeline, the Applicant would pay for the associated costs of construction. The proposed gas line from the proposed metering station to the existing SCG pipeline transmission facility is bounded to the north by commercial land uses and residential development in the City of Redondo Beach and to the south by commercial land uses, residential development, and public facilities including Dominguez Park and Redondo Beach Dog Park in the City of Redondo Beach. Oil Pipeline Route The offsite underground pipeline for the transport of oil to an area refinery via a connection to a valve location in the City of Torrance would be constructed for a distance of approximately 3.55 miles in one of three potential pipeline scenarios that would follow a route through the Cities of Hermosa Beach and Redondo Beach and terminate in Torrance. The selection of the pipeline route would occur after Project approval. Appendix A of the Final EIR shows the pipeline route scenarios in detail. The pipeline would be 8 inches or less in diameter, located at a depth of approximately 3.5 to 4 feet bgs depending on the grade. At one of four potential valve box locations, the pipeline would tie-in to an existing pipeline that transports oil to a refinery. Appendix A of the Final EIR provides the proposed alignments of the three oil pipeline scenarios, the respective jurisdictional boundaries, and the adjacent land uses. Appendix A of the Final EIR provides the four valve box location options that the pipeline could tie into. More details are included in Appendix A. The oil line would be designed for a maximum operating pressure of approximately 500 psig, but would typically operate at approximately 100 to 200 psig of pressure. The pipeline would Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources include pigging stations to send and receive maintenance pigs into and from the pipelines to clean or inspect the pipelines during ongoing operations. This would occur for the lifetime of the Proposed Oil Project. Pigging refers to the practice of using pipeline inspection gauges or 'pigs' to perform various maintenance operations on a pipeline without stopping the flow of the product in the pipeline (refer to sidebar for more information). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.15 Proposed Pipeline Routes Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source:Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources As shown in Figure 2.15, the oil pipeline would be constructed for a distance of 0.39 miles in the ROW of southbound Valley Drive (which is one-way starting at 2nd Street) in the City of Hermosa Beach to the corner of Valley Drive/N. Francisca Avenue and Herondo Street in the City of Redondo Beach. At this point, the oil pipeline would turn to the east along one of the following three pipeline scenarios (see Appendix A of the Final EIR):  Scenario 1 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street, Anita Street, and 190th Street in the City of Redondo Beach to the intersection of 190th Street/Hawthorne Boulevard in the City of Torrance. At this point, Scenario 1 would continue to one of the four valve box options presented later in this discussion;  Scenario 2 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street and Anita Street in the City of Redondo Beach and the ROW of 190th Street in the City of Torrance to the intersection of 190th Street/Hawthorne Boulevard. At this point, Scenario 2 would continue to one of the four valve box options presented later in this discussion; and  Scenario 3 consists of the construction of the oil pipeline towards the east within the SCE Utility Corridor in the Cities of Redondo Beach and Torrance. When the oil pipeline meets Hawthorne Boulevard in the City of Torrance, Scenario 3 would continue to one of the four valve box options presented later in this discussion. The function of the valve box is to house the valve on the new oil pipeline to isolate it from the main oil transmission line and allow for inspection, operation, and maintenance of the valve and line to be performed as required by Federal and State regulations. The site requirement for a valve box for the Proposed Oil Project would be approximately six feet wide by eight feet long by six feet high. The valve box would be a precast concrete box with walls that are typically eight to ten inches thick. The valve box would be located below grade and designed to State of California Highway “traffic-rated” standards to allow for vehicle travel over it. A standard 36-inch or 42-inch manhole cover would provide access down into the valve box from grade. The manhole cover, the weight of which takes two people to remove and replace, would be bolted into place with special tools, providing security for the valve box. The oil pipeline would end at one of the following valve box locations: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources  Valve Option 1 – For Pipeline Scenarios 1 and 2, the pipeline would continue from the Hawthorne Boulevard/190th Street intersection down 190th Street to the Exxon Mobil Refinery, where it would connect with a valve box location within the refinery site. For Pipeline Scenario 3, the pipeline would turn north in Hawthorne Boulevard and east in 190th Street to the refinery site;  Valve Option 2 - For Pipeline Scenarios 1 and 2, the pipeline would turn south in Hawthorne Boulevard to the SCE Utility Corridor where it would turn east to the valve box location. For Pipeline Scenario 3, the pipeline would continue east in the SCE Utility Corridor across Hawthorne Boulevard to the valve box location;  Valve Option 3 – For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location adjacent to the Santa Fe Rail Road line; and  Valve Option 4 - For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location northeast of the intersection of 190th Street/Hawthorne Boulevard. The oil pipeline would be equipped with a supervisory control and data acquisition system (SCADA), which would monitor pipeline pressure and flow and, if a leak is suspected, would notify the operators. The percentage that is set in the SCADA system would notify the operator of potential oil leak. The detection timeframes set by the Applicant would vary depending on the crude oil flow rate in the pipeline. When the flow rate is at the maximum anticipated production rate of 8,000 barrels per day, flowing on a continuous basis, the flow rate would be 5.5 barrels per minute, and the following would apply:  15 minute time interval 5 % or 4.1 barrels  1 hour time interval 2 % or 6.7 barrels  24 hour time interval 1 % or 80 barrels If oil production is considerably less than the 8,000 barrels per day, the percentages would be adjusted upward to maintain essentially the same volume of oil previously noted based on the reduced flow rate in the pipe. Pipeline Construction Methods The gas and oil pipelines would be installed utilizing conventional trenching methods within Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources either one trench or two separate trenches within the roadway ROW. The construction and installation process would occur in stages consisting of approximately 237 feet in length each. Two stages would be constructed per day (a segment of 237 feet would be new construction, and another 237 feet would be the completion of the construction from the previous day). With the addition of approximately 126 feet for lane transitions and safety cones, a total of approximately 600 linear feet of roadway would be affected per day. A construction spread would be used to accomplish most aspects of the gas and oil pipeline construction along the alignments previously discussed. A construction spread is a clustering of construction equipment that moves along the pipeline route, sequentially removing asphalt roadway, trenching, laying pipe, filling, re-paving, and cleaning up. A pipeline construction spread consisting of several units would be organized to proceed in the following order:  Pre-construction activities  Asphalt removal and ditching or ROW grubbing and ditching  Pipe handling/welding  Pipe coating  Pipe lowering, backfilling, and street repair  Pipe testing and inspection  Metering, pigging, odorant station installation If the oil pipeline can be laid within the SCE Utility Corridor (Scenario 3 pipeline route), a construction spread similar in arrangement, but smaller, would be used since the alignment would not have asphalt. In addition, if it is determined that existing sleeves under streets crossing the SCE Utility Easement exist, trenching across some streets may not need to occur. The following describes the activities that would occur for the construction of the pipelines and Figure 2.16 depicts a typical pipeline construction spread. Pre-Construction Activity The pipeline alignment ROW would include roadways and/or land in existing paved streets and other property, potentially including private property. Approval to construct and operate a pipeline would be obtained from or authorized by franchise agreements or permits from the agency with jurisdiction over the roadways and, if needed, from affected property owners. The construction requirements in the municipal codes and ordinances of the Cities of Hermosa Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Beach, Redondo Beach, and Torrance allow for the construction on major roadways during the following weekday hours:  Hermosa Beach: 8:00 a.m. to 6:00 p.m. on weekdays and 9:00 a.m. to 5:00 p.m. on Saturday. No construction on Sundays and holidays;  Redondo Beach: 9:00 a.m. to 3:00 p.m. on weekdays. No construction on weekends and holidays; and  Torrance: 8:30 a.m. to 3:30 p.m. on weekdays. No construction on weekends and holidays. Figure 2.16 Typical Pipeline Construction Spread Note: All activities may not occur simultaneously. The pipeline construction activities would occur on weekdays between the hours of 9:00 a.m. and 3:00 p.m. (as per the CUP requirements), a time frame which is after morning peak commute hours (i.e., 7:00 a.m. to 9:00 a.m.) and before evening peak commute hours (i.e.: 4:00 p.m. to 6:00 p.m.) on the affected roadways. The Applicant proposes no construction activities during weekends and holidays. The Applicant would prepare a Construction Traffic Management Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources (CTMP) that would include the following:  Require the pipeline contractor(s) to obtain and follow Street Construction Permits in the affected Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities (Pacific Coast Highway and Hawthorne Boulevard);  Develop detour and traffic management plans consistent with the affected City’s Standard Roadway Plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH);  Revise pipeline construction segments to minimize access conflicts to adjacent residents and businesses;  Develop truck route plans to reduce traffic on the street network during peak traffic commute hours;  Avoid construction-related traffic to occur during peak travel periods; and  Implementation of staggered construction worker shifts to minimize Project traffic during the peak hours. Underground Service Alert would notify service providers of construction to avoid conflicts with existing utilities and disruptions of service to utility customers. Because construction would occur in either paved streets or an existing utility corridor, extensive grading is not proposed. Asphalt Removal and Ditching Once traffic control measures are in place, trenching operations would begin. Typically, a five- foot deep and 18- to 24-inch wide ditch (single pipe) or 36-inch wide ditch (double pipes) would be excavated (varying depths, depending on the conditions encountered). Backhoes and track hoes would excavate the ditch. However, hand digging would be necessary to locate buried utilities, such as other pipelines, cables, water mains, and sewers. Fugitive dust emissions at the construction site during earthmoving operations would be controlled by water trucks equipped with fine-spray nozzles. Spoils from cuts, including cuts in the streets, would be saved for backfill or would be removed, and the ditch would be backfilled with slurry material as approved by the local jurisdictional agency. Effort would be made to minimize the amount of excess material. Material unsuitable for backfill and not economically useful for other purposes at the pipeline location would be disposed of at a landfill according to local jurisdictional guidelines. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources When used for backfill, the spoils from the trenches would be hauled to previously disturbed sites, as determined by the construction contractor. Pipe Handling Special trucks would transport the pipe in 40- to 80-foot lengths from the shipment point or storage yard to the pipeline installation point. Where sufficient room exists, trucks would carry the pipe along the roadway, and sideboom tractors would unload the joints of pipe from the stringing trucks and lay them end to end beside the ditch-line for future line-up and welding. A portable bending machine would bend the pipe to fit the ditch contour both vertically and horizontally. Construction ROW conditions could occasionally require pipe bends that are not able to be accomplished in the field. In these cases, manufactured or shop-made bends would be used, and pipe would be bent prior to the application of coating. While the line-up crew lays the pipe, line-up clamps would hold the pipe sections in position until approximately 50 percent of the first welding pass is completed. The welding crew would then apply the remaining weld passes to comply with API 1104, ASME B31.4, or ASME 31.8.2 All pipeline welds would be radiographically inspected. Pipe Coating Protecting the pipe from moisture and air helps prevent corrosion, thereby preventing cracks, breaks, and leaks in the pipe. The steel pipeline would be coated externally with fusion-bond epoxy or a corrosion resistant tape wrap system. Pipeline coating would be applied at the mill before delivery to the construction site. However, field coating would be necessary on all field weld joints to provide a continuous coating along the pipeline. After the pipe has been welded and radiographically inspected, one of the following would be applied: two-part epoxy, heat- shrink polyethylene sleeves or polyethylene tape and tape primer. Pipe Lowering, Backfilling, and Street Repair The pipe would be lifted and lowered into the ditch by one or two sideboom tractors spaced so that the weight of unsupported pipe would not cause mechanical damage. Cradles with rubber rollers or padded slings would allow the tractors to lower the pipe without damage as they travel 2 ASME - American Society of Mechanical Engineers; API – American Petroleum Institute Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources along the ditch line. Additional welds could be required in instances where the ditch line is obstructed by other utilities crossing the pipe ditch. These welds would typically be made in the ditch at the final elevation. In addition to normal welding and weld inspection, each weld would require pipe handling for line-up, cutting to exact length, coating, and backfilling. Backfill material in roadways would most likely be slurry material or could be ditch spoils, according to local agency requirements. Slurry material would be delivered by concrete trucks and consist of sand and cement. Concrete trucks would be trucks from local commercial sources. The area would be repaved if it was previously an existing paved street. In areas where the pipeline would be in previously unpaved areas, the backfill would include topsoil preserved from the excavation for re-vegetation where needed. At the time of backfilling, a colored warning tape would be buried approximately 12 to 18 inches above the pipeline to indicate the presence of a buried pipeline to third-party excavators. The backfilled earth would be compacted using a roller or hydraulic tamper. The trench would be filled with slurry where approved or required by local regulations. Steel plates would cover any open trench at the end of each workday. Pipe Testing and Inspection All field welding would be performed by qualified welders that meet the Applicant’s specifications and in accordance with all applicable laws, ordinances, regulations, and standards, including API 1104, the Standard for Welding Pipe Lines and Related Facilities, and the rules and regulations of the U.S. Department of Transportation found in the Code of Federal Regulations. All welds would be visually and radiographically inspected. All rejected welds would be repaired or replaced as necessary and radiographically inspected again. The radiographic reports and a record of the location of welds would be maintained for the life of the pipeline. In addition to standard testing of all pipe and fittings at the mill, hydrostatic testing would be performed after construction and prior to startup. Federal regulations mandate hydrostatic testing of new, cathodically protected pipelines prior to placing the line into operation. This test involves filling a test section of the pipeline with fresh water and increasing pressure to a predetermined level. Such tests are designed to prove that the pipe, fittings, and weld sections would maintain mechanical integrity under pressure without failure or leakage. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Cathodic protection controls the corrosion of a metal surface by making it work as a cathode of an electrochemical cell. This is achieved by placing the cell in contact with the metal surface and another more easily corroded metal to act as the anode of the electrochemical cell. The cathodic protection system consists of power sources called rectifiers, buried anodes (either sacrificial or impressed current), and test stations along the pipelines. Metering and Pigging Station Installation A gas-metering station would be required at the custody transfer location where the Applicant’s proposed gas pipeline interconnects with the existing SCG pipeline. The metering station would measure and record gas volumes, gas quality, and gas characteristics and provide custody transfer of the gas to SCG. The metering station would be located adjacent to N. Francisca Avenue, southeast of the intersection of Herondo Street and N. Francisca Avenue. SCG would then construct a new six-inch pipeline to a tie-in location with the existing SCG pipeline transmission facility (Line 1170) as previously discussed in Section 2.4.3.2, Phase 3 Offsite Pipeline Construction. In addition to the metering station, a pigging station would be installed at the metering station and Project Site for the gas pipeline, as required by SCG, and at the tie-in point for the oil pipeline. An odorant station would be installed at the Project Site consisting of a 500 gallon odorant tank that would be filled approximately annually. The gas would be odorized before it leaves the site. 2.4.3.3 Phase 3 Hazardous Materials Hazardous materials used as part of Phase 3 would be associated with construction activities, including diesel fuels, lubricating oils, pipe coatings, solvents, etc. No storage of hazardous materials beyond standard consumer quantities (a few gallons) is anticipated in this phase. 2.4.3.4 Phase 3 Schedule It is anticipated that Phase 3 would occur for a period of approximately 14 months as indicated in the schedule provided in Table 2.10. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.10 Phase 3 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28- 38 39- 53 54 55 56 57 58 59 60 61 62 63 64 Remove temporary equipment Remove trees along Valley Remove32-foot sound wall Implement RAP Construct retaining walls Final grading Construct well cellars Construct 16-foot block wall Remove 16-foot sound wall Construct/install facilities Construct street improvements Install landscaping Construct offsitepipelines Start-up of equipment Install 32-foot sound wall Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Set conductor Note: Days are weekdaysSource: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.11 Phase 3 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Remove production equipment 6 15 21 Remove trees along Valley Drive 2 4 6 Install 16-foot noise wall 6 8 14 Implement Remedial Action Plan 18 8 28 Construct retaining walls 3 20 24 Final grading (balanced) 4 6 10 Construct well cellars 9 15 25 Construct 16-foot perimeter wall 5 20 25 Remove 16-foot noise wall 5 5 10 Construct/install onsite facilities 18 40 47 Construct street improvements 11 9 20 Install landscaping 1 7 7 Construct pipeline 18 22 54 Start-up production equipment 0 7 7 Install 32-foot sound wall 6 9 16 Set conductor 2 5 7 Greatest number of trips in one day 18 (during weeks 6-13, 23, 54) 62 (during weeks 39-53) 78 (during week 39-53) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips (RT). Maximum truck activity occurs during week 6-13 with RAP activities, week23 with construct well cellars, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 4 Development and Operations: 2.5 years drilling program. Operations - ongoing perimeter wall and onsite facilities and week 54 with construction of onsite facilities, pipeline construction and conductor setting. However, the majority of the pipeline construction traffic would occur away from the Project Site except during the installation of the sections of the pipeline located very close to the Project facility. Maximum auto activity occurs during weeks 39-53 with the facilities construction. Maximum activity trucks and autos combined occurs during weeks 39-53, however, the majority of the vehicles for the pipeline construction would be parked at the contractor’s facilities or near the pipeline alignment. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices 2.4.3.5 Phase 3 Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 3 are provided in Table 2.11. The vehicle trips required to transport employees and equipment for Phase 2 are also provided in Table 2.11. 2.4.4 Phase 4 Development and Operations The purpose of Phase 4 would be to maximize oil and gas recovery from the reservoirs by drilling additional wells and operating the permanent facility. To accomplish this, Phase 4 would involve the drilling of wells; the operation of the permanent oil production equipment; the transport of the oil and gas by pipeline to their respective destinations; and the ongoing Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources maintenance of the Proposed Oil Project. The Proposed Oil Project would be designed for a maximum capacity of 8,000 barrels of oil per day and 2.5 million cubic feet of gas per day. Figure 2.17 provides the conceptual site plan for Phase 4. Elevations and the conceptual landscape plan for the Proposed Oil Project during Phase 4 are included in Appendix A of the Final EIR. 2.4.4.1 Phase 4 Drilling Phase 4 drilling would involve delivery and setup of the drilling rig and the drilling of the remaining wells. Delivery and Set Up of Drill Rig The drilling rig and its associated equipment would be brought to the Project Site by trucks with trailers permitted by the City and the California Highway Patrol. The approximately 87-foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. The crane would be removed from the Project Site after the drill rig and supporting equipment have been set in place. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, the generator, which would be a non-road portable diesel-fuel generators certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. The drill rig and its associated equipment would require the same setup as described under Section 2.4.2, Phase 2 Drilling and Testing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.5 Drill Remaining Wells The drilling of the remaining oil wells and water disposal/injection wells, up to a total of 30 oil wells and four water disposal/injection wells, would involve the same activities as described for Phase 2. As previously discussed regarding Phase 2, once the drilling of a well is complete, the cemented casing would be run from the surface to the bottom of the wellbore where the well penetrates the oil-producing reservoir. The well would be plumbed into the temporary production equipment and pump system that had been installed. The pump system, installed below ground, would bring the oil, gas, and water to the surface for processing. In addition, up to three additional water disposal/injection wells (in addition to the single water disposal/injection well drilled during Phase 2) would be drilled to allow for the injection of processed produced water back into the oil-producing reservoir and at below formation fracture pressure. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take approximately 30 days to drill each well, including the time for placing the drilling rig in position and installing rigging. After the drilling of the wells is complete, the drill rig would be removed from the Project Site. Including set up for each well and removal from the Project Site, the total drilling time for Phase 4 would be about 30 months (2 ½ years). Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District conveyed via extension of an existing waterline serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in tanks. Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. All other waste generated by the test drilling would be transported by truck to Clean Harbors Buttonwillow Landfill or a similar facility closer to the Project Site. Noise abatement would be incorporated into the drilling process in the same manner as described for Phase 2, including a 32-foot high sound attenuation wall. After the drilling of the wells is Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources completed, the 32-foot sound attenuation wall would be removed from the Project Site. Re-Drilling of Wells Re-drilling of a well occurs if production from a well declines substantially or if problems exist with the well, affecting the well’s efficiency or viability. The same activities would be required for re-drills as for initial drilling, except that conductor piping would not have to be installed again, as the same conductor piping would be used for the re-drill. Although the Applicant does not expect the need for the re-drilling of wells, the activity may be required under extraordinary circumstances. Depending on the circumstances, a workover rig might be able to be used to complete a re-drill. However, for the purpose of providing a worst- case analysis, the Applicant estimates that up to 30 re-drills could occur over the life of the Proposed Oil Project, with up to five re-drills occurring during any given year. In the event that a re-drill would occur, noise attenuation design features, including the use of a 32-foot sound attenuation wall and acoustical covers, would be implemented on the Project Site. Re-drills would involve the same activities and equipment as the drilling proposed for Phase 2 and 4. 2.4.5.1 Phase 4 Processing and Operations During the drilling of the remaining oil wells and water disposal/injection wells, the production of the extracted oil would occur. Figure 2.18 shows the steps involved in processing the oil, water, and gas produced from the wells during Phase 4. The permanent production equipment on the Project Site would be used to process the oil and gas to a standard that would be suitable for sale. The produced water would be processed and injected into the oil-producing reservoir. The gas produced would be processed and sold to the gas company. The oil and gas produced would be transported offsite via pipelines constructed during Phase 3. Figure 2.18 Phase 4 Process Flow Diagram Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Noise abatement would be incorporated into operational practices and permanent production equipment. The anticipated personnel on the Project Site would be four personnel for a 12-hour daytime shift, two personnel for an 8-hourgraveyard shift, and two personnel for an 8-hour swing shift. Therefore, personnel would be present 24 hours per day on the Project Site. During the ongoing operation of the Proposed Oil Project, active wells would require periodic routine service. These activities could include the replacement of down-hole pumps, piping, and cleaning. These maintenance activities would typically be accomplished by utilizing a service rig, or “workover” rig, approximately 110 feet high. The workover rig would be operated on the Project Site a maximum of 90 days per year. The workover rig would be operated between the hours of 8:00 a.m. and 6:00 p.m. on weekdays only (excluding holidays). Only a single workover rig would be onsite at one time. In addition, there would be an occasional need for other services such as facilities repair and Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources solid and liquid waste pick-up. Preventative maintenance would be performed on a routine basis to ensure the integrity of the operating equipment. The pipelines would be periodically inspected to ensure their continued integrity. The permanent production facility would be utilized to separate and treat produced oil, gas and water. The separation and treatment of these fluids allows for the oil and gas to be sold and subsequently transported via pipeline and for the water to be injected into the oil-producing reservoir below the oil water contact line. Figure 2.18 provides a simplified flow diagram of the flow of fluids through the permanent production facility. The following describes the steps of production and operational characteristics in Phase 4. Fluids Piped from the Wellhead to the Production Facility After a well has been drilled and completed (final down-hole equipment installed), the extracted fluids would be piped to the permanent production facility on site. The combination of fluids (i.e., oil, gas, and water mixture) is referred to as an emulsion. This emulsion would be sent via pipes to a production header, where it is commingled with the emulsion from all the wells in a gross line before entering a three-phase separator. There is also a test header that allows the diversion of emulsions from a single well through a well test station before the three-phase separator. The well test station allows for the testing of each well quality and flow characteristics. After the emulsion passes through the well test station, it would be directed back to the gross line where it would be commingled back with the emulsion from the production header and then enter the three-phase separator. The three-phase separator separates the oil, gas, and water. The gas exits the top, the oil exits the middle, and the water exits the bottom of the separator. Each of these fluids enters a specific system of treatment, as is discussed in the following subsections. Oil Treatment System After the produced oil leaves the three-phase separator, it would enter a stock tank, where it may need to be heated depending on the quality of the crude oil. This heating would allow excess water to drop from the oil. Heating, if necessary, would be provided by the microturbine exhaust waste heat recovery system. From the stock tank, the oil would be measured using a Lease Automated Custody Transfer Unit (LACT) and transported via pipeline to the purchaser. Any water that drops out of the oil would be routed to the water treatment system. Vapors would be Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources directed to the gas processing systems through the vapor recovery unit. Gas Treatment System During this phase, gas would be treated, sold, and subsequently transported via pipeline to the SCGC. Treatment of the gas would be required to meet gas pipeline specifications. After the gas leaves the three-phase separator, it would be sent to the first stage compressor. The first stage compressor would increase the pressure of the gas for treatment. The first stage of gas treatment is removal of H2S from the gas utilizing triazine using the SulfaScrub system. SulfaScrub is a non-regenerative batch process that requires replacement of the SulfaScrub materials periodically. The SulfaScrub process is a “scavenging” process, meaning it is used to remove H2S in process gas at low concentrations (up to concentrations of approximately 200 ppm). After leaving the SulfaScrub system, the gas would be sent through the amine system. This amine system removes CO2 from the gas. After leaving the amine system, the gas would pass through the second stage compressor, where pressure is increased prior to the gas’ entry into the low temperature separation system. The low temperature separation system removes any remaining moisture (mostly water) and gas liquids from the gas prior to sale. Propane would be utilized as a refrigerant in the low temperature separation system. Before the gas leaves the Project Site, it would be odorized using an odorizing substance (mercaptan or equivalent) as required by law. The gas would then be sent via pipeline through a metering station to a SCG pipeline constructed in Phase 3 located near the corner of Herondo Avenue and N. Francisca Drive to the south of the Project Site. Water Treatment System After the water leaves the three-phase separator, it would be sent to the clarifier tank. This tank would allow solids in the water to drop out. From the clarifier tank, the water would then enter the induced gas flotation unit for the removal of suspended matter, such as oil or solids. The induced gas flotation unit removes oil by injecting gas bubbles into the water. The bubbles adhere to the suspended matter, causing the suspended matter to float to the surface and form a froth layer, which is then removed by a skimmer. From the induced gas flotation unit, the water would then pass through a filter unit. The filter Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources unit would be used to clean the water of any remaining oil and solids, such as sand. After the water has left the filter unit, it would enter the water surge tanks for storage before disposal/injection. From the water surge tank, the water would then flow through pumps and be sent to the disposal/injection wells for injection into the oil producing reservoir. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.17 Phase 4 Site Plan with Drilling Rig Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Vapor Recovery System Gas from all tanks and vessels not part of the gas processing system (the oil and water processing tanks and vessels), as well as pressure relief valves, would be gathered through pipes into a closed-system and directed to a vapor recovery compressor unit. The vapor recovery compressor would compress the gas and then add it to the gas in the gas processing system (from the three- phase separator, etc), where it would be processed and sent via pipeline to the metering station and the SCG system. Process Drain System All equipment would be connected to a drain system that would be directed to a drain tank. Liquids from the drain tank would be sent back to the three-phase separator for reprocessing. Solids from the drain system may periodically be removed to an offsite approved disposal facility. Electrical Generation System The facility would utilize a Microturbine system, which would consist of five 200 kw Capstone turbines configured as a single 1,000 kw package. Anticipated NOx emissions would be 4 ppm. Gas produced on the Project Site would be utilized as fuel for the turbines. Facility Storm Drainage System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the Project Site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation from a 100- year storm event. Waste Waste would be generated as part of the facility operations and the production process. Regular waste would include typical municipal trash such as paper, trash bags, food, and cups. Process waste would include generic oil field waste such as sandy oil (from the tank bottoms), spent H2S scavenger, spent filters, oily cloths (i.e., rags), gloves and Tyvek® suits. Intermittently the facility could generate hazardous waste. These wastes could include empty drums, rinse water, painting supplies, spilled chemicals, spent media, and hydraulic fluids. The Applicant indicates Section 2: Project Description Exhibit B that the Project Site would have an Environmental Protection Agency (EPA) and Department of Toxic Substances Control(DTSC) Identification Number. Phase 4 Safety and Security Systems The Fire Protection Plan for Phase 4 would be provided by the Applicant for review and approval by the City of Hermosa Beach Fire Department (Fire Department) and incorporated into the Phase 4 Site Safety Plan. Emergency access would be incorporated into the design of the Proposed Oil Project. An additional fire hydrant would be provided adjacent to the Project Site as a component of the Proposed Oil Project. The location of the hydrant would be determined by the Fire Department, and installation would occur as a part of the construction completed in Phase 3. A fire suppression system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed during Phase 3. The fire suppression systems would include a foam injection system and automated detection and annunciation systems. Automated alarm systems would be installed for the detection of chemicals and fire hazards to notify onsite personnel that an emergency situation is potentially occurring. If it is determined that a chemical fire or fire emergency exists, the onsite operator would activate the emergency shutdown system and notify the Fire Department. The Fire Department and their allied agencies would respond as indicated in their mutual and automatic aid agreement contracts. The onsite personnel for the Proposed Oil Projectwould be trained for initial spill response and activation of emergency systems at the site as per HAZWOPER requirements, but would not be trained for fire fighting and would rely on the Fire Department for response activities. The fire detection system would consist of thermal fire detection and optical surveillance systems that would monitor potential fire zones and activate warning indicators. The Applicant proposes Subsidence and Induced Seismicity Monitoring Programs to detect subsidence as a result of drilling activities. This would ensure that subsidence would not be tolerated to the degree that it could endanger the facility, offsite structures, and the shoreline. Also, an Induced Seismicity Monitoring Program would be designed to detect seismic activity that might result from drilling activities. The security system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed and initiated during Phase 3. Security on the Project Site would be provided by onsite personnel and a site security program that would include a Closed Circuit Television System, a gate access system, and an intrusion and motion detection system. The security system would Section 2: Project Description Exhibit B control all access to and from the Project Site. During the final design of the Proposed Project and submission of plans to the appropriate agencies for permits, the following plans and programs would be developed by the Applicant as part of the facility drilling and operations phases (Phase 2 and Phase 4 activities):  Odor Minimization Plan;  Air Monitoring Plan;  Fire Protection Plan;  Safety and Environmental Management Program;  Mechanical Integrity Program;  Hazardous Materials Business Plan;  Subsidence and Induced Seismicity Monitoring Programs;  Noise Monitoring Plan;  Quiet Mode Drilling Plan; and  Various plans related to grading, equipment design, electrical design, landscaping, etc. Safety devices would be installed within the piping, vessels, and tanks in the processing system. Safety devices would provide early warning, corrective action, or shut down of a specific segment of the system or the entire facility, if necessary. A number of safety devices are required or recommended by codes, standards and regulations, including:  High level warning systems;  High pressure warning systems;  Automatic shutdown valves;  Vessel and pipe design requirements;  Vapor recovery and component leakage limits; and  Fuel contaminant limits. Detailed piping and instrument diagrams would be provided by the Applicant during the detailed permitting stages, and reviews of the final design would be undertaken at that time. Specific measures to reduce the risk of hazardous material releases are addressed in Section 4.8, Safety, Risk of Upset, and Hazards. Phase 4 Hazardous Materials The operation would require the use of hazardous chemicals. The chemicals would be stored Section 2: Project Description Exhibit B onsite with secondary containment. The chemicals would be documented in a required Hazardous Materials Business Plan and submitted to the Los Angeles County Fire Department as the Certified Unified Program Agency (CUPA) and the Hermosa beach Fire Department. Typical chemicals utilized in the permanent production facility and the maximum quantities that would be onsite at any time are listed in Table 2.12. Hydrogen Sulfide The Applicant indicates that low levels of potential “native” H2S, in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the underlying oil reservoir. In order to have the capability to treat higher levels, the Proposed Oil Project has been planned to treat H2S levels of 15 ppm and has a maximum design capacity to treat H2S levels of up to 100 ppm. After treatment with the SulfaScrub system, the H2S levels of the gas would be reduced to less than 4.0 ppm. SCG’s specifications limit the H2S concentrations in gas delivered to the meter from a producer to less than 4.0 ppm. The Proposed Project provides for the disposal/injection of treated produced water from the drilling and production process back into the oil reservoir using water disposal/injection wells. Untreated produced water can result in the creation of H2S concentrations in the reservoir above the existing levels in the oil reservoir (referred to as the “native” condition). Prior to the disposal/injection of produced water from the oil extraction process, surface runoff from precipitation that collects on the Project Site, or any additional injected water, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff and additional water would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) Odorant/Mercaptan Odorize the sales gas 500 H2S Scavenger/Pertrosweet Gas treatment for H2S 9,000 Section 2: Project Description Exhibit B Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) HSE700 Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter Cor7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Glycol/TEG Gas treatment for water removal 55 Amine/DEA Gas Treatment for H2S removal 110 Methanol For oil treatment 55 Biotreat 8415 Water treatment prior tore- injection 55 Hydrochloric Acid 15%, used for acid washing during completion Varies Hydrofluoric Acid 3%, used for acidizing muds Varies Note: Project Application, Amendments and Appendices 2.4.5.2 Phase 4 Schedule It is anticipated that Phase 4 would occur for a period of approximately 30 to 35 years, as indicated in the schedule provided in Table 2.13. The drilling of the remaining wells would occur during the first 30 months of Phase 4, with periodic re-drills thereafter for the life of the project (averaging 30 days per year with a maximum of 150 days in one single year). The permanent production equipment would operate 24 hours a day, seven days per week. The Section 2: Project Description Exhibit B Project Site would be staffed 24 hours a day, seven days per week. Section 2: Project Description Exhibit B Table 2.13 Phase 4 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 through 131 132 133 134 135 Life of Project Deliver and Set up drill rig Drill remaining 30 wells Remove drill rig Remove 32-foot noise wall Facility operations and maintenance Continuous Re-drills Avg. 30 days/yr Max 150 days/yr* Well workovers Max 90 days per year Source: Project Application, Amendments and Appendices. To re-drill a well, a drilling rig similar to the one initiallyused to drill the wells would be used with the same setup, drilling and removal procedures. Workovers would use an 110-foot tall truck mounted drilling rig and would be conducted a maximum of 90 days per year. * This is the maximum number of days per year proposed by the Applicant. The 150 days per year is predicted to occur once every 5 years. Most likely re-drill activity would be lower. 2.4.5.3 Phase 4 Vehicle Requirements The number of vehicles estimated by the Applicant to be necessary for Phase 4 operations are provided in Table 2.14. During drilling, parking for Project employees would be provided as previously described under Section 2.4.1.1, Phase 1 Construction Activities, under the subsection Clearance of the Project Site. Parking for Project employees would be provided on the Project Site after the drilling of all the wells is completed and the drill rig has been removed from the Project Site. 2.4.6 Parking Requirements The Proposed Project construction and operation activities would result in increased parking demand. The elimination of existing parking would also make necessary the replacement of spaces lost. Parking requirements addressed in this FEIR include the following:  Temporary parking for a maximum of 40 Project employee vehicles, varying between Section 2: Project Description Exhibit B approximately 20 and 40 employee vehicles during construction and/or drilling activities in Phases 1-4, excluding ongoing production in Phase 4;  Long-term parking for four Project employees during the ongoing operation of the Proposed Project and four additional spaces for maintenance workers in Phase 4; Exhibit B Replacement of 15 parking spaces currently located at the City Maintenance Yard that supply free remote public parking on weekends under the City’s Preferential Parking Program approved by the Coastal Commission. These spaces are used by:  Maintenance Yard employees during working hours (i.e., Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays) and by the public at other times; and  Replacement of two on-street public parking spaces that would be eliminated by improvements to the southwest corner of 6th Street and Valley Drive. These spaces are not part of the City’s Preferential Parking Program. Table 2.14 Phase 4 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Deliver and Set up drill rig 6 20 26 Drill remaining 30 wells 12 11 23 Remove drill rig 5 20 25 Remove 32-foot sound wall 4 8 12 Facility operations and maintenance 5 13 18 Well workovers/Major Maintenance 4 14 18 Greatest number of trips in one day 17 (during drilling ) 34 (during drilling) 44 (during drilling) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum activity occurs during drilling of wells with facility operations and maintenance. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simple addition of the two. See Appendix A. Re-drilling would produce the same level of traffic as traffic produced during drilling activities. Exhibit B See Appendix A for details regarding vehicles, employees, trucks and construction equipment necessary for Project operations each week. Source: Project Application, Amendments and Appendices In order to comply with the City’s Preferential Parking Program and Coastal Development Permit requirements and be consistent with the City’s Coastal Land Use Plan (titled Local Coastal Plan) policies,, 17 public parking spaces would have to be generated under the Proposed Oil Project to replace the 15 parking spaces removed at the current City Maintenance Yard and the 2 on-street public parking spaces removed from 6th Street, Table 2.15 provides the Applicant’s assessment of parking demand for each phase of the Proposed Oil Project and the Applicant’s proposal for the development of the required parking as a component of the Proposed Oil Project. As indicated in Table 2.15, Phases 1, 2, and 3 and the drilling portion of Phase 4 would require temporary offsite parking. Exhibit B Table 2.15 Proposed Oil Project Parking Requirements Phase and Peak Activities Peak Number of Employees Number of Offsite Parking Spaces Needed Comments Phase 1: construct fence, wells cellar and install electrical service 27 20 Some employees would park onsite and others would use temporary parking lot. Phase 2: Install equipment and drill test wells. 22 12 Two 5 person shifts for drilling, some carpooling assumed. Phase 3: Construct wall, remove soundwall, construct onsite facilities 30-60 40 Peak employees occurs for constructing onsite facilities. Assumes some carpooling. Phase 4: Drilling and Operations 10 4 5 persons per shift with 2 shifts per day. Carpooling is assumed. Phase 4: Operations Only 2-4 0 No offsite parking needed. Source: Applicant submittals January 2014 The following information summarizes E&B’s proposal in the Project Application to meet parking demands. Cypress Parking Lot: Parking for 20 employees during temporary construction and drilling activities during Phases 1, 2, 3, and the drilling portion of Phase 4 would be provided in an offsite temporary parking lot to be developed at 636 Cypress Avenue adjacent to the western Project boundary (referred to as the temporary parking lot). The Applicant states it has entered into an agreement with the current owner of the subject property at 636 Cypress Avenue (Assessor Parcel No. 4187-031-22) for this use. Access to the parcel is provided from Cypress Avenue. While adjoining the Project Site at 555 6th Street, the temporary parking lot will not be accessible from the Project Site due to an elevation difference between the properties and the need for secured points of entry onto the Project Site. Exhibit B The 6,000-square foot parcel at 636 Cypress Avenue is a relatively level property. Itis currently developed with a single-story building that occupies approximately 75 percent of the parcel and a parking lot with approximately 6 parking spaces. The development of the parcel would comply with all City requirements. Development would require demolition of the existing building, removal of the current asphalt parking area, and minimal grading. The Cypress Parking Lot would be completed before the commencement of construction activities to occur under Phase 1 Site Preparation of the Proposed Project. Improvements that would be made to the new 60-foot by 100-foot parking lot with 20 parking spaces would include drainage, landscaping with irrigation, lighting, a trash container, and other elements to comply with the City of Hermosa Beach Municipal Code. Details of the redeveloped parcel are shown in Figure 2-18. The Applicant has requested that the City supply the required 17 replacement spaces as part of the City Maintenance Yard relocation. If the No Added Parking option is constructed, then the 17 spaces would be provided on a temporary basis at the proposed temporary parking lot at 636 Cypress Avenue and on a permanent basis as indicated below.. The City has not agreed to supply any replacement spaces regardless whether the Parking option or No Added Parking option were to be constructed Additional 20 Temporary Parking Spaces (Phase 3):During peak construction activities in Phase 3, parking for a maximum of 20 temporary parking spaces, in addition to the 20 temporary parking spaces provided at the off-site temporary parking area at 636 Cypress Avenue , would be provided at one or more sites, not yet identified, that would be leased or rented by the Applicant. Employees would walk to or be shuttled to the Project Site. The Applicant proposes to ensure to the City, through the submittal of any required documentation, that the parking spaces would be available during the temporary construction and drilling activities for the Proposed Project. If spaces are “remote,” located farther than 5 to 8 blocks from the Project Site as defined by the Applicant, a van pool shuttle service from the remote parking spaces would be provided to the Project Site by the Applicant. The Applicant proposes to obtain all required approvals and entitlements from the City and to make any required modifications to conform with City codes, identified as mitigation measures in the certified EIR, and any other requirements that may be imposed as a result of the Development Agreement or ballot measure. Construction Vehicle Parking (Phases 1-4 excluding permanent operations): The Applicant Exhibit B indicates that it has an agreement to utilize the below-ground parking area at 601Cypress Street for non-hazardous equipment storage and construction vehicle parking. Parking for construction vehicles and staging would be provided both at the Project Site at 555 6th Street and within the building at 601 Cypress Street during Phases 1-4. Parking for Ongoing Operations in (Phase 4): The long-term parking for a maximum of four Project employee vehicles during ongoing operations and maintenance will be supplied by four marked parking spaces on the Project Site at 555 6th Street. Additional parking required for maintenance activities for ongoing operations would also be accommodated onsite along the perimeter wall as indicated in Figure 2-18. No additional offsite parking would be required for long-term Project operations. Replacement of Spaces Eliminated by the Project: Fifteen parking spaces at the Project Site at 555 6th Street are used by City Maintenance Yard employees during working hours of Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays. These spaces also supply free remote public parking on weekends under the City’s Preferential Parking Program, approved by the Coastal Commission, and are otherwise used by the public when available. The Application proposes to replace 15 spaces for free remote public parking in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The City would be responsible to supply parking for its Maintenance Yard employees as part of its City Maintenance Yard relocation plan. Two on-street public parking spaces would also be eliminated by Project improvements to the southwest corner of 6th and Valley Drive; these spaces are not part of the City’s Preferential Parking Program. The Application proposes to replace these two spaces in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The Application indicates potential overlap with onsite employee scheduling during the drilling portion of Phase 4, requiring four parking spaces at 636 Cypress Avenue to be vacant as one shift arrives and another shift is leaving. This results in the availability of 16, rather than 17, parking spaces for a period of approximately one hour. The Application indicates that relocation of the 17 public parking spaces requires a coordinated approach between the Applicant and the City and proposes that this relocation be governed by the Lease Agreement (Section 13). The Applicant proposes the relocated City Maintenance Yard be developed in a manner which could supply the permanent public parking spaces on weekends Exhibit B and at night, similar to the way in which the existing parking spaces at the current City Maintenance Yard are utilized. If the relocation of the City Maintenance Yard does not become the location for the permanent public parking spaces, then the Applicant proposes to provide 15 replacement public parking spaces as well as the additional 2 public parking spaces, prior to the commencement of Project operations, at the offsite temporary parking lot at 636 Cypress Avenue or to provide other suitable public parking spaces consistent with requirements of the City’s Preferential Parking Program, the California Coastal Act, and a framework proposed by the Applicant. 2.4.7 Project Life and Decommissioning Under the Proposed Oil Project, the oil and gas resources would be developed until they are depleted and developing them is no longer economically viable, for up to 35 years. Currently, the amount of crude oil that could be produced from the field is unknown, and future crude prices are difficult to assess. According to the Lease Agreement, the Proposed Oil Project could operate for up to 35 years. Figure 2.19 shows the estimated crude oil, gas and water production for the life of the Proposed Oil Project. If during Phase 2 the Applicant does not consider the level of production from the Project Site to be economically feasible, then decommissioning of the installed equipment would commence. Decommissioning would involve the removal of the drilling and temporary testing equipment and would include abandonment of wells according to the Division of Oil, Gas and Geothermal Resources (DOGGR) requirements. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. At the end of the Proposed Oil Project, when the owner applies to DOGGR and to the City to abandon the facility, a separate permit process and CEQA environmental review would be required to evaluate decommissioning of the entire Project Site. Since the timing of the decommissioning is unknown, the Applicant has not submitted a detailed decommissioning plan, and therefore any assessment of decommissioning activities would be speculative at this time. Exhibit B Figure 2-18 Cypress Parking Area Source: E&B Updated Parking Plan 1/8/2014 Exhibit B Figure 2.19 Estimated Production Levels Source: Based on Applicant submitted estimates 2.4.8 Project Scheduling Summary Under the Proposed Oil Project, there are a number of different activities with various allowances for time of day, day of week and annual limits. These are summarized in Table 2.16. Table 2.16 Proposed Oil Project Scheduling Summary Activity Allowed Period Annually Days and Hours per Day Workover Rig Maximum 90 days per year 8 am - 6 pm weekdays only Drilling Rig Phase 2 - 120 days 24 hours per day Exhibit B Phase 4 - 30 months Re-drills 30 days per year average, up to 150 per year max 24 hours per day Phase 1 and Phase 3 Construction Any 8 am - 6 pm weekdays and 9 am - 5 pm Saturdays Offsite ROW Construction Any 8 am - 3 pm weekdays only in the City of HB Truck deliveries Any 9am - 3 pm weekdays or emergencies Quiet mode drilling Phase 2 and Phase 4 Drilling, Re-drills 7 pm - 8 am Pipeline construction activities Phase 3 9 am - 3 pm weekdays. Exhibit B Exhibit C EXHIBIT “C” PUBLIC BENEFITS OF PROJECT With the approval of the Project by the voters of the City, the public benefits of the Project provided by the Lease include: a) the royalties as further described in the Lease, that have been recently estimated to range from [insert amount] pursuant to the City’s Cost Benefit Analysis to [insert amount] pursuant to E&B’s Economic Analysis;[UNDER DISCUSSION] and b) the minimum annual royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled as further described in the Lease (“Minimum Royalty”). In addition, and as consideration for the benefits provided to E&B through the approval of this Agreement by the voters of the City, E&B has agreed to provide the additional public benefits as follows: 1) Advances Commencing with Issuance of City Drilling Permit for First Well: E&B shall pay to the City, as an advance, One Million Dollars ($1,000,000) per year, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Drilling Permit Advance” or collectively, “Drilling Permit Advances”). (For clarity, this period is estimated to continue for approximately five years, for a total of Five Million Dollars ($5,000,000).) The Drilling Permit Advances are not restricted and may be used in accordance with applicable City laws. Each $1,000,000 Drilling Permit Advance would be adjusted by any royalties received by the City in that year to ensure that the City receives a minimum of $1,000,000 each year. The Drilling Permit Advances shall be repaid by the City from royalties, including royalties from tidelands, without interest, and will be added to the advance amount and subject to the repayment process set forth in Section 13.d(4) of the Lease. If royalties are not sufficient to repay the Drilling Permit Advances, then the City is not required to repay the Drilling Permit Advances. 2) Additional Payment During Years 4-13 To Ensure $1,000,000 Minimum Amount: The Lease provides for a Minimum Royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled and continuing to the 13th anniversary (“Years 4-13”). If royalties provided to the City during Years 4-13 do not exceed One Million Dollars ($1,000,000), E&B shall pay to the City an additional amount equal to the difference between the Minimum Royalty and One Million Dollars ($1,000,000). For clarity, given that the Minimum Royalty is Five Hundred Thousand Dollars ($500,000), this payment would be an additional amount of up to Five Hundred Thousand Dollars ($500,000), for a total of One Million Dollars ($1,000,000). Exhibit C 3) Remediation of City Maintenance Yard: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, E&B shall implement the proposed Remedial Action Plan as described in Exhibit B to this Agreement in Phase 3 of the Project; however, if E&B determines as a part of Phase 2 not to proceed with Phase 3 of the Project, then E&B shall conduct any necessary remediation activities at the Project site to allow the site to be used for industrial or commercial purposes (e.g., City maintenance or commercial activities), in a manner consistent with its obligations under the Lease, the Settlement Agreement and this Agreement. E&B shall not be obligated to remediate the property for any other future uses, such as commercial or residential uses. [If voters do not approve ballot measure, this document would not be vehicle for determining clean-up, but in any case, E&B is will not remediate site if project is not approved.] 4) Educational Funding: E&B’s Proposal: E&B shall pay 1% of gross revenues (currently estimated to be Thirty Seven Million Dollars ($37,000,000)) to the Hermosa Beach Education Foundation (“Foundation”), and if the Foundation does not accept the donation, the amount shall be provided to the City to be used for any municipal purposes. Councilmember DiVirgilio’s proposal: Education Funding: E&B shall pay 1% of its gross annual revenues directly to the Hermosa Beach School District. In the event that the School District does not accept the funds, E&B shall pay 1% of its gross annual revenues directly to the Hermosa Beach Education Foundation. Payment shall be made monthly each year the Development Agreement is in effect, commencing the month that production commences. The School District and the Education Foundation, as the case may be, are third party beneficiaries of this obligation and may enforce it as though parties to this Development Agreement. The City is not an indispensable party in any such action. In the event neither the School District nor the Education Foundation accepts the funds, this requirement will be deemed satisfied. Councilmember Fangary would delete this paragraph 4. [UNDER DISCUSSION] 5) Relocation of City Maintenance Yard: If the voters approve the Project, the City may determine to relocate the City Maintenance Yard to a temporary location and then to a permanent location or alternatively, to relocate the City Maintenance Yard directly to a permanent location, without a temporary location. With respect to either of these options, E&B agrees as follows: a. $3.5 Million Forgiven Upon Issuance by City of Drilling Permit for First Well: Upon the issuance by the City of the drilling permit for the first well, the City shall not be required to repay the Three Million Five Hundred Exhibit C Thousand Dollars ($3,500,000), plus interest, to E&B as further described in Section 4.6.b of the Lease. b. $6.5 Million Advance for Permanent Relocation: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, then E&B shall advance Six Million Five Hundred Thousand Dollars ($6,500,000) to the City for the permanent relocation of the City Maintenance Yard. 6) Matching Funds to Property Owners for Undergrounding Utility Lines in the City: If E&B determines as a part of Phase II of the Project to proceed with Phase III of the Project, E&B agrees to provide up to Thirty Million Dollars $30,000,000 in matching funds (50% of the costs) to property owners for the purpose of undergrounding utility lines in the City. Property owners in the City may utilize the City process to create a district for this purpose or, alternatively, coordinate directly with the utility to achieve the undergrounding of utilities. The costs would be confirmed through the City process or by the utility, and any costs incurred by the City (that would otherwise be reimbursed by the property owner) would be included in the cost amount. These matching funds would be funded through gross revenues from the Project, with an initial amount of One Million Dollars ($1,000,000) to be contributed by E&B at the commencement of the program. [UNDER DISCUSSION] 7) Hermosa Beach Residential Property Fund: Purpose: To provide owners of residential properties within 600 feet of the Hermosa Beach Oil Recovery Project (Project) with assurance that they will incur no loss, as a result of the Project, to their property’s fair market value (Market Value), in the event of a sale of their property. Such assurance is offered through voluntary participation in a Hermosa Beach Residential Property Fund (Fund). Offer: The Fund will pay the difference between an eligible property's actual negotiated sale price and the appraised Market Value of the property, which will be determined as if the Project had not been built. A predetermined independent appraisal process will demonstrate if there is a loss in the Market Value of an owner's residential property. Participation: Participation in the Fund is entirely voluntary. Eligibility: Owners of residential properties that are located within the “eligibility area” (within 600 feet of the Project, measured property edge to property edge) are eligible to participate. The claim must be made by the then current owner of the property and only one claim per property will be allowed; however, the owner need not own the property when the Fund commences in order to be eligible for a claim. By way of example only, if the original owner of the property does not make a claim in connection with its sale to a buyer, then so long as the sale occurs during the Fund term, the buyer would automatically succeed to the rights of the selling property owner with respect to the Fund, Exhibit C including the right to make any claim, subject to the other requirements for participation in this Fund. Costs: There is no monetary cost to participating residential property owners to receive the benefits of the Fund, now or in the future. All costs, including the costs of obtaining required appraisals, are paid by the Fund. Cap: There will be a $20,000,000 cap (Funding Cap) on the total amount of benefits that the Fund can pay out. Term: The Fund will commence upon issuance of the City Drilling Permit for First Well by the City of Hermosa Beach and will continue in effect until the first to occur of (a) six years from commencement of the Fund, or one year after the completion of the final Project well, whichever is later, or (b) the entire Funding Cap has been disbursed to eligible residential property owners. The six-year aspect of the Fund term described in subpart (a), above, will be extended consistent with any extension of the term of the Development Agreement in accordance with Section 6.24 of the Development Agreement. Administration: E&B Natural Resources (E&B) will establish the Fund and designate a qualified, independent Fund Administrator. The Fund Administrator will not be an officer, employee, or affiliate of E&B. Application: To receive benefits, a selling owner of a residential property within the eligible area will submit to the Fund Administrator: (1) a signed Program Participation Agreement setting forth the terms of the Fund program (Program) and a signed claim form; (2) a copy of an accepted written offer to purchase the residence on arms-length terms from a buyer who is not related to or affiliated with the selling residential property owner and that complies with the Program requirements; and (3) a current (dated not earlier than six months prior to the property owner’s application) appraisal reflecting the Market Value of the property, which will be determined as if the Project had not been built. The appraisal must be prepared by an MAI or RM designated appraiser who is licensed in California and has at least five years of experience appraising similarly-situated residential properties in the South Bay region of Los Angeles County, California. Benefits: Within 14 calendar days after receiving a selling residential property owner’s application materials, the Fund will either agree to pay the amount of the claim, or obtain another appraisal of the residential property using the same criteria as the owner's appraisal. If the Fund obtains an alternate appraisal and the difference between the two appraisals is within 10% of the higher appraised Market Value, the Market Value for purposes of the residential property owner’s claim on the Fund will be equal to the average of the two appraised Market Values. If not, a third appraiser will be selected by the first two appraisers, and the Market Value determination in the Exhibit C third appraisal will be deemed the Market Value of the property. The owner and the Fund will be conclusively bound by the third appraisal. The difference between the Market Value of the residence, as so determined, and the property’s actual negotiated sale price will be paid by the Fund to the selling homeowner either at closing or within 10 calendar days after the Market Value of the residence has been determined, whichever takes place later. Market Value: Each appraisal obtained will determine the Market Value of the homeowner’s residential property as of the date of the appraisal and as if the Project had never been built. Claims: By submitting a claim to the Fund, the homeowner agrees to be bound by the terms of Program, and to accept reimbursement from the Fund for a loss in the Market Value of the owner’s residential property in exchange for foregoing any legal action to receive compensation for a decrease in the Market Value of the owner’s residential property that is caused by or results from the Project. Any offer that a participating owner enters into for sale of its residence must disclose that E&B has a right of first refusal to purchase the property for a price equal to the Market Value determined by the appraisal process without incurring any broker's commission. Any claim against the Fund must be submitted before the sale of the eligible residential property is completed; no claim will be considered or paid by the Fund after the closing of the sale of the residential property. Funding: E&B will ensure that, at all times during the Fund term, there is a minimum balance of $1,000,000 in the Fund, and E&B will ensure that at least $1,000,000 is in the Fund upon expiration of the six-year Fund term. E&B will regularly replenish the Fund up to the Funding Cap, as and if disbursements are made, to ensure that the Fund has readily-available funds to satisfy potential claims asserted by owners of eligible residential properties under the Program. E&B will also provide additional funding totaling a maximum of $4,000,000 from contributions based on 1.5% of gross project revenues on an annual basis until either a total of $4,000,000 has been contributed to the Fund from gross project revenues or the Funding Cap has been reached. Distribution: E&B will ensure that upon expiration of the Fund term, the Fund will have a remaining balance of at least $1,000,000 and up to a maximum sum of $5,000,000, depending on the total amount of claims that have been made against and paid by the Fund. The remaining amount in the Fund at the end of the Term shall be distributed to the then current owners of all otherwise-eligible residential properties located within 300 feet of the Project for which there has not previously been made any claim. The owner of each such residential property will be entitled to an equal, pro rata share of the amount remaining in the Fund at the end of the Fund term (after all appraisal costs and other Fund administrative expenses have been deducted). The pro rata share of the Fund balance to which each owner will be entitled will be based on the total number of properties entitled to share in the distribution. By way of example only, if at the end of the Fund Exhibit C term, there are 60 residential properties within 300 feet of the Project for which no claim has been made against, and no distribution received from, the Fund, then the owner of each such residential property will be entitled to 1/60 of the amount then remaining in the Fund after all appraisal costs and other Fund administrative expenses have been deducted. : Exhibit D EXHIBIT “D” CONDITIONS OF PROJECT APPROVAL Exhibit D includes: 1. Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this agreement) 2. Exhibit D-2 Additional Project Conditions 3. Exhibit D-3 Mitigation Measures/Mitigation Monitoring Plan- from Section 8.0 of Final Environmental Impact Report (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). Exhibit D Exhibit D-1 Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this Agreement) (Amendments to conditions necessary for consistency with Project Description, Mitigation Measures and other conditions and terms are reflected herein) SECTION 1. GENERAL 1. The testing phase for all production shall be a maximum of one year from the date drilling is initiated. 2. A minimum of one annual site audit shall take place to inspect for soil contamination as a result of accidental spills in any area not paved and expose. Auditor shall be hired by City. 3. The maximum number of days the work over rigs or any other rig (other than a drill rig) that is to be used on-site shall be 90 days per year, and shall be operated weekdays 8:00 A.M. to 6:00 P.M. excluding holidays. 4. In the event that a residence with solar panels is affected by shading, a site specific study paid for by the oil contractor shall be conducted to determine economic impact. 5. Pursuant to Assembly Bill 3180 the operation shall be monitored for all condition of the approval of which the City has responsibility which includes (but not limited to) noise monitoring and inspection of the site for proper maintenance. 6. The proposed plans shall be submitted to the State Division of Oil, Gas & Geothermal Resources for their review and recommendation; a. Any recommendation by the State Division of Oil, Gas & Geothermal Resources shall be taken into consideration prior to approval, and may be included as condition of approval. 7. Drill cuttings and other wastes, shall be collected in above ground containers and disposed of at an approved disposal site. Receipts for all disposal of waste product shall be provided within ten (10) days of disposal to the Public Works Director. Exhibit D-1 8. All requirements, standards, conditions stated within the oil Production Code, Chapter 21-A, of the City’s Municipal Code shall be met, unless more restrictive requirements are imposed through mitigation measures; where it cannot be clearly determined whether the City’s Oil Ordinance, Chapter 21-A or mitigation measure are more stringent, the appropriate City staff shall make a determination; appealable to the City Council. 9. Three (3) copies of final building plans including site, elevation, and floor plans shall be submitted for review and approval by the Planning Director prior to the issuance of any Building Permit. 10. The proposed development shall be in substantial conformance with submitted plans. Any minor modification shall be reviewed and may be approved by the Planning Director. 11. All wells must be drilled and completed within 55 months from the start of drilling of the first exploratory well in accordance with the following schedule: PHASE 1 SITE PREPARATION 6 MONTHS PHASE 2 DRILLING AND TESTING PHASE 12 MONTHS (Exploratory drilling, production testing) PHASE 3 FINAL DESIGN AND CONSTRUCTION PHASE 14 MONTHS (Permanent facility construction) PHASE 4 DEVELOPMENT AND OPERATIONS (DRILLING) 34 MONTHS (Development Drilling, 1 month per well) If the Drilling Contractor is delayed at any time in the progress of work by any act or neglect of the City of Hermosa Beach or any other governmental body having authority over this project, or by labor disputes, adverse weather conditions, by law, war, riots, strikes, Exhibit D-1 unavoidable casualties, unusual delays in receiving material or equipment or by an act of God, or causes beyond the control of the Drilling Contractor, when justified, the time period may be extended to a reasonable time to correspond with the delay incurred by the Drilling Contractor. SECTION 2. LAND USE 1. The maximum size for any storage tank of any type shall be forty feet in diameter and sixteen feet in height, appurtenances not included. 2. Prior to construction and prior to obtaining building permits for oil production, a complete soil analysis shall be performed and approved by all applicable governing agencies having jurisdiction over the project. 3. Not more than five tanks shall be installed, and shall be submerged in a concrete basin which contains 10% above the volume required by the State Division of Oil, Gas & Geothermal Resources and the Uniform Fire Code which is as follows: the volumetric capacity of the diked area shall not be less than the greatest amount of liquid that can be released from the largest tank within the diked area. The capacity of the diked areas enclosing more than one tank shall be calculated by deducting the volume of the tanks other than the largest tank below the height of the dike. 4. All wells shall be drilled and cemented in accordance with State Division of Oil, Gas and Geothermal Resources regulations to protect underground aquifers. 5. The electrical service systems shall be designed with sufficient capacity to minimize surging impacts. 6. The well cellars shall be concrete lined and shall be designed to hold contaminated run-off from on-site sources; or a sump shall be provided. 7. Solid state control console linked to a control system to perform energy conservation functions such as start/stop time programming of motor equipment, data logging of energy consumption and maintenance and service scheduling shall be provided. a. All Electrical machinery where possible shall have a minimum coefficient of Exhibit D-1 efficiency of 0.75. SECTION 3. PUBLIC SAFETY 1. The site shall be enclosed by a solid masonry or concrete wall with solid gates during all operations, protecting both against public entry, observation and attraction. A chain link fence to provide security is acceptable only through Phases 1 and 2. 2. Security personnel shall be employed at all times during the drilling stage (24 hours) and emergency phone numbers shall be posted during production Phases 2 and 4. 3. Signs warning of unauthorized entry and safety hazards shall be posted on all sides. 4. Access to facilities shall be limited to authorized personnel only. 5. Trees shall be maintained at a distance from all walls to prohibit children and others from unauthorized entry. 6. All site personnel shall be instructed on required safety procedures if hydrogen sulfide concentrations are encountered. Documentation of training and instruction shall be made available to the City Manager. 7. Both solid and liquid wastes shall be sampled and tested to determine if it needs to be treated as a hazardous waste. 8. An Oil Spill Prevention Control Countermeasures (SPCC) Plan and an Oil Drilling Contingency Plan will be Prepared for the Project and approved by the State Division of Oil, Gas and Geothermal Resources, and the City of Hermosa Beach Fire and Building and Safety Departments. 9. Drillsite and production facilities shall be constructed in accordance with the State seismic standards, and designed in accordance with U. B.C. seismic requirements for hazardous facilities. 10. A soils engineering report and engineering geology report prepared by a licensed Exhibit D-1 geologist and engineer shall be prepared and reviewed in conjunction with the plans for all physical improvements. Said report shall address potential seismic hazards, such as liquefaction, due to soils or geologic conditions. All recommendations contained in said reports shall be incorporated in the construction documents. 11. An emergency response plan, including a blowout prevention and control plan, shall be prepared for review and approval by the State Division of Oil, Gas & Geothermal Resources and the Hermosa Beach Fire Department. 12. When a leak or spill occurs, it shall be contained, the fluid shall be recovered and the area restored to its original condition. SECTION 4. FIRE SAFETY 1. Adequate fire detection and fighting equipment and supplies, approved by the Fire Department, shall be maintained on the drillsite and tank production facility at all times. 2. A supplementary analysis by a professional consultant shall be provided detailing any necessary improvements the Fire Department may need to prevent, and to halt oil related fires and shall also include the following: public notification, warning and evacuation plan. 3. Oil sumps, drip pans, etc. shall be cleaned at regular intervals to reduce fire hazards and prevent minor spills. 4. Oily rags, paper and miscellaneous waste shall be disposed of in an appropriate manner to reduce fire hazards 5. Signs warning of flammable fluids and prohibiting smoking shall be installed where appropriate. 6. The drillsite and production facility shall be protected by automatic fire detection sensors and suppression systems. The fire suppression systems shall include a tank- cooling sprinkler system. Exhibit D-1 7. Drilling operations shall be conducted in accordance with appropriate State Division of Oil, Gas & Geothermal Resources regulations and shall utilize all required blowout prevention equipment and safety devices. 8. Fire flows to service the operation shall meet Fire Department regulations. 9. All equipment necessary to contain an oil fire or blowout shall be provided and/or maintained on site and all fire personnel shall be trained on its use. SECTION 6. VEHICLE TRAFFIC AND CIRCULATION ON AND OFF SITE 1. All truck deliveries shall be limited to daylight hours (9:00 AM – 3:00 PM), Monday through Friday, except for an emergency situation, as defined by this agreement and reported to the City in accordance with the notification requirement, which have been reported to the Director of Public Works in advance of the delivery. 2. Operation of earthmoving equipment shall be limited to daytime hours between 8 AM and 6 PM. 3. Equipment deliveries shall be made only during daytime hours between 9 AM and 3 PM. 4. Project related truck travel shall be restricted to specific truck routes and access points as approved by the Public Works Department. 5. Signs shall be installed to direct detour traffic as approved by the Public Works Director. 6. The number of truck trips shall be limited to a maximum of 18 round trips per day, except in an emergency, as defined by this agreement and reported to the City in accordance with the notification requirement. 7. Maintenance Yard site access shall be designed to enable trucks to turn into the site without inhibiting traffic movement on Valley Drive or Sixth Street. 8. Minor curb radii reconstruction shall be done by the operator as determined by the Exhibit D-1 City Public Works depending on the length and necessary turning radii for project related trucks. 9. Area residents shall be notified of pipeline construction prior to commencement. Signs shall be installed to direct detour traffic. 10. All trucks arriving or departing the drill site shall be washed to prevent spillage of earth and all routes shall be swept and washed by the driller as required by the City. 11. An evaluation of the structural condition of the existing pavement shall be performed by a soils engineer on all access streets and the proposed truck routes prior to commencing any site preparation or construction and prior to the issuance of any necessary permits. The evaluation shall include as a minimum: a) the number, type, size and weight of trucks for export of materials or product, b) the number, type, size and weight of truck deliveries of building supplies, drilling supplies etc., c) the number, type, size and weight of equipment transported to the site, d) other associated transportation items, e) other anticipated loading. The evaluation shall contain recommendations as to the actions required to maintain said streets and routes in their current condition throughout the planned development phase, planned production phase, and in the close out phase. 12. The operator shall perform the actions on the existing pavement as recommended by the soils or highway engineer, the operator will hire a licensed contractor and provide street profiles, drawings, and engineering to the satisfaction of the Public Works Department prior to work commencing. 13. The City Council may restrict the use of certain street, alleys, or roadways in connection with the permittee’s operation. In the event any street, alley or roadway is Exhibit D-1 damaged by the permittee’s operations, such damages shall be paid for by the permittee upon demand by the City, and the failure to pay such damages, being the reasonable cost of the repair of any such damaged portions, shall be grounds for the revocation of the permit and the collection of such damages. SECTION 7. SANITARY SEWER 1. Use of sanitary sewer is prohibited, except for the minimal use associated with the office and restroom facilities. Any water from oil production shall be disposed in the four disposal wells. SECTION 8. NOISE /VIBRATION 1. Tripping will be restricted to daylight hours only. 2. Loudspeaker paging systems shall be prohibited. 3. Well workover rigs or any other rig that is used shall be operated only between the hours of 8:00 A.M. and 6:00 P.M. during daytime weekday hours only, excluding holidays, except in an emergency, as defined herein and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) shall be muffled to reduce noise to an acceptable limit. The operator shall use whatever means necessary, including but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing. 4. All oil maintenance equipment, vehicles and non-electrical motors shall be equipped with manufacturer approved mufflers or housed in a sound-proofing device. 5. Noise monitoring shall be conducted under the supervision of an independent certified acoustical engineer paid for by the permittee. Reports shall be submitted to the Planning Director within three working days after the completion of each phase of the monitoring. The monitoring shall include the following: a. Pre-drilling phase monitoring. Prior to the start of the drilling phase, noise measurements shall be obtained during the operation of the specific drilling rig which has been selected and the measurements shall be related to those Exhibit D-1 experienced at the nearest residential boundaries to the drilling site. In addition, the noise control measures which have been (or will be) applied to the rig as needed for compliance with the City of Hermosa Beach noise ordinances shall be identified. b. Start of Drilling. Noise measurements shall be obtained during the nighttime hours (10:00 P.M. to 7:00 A.M.) for at least six hours on each of the three nights within the five day period from the start of the drilling phase. Monitoring is to occur at the nearest residential boundary to the actual drilling operation. c. During the drilling phase. Noise monitoring shall occur during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each month during the drilling phase of the project. The noise level data obtained shall be compared to the City of Hermosa Beach Noise Ordinance standards by the Planning Department. Where an exceedence of the standards is identified, noise control measures shall be required. Production phase. Noise measurements shall be obtained during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each year during the production and completion phase.SECTION 9. LANDSCAPING 1. A Detailed Landscape Plan for Phases 2 (exploratory drilling and testing) and Phase 4, indicating the type, size and quantity of plant materials shall be submitted to the Planning Commission, and shall comply with Section 21A-2.9 of the Oil Code. 2. During Phase 2, test facility, landscaping consisting of 24” box, or larger size trees may be installed without permanent planting. 3. Minimum 24” boxed trees for Phases 2 and 4 shall be adequate in size to create a buffer effect to obscure visibility of oil production activity. Permanent trees planted around the perimeter of the site for Phase 4 shall be a minimum sixteen (16) feet high at planting. 4. Trees along the lot perimeter shall be provided to create a dense landscape buffer to the satisfaction and field review of the Planning Director. Exhibit D-1 5. The aesthetic impact of the exposed masonry walls on the west and northern sides shall be softened with the planting of climbing vines to the satisfaction and review of the Planning Director. 6. Landscaping shall be maintained in a neat and clean condition. 7. A complete automatic sprinkler system shall be provided prior to commencement of Phases 2 and 4. SECTION 10. AESTHETICS 1. The tanks, acoustical wrap and wall, and production facility shall be painted a neutral color to blend in with in with the surroundings; color shall be reviewed and approved the Planning Commission. 2. The use of architectural lighting beyond safety and security requirements shall be prohibited. 3. The site for drilling equipment and the storage facilities shall be depressed in combination with walls so that the visual impact is minimized. 4. All outdoor lighting shall be shielded and directed inward of the site. 5. Lighting shall be limited solely to the amount and intensities necessary for safety and security purposes. 6. Certain activities which might involve unshielded lighting (i.e., site preparation and restoration) activities shall be limited to daylight hours and thus not require nighttime lighting. 7. A wall maintained graffiti free of a minimum of 12 feet in height shall be provided; wall materials shall be reviewed and approved by Planning Director. During test drilling minimum 6’high fencing shall be provided. See Mitigation Measures for Noise and Vibration in D-3 below for additional requirements for this wall. Exhibit D-1 8. Tanks shall be submerged 6 to 8 feet or more below grade and will be adjacent to the 35-foot high privacy wall. 9. If the drill derrick remains idle for more than one year, review and approval by the City Planning Commission or the City Council shall be required, or the derrick shall be dismantled at the expense of the operator. 10. All production equipment and structures shall be painted to blend with the surrounding environment with review and approval by the Planning Director. 11. On-site signs shall be limited to those needed for public health and safety. 12. All derricks masts hereafter erected for drilling, re-drilling or remedial operations or for use in production operations shall be removed within 45 days after completion of the work unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources of the state. 13. The operator shall diligently and continuously pursue drilling operations until the all 30 oil wells and all four (4) water disposal wells are completed or abandoned to the satisfaction of the Division of Oil, Gas & Geothermal Resources of the state and upon completion or abandonment shall remove all drilling equipment from the drill site within 45 days following completion or abandonment of the well unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources. SECTION 11. ODORS/VAPOR/AIR POLLUTION 1. A vapor recovery system shall be installed to recover 99% of hydrocarbon emission during storage and transfer of crude oil. 2. Raw gas shall not be allowed into the atmosphere. 3. Gas and vapor detection systems shall be installed at appropriate locations. 4. All project site activities shall be conducted such as to eliminate escape of gas in accordance with best available control technology and practices which shall be reviewed and approved by the City. Exhibit D-1 5. All requirements of AQMD shall be met at all times. 6. A state-of-the-art scrubber shall be employed for the exploratory phase to eliminate odors from waste gases, and any flame shall be enclosed. 7. Tanks shall be designed and located so that no odors or fumes can be detected from the adjacent areas outside the exterior walls of the project. 8. Operators shall not blow lines to the atmosphere, except in an emergency, as defined below in Section 14. and reported to the City in accordance with the notification requirement. 9. Construction equipment and vehicles shall be maintained in proper tune. 10. Odorless drilling muds shall be used. 11. Well tubing and rods shall not remain out of the well during workover operation less than 8-hours. The tubing will be surface washed with a detergent solution to remove odor bearing residual hydrocarbons if exposed longer than 8-hours. 12. Odor control will be further enforced by the SCAQMD under Rules 402, 466.1 of their regulations, and the commercial recovery system shall be employed for the permanent facility. 13. There shall be no open flames allowed. 14. The permittee shall monitor drilling mud during drilling on the site for odorous substances and take such measures to eliminate any odor which would be perceptible outside the drill site. 15. The permittee shall undertake no refining process or any process for the extraction of products from natural gas, except for such minor processeds as necessary to make natural gas acceptable to the City gas mains for domestic use. [correction of typo] 16. Well cellars shall be maintained in a clean and efficient manner to prevent waste accumulation and shall be frequently steam cleaned. Exhibit D-1 SECTION 12. GRADING/STORM WATER/SITE RUNOFF 1. Grading shall not be performed when wind speeds exceed 20 mph. The contractor shall maintain a wind speed monitoring device on site during grading operations. The contractor shall continually keep the soil moist during grading operations. At no time shall any dust be allowed to leave the work site. 2. Normal wetting procedures shall be employed during grading. Review and approval of procedure shall be by Public Works Director. 3. Graded surfaces shall be paved or landscaped per approved plan. 4. Project site shall be graded so that all contaminated runoff is collected and treated on-site and disposed of according to all laws. 5. Site shall be graded in a manner so that all hazards or contaminated fluids and runoff are directed toward a cellar and approved pit and disposed of properly. 6. No water from the site shall be allowed to enter the storm drainage system or any public area. 7. No water from the site shall be allowed to surface flow across the public beach. SECTION 13. PIPELINE CONSTRUCTION 1. The pipeline operators shall adhere to all applicable federal, state, regional, and local statutes governing design, construction, operation, and maintenance of the pipelines and related equipment. 2. A detailed pipeline survey shall be conducted in order to locate existing pipelines prior to excavation for pipeline construction. 3. A responsible agent paid for by the applicant shall be present during excavations. 4. Areas of construction and maintenance activities shall be delineated by signs, Exhibit D-1 flagmen, pavement markings, barricades, and lights, as determined by permit requirements of all local agencies. 5. Where pedestrian activities are affected during construction, appropriate warning signs shall be installed and pedestrians will be diverted. Pedestrian access to businesses and residences will be maintained during construction. Special facilities, such as handrails, fences, and walkways shall be provided, if necessary, for the safety of pedestrians. 6. Obstruction of emergency vehicle operations will be partially mitigated by ensuring that providers of emergency services are kept informed of the location, nature, and duration of construction activities so alternate routes can be chosen. It is essential that fire department access is maintained to all buildings adjacent to construction activities. For this reason, a minimum of at least one lane for streets undergoing construction will be kept open at all times, and fire hydrants in construction areas will remain accessible. 7. If public transit stops along pipeline routes need to be temporarily relocated during construction, the applicant shall provide signs directing riders to the temporary stop location. 8. When hauling excavated and waste materials from construction sites, substandard roadways will be avoided and local jurisdiction regulation governing hauling vehicles will be adhered to. 9. Pipeline construction and operation of earth moving equipment shall be limited to daylight hours between 8:00 AM and 3:00 PM and shall not be permitted during weekend periods. Additionally, construction-related trucks should not be operated during peak traffic hours of 7 to 9 AM and 3 to 7 PM. Pipeline construction at major intersections shall be limited to daylight hours between 9:00 AM and 3:00 PM to avoid peak traffic periods. 10. Equipment deliveries shall be made only during daytime hours between 8 AM and 3 PM. 11. In order to reduce visual impacts and possible safety hazards, storage of pipes and Exhibit D-1 other materials, as well as construction equipment, shall not be permitted on any street during non-construction hours. 12. Area residents within 300’ shall be notified about the pipeline construction operation prior to commencement of construction. 13. Detour signs on pipeline construction routes shall be placed at appropriate locations. 14. Steel plates covering pipeline excavation trenches shall be placed to permit traffic movement during non-construction hours. 15. Pipelines shall be designed with ample safety factors, pressure-tested prior to being placed in operation, and monitored for corrosion once in operation. 16. Safety shut-down devices that respond to drops in pipeline pressure shall be incorporated into the project in order to stop the flow of the pipeline contents in case of a pipeline rupture. 17. Groundwater level and land subsidence shall be monitored to insure that pipeline damage does not occur as a result of geologic and hydrologic phenomena. The annual subsidence survey shall include a report to the City on monitoring efforts to insure pipelining damage has not occurred. 18. Pipeline construction along Valley Drive shall be approved by the Director of Public Works prior to issuance of a permit. 19. Pipeline construction shall not occur in the area known as the Hermosa Valley Greenbelt except that the permittee may connect to West Basin Municipal Water District’s existing reclaimed water line for the purposes and as described in Exhibit B to this Agreement. 20. Storage of materials shall not be allowed on the Hermosa Valley Greenbelt. The storage or dumping upon the greenbelt of any materials, construction equipment, debris, oil drilling equipment, drilling rigs, piping, etc., and any and all equipment and vehicles necessary for the construction and maintenance of the pipeline and oil development site shall be prohibited. The use of the greenbelt as a staging area for Exhibit D-1 construction of the oil facility or pipeline shall be prohibited. There shall be no parking or standing of any vehicles on the greenbelt for any time period. 21. Trenches shall be covered during non-working hours to minimize traffic circulation problems. SECTION 14 Definition and notification requirements for emergency situations: I. For purposes of these conditions, “Emergency” is defined as follows: A threat to the health and safety of persons in the surrounding area to the drill site and the following conditions which require immediate action: A. Conditions which could lead to potential spill or well blowout: 1. Entry of oil and gas into the wellbore while drilling, tripping or out of the hole which may be indicated by one or more of the following: a. Pit volume gain b. Well flowing with pumps off c. Flow rate increases with circulation d. Improper hole fill-up on trips e. Sudden increase in drilling rate f. Pump pressure decreases and pump rate increases g. Decrease in returning mud rate h. Sloughing shale i. Changes in mud salinity and/or mud flow properties 2. Lost circulation or loss of ability to circulate 3. Casing or wellhead failure while drilling 4. Stuck pipe and/or equipment during any of the following operations: Exhibit D-1 a. Drilling b. Tripping drill pipe and tools c. Wireline logging d. Drill stem testing e. Running casing f. Perforating and stimulating completion interval 5. Loss of rig power or equipment failure while drilling or tripping. B. Injuries to personnel at the Drill Site C. Conditions which could reduce the stability and safety of the rig and production equipment: 1. Natural events: a. Excessive winds, rain and lightning b. Floods c. Subsidence d. Earthquakes 2. Other events a. Riots/Demonstrations b. Fire II. Notification Required: In the case of an emergency, as defined above, the permittee shall give immediate notice to the City of the occurrence of the emergency event. The City will provide the permittee with a list of phone numbers of City personnel to call for notification purposes. A written notice, including a detailed description of the emergency condition, and the actions take and/or proposed to be taken to correct the situation, shall be provided within 24 hours of the occurrence of the emergency event. SECTION 15 Exhibit D-1 1. Each of the above conditions is separately enforced, and if any of the conditions of approval is found to be invalid by a court of law, all the other conditions shall remain valid and enforceable. 2. The subject property shall be developed, maintained and operated in full compliance with the conditions of this grant and any law, statute, ordinance or other regulation applicable to any development or activity on the subject property. Failure of the permittee to cease any development or activity not in full compliance shall be a violation of these conditions. Exhibit D-2 Exhibit D-2 ADDITIONAL PROJECT CONDITIONS A. GENERAL E&B (herein “Operator”) is the owner and Operator of this project, responsible for implementing and complying with all applicable conditions. A-1 Project Description This Development Agreement, and associated conditions, is based upon and limited to the project described in Exhibit B to the Development Agreement. A-2 Acceptance of Conditions Execution of this agreement shall be deemed as acceptance of all conditions herein and waiver of any objections thereto. A-3 Costs of Implementing and Enforcing Conditions The Operator shall be fully responsible for all reasonable costs and expenses incurred by the City or any City contractors, consultants, or employees, in implementing, monitoring, or enforcing this approval, including but not limited to, costs for permitting, permit conditions implementation, mitigation monitoring, compliance monitoring, reviewing and verifying information contained in reports, undertaking studies, research and inspections, administrative support, and including the fully burdened cost of time spent by City employees on such matters. Draw-Down Account. The Operator shall maintain a draw-down account with the City, from which actual costs will be billed and deducted for the purpose of defraying the expenses involved in the City’s review and verification of the information contained in any required reports or plans and any other activities of the City, including but not limited to: enforcement, permitting, inspection, coordination of compliance monitoring, administrative support, technical studies, and the hiring of independent consultants. The initial amount to be deposited by the Operator shall be $500,000. In the first year, if withdrawals from the Exhibit D-2 account have reduced its balance to less than 50 percent of the amount of the initial deposit ($250,000), the Operator shall deposit $50,000 in supplemental funds within 30 business days of notification. After the first year, if the balance in the draw-down account is reduced at any time to $50,000 or less, the Operator shall deposit $50,000 in supplemental funds on each occasion that the account is reduced to $50,000 or less within 30 business days of notification. There is no limit to the number of supplemental deposits that may be required. At the discretion of the Operator, the amount of an initial or supplemental deposit may exceed the minimum amounts specified in this subsection. The City Manager or Designee may, from time to time, increase the minimum $50,000 figure to account for inflation or the City’s experience in obtaining funds from the account. Operator shall be entitled to reasonably review during normal business hours the expenditures from the deposit to ensure the expenditures are related to the Project. Should Operator object to an expenditure, Operator shall submit a request in writing to the City Manager for a detailed written explanation of the expenditure. Following receipt of the written explanation from the City and should Operator continue to object to payment of the expenditure, it shall file such objection in writing with the City Council explaining why such expenditure is not appropriate from the draw down account or why the amount of the expenditure is not appropriate for the work. Following City Council consideration of the matter and decision, the Council’s determination on the expenditure shall be final and binding on the parties. A-4 Substantial Conformity The Project shall be designed, constructed, and operated in substantial conformity with the Project Description in Exhibit B and all conditions of approval set forth in this Exhibit D. A-5 Conflicts Between Conditions In the event that any condition or mitigation measure contained in this development agreement is determined to be in conflict with any other condition contained herein, then where principles of law do not provide to the contrary, the condition most protective of natural environmental resources and public health and safety shall prevail to the extent feasible. A-6 Facility Throughput and Source Limits All facilities constructed under this approval shall be limited to the following maximum Exhibit D-2 production volumes: Phase 2 shall be limited to 800 barrels of oil and up to 250,000 standard cubic feet per day of gas. Phase 4 shall be limited to 8,000 barrels of oil per day and 2.5 million standard cubic feet of gas per day. A-7 Alternative Mitigation if Condition Invalidated If any condition of this project is invalidated by a court of law in a final adjudication, this approval shall be suspended pending imposition of a substitute condition or mitigation measure that will achieve equivalent results or reduction of impacts. A substitute condition or mitigation measure shall be incorporated into the Development Agreement in accordance with Section 4.2 of the Agreement- Changes and Amendments to Project before the suspension shall be lifted and the project is allowed to proceed. A-8 Applicability of Conditions to Construction and Operations These conditions are intended to apply to the E&B Project during both the construction and the operation of the permitted facilities. The term "operations" shall be understood to encompass both construction and operation phases unless such an interpretation would be inappropriate. A-9 Compliance Plans to have Same Force and Effect as Conditions All elements of the plans and programs required under this Exhibit D shall have the force and effect of a project condition. The remedies available to the City upon Operators failure to comply with such plans and programs includes but is not limited to those remedies which are available to the City upon Operator’s failure to comply with a project condition. A-10 Performance Security The Operator shall be subject to the following provisions: a. Performance Bond. Prior to issuance of the first drilling permit, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in a commercially reasonable amount to be determined by the City Manager taking into account existing bonds to the extent they overlap, payable to the City and executed by a corporate surety acceptable Exhibit D-2 to the City and licensed to transact business as a surety in the State of California to cover the exploratory phase of the Project. The exploratory phase performance bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, financing spill response connected with exploration. Should the Project proceed to the oil production phases of the Project, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in the sum to be determined by the City Manager, payable to the City and executed by a corporate surety acceptable to the City and licensed to transact business as a surety in the State of California Such bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, financing spill response and shall be in a format and include terms approved by the City Manager connected with the production phases of the project. These bonds shall be in addition to any other bond required by law (including without limitation Public Resources Code Sections 3202, 3204, 3205, 3205.2 and 3206 and 14 C.C.R. § 1722.8. These bonds shall satisfy the bond requirement in Section 23 of the Lease, and in the City Manager’s discretion, may satisfy the bond requirement in Condition E-1 below. b. Change of Operator. The performance bond(s) required above shall continue in force for one (1) year following any sale, transfer, assignment, or other change of Operator of the Project Site, or of the current Operator’s termination of activities at the Project Site. The City may release said bond prior to the end of the one (1) year period upon satisfaction by said Operator of all its obligations. Notwithstanding the foregoing, the performance bond shall not be terminated or released upon the sale, transfer, assignment, or other change of Operator until the new Operator has delivered a replacement bond complying with the provisions of this section. c. Funding Options. At its sole option, the City may accept Certificates of Deposit, Cash Deposits, or U.S. Government Securities in lieu of commercial bonds to meet the above bonding requirements on terms approved by the City Manager. B. PROJECT REVIEW B-1 Review by Community Development Director Prior to commencement of construction or operation for Phase 1, 2, 3 and 4, and for subsequent modifications, Operator shall submit to Community Development Department Exhibit D-2 relevant construction plans, engineering drawings and supporting text demonstrating compliance with the relevant conditions of this approval. Construction or operation may not commence until City has reviewed and approved the appropriate submittal, consistent with applicable conditions. The City agrees to make a good faith attempt to review the submittal for completeness as expeditiously as possible, which may involve retaining consultants with the appropriate technical expertise to review the submittal, and to provide a list of deficiencies. When the submittal is deemed complete, the City agrees to provide written notice of approval of construction plans as expeditiously as possible, or indicate in writing the conditions which have not been met, or notify the permittee that the Community Development Director review shall be completed within a period of time specified by the City, based on sound engineering practices. When such conditions have been met and city confirms in writing, construction or operation may be commenced. The City may require post-construction inspections or review of as-built drawings, as necessary to confirm consistency with the approved submittal. B-2 Condition Scheduling Conflicts In the event that scheduling requirements among or between conditions in this approval (or with this approval and conditions imposed by other agencies) conflict with respect to timing, Community Development Department (in consultation with other departments, agencies, and Operator as appropriate) shall resolve such conflict. B-3 Authority to Begin Construction Operator shall not commence construction without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to construction of Phase 1, Phase 2, and Phase 3, as specified by this approval, have been satisfied. B-4 Authority to Begin Operations After construction and prior to start-up, Operator shall not commence operations without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to start-up, as specified by this approval, have been satisfied. Start-up, for purposes of this condition, is defined as the introduction of hydrocarbons into Exhibit D-2 the facility production equipment for both Phase 2/4. C. MANAGEMENT AND MONITORING C-1 Environmental Quality Assurance Program (EQAP) Under EM-1 below in Exhibit D-3, Operator is required to provide funding for implementation and administration of an environmental monitoring program, including an environmental monitor (“Monitor”), to ensure compliance with the environmental conditions of approval. The Monitor shall assist in condition compliance and mitigation monitoring for all applicable construction and operational stages of the project. The monitor shall be under contract with the City and funded by the Operator. 1. In accordance with EM-1, the Monitor will create a monitoring program for the project that includes a post-construction component to monitor measures that extend beyond the construction period and the operational phase of the project. 2. The Monitor will prepare a working monitoring plan that reflects the approved environmental mitigation measures and conditions of approval. The monitor’s plan will include: a. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; b. Lines of communication and reporting methods; c. Daily and weekly reporting of compliance; d. Construction crew training regarding environmental sensitivities; e. Authority to stop work; and f. Action to be taken in the event of non‐compliance. 3. Under EM-1 and other conditions, Operator is also responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, noise engineer, etc.). The Monitor will coordinate the monitoring efforts of the specialists, including communication with the City and responsible Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). To assist the Monitor in creating and implementing its working monitoring plan, Operator shall prepare and obtain Community Development Department approval of an Environmental Quality Assurance Program (EQAP) prior to commencement of Phase 1 construction activities, and obtain Community Development Department approval of a revised EQAP Exhibit D-2 prior to commencement of Phase 2, Phase 3, construction activities and Phase 4, Operations. The approved EQAP and all approved revisions to the EQAP shall be submitted to the Monitor prior to commencement of each Project phase. This EQAP shall encompass both construction and operations phases of the E&B Project, and shall describe the steps Operator will take to assure compliance with the conditions contained in the approval for this project. The EQAP is intended to provide a monitoring and reporting framework for compliance with all conditions, programs and plans specified by these conditions and the mitigation measures. As such, it will become a comprehensive reference document for the City, the Monitor, other agencies, and the public regarding the E&B Project. The EQAP shall include, without limitation: a. All plans, as required by these conditions and mitigation measures, relevant to construction and operation of the permitted facilities (including the Risk Management Program, SIMQAP, Emergency Response Plan, Hazardous Material and Waste Management Plan, Site Security Plan, and Fire Protection Plan). To the extent there is any overlap or redundancy between plans required under Exhibits D-2 and D-3, upon E&B request the Monitor may in its discretion authorize E&B to combine required plans into one submittal; b. Provisions for regularly communicating with and reporting to the Monitor; c. Provisions for ensuring knowledge of and compliance with these conditions; d. Provisions for the submittal to Community Development Department and the Monitor of monthly compliance reports throughout construction and annual summary reports during operations unless more frequent reporting is deemed necessary by Community Development or the Monitor. Upon receipt of compliance reports, Community Development Department or the Monitor shall advise Operator of what additional compliance items require reporting prior to the next report. These compliance reports shall describe: 1. Project status, including but not necessarily limited to: i. the extent to which construction has been completed on various project phases ii. the background and experience of the construction labor force Exhibit D-2 iii. the rate of production/throughput during operation, iv. environmental planning and implementation efforts, and v. any revised time schedules or timetables of construction and/or operation that will occur in the next one-year period. 2. Condition compliance, including but not necessarily limited to the results of the specific mitigation requirements identified in these conditions and any compliance plans. 3. Results and analyses of all data collection efforts being conducted by Operator pursuant to these permit conditions. d. Copies of all local, state, and federal permits relative to the E&B Project, and any amendments thereto. The EQAP shall be updated regularly to include all up-to-date compliance plans required under these conditions of approval. C-2 24-Hour Emergency Contact Prior to issuance of the Permit for Phase 1, Operator shall provide to the Community Development Department and the City Fire Department the current name and position, title, address, and 24-hour telephone numbers of the person in charge of the facility, person in charge of construction, and other representatives who shall receive all orders and notices, as well as all communications regarding matters of condition and permit compliance at the site and who shall have authority to implement a facility shutdown pursuant to this agreement or other City ordinances. There shall always be such a contact person(s) designated by the Operator. One contact person shall be available 24 hours a day in order to respond to inquiries received from the City, or from anyone in case of an emergency. If the address or telephone number of Operator’s agent should change, or the responsibility be assigned to another person or position, Operator shall provide to Community Development Department the new information within 24 hours of the effective date of such change. Exhibit D-2 C-3 Operator to Provide Copies of Permits to Community Development Department Operator shall furnish to Community Development Department and Monitor copies of all local, state, and federal permits relative to the E&B Project within 30 days of receipt by Operator. C-4 Pipeline Construction Confined to Right-of-Way All pipeline construction activities, including work areas and staging and storage areas of pipe, shall be confined to the area defined in the encroachment permit. C-5 Capacity and Throughput Reports Operator shall report to Community Development Department and Monitor the volumes and rates of: (1) inlet volumes; (2) transferred for sales into the Southern California Gas Company transmission line; and (3) Oil volumes transported to Pipeline. Reports shall be made on at least a monthly and annual basis and supporting documentation will be provided upon request from Community Development Department or Monitor. Upon approval from the Community Development Director and the Monitor, these reports may be combined with and submitted at the same time as Royalty Statements under Section 4 of the Lease. C-6 Risk Mitigation Program A Risk Management Program to substantially reduce the risks of project-related accidents which may result in loss of life and/or injury, and damage to property and/or the natural environment shall be submitted for approval to the Hermosa Beach City Community Development, Fire and Public Works Departments. Other City departments, as deemed necessary, may be consulted. All reasonable costs associated with this City review shall be borne by Operator. Operator shall be entitled to participate fully in the review process. The Program shall include all appropriate construction plans, Process Hazards Analyses (PHA), and Hazard and Operability Studies (HAZOPs) for the proposed facility and ancillary equipment to the City who may employ a third-party technical review in order to evaluate project design and help identify possible design hazards prior to issuance of ministerial permits. The HAZOPs shall be reviewed and approved by the City prior to construction for each Phase of the project. This review shall also evaluate all mitigation identified in the EIR. Exhibit D-2 The City may require as-built inspections and the submittal of as-built drawings for approval prior to the operation of any plant modifications. C-7 Safety Inspection, Maintenance And Quality Assurance Program Operator shall submit a detailed Safety Inspection, Maintenance and Quality Assurance Program (SIMQAP) for all facilities and pipelines which shall be implemented during construction and operations. Separate SIMQAP plans may be submitted for Phase 1 and Phase 2/3/4 activities. The SIMQAP shall be reviewed and approved by the City, including the Hermosa Beach City Community Development Department, Hermosa Beach Fire Department and the Monitor. Other City departments, as deemed necessary, may be consulted. The SIMQAP for construction shall be approved prior to construction, and the SIMQAP for operation shall be approved prior to operation for each Phase of the project. The plan is a dynamic document and, as such, updates including new procedures, safety and maintenance technologies and processes, shall be reviewed jointly by Operator and the City. The SIMQAP shall be revised as appropriate. The SIMQAP shall include, but not be limited to, evaluation of staffing levels for safe operation of the plant in emergency situations, establishing procedures for review of safety inspection records, regular maintenance and safety inspections, periodic safety audits, development of safety system testing protocols, training and experience standards for personnel and use of simulation techniques in training programs, inspections of all trucks carrying hazardous and/or flammable material prior to loading, monitoring of critical safety devices and systems, and review of the routing of all trucks carrying hazardous material. Operator shall implement the approved plan and shall provide for involvement of the Monitor, City staff, or its consultants in all inspections as appropriate. Prior to construction and operations, Operator shall demonstrate that employees (and subcontractors) are trained in the safety, inspection, maintenance and operations requirements of the project. All costs associated with this review process shall be borne by Operator. C-8 Emergency Response Plan Operator shall submit to the applicable City Departments and the City Fire Department an Emergency Response Plan (ERP) that addresses response procedures to be implemented by Operator for accidental events that pose significant threats to public health and safety, property, or the environment. Exhibit D-2 The ERP shall be reviewed and approved by the City Fire, Community Development and Public Works Departments prior to commencement of drilling operations. Separate ERPs may be required for Phase 1 and Phase 2/3/4 activities. The ERP shall include specific measures to avoid impacts on cultural resources, sensitive habitats, and sensitive biological resources identified in the project EIR whenever possible without affecting emergency response. Operator shall demonstrate the effectiveness of its ERP by responding effectively as determined by Fire to one emergency response drill prior to Phase 1 and prior to approval of the Plan by Fire. The ERP shall be submitted sufficiently prior to Operator’s projected start-up date so as to allow reasonable time for review and the planning of a drill required prior to ERP approval. The ERP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when warranted to incorporate new planning strategies or procedural changes, new technologies, and the acquisition of more effective, feasible response equipment as it becomes available. Any changes shall be submitted to the City Fire, Community Development and Public Works Departments for their review and approval, prior to implementation. Operator shall demonstrate the ongoing effectiveness of the ERP by responding to no more than two surprise drills each year which may be called by the City. If critical operations are underway, Operator need not respond to the drill at that time but shall explain the nature of the critical operations and why response is not possible. The City may then call for an additional surprise drill in the same year. Operator shall implement all reasonable changes based on review of drill performance, which will further enhance overall emergency response planning and capabilities. Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-9 Hazardous Material and Waste Management Plan Prior to start-up, Operator shall submit a Hazardous Material and Waste Management Plan (HMWMP) to the City Fire Department and Community Development Department for all facilities. The HMWMP shall be reviewed and approved by Fire and Community Development prior to start-up. The Plan shall demonstrate compliance with the provisions of the Uniform Fire Code as adopted in Chapter 15 of the Hermosa Beach Municipal Code and the provisions of the Health and Safety Code §25500 et seq, Chapter 6.95 Business Plan Requirements, with the Exhibit D-2 exception of emergency response procedures which are complied with above. The Hazardous Material and Waste Management Plan shall include but not be limited to the following: a. Locations and methods for storing hazardous materials and wastes, both within the facility and along the OIL pipeline right-of-way. b. Treatment procedures, or justification where none are used, to reduce the hazardous nature of the materials before they are permitted to leave the site. c. Specific routes for transportation of hazardous waste materials to Class I disposal sites consistent with City policy. d. Letter of commitment that the materials are transferred by a carrier licensed in hazardous material transport. e. Letter of commitment ensuring complete accounting of intake, processing, and exit of hazardous material and wastes. f. Detailed description of a monitoring system to be installed, capable of detecting hazardous material and wastes that may escape from primary storage devices. g. A revised Hazardous Materials Business Plan which accurately reflects the revised chemical inventory of the project site to Environmental Health Services for review and approval, in accordance with the California Health & Safety Code, Chapter 6.95, Section 25,500 et seq. The HMWMP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when parties mutually agree it is warranted to incorporate new planning strategies, changes in procedures, new technologies, or changes in materials, or when required by law. Any changes requested by Operator or City shall be submitted to Fire and Community Development for their review and approval, prior to implementation. C-10 Site Security Plan Exhibit D-2 Prior to issuance of a Permit for Phase 1, Operator shall submit to the Community Development and the Hermosa Beach City Police Department for review and approval a site security plan. The plan shall describe the procedures to be implemented by Operator which will prevent intentional damage to the drilling and production facilities which may result in environmental damage or public safety hazards. The plan shall include placement of security cameras to the satisfaction of the Community Development and Police Departments, and employment of security personnel at all times during drilling stages (24 hours) (see condition 3.2 in D-1) and employment of security personnel from dusk until dawn at all other times. The plan shall be reviewed and revised as warranted to require incorporation of new planning strategies, new technologies or changes in plant operation, and changes in notification procedures. C-11 Fire Protection Plan All E&B Project facilities shall have fire protection features installed in accordance with the provisions of an E&B Project Fire Protection Plan (FPP), and as such features may be required under this Exhibit D. All facilities, construction activities, process equipment, and fire protection equipment shall comply with the standards of the National Fire Protection Association (NFPA), American Petroleum Institute, Uniform Fire Code as adopted in Chapter 15, Building and Construction of the Hermosa Beach Municipal Code, and the Hermosa Beach City Fire Department. In the event of a conflict between these standards, the Fire Marshal, in consultation with the Operator, shall make a cost/benefit decision regarding which standards apply. Prior to construction, Operator shall receive Fire Department approval of an FPP which addresses both construction and operation of the E&B Project. Operator shall distribute copies of the approved contingency plans to applicable City Departments and the City Fire Department. All plan recipients are to be notified of contingency plan changes via formal contingency plan updates. Separate FPPs may be submitted for Phase 1 and Phase 2/3/4 activities. The FPP shall include, but may not be limited to, discussions of the following:  Onsite firefighting equipment and systems  Fire and detection  Access  Vegetation management  Employee training and safe practices Exhibit D-2  Process control and monitoring analysis  Drainage and containment  Safety, inspection (including City inspectors) and maintenance practices Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-12 Prevention of Internal Pipeline Corrosion Operator shall implement techniques to prevent internal corrosion in accordance with the requirements of the California State Fire Marshal (Title 5 §51010-5-019 of the California Government Code), 49 CFR 192 Parts 150, 475 and 477, and 49 CFR 195.418 as part of the Oil and pipeline maintenance procedures. The internal inspection records shall be submitted to and reviewed by the appropriate governmental agencies. Such activities shall include routinely scheduled pigging of the pipeline to remove pockets of accumulated fluids that contribute to internal corrosion (such as hydrogen sulfide, carbon dioxide, and water), the use of corrosion inhibitors and corrosion coupons, and periodic testing by a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents, cracks and other defects have occurred. Specific measures are discussed below: a) Whenever any section of the pipelines are removed for any reason, they shall be inspected for possible internal corrosion and records retained for inspection by the State Fire Marshal. b) The pipeline shall be tested with a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents cracks and other defects have occurred. State-of- the-art pigging will be capable of defining wall-thickness contours around any area of reduced wall thickness. The smart pigging will be done prior to operation of the Oil and natural gas pipelines and at a subsequent interval to be determined by the California State Fire Marshal. A program of maintenance shall be developed to ensure that permits to perform the work are obtained as soon as possible and that pipeline defects are rectified within one month of securing the necessary permits for severe defects, and within six months for moderate defects. This procedure shall be noted in the SIMQAP and receive approval by the SSRRC prior to operations of either the OIL or natural gas pipelines. Exhibit D-2 C-13 Prevention of External Pipeline Corrosion Operator shall undertake the following provisions to avoid external pipeline corrosion: a) The Oil and natural gas pipelines shall be coated to reduce the potential for external corrosion. Final selection of pipeline coating will be demonstrated, to the satisfaction of the California State Fire Marshal, that the selected coating would provide the maximum level of protection of available coatings for all expected operating conditions; and b) A baseline pipe-to-soil cathodic profile and reading shall be obtained after the pipeline has been installed, but before any cathodic protection facilities are connected. Other utilities shall disconnect their bonds as well. This measure shall be included on the construction plans which shall be reviewed by the City. C-14 Pipeline Hydrotesting The oil and natural gas pipelines shall be hydrotested prior to operation, and every five years thereafter or sooner if warranted by major ground movement that has the potential to undermine the structural integrity of the pipeline. This procedure shall be noted in the SIMQAP which shall be reviewed and approved prior to operations. C-15 Structural Support for Underground Utilities Operator shall provide structural support for underground utilities in and near the construction area during work in the trench and backfilling operations to prevent damage to such facilities during construction activities. C-16 Underground Utility Damage Operator shall halt work in the immediate vicinity in the event of inadvertent damage to an underground utility, until the owner of the utility has been contacted and repairs have been effected. C-17 Underground Pipeline Warning Marker A plastic ribbon or other suitable material shall be buried 12 to 18 inches above the oil and Exhibit D-2 natural gas pipelines and shall cover the length of the pipeline. The material shall be brightly colored and be labeled with a warning that this area contains a hazardous liquid pipeline trench. This measure shall be noted on the design and construction plans to be reviewed and approved by the City. C-18 Pipeline Route Warning Signs The entire pipeline route shall be marked with pipeline warning signs a minimum of every 500 feet. Spacing of markers may be greater in agricultural areas provided markers are clearly within sight of each other. Bright colored markers shall be installed above new pipelines that extend offsite of the proposed facility. This type of measure helps reduce the likelihood of external mechanical interference, of which third party damage associated with excavation near the pipelines is the most common cause of pipeline failures. C-19 Underground Service Alert Notification Operator shall notify owners through the office of Underground Service Alert of any underground facilities (including electrical, water, petroleum pipelines, fiber-optics and agricultural water delivery and drainage pipelines) 48 hours in advance of excavation in the vicinity of these facilities. Operator shall have an electrical contractor on-call at all times during construction near the potentially affected facility to repair any circuits if required by the owner in the event they are damaged during construction. The appropriate response to hazards associated with damage to natural gas pipelines will be determined in consultation with Southern California Gas Company. The City Fire Department shall be notified of the schedule for construction activities in the vicinity of natural gas and other oil pipelines. C-20 Finished Pipeline Route Maps Upon completion of pipeline construction, Operator shall provide all jurisdictional agencies with at least two copies of maps showing the finished pipeline route and shall include locations accessible by fire department emergency response vehicles. Said maps shall be 7 1/2 minute quadrate scale, (one inch equals 24,000 inches), and shall represent topographical features. C-21 Supervisory Control and Data Acquisition and Emergency Shutdown Systems Exhibit D-2 The pipeline supervisory control and data acquisition (SCADA) and Emergency Shutdown (ESD) systems, including inspection, maintenance and quality assurance procedures for the SCADA and ESD systems, shall be reviewed and approved by the Fire Department and the Building Department and Public Works Department prior to operations of either the oil or natural gas pipelines, and as appropriate thereafter. The SCADA and ESD systems shall comply with the provisions of Fire Department Development Standard No. 7 and the National Electrical Code Article 760. Operator shall conduct a comprehensive safety and reliability analysis of the SCADA system as well as the processing facility and oil and natural gas pipelines control room prior to commencement of pipeline operations, and as appropriate thereafter. The analysis shall meet or exceed the guidelines developed by the Institute of Electronic and Electrical Engineers. Any improvements identified in the study shall be included in the suggested hardware and software. Results of the study shall be provided to the Community Development Department. Company shall design the project such that the entire project will integrate the supervisory control and data acquisition (SCADA) or other monitoring system for all the components of this project in a manner so as to provide timely and efficient detection, shutdown, notification and response to an emergency involving any of the project components. Any break, rupture, and/or damage to the facilities shall result in the orderly shutdown of the pumping operations, and will activate the shut off valves in a manner which will minimize environmental damage. C-22 Update of Operational Risk Assessment Upon City request, Operator shall fund the updating of the operational risk assessment subject to ministerial permitting, as needed, so that any surrounding land use proposals are aware of existing risk, if any. D. FACILITY DESIGN D-1 Submittal of As Built Drawings Within one year after initial start-up of the E&B Project (Phase 1), and again within one year of commencement of Phase 2 operations, Operator shall submit as-built drawings of the Exhibit D-2 entire facility(s) to City. Any facility modifications required for Phase 3 operations shall also be documented on facility as-built drawings within one year of their construction. Operator shall submit as many sets of drawings (up to ten sets) as requested by the Community Development Department. D-2 Solid Waste Disposal Solid waste generated on the site shall be collected by the City’s franchised commercial trash hauler. Construction waste shall be transported by E&B’s own efforts to a facility authorized to accept construction waste in accordance with the provisions of the Hermosa Beach Municipal Code. Hazardous waste shall be transported by E&B’s own efforts to a facility authorized to accept hazardous waste in accordance with all local, state and federal laws. D-3 Water Conservation Measures The design of all new and/or modified onsite facilities shall incorporate the use of cost- effective water-conserving fixtures, including by way of example indoor and outdoor plumbing fixtures and irrigation. D-4 Energy Conservation Measures Throughout the project life, as equipment is added or replaced, cost-effective energy conservation techniques shall be incorporated into project design, including by way of example indoor and outdoor lighting, HVAC, drill equipment, vehicles, and microturbines. E. ABANDONMENT E-1 Abandonment Procedures In implementing Section 26 of the Lease and Article VII of the Hermosa Beach Municipal Code - Oil Code Chapter 21A, Operator shall secure all necessary permits and proceed in accordance with a City Council approved abandonment and restoration plan within one year of permanent shut down. The abandonment plan shall be processed with environmental review of the plan. Operator shall post a performance bond, or other security device Exhibit D-2 acceptable to City Council, prior to commencement of Phase 1 construction for estimated costs of abandoning Phase 1 facilities. Operator shall also post a performance bond, or other security device acceptable to City Council, prior to commencement of Phase 2 for estimated costs of abandoning Phase 2 facilities. E-2. Abandonment Costs All costs associated with abandonment or removal shall be borne by Operator. E-3. Wellsites Prior to permanent shutdown or termination of this agreement or the lease, any well drilled by Operator shall be plugged and abandoned within three months from the date it is determined that such well is no longer capable of production, subject to weather and rig availability, and capped, in accordance with the rules and regulations of the State Division of Oil, Gas & Geothermal Resources. Thereafter, the wellsite shall be restored as near as practicable to its original condition. F. Miscellaneous Conditions F-1. Hydraulic Fracturing Prohibited The use of hydraulic fracturing as a well stimulation technique for enhanced hydrocarbon production shall be prohibited on the project site. F-2. Pipelines All pipelines installed for the Project shall not go below the depth authorized by the State Division of Oil, Gas & Geothermal Resources. After completion of the construction of any such pipelines, Operator shall restore the surface of the area impacted by the construction of such pipeline as nearly as practicable to its condition immediately prior to such construction. F-4. Fire Marshal Position Operator shall fund a full-time dedicated Fire Marshal position for the Hermosa Beach Fire Department for the full Term of the Development Agreement. Exhibit D-2 F-5. Training Operator shall pay for annual training for Hermosa Beach Fire Department personnel and fire personnel from the City’s automatic aide partners on fighting oil fires. F-6. Odor (from HIA) In the event of frequent reports of odor emanating from the site, Operator shall pay for additional studies and/or periodic air monitoring. If the studies or monitoring indicate that additional control measures should be implemented to reduce the frequency of noticeable odors, Operator shall include those measures as project conditions. F-7. Notice (from HIA) During Phase 3 pipeline construction, Operator shall provide written notification of impending construction activities, including the dates and times of activities that may produce excessive noise, to all residents within 100 feet of the construction activities. Notice shall be provided no less than 72 hours before construction begins. F-8. Light impact reduction (from HIA) Operator shall pay for or provide black-out blinds or curtains for bedrooms with direct line- of-sight to the exposed side of the electric drill rig that will be lit at night. The amount of payment or the brand of blinds/curtains shall be pre-approved by the City Manager, and may be provided through a direct mail program. F-9. Community Relations (from HIA) As recommended in Intrinsik’s Health Impact Assessment for the project, and at the City Council’s discretion, the Operator may be required to pay for the costs associated with (1) organizing a Community Liaison Committee; (2) a follow-up Community Health Assessment; and/or (3) a quality of life health survey. Exhibit D-2 [Continue to following page for Mitigation Measures] Exhibit D-3 EXHIBIT “D-3” Mitigation Measures/Mitigation Monitoring Plan from Section 8.0 of FEIR (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). 8.0 Summary of Mitigation Measures and Mitigation Monitoring Plan 8.1 Mitigation Monitoring Program As the Lead Agency under the California Environmental Quality Act (CEQA), the City of Hermosa Beach (City) is required to adopt a program for reporting or monitoring regarding the implementation of mitigation measures for this Project, if it is approved, to ensure that the adopted mitigation measures are implemented as defined in this Environmental Impact Report (EIR). This Lead Agency responsibility originates in Public Resources Code Section 21081.6(a) (Findings) and the CEQA Guidelines Sections 15091(d) (Findings) and 15097 (Mitigation Monitoring or Reporting). 8.2 Monitoring Authority and Enforcement Responsibility The purpose of a Mitigation Monitoring, Compliance, and Reporting Program (MMCRP) is to ensure that measures adopted to mitigate or avoid significant impacts are implemented. A MMCRP can be a working guide to facilitate not only the implementation of mitigation measures by the Project proponent, but also the monitoring, compliance, and reporting activities of the City and any monitors it may designate. The City may delegate duties and responsibilities for monitoring to other environmental monitors or consultants as deemed necessary, and some monitoring responsibilities may be assumed by responsible agencies, such as affected jurisdictions and cities. The number of monitors assigned to the Project will depend on the number of concurrent activities and their locations. The City or its designee(s), however, will ensure that each person delegated any duties or responsibilities is qualified to monitor compliance. Any mitigation measure study or plan that requires the approval of the City must allow at least 60 days for adequate review time. When a mitigation measure requires that a mitigation program Exhibit D-3 be developed during the design phase of the Project, the Applicant must submit the final program to City for review and approval for at least 60 days before any activity begins. Other agencies and jurisdictions may require additional review time. It is the responsibility of the environmental monitor assigned to the Project to ensure that appropriate agency reviews and approvals are obtained. The City or its designee will also ensure that any deviation from the procedures identified under the monitoring program is approved by the City. Any deviation and its correction shall be reported immediately to the City or its designee by the environmental monitor assigned to the Project. The City is responsible for enforcing the procedures adopted for monitoring through the environ- mental monitor assigned to the Project. Any assigned environmental monitor shall note problems with monitoring, notify appropriate agencies or individuals about any problems, and report the problems to the City or its designee. 8.3 Mitigation Compliance Responsibility The Applicant is responsible for successfully implementing all the mitigation measures in the MMCRP, and is responsible for assuring that these requirements are met by all of its contractors and field personnel. Standards for successful mitigation also are implicit in many mitigation measures that include such requirements as obtaining permits or avoiding a specific impact entirely. Other mitigation measures include detailed success criteria. Additional mitigation success thresholds will be established by applicable agencies with jurisdiction through the permit process and through the review and approval of specific plans for the implementation of mitigation measures. 8.4 General Monitoring Procedures Environmental Monitors. The City and the environmental monitor(s) are responsible for integrating the mitigation monitoring procedures into the construction or operation process in coordination with the Applicant. To oversee the monitoring procedures and to ensure success, the environmental monitor assigned to the Project must be on site during that portion of the construction or operation that has the potential to create a significant environmental impact or other impact for which mitigation is required. The environmental monitor is responsible for ensuring that all procedures specified in the monitoring program are followed. Exhibit D-3 Construction and Operations Personnel. A key feature contributing to the success of mitigation monitoring will be obtaining the full cooperation of construction and operations personnel and supervisors. Many of the mitigation measures require action on the part of the supervisors or crews for successful implementation. To ensure success, the following actions, detailed in specific mitigation measures, will be taken:  Procedures to be followed by construction or operations companies hired to do the work will be written into contracts between the Applicant and any contractors. Procedures to be followed by construction and operations crews will be written into a separate document that all personnel will be asked to sign, denoting agreement.  One or more meetings will be held to inform all and train personnel about the requirements of the monitoring program.  A written summary of mitigation monitoring procedures will be provided to supervisors for all mitigation measures requiring their attention. General Reporting Procedures. Site visits and specified monitoring procedures performed by other individuals will be reported to the environmental monitor. A monitoring record form will be submitted to the environmental monitor by the individual conducting the visit or procedure so that details of the visit can be recorded and progress tracked by the environmental monitor. A checklist will be developed and maintained by the environmental monitor to track all procedures required for each mitigation measure and to ensure that the timing specified for the procedures is adhered to. The environmental monitor will note any problems that may occur and take appropriate action to rectify the problems. Public Access to Records. The public is allowed access to records and reports used to track the monitoring program. Monitoring records and reports will be made available for public inspection by the City or its designee on request. 8.5 Mitigation Monitoring Table The Tables below present a summary of monitoring and reporting plan requirements for the mitigation measures identified in Chapter 4 of the EIR as applicable to the Proposed Project. The Table provides the following information, by column:  Mitigation Measure (description of the mitigation measure identified in Chapter 4);  Monitoring/Plan Requirements (monitoring or plan requirements necessary to verify compliance with the mitigation measure); Exhibit D-3  Method of Verification (this is how the responsible agency can determine if the mitigation measure has been implemented);  Timing (this identifies when action needs to be taken on mitigation measure); and  Responsible Agency (this is the agency that is responsible for assuring compliance with the mitigation measure). Table 8-1 Aesthetics and Visual Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party EM-1 Prior to issuance of the first grading and/or construction permits, the Applicant shall enter into agreements with the City to provide funding for the implementation and administration of an environmental monitoring program, including an environmental monitor, to ensure compliance with each Agency’s environmental Conditions of Approval. The monitor shall assist the Agencies in condition compliance and mitigation monitoring for all applicable construction and operational stages of the Oil Project, as specified in a scope of work, as approved by the Agencies. The monitoring program shall include a post‐construction program to monitor measures that extend beyond the construction period (e.g., success of landscaping, etc.), as well as monitor certain mitigation measures required during the operational phase. The monitor will prepare a working monitoring plan that reflects the Agencies ‐ approved environmental mitigation measures/conditions of approval. This plan will include: 1. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; Conditions included within the Development Agreement, including administrative measures to ensure bonding, payment methods and insurance Before the start of Phase 1 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party 2. Lines of communication and reporting methods; 3. Daily and weekly reporting of compliance; 4. Construction crew training regarding environmental sensitivities; 5. Authority to stop work; and 6. Action to be taken in the event of non‐compliance. The environmental monitor shall be under contract to the Agencies. Costs of the monitor, monitoring program, and any Agency administrative fees, shall be paid by the Applicant. The Applicant shall also be responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, noise engineer, etc.). The Agencies’ environmental monitor will coordinate the monitoring efforts of the specialist, including communication with the Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). AE-1a Material choice of electrical drill rig acoustical shroud shall be of neutral sky color which is selected for its ability to reduce visual impact, in coordination with and approval by the City Community Development Director. Approval of Construction Documents and Specifications and field- Prior to issuance of permits City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party demonstration AE-1b The sound attenuation wall shall be replaced by a permanent wall with design features installed at the end of Phase 3. The intent is to provide stability of views and opportunities for positive visual elements that partially mitigate the visual presence of the walls from the Hermosa Greenbelt and other sensitive views in the immediate Project vicinity. The permanent wall shall be allowed to be provided in lieu of the 16-foot block wall. Landscape design shall be allowed to be adjusted to respond to façade articulations, though quantities and densities shall be maintained. The permanent wall shall be designed with architectural features in coordination with and approval of the City Community Development Director. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2a Design of the sound attenuation wall exterior façade shall be required to include design articulations that are complementary to the character, scale, and quality of the surrounding environment. The intent is to mitigate the visual impact of the wall from the Hermosa Greenbelt and other sensitive views in the immediate project vicinity. The following measures of success shall be met: 1) Articulations of façade decrease scale and proportion of mass into smaller increments that more closely resemble those of adjacent buildings; and 2) Colors, detailing and material use are varied to a level consistent with existing Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party visual environment. AE-2b Planting area growth medium shall be capable of supporting the long term health and growth of the landscape design. Requirements shall be: 1) Demonstrated free of debris and construction waste (asphalt, concrete, etc) to a minimum depth of 3 feet within all planted areas. Wall footings shall be designed to limit encroachment into planted areas; 2) Soils analysis report shall be conducted by a certified soil scientist. Report shall include recommendations to meet the intent of this mitigation measure; and 3) If soils are determined to be unsuitable to support plant growth, they shall be amended or removed/replaced to meet requirements of soils analysis for plant pallette selected. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2c Vine plantings where used shall meet the following conditions: 1) be self- attaching or structure supported; 2) have demonstrated success in the City; 3) be planted at a density to achieve full coverage at maturity; 4) be planted at a minimum 5 gallon size; and 5) be required on the visible portion of the west wall at the temporary parking facility. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2d All trees shall be required to be a minimum of 20’ in height at installation and meet the American Standard for Nursery Stock (ANSI Z60.1-2004). If a tree species alternate is proposed, it shall be required to be an equal to the species Approval of Construction Documents and Prior to issuance of permits and City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party proposed in the Project Application in the following characteristics: 1) Dense evergreen with similar form and habit; 2) Probability of achieving a minimum of 35-40 feet at maturity; and 3) Comply with Municipal Code Chapter 8.60 and 8.56. Specifications and Inspection during construction AE-3a Pipeline alignments and valve box locations shall be designed to avoid the removal or modification of trees, hedgerows, and/or large shrubs to the extent feasible. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach, and Torrance AE-3b If landscaped areas, streetscapes, plazas and/or parklands are required to be temporarily disturbed, they shall be restored to their previous condition following completion of construction. Avoidance of disturbance shall be the preferred option, especially where landscape elements act to screen views (hedges, large shrubs, etc) or where they act as community gateways (Redondo Beach at Hwy-1). Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach and Torrance AE-3c Block color/s selection and pattern (if applicable) shall be complementary to adjacent buildings. A buffer of shrubs and vines shall be planted to match the existing character and quality of the adjacent properties. Approval of Construction Documents and Prior to issuance of permits and Cities of Hermosa Beach, Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Specifications and Inspection during construction Redondo Beach and Torrance AE-4a Final acoustical cover material selection shall be required to be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4b Colors and finishes of equipment and surfaces within the soundwall (including the interior face of the soundwall, the interior face of the drill rig acoustical cover, and the physical structure of the drill rig within the acoustical shield) shall have a reflectivity rating of 0.3 or lower. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4c All proposed site lighting fixtures associated with the drilling activities shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AE-5a Colors and finishes of surfaces within the facility, including the interior face of the soundwall, ground materials (darker or asphalt), wall paints and equipment paints to the extent feasible shall have a low reflectivity rating of 0.3 or lower to reduce the potential for glow. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5b Final sound wall material/s selection/s (including gates) shall be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5c All proposed site lighting, including fixtures outside the wall, shall be fully shielded. Fully shielded shall be defined as: A luminaire constructed and installed in such a manner that all light emitted by the luminaire, either directly from the lamp or a diffusing element, or indirectly by reflection or refraction from any part of the luminaire, is projected below the horizontal plane through the luminaire’s lowest light-emitting part (IES/IDA, 2011) Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5d The LZ-2 parameters of the Model Lighting Ordinance (IES/IDA, 2011) shall be used to demonstrate that maximum vertical illuminance for the site are not exceeded. For site lighting inside the wall, Table B allowances shall be used. Approval of Construction Documents and Prior to issuance of permits and City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Lighting outside the wall at site entrances shall not exceed that of existing street lighting, which produces a maximum of 1 footcandle. For the purposes of measuring vertical illumination, the plane of the property line shall be extended to an elevation equal to the height of the electric drilling rig. Specifications and Inspection during construction AE-5e All proposed site lighting fixtures shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-6a Any proposed metering station site lighting shall be fully shielded and shall incorporate permanent features (shields, hoods, etc.) shall incorporate permanent features which prevent light spillage beyond the property line. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Redondo Beach AE-6b Light levels and quantities of fixtures shall not exceed that which is needed for security and safety. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Redondo Beach and Torrance Table 8-2 Air Quality and GHG’s Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AQ-1a The Applicant shall submit and implement a Fugitive Dust Control Plan that includes SCAQMD mitigations for fugitive dust mitigation, according to Rule 403, and SCAQMD CEQA Guidelines. Fugitive dust mitigation measures in the plan shall include the following (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - Apply water every 3 hours to disturbed areas and unpaved roads within a construction site (61 percent reduction). - Require minimum soil moisture of 12 percent for earthmoving, by using a moveable sprinkler system or water truck. Moisture content can be verified by lab sample or moisture probe (69 percent reduction). - Limit onsite vehicle speeds on unpaved roads to 15 mph and posting of speed limits. - All trucks hauling dirt, sand, soil, or other loose materials are to be tarped with a fabric cover and maintain a freeboard height of 12 inches (91 percent reduction). - Install gravel bed trackout apron (3 inches deep, 25 feet long, 12 feet Plan review, site inspections Before and during construction Both Oil Project and City Yard SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party wide per lane, and edged by rock berm or row of stakes) to reduce mud and dirt trackout from unpaved truck exit routes (46 to 80 percent reduction). - Water storage piles by hand or apply cover when wind events are declared, according to SCAQMD Rule 403 when instantaneous wind speeds exceed 25 miles per hour (90 percent reduction). - Appoint a construction relations officer to act as a community liaison concerning onsite construction issues, such as dust generation. AQ-1b The Applicant shall implement a NOx reduction program including the following, or equivalent, measures to the satisfaction of the SCAQMD (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - All off-road construction equipment shall be tuned and maintained according to manufacturers’ specifications. - Any temporary electric power shall be obtained from the electrical grid, rather than portable diesel or gasoline generators. - All off-road diesel construction equipment with greater than 100- horsepower engines shall meet Tier 3 NOx requirements. - Limit onsite truck idling to less than 5 minutes. - A copy of the certified tier specification, best available control Plan review, site inspections Before and during construction SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party technology documentation, or the CARB or SCAQMD operating permit for each piece of equipment shall be kept onsite during all operations. AQ-3a The Applicant shall limit flaring during Phase 4 to a total of 5 hours per day at the full flaring capacity (or to an equivalent volume of flared gas) during all emergency or routine flaring events in order to ensure that NOx emissions are reduced below the thresholds. Lower NOx emission combustors or other equivalent measures can also be used to satisfy the requirement. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-3b The Applicant shall implement methods to reduce the off-gassing of muds by at least 90 percent through the installation of fully enclosed mud pit areas with vapor control (either through carbon canisters or vapor recovery) and/or the use of mud degassing units routed to vapor control systems. The Applicant shall monitor the muds vapor immediately above the muds exit point from the wellbore and at other areas above the mud pits where muds may be exposed to the atmosphere in order to ensure that hydrocarbon vapors are captured at the minimum rate of 90 percent. Plan review, site inspections Before Phase 2 and Phase 4 drilling SCAQMD City of Hermosa Beach AQ-4 The Applicant shall limit the microturbine PM emissions to 0.0035 lbs/mmbtu, or an equivalent reduction in the number and/or size of the microturbines, in order to reduce emissions to below the localized thresholds. The City shall be responsible for ensuring that the applicant will be subject to permit conditions Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party that limit emissions from the set of microturbines, not just individual permit units. AQ-5a The Applicant shall at all times have a gas buster and SCAQMD-approved portable flare at the site and connected for immediate use to circulate out and combust any gas encountered during drilling. The flare shall be capable of recording the volume of gas that is flared. The operator shall report any flared gas from drilling to the Hermosa Beach Fire Chief and the SCAQMD. Plan review, site inspections Before Phase 2 drilling SCAQMD City of Hermosa Beach AQ-5b The Applicant shall install a compressor seal vent collection system. In the event of a seal leak, vapors shall be collected and sent to the vapor recovery system or flare for destruction. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-5c The Applicant shall develop and implement an Odor Minimization Plan, submitted to and approved by the City and the SCAQMD. The Odor Minimization Plan shall address reducing the frequency from potential sources of odors from all site equipment, including wells and drilling operations, temporary operations such as truck loading, and measures to reduce or eliminate these odors (e.g., containment, design modifications, carbon canisters). The Plan shall address issues such as facility information, buffer zones, signs with contact information, logs of odor complaints, the protocol for handling odor complaints and odor release investigations and methods Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party instituted to prevent a re-occurrence. The Plan shall require that all odor complaints and issues be immediately communicated to the City and that the City shall have the authority to implement and enforce contingency measures to ensure that any nuisance odors from the facility are eliminated. AQ-5d The Applicant shall develop and implement an Air Monitoring Plan. The Plan shall provide for the monitoring of total hydrocarbon vapors and hydrogen sulfide and total hydrocarbon vapors at all perimeter locations of the facility as well as at strategic locations near processing equipment. At all times during operations, drilling, redrilling and workover operations, the Operator shall maintain monitoring equipment that shall monitor and digitally record the levels of hydrogen sulfide and total hydrocarbon vapors. Such monitors shall provide automatic alarms that are audible and visible to the Operator of the drilling equipment, and gas plant, and shall be triggered by the detection of hydrogen sulfide or total hydrocarbon vapors. Alarm points shall be set at a maximum of 1 5 and 5 10 ppm H2S and 500 and 1,000 ppm hydrocarbons, with the higher level requiring shut-down of drilling or plant operations and the lower level requiring notification to appropriate agencies, including the Hermosa Beach Fire Department and SCAQMD. A meteorological station to monitor wind speed and direction under the guidance and specification of the SCAQMD shall be Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party installed at the site. The Air Monitoring Plan shall be reviewed and approved by the City and the SCAQMD. AQ-5e The Applicant shall use an odor suppressant spray system on the mud shaker tables, and shall install carbon capture canisters on all tanks (permanent and portable) that are not equipped with vapor recovery, containing potentially odiferous materials (for example; the mud baker-type tanks) for all drilling operations so that no odor can be detected at the closest receptor. Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach AQ-5f The fugitive component leak detection program under Rule 1173 shall utilize a Leak Detection and Reporting (LDAR) level of monthly detections with an action level of 100ppm, the installation of bellows valves where applicable (valves 2 inches or smaller) and the use of IR cameras or equivalent during monthly detections to ensure that leaking components are minimized at the facility. Plan review, site inspections Before Phase 2 operations SCAQMD City of Hermosa Beach AQ-6 The Applicant shall provide credits for all GHG emissions generated above the threshold of 10,000 MTCO2e per year. A GHG Reporting and Reduction Plan shall be submitted to the SCAQMD and the City detailing the measures to be implemented to achieve the required reductions, updated annually, and shall include specifications on the protocol, vintage, and registry for any offsite mitigation. The following mitigation credits shall not require prior City or SCAQMD approval: Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party 1. Credits generated within Los Angeles County per an approved SCAQMD protocol; 2. Credits generated within the State of California per an approved SCAQMD protocol; 3. Credits that are generated and verified under the CAPCOA GHG Rx program; 4. Credits that are generated and verified under the voluntary SCAQMD Regulation XXVII; 5. Verified credits registered with the Climate Action Reserve or the American Carbon Registry. In addition, independently verified GHG credits available through other carbon registries that follow specific protocols may be eligible for offsite mitigation, subject to review and prior approval by the City and the SCAQMD. The general criteria for acceptable credits include: • Real: emission reduction must have actually occurred, as the result of a project yielding quantifiable and verifiable reductions or removals. • Additional/Surplus: an emission reduction cannot be required by a law, rule, or other requirement. • Quantifiable: reductions must be quantifiable through tools or tests that Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party are reliable, based on applicable methodologies, and recorded with adequate documentation. • Verifiable: The action taken to produce credits can be audited and there is sufficient evidence to show that the reduction occurred and was quantified correctly. • Enforceable: An enforcement mechanism must exist to ensure that the reduction project is implemented correctly. • Permanent: Emission reductions or removals must continue to occur for the expected life of the reduction project. Operational/drilling GHG emissions from stationary and mobile sources shall be quantified and reported to the City and to the SCAQMD annually. Emissions reporting will follow the same reporting format and procedures as required by the Mandatory Reporting Rule. AQ-7a All diesel equipment used at the site shall meet EPA Tier 3 emission requirements and be equipped with a CARB Level 3 diesel particulate filter to reduce Diesel PM emissions. Workover rigs operated at the project site shall have cumulative total DPM emissions below 1.5 lbs/year or shall utilize electric drive/sources . Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-7b Vapor recovery on crude oil tanks shall achieve a minimum of 99 percent Plan review, Before Phase SCAQMD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party recovery of fugitive emissions. site inspections 4 operations City of Hermosa Beach Table 8-3 Biological Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party BIO-1 To minimize potential impacts to nesting native bird species, and in compliance with the federal Migratory Bird Treaty Act and Sections 3503, 3503.5, or 3513 of the California Fish and Wildlife Code, initial vegetation removal/trimming shall be done outside the breeding season (breeding season is defined herein as January 15 through August 31 for raptors and February 15 through August 31 for all non- raptor species). If vegetation removal/trimming must be completed during this period, then surveys for nesting birds must be conducted by a qualified, City-approved Biologist, within 3 days prior to vegetation removal or other construction-related disturbances. If nesting birds are observed within the Plan review, site inspections Before and during construction City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party project area, then a minimum 100-foot buffer from any non-raptor species and 500 foot buffer from any raptor nest would be established and maintained for the duration of vegetation removal/trimming activities or until nestlings fledge from the nest. BIO-2 The Applicant shall submit for City approval and shall implement an Emergency Response Plan that would, in compliance with the California State Oil Spill Contingency Plan (CDFW, OSPR 2014),address protection of biological resources and possible revegetation of any areas disturbed during an oil spill or cleanup activities. The Emergency Response Plan shall, at a minimum, include specific measures to avoid impacts to native vegetation and wildlife habitats, plant and animal species, and environmentally sensitive habitat areas during response and cleanup operations. The Emergency Response Plan shall include provisions for containment and cleanup measures and responsibilities. The plan shall contain: • Definition of the authorities, responsibilities, and duties of all entities involved in oil removal operations, and methods of emergency action agency coordination during and after an oil spill; • Agreements and statements from all resource agencies involved in an oil response and removal operation; Plan review Before construction City of Hermosa Beach OSPR Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party • Procedures and frequencies for regular monitoring and inspections of pipelines and facilities; • Procedures for early detection and timely notification of an oil discharge; • A description of the necessary onsite equipment and details on the placement of the material required to quickly control, contain, and remove any discharged oil; • Assurance that full resource capability is known and can be committed following a discharge; • A description of sensitive biological resources in the SMB that should be prioritized for clean-up activities in the case of an oil spill into the marine environment; • Actions for after discovery and notification of a discharge; • Procedures to facilitate recovery of damages and enforcement measures. The Emergency Response Plan shall be approved by the California Department of Fish and Wildlife (CDFW) Office of Spill Prevention and Response (OSPR). When habitat disturbance cannot be avoided, the Emergency Response Action Plan shall provide stipulations for development and Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party implementation of site-specific habitat restoration plans and other site-specific and species-specific measures appropriate for mitigating impacts to local populations of special-status wildlife species and to restore native plant and animal communities to pre-spill conditions. Access and egress points, staging areas, and material stockpile areas that avoid specific habitat areas shall be identified. The Emergency Response Action Plan shall include species- and site-specific procedures for collection, transportation and treatment of oiled wildlife. The Emergency Response Plan shall be approved by the City prior to commencing any construction activities. ____________________________________________________________________________________________________________ _________ Table 8-4 Cultural Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party CR-1 Prior to beginning demolition of the existing City Maintenance Yard Building, Development During Project Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party guidelines shall be developed for the careful exposure of extant elements of the historic brick and mortar furnace. Once exposed, detailed documentation of the furnace shall be undertaken. Documentation shall be guided by the Historic American Engineering Record (HAER) standards. This documentation shall include production of high quality 35-mm photographs and plan drawings of building elements exposed, including but not limited to, a floor plan, any character-defining building features, and elevation drawings. All work carried out pursuant to the recordation of the furnace building shall be conducted by, or under the direct supervision of a person or persons meeting, at a minimum, the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994) as an architectural historian. A written report detailing the HAER-like documentation shall be provided to the City upon completion the work. This report shall be produced on archivally stable materials and filed with the Hermosa Beach Historical Society. and implementation of a monitoring and documentation plan by a qualified archaeologist. building demolition within areas of recorded historical resources. Proponent and Construction Contractor CR-2a The design of the New City Maintenance Yard Building shall be compatible in design, styling, material, and massing of the adjacent City Hall complex. The building design should not attempt to replicate the New Formalist style, but it shall not conflict or contrast with the existing building style. The buildings constructed in the New City Maintenance Yard shall be no more than two Design of the New City Maintenance Building and landscape Design Phase Project Proponent and City Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party stories high. They shall not overpower or overshadow the existing building complex. CR-2b The landscaping associated with the proposed New City Maintenance Yard shall replicate the planting types surrounding the City Civic buildings, to the extent possible, in order to blend the new construction into the existing Complex. The final design of both the new building and landscape should be developed in consultation with an historic architect or architectural historian who meets Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). Design of the New City Maintenance Building and landscape Design Phase Project Proponent and City CR-3a Prior to any ground-disturbing activities or building removal within the Proposed Project sites, an Archaeological Monitoring Plan shall be developed by a qualified archaeologist with provision for review and input by concerned Native Americans and approval by the City. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. The Plan is to include provisions for archaeological and Native American monitoring, detailed documentation of all early twentieth-century artifact-bearing deposits exposed during ground- disturbing site work, and development of a clear collection policy for both prehistoric and historic artifacts, subsequent artifact analysis, reporting of Development and implementation of a monitoring plan by a qualified archaeologist in consultation with concerned Native The monitoring plan shall be submitted for review by the City of Hermosa Beach and approval prior to beginning Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party findings, and disposition and/or curation of any significant artifacts recovered. All reports of findings shall be filed with to SCCIC. American tribes. development. Plan shall be implemented prior to and during construction. CR-3b Any significant archaeological deposits remaining in the area of the previous City of Hermosa Beach Dump following over-excavation at the Proposed Oil Development Project site must be protected in place. Stabilization and covering of these archaeological deposits shall be monitored by a qualified historical archaeologist meeting the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). Following construction any remaining archaeological deposits must be stabilized and covered for protection. Following over- excavation Project Proponent and Construction Contractor CR-4 Should Project-related excavations be designed to exceed 45 feet in depth at the City Dump, or depths greater than 15 feet along the pipelines, or otherwise be shown to have the potential to impact intact San Pedro Sand deposits as described above, a Paleontological Resources Monitoring and Mitigation Plan (PRMMP) shall be developed by a qualified paleontologist in consultation with A paleontological resource monitoring and mitigation The monitoring plan shall be submitted for review by the Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party the City and implemented prior to or during Project-related ground disturbing activities. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. program (PRMMP) for treatment of the paleontological resources will be developed and implemented. City of Hermosa Beach and approval prior to beginning development. Plan shall be implemented prior to and/or during construction. CR-5 Ground-disturbing activities in the area of the discovery shall immediately be halted or redirected. A temporary construction exclusion zone shall be established surrounding the site to allow for further examination and treatment of the find. A City representative shall immediately notify the Los Angeles County Coroner’s office by telephone. By law, the Coroner will determine within two working days of being notified if the remains are subject to his or her authority. If the Coroner recognizes the remains to be Native American, he or she shall contact the Native American Heritage Commission who will appoint The Native American Heritage Commission (NAHC) must be contacted by the Los Angeles Upon discovery of human remains. Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party the Most Likely Descendent (MLD). Additionally, if the remains are determined to be Native American, a plan will be developed regarding the treatment of human remains and associated burial objects and the plan will be implemented under the direction of the MLD. County Coroner, and a Most Likely Descendant must be designated. Any further treatment of the remains will occur in consultation with the MLD, the NAHC, and a qualified archaeologist. __________________________________________________________________________________________________________ Table 8-5 Fire Protection and Emergency Response Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party FP-1a The Applicant shall ensure adequate (3,000-5,000 gpm) water supplies are available from the existing water lines and hydrant system, by extending the 8 inch water main or some other source for water supplies that provides sufficient water supply rates, pressure and duration to comply with codes, standards and requirements of the LACFD and the HBFD. Installation of a fire pump, or installation of a piping connection to area water mains that can supply the flows, may be required to ensure the appropriate water flow and pressure requirements. The Applicant shall ensure that all area hydrants and water supplies are tested annually as to the NFPA standards for water flows and pressures, and shall ensure that the results are reported to the City of Hermosa Beach and the Hermosa Beach Fire Department. Review of water flow calcs and tests, annual reviews Before Phase 2 City of Hermosa Beach HBFD FP-1b The Applicant shall coordinate with the HBFD to integrate a community alert notification system for the proposed project into the City's existing alert system to automatically notify area residences and businesses in the event of an emergency at the project site that would require residents to take shelter or take other protective actions. The Applicant shall implement programs to ensure that all immediate neighbors are provide ample opportunity to participate in the notification system. Review and testing of system Before Phase 2 City of Hermosa Beach HBFD FP-1c The Applicant shall fund an additional FTE position at the HBFD, or equivalent, Training and Before Phase City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party for personnel with specific capabilities in inspection and code compliance associated with oil and gas production facilities. This arrangement shall be to the satisfaction of the HBFD. hiring completed at HBFD 2 Hermosa Beach HBFD FP-1d The Applicant shall develop emergency response plans addressing the facility's fire-fighting capabilities pursuant to the most recent NFPA requirements, Los Angeles County Fire Code, LACFD, California Code of Regulation, and API requirements, in coordination with and to the satisfaction of the LACFD and the City of Hermosa Beach Fire Department. These plans shall include, but not be limited to, fire monitor placement, water capabilities, fire detection capabilities, fire foam requirements, facility condition relating to fire-fighting ease and prevention, and measures to reduce impacts to sensitive resources. The plan should also address coordination with local emergency responders and area schools and daycare facilities. Review and approval of plans Before Phase 2 City of Hermosa Beach HBFD FP-1e The Applicant shall ensure that the emergency response planning includes development of evacuation plans of neighbors for an emergency scenario at the facility,. The plan shall be reviewed by the LACFD, HBFD and the City annually and updated as needed. The relevant portions of the plan shall be distributed to the public utilizing a method determined by the reviewing Agencies. Review of plan revision Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-1f The Applicant shall ensure and make funding available to 1) upgrade the Review of Before Phase City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party dispatch system and procedures within Hermosa/Torrance/Redondo to implement a CAD-to-CAD system to improve dispatch times; and 2) extend the mutual aid agreements to become automatic aid agreements between the Hermosa Beach Fire Department, Redondo Beach Fire Department and the Torrance Fire Department and to include the Torrance HAZMAT unit, or provide for funding to provide additional equipment and to train a sufficient number of Hermosa Beach, Redondo Beach and/or Manhattan Beach Emergency Response personnel to provide first response HAZMAT capabilities. Mutual Aid agreement revision 2 and Phase 4 Hermosa Beach HBFD FP-1g The Applicant shall ensure, during Phase 2 and Phase 4, that the site shall have sufficient water containment capabilities, as per guidance and approval of the Fire Department. Area storm drains along 6th Street and Cypress Avenue shall be equipped with flapper-type valves to enable the closure of the storm drain system in the event of potential overflow. Review of plan and onsite inspections Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-2a The Applicant shall ensure that design and construction comply with applicable codes and standards for equipment spacing, particularly those related to flare location and distances to public areas and distances from well drilling equipment to buildings. If this cannot be achieved, additional requirements shall include the construction of thermal radiation barriers or insulation on the crude oil tanks, installation of thermal barriers/walls around the flare stack, Third party audit report review Before Phase 2 and Phase 4 City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party increasing the height of the flare stack during drilling, relocation of the flare stack, providing thermal radiation modeling to estimate the impacts of equipment on the crude tanks and process piping and public areas and the design and construction of blast walls as per API 752. Fire rated barriers shall be established, as per LACFD requirements, to ensure that all buildings within 100 feet of well drilling would be protected from thermal radiation. Thermal assessments shall be completed to ensure that the thermal radiation from the flare is within acceptable levels (as per API RP 521) and does notproduce damage to other equipment or nearby walls/soundwalls. The design and construction compliance status shall be verified by third-party audits under the direction of the City. FP-2b Fire protection measures specific to the crude oil containment system shall be provided, including the installation of manual fire foam systems with automatic detection and notification (to both the operators and the HBFD) capable of foaming in the perimeter of the crude oil containment system, wellhead area and the area immediately adjacent to combustion or spark producing equipment within or immediately adjacent to the crude oil containment area. The system shall be capable of being remotely activated from a safe location in the event of a crude oil fire. The highest level electrical classification achievable shall be Review of design documents Before Phase 2 and Phase 4 City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party designated for all equipment located within the crude oil containment and wellhead area. ____________________________________________________________________________________________________________ _________ Table 8-6 Geological Resources/Soils Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party GEO-1a In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds a ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil Inspection by a California Registered Civil Engineer Following any seismic event that results in substantial ground accelerations at the Project Site, as pre- determined by City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party field infrastructure is structurally sound. a California- licensed geotechnical engineer. GEO-1b All seismic related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. These measures shall include, but not be limited to the following: - Drilled-in-place piles or cast-in-drilled-hole piles shall be constructed for foundations in the landfill area, i.e., northeast Project Site, to reduce seismically induced settlement. - Ground improvement techniques, including high pressure grout injection, i.e., compaction grouting, shall be used in the landfill area to reduce seismically induced settlement and allow construction of conventional shallow foundations. - Seismic design criteria for horizontal and vertical accelerations, identified in Tables 10 and 11 of the geotechnical report, shall be used during Proposed Project design (including incorporation of updated seismic design criteria from the 2013 California Building Code). - During Phase 1, the upper 2 to 4 feet of soil in the vicinity of the proposed well cellars shall be excavated and replaced with compacted fill. In addition, the Review and approval of geotechnical report. Approve geotechnical report prior to issuance of grading permit. City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party basement under the maintenance building shall be removed and filled in with compacted fill. In addition, the basement under the maintenance building shall be removed and filled in with compacted fill. - During Phase 3, the eastern portion of the site shall be excavated approximately 7 feet deeper than the majority of the proposed building pad, with a minimum of 3 feet of overexcavation below design grades, and recompacted to provide a uniform fill blanket below proposed tanks, compressors, and other equipment. - Asphalt pavement and underlying subgrade soils shall be designed to accommodate the proposed drill rig. Positive surface drainage shall be provided to direct runoff away from slopes and structures and toward suitable drainage devices. Ponding of water on structural pads shall not be allowed. GEO-2a Injection pressures associated wastewater injection shall not exceed reservoir fracture pressures as specified in California Code of Regulations Title 14, Division 2, Section 1724.10, and as approved by the California Division of Oil, Gas, and Geothermal Resources.. Comparing pressure measurements on each injection well to formation During waste water injection operations California Division of Oil and Gas and Geothermal Resources (DOGGR) Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party fracture pressure and Hermosa Beach Public Works Department GEO-2b In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). Readings from the accelerometer shall be recorded at the Oil Field and transmitted in real-time to the Caltech Seismological Laboratory. The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil field infrastructure is structurally sound. Monthly City of Hermosa Beach GEO-2c In the event that monitoring indicates that Proposed Oil Project-induced seismicity is occurring, wastewater injection operations shall be adjusted to alleviate such seismicity. The drilling operator shall first receive approval from Seismicity monitoring Following monthly monitoring, as City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party the California Division of Oil, Gas, and Geothermal Resources prior to any change (increase) in the injection operations. necessary GEO-3 All slope stability related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. Temporary excavations shall be stabilized per the latest edition of Cal/OSHA requirements for loose sands, including shoring or laying back of trench walls. Shoring along the northern perimeter of the Project Site shall be designed by an experienced structural engineer due to the proximity to existing buildings that must be protected from potential settlement and lateral movements. Submit temporary shoring plans and calculations. Prior to permit issuance City of Hermosa Beach GEO-4a Prior to approval of the first Phase 4 drilling permit, the Applicant shall have submitted and the City of Hermosa Beach and the California Coastal Commission shall have approved a Subsidence Monitoring and Avoidance Program, for both onshore and offshore areas. The onshore monitoring plan shall be completed throughout the life of this project, in accordance with Appendix A, Subsidence Monitoring Program, of the Subsidence and Induced Seismicity Technical Report, E&B Oil Development Project (Geosyntec Consultants 2012), included as Appendix _F of this EIR. The offshore monitoring plan shall be completed throughout the life of this project in accordance with the Offshore Subsidence Monitoring Program and Possible Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Mitigation Measures, Hermosa Beach, California (Coastal Environments 1998), included as Appendix _F of this EIR. The latter shall be updated, as applicable, to reflect advances in science since 1998. In addition, Section 7.6, Mitigation of Onshore Subsidence, of the latter report, shall not be applied to this mitigation measure, as the onshore monitoring program would be completed in accordance with the Geosyntec Consultants (2012) report. GEO-4b The Subsidence Monitoring Program shall include: Ground elevation survey methodologies with high vertical resolution; including onshore surface elevations and offshore bathymetric elevations; Prior to Phase 4 II drilling, establishment of a network of onshore and offshore survey or subsidence monitoring locations, including continuous GPS stations, GPS benchmarks, and tautly anchored offshore monitoring points, positioned within the City, outside the City, and in offshore areas, that are sufficiently spaced to draw conclusions about subsidence within the zone of influence of the Project; Because subsidence can occur for a variety of reasons, establishment of control points outside the zone of influence to allow differentiation of possible subsidence effects related to other activities; Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Use of InSAR imagery technology to evaluate regional subsidence patterns both within and beyond the proposed oil field; Sufficient monitoring frequency to establish trends in subsidence in order to distinguish background ground movement from any subsidence caused by proposed oil field operations; Reservoir monitoring, including documentation of produced fluid volume (oil, gas and water) and reservoir pressures at similar frequency to ground elevation measurements; Reporting requirements; and Action levels, as specified in the onshore and offshore subsidence monitoring reports. Surveying for both vertical and horizontal ground movement shall be completed along the perimeter and throughout the interior of the oil field, including both onshore and offshore areas, utilizing Global Positioning System technology in combination with a network of ground stations. The onshore continuous monitoring GPS stations shall include: Hermosa Beach Pier. The pier will serve as the furthest offshore point in the onshore monitoring program. Longfellow Outfall. This Outfall is larger and more structurally stable than some Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party of the other outfalls along the City’s coast. King Harbor Jetty. This location was selected to achieve a distribution of continuous monitoring points along the coast of Hermosa Beach. This will help provide a limited regional picture of the subsidence between survey events. GEO-4c An onshore and offshore baseline subsidence report shall be completed and made available to the City of Hermosa Beach and the California Coastal Commission at least two months and no more than six months prior to planned commencement of Phase 4 II drilling operations. Subsidence monitoring reports shall be completed annually and the results shall be forwarded to the California Coastal Commission and the City of Hermosa Beach for review, no more than one month following the end of each annual monitoring cycle. In addition, results shall be forwarded to the adjoining City of Redondo Beach and City of Manhattan Beach. Coordinate with Hermosa Beach Public Works Department At least two months prior to Phase 4 2 drilling operations Hermosa Beach Public Works Department GEO-4d In the event that the Global Position System monitoring indicates that significant subsidence, as defined by the onshore and offshore subsidence monitoring reports described in GEO-4a, is occurring in and/or around the Proposed Project area, wastewater or water reinjection operations shall be increased to alleviate such subsidence. The Applicant shall coordinate with the California Division of Oil, Gas and Geothermal Resources, which will approve increased Coordinate with California Division of Oil and Gas and Geothermal Resources Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party levels of wastewater or water reinjection operations in accordance with the approved Subsidence Monitoring Program. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. (DOGGR) and Hermosa Beach Public Works Department GEO-4e In the unlikely event that subsidence related mitigation induces seismicity, corrective actions related to subsidence shall proceed until baseline surface elevations have been achieved, as subsidence related damage would likely be more pronounced in comparison to damage associated with Project related micro-seismicity. Upon reestablishment of baseline elevations, drilling operations shall cease until a balance between subsidence avoidance and induced seismicity avoidance can be established, as agreed upon by the California Division of Oil, Gas and Geothermal Resources, the California Coastal Commission, and the City of Hermosa Beach. Coordinate with California Division of Oil and Gas and Geothermal Resources (DOGGR) Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Department GEO-6 A Registered Civil Engineer shall analyze surficial and near-surface soils at the Project Site subsequent to grading and prior to on-site construction, to determine whether expansive soils are present. Similarly, soils at the Proposed Soil auger and analytical laboratory Prior to final design City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party City Maintenance Yard Project Site and along the proposed pipeline route shall be analyzed for soil expansion potential. In the event that clay-rich, expansive soils are present, foundations shall be designed to accommodate expansive soils and pipelines shall be placed within a blanket of non-expansive soils to prevent structural damage and/or failure. Foundation and pipeline design shall be reviewed and approved by a Registered Civil Engineer. GEO-7a Proposed Oil Project design must conform to the recommendations of HDR Schiff (2012), included within Appendix C in NMG Geotechnical (2012), or as per the City Engineer, and should occur prior to completion of the final Project design. Design for protection against corrosion Prior to final design City of Hermosa Beach GEO-7b All buried metal pipelines shall be coated and placed under impressed cathodic protection. To monitor for internal corrosion, corrosion coupons or equivalent measures can be utilized. Under impressed cathodic protection Prior to final design City of Hermosa Beach GEO-7c External pipe inspections shall be conducted for the exposed pipeline sections to ensure atmospheric coatings are in good conditions. All external inspections shall be documented and reviewed by the operations management and repairs documented, when necessary. Visual inspections Monthly City of Hermosa Beach GEO-7d In accordance with California Division of Oil, Gas, and Geothermal Resources Prepare under Prior to final California Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party pipeline regulations (Public Resources Code Sections 3013 and 3782), a pipeline management plan shall be implemented for the Project Site. Similarly, in accordance with United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration regulations, a pipeline management plan shall be implemented for proposed pipelines located beyond the perimeter of the Project Site. These plans shall include, but not be limited to mechanical testing, including ultrasonic and hydrostatic testing. guidance of California Department of Conservation Division of Oil, Gas, and Geothermal Resources and United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration design Division of Oil and Gas and Geothermal Resources (DOGGR), United States Department of Transporta- tion, Pipeline and Hazardous Materials Safety Administra- tion, and Cities of Hermosa Beach, Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Redondo Beach, and Torrance GEO-7e All concrete in contact with the high sulfate or corrosive soils shall be Type V concrete in accordance with the 2010 California Building Code. Pour proper concrete adjacent to corrosive soils During construction City of Hermosa Beach ___________________________________________________________________________________________________________ Table 8-7 Safety, Risk of Upset and Hazards Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1a The Applicant shall cause to be prepared an independent third-party audit, under the direction and supervision of the City, of the gas and crude oil plants and pipelines, once constructed, including the well pads, to ensure compliance with Fire Code, applicable API and NFPA codes, EPA RMP, OSHA PSM, DOGGR and SPCC and emergency response plans requirements. All audit items shall be implemented in a timely fashion, and the audit shall be updated annually, as directed by the City and the Los Angeles County Fire Departments. The final installation of the facilities shall include a seismic assessment, including walkthroughs, of equipment to withstand earthquakes prepared by a registered Structural Engineer in compliance with Local Emergency Planning Committee Region 1 CalARP guidance and the seismic assessment shall be updated, with walkthrough inspections, annually to ensure compliance with the codes and standards at the time of installation. Review of audit reports Before Phase 4 operations and annually thereafter LACFD HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1b The Applicant shall ensure that the crude oil spill containment areas shall be designed as Class I Division I areas according to NFPA and NEC, or that spark producing equipment (such as the flare) would be isolated from the containment area, in order to reduce the potential for crude oil fires. The refrigeration system shall utilize non-flammable refrigerant. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1c The Applicant shall ensure that all crude-oil truck haulers and a sufficient number of onsite personnel (at least two per shift) are trained in HAZMAT (to the HAZWOPER technician level at least) spill response and that each truck carries a spill response kit. Site inspections, review of contracts Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1d The Applicant shall install automatic valves on the gas pipeline that will automatically shut down under a low pressure scenario at the Processing Facility Area for all pipelines leaving the processing plant, and shall install a backflow prevention device at the main gas pipeline tie-in location, to prevent the release of gas from the main transmission pipeline in the event of a rupture in the gas pipeline. The second, return pipeline shall remain isolated from the main gas pipeline during normal operations. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1e The Applicant shall ensure that warning tape is installed above the pipelines within the pipeline trench to warn third parties that pipelines are located below the warning tape and that the pipelines are capable of utilizing a smartpig. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1f The odorant system shall have its own, smaller containment area around it limiting the spilled pool size to the minimum size attainable, in order to prevent any offsite impacts. Transfer of odorant shall utilize carbon canisters and a canister change-out/maintenance program to ensure that filling of odorant tanks do not cause offsite impacts. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD SR-1g The comingled produced gas shall be continuously monitored for hydrogen sulfide. If H2S levels in the produced gas from any individual well exceeds 100 ppm, then that well shall be shut in and abandoned as per DOGGR requirements. Wells shall be tested when fluids first flow, when the well is placed into production and periodically thereafter in order to ensure that all wells operate below 100 ppm H2S. Review of design documents and in-field inspections Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-2 The Applicant shall sample soil during Phase 1 grading to ensure that soil lead contamination levels are below 9,500 mg/kg and that soil contaminated with TPH are below the regulatory guidelines. If soils are encountered above these levels, then those soils shall be removed from the site and transported to a disposal site. This may necessitate implementing the RAP during Phase 1 if substantial amounts of contamination are encountered. Review of design documents and in-field inspections Phase 1 City of Hermosa Beach ____________________________________________________________________________________________________________ _________ Table 8-8 Hydrology and Water Quality Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2a The Applicant shall properly maintain the associated crude oil pipelines, storage tanks, and processing facilities within and outside the Project Site, including smart-pigging according to State of California Office of the State Fire Marshal requirements and the standards outlined by the Department of Oil, Gas and Geothermal Resources, and the Los Angeles Regional Water Quality Control Board. The Applicant shall visually inspect onsite storage tank and processing equipment at least daily and provide a visual inspection of the crude oil pipeline right-of-way inspections on a weekly basis. Review of maintenance reports Before Phase 4 operations Annually Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2b The Applicant shall install a leak detection system for crude pipelines to the Exxon Mobil Refinery transfer of custody location. The system shall include pressure and flow meters, flow balancing, supervisor control and data acquisition system, and a computer alarm system in the event of a suspected leak. Temperature, pressure, and flow shall be monitored at each pipeline entry and exit. If any variable deviates by more than 10 percent of the normal operating range, the system shall trigger both audible and visual alarms. Flow balancing shall be conducted every 5 minutes, 1 hour, 24 hours, and 48 hours with the accuracy defined once the system is established and tested. Review of system design and testing results Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2c Personnel at the site shall be trained in equipment use and containment and cleanup of an oil spill. Dry cleanup methods, such as absorbents, shall be used on paved and impermeable surfaces and shall be included in a spill trailer maintained onsite. Spills in dirt areas shall be immediately contained with an earthen dike and the contaminated soil shall be dug up and discarded in accordance with local and state regulations. Review of training and equipment Before Phase 2 and Phase 4 operations and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2d Oil spills shall be contained and cleaned according to measures outlined in the then-current California Stormwater Quality Association Best Management Practice Handbook. Review of training and incident reports Before Phase 2 and Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2e A United States Environmental Protection Agency, Spill Prevention, Control, and Countermeasure Plan, approved by the City of Hermosa Beach Fire Department, shall be implemented in the event of a spill. The Plan, which shall include a spill response trailer, equipment, and personnel training shall be completed prior to Phase 2 and Phase 4, and in compliance with the California State Oil Spill Contingency Plan (California Department of Fish and Game, Office of Spill Prevention and Response 2010) and the Los Angeles/Long Beach Oil Spill Contingency Plan (California Department of Fish and Wildlife 2011). Spill cleanup shall be completed under the oversight of the lead regulatory agency, with respect to oil spills, as identified in the Spill Prevention, Control, and Countermeasure Plan. Review of reports Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2f The well cellar shall be lined with an impermeable membrane to prevent oil- based substances from seeping into groundwater supplies. All drilling muds storage shall be contained within Baker-type enclosed tanks, which shall be sized to accommodate high intensity rainfall events without overtopping. Review of design documents, field inspection Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2g The Applicant shall install a check valve in the crude oil pipeline at the Herondo and Valley drive where the crude oil pipeline turns eastward and starts uphill. Review of design documents, field inspection Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2h The Applicant shall fund and install, under the direction of the Hermosa Beach Public Works Department, an oil/grit separators or oil/water separator located along Herondo Street downstream of Valley Drive, in order to capture small to medium sized spills before they reach the ocean. Installation and maintenance costs shall be provided by the Applicant and the devices shall be inspected by the Applicant to ensure that the "trap" is operational before any storm events. Review of design documents, field inspection Before Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2i The Applicant shall utilize a smaller 6" ERW pipe and a heat and impact resistant coating at a minimum comparable to a 3-layer fusion bonded epoxy (such as BrederoShaw 3LPP) and weld coverings equivalent to sleeves with epoxy primer. Specification of the pipe and coating shall approved by the City. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach, CSFM Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2j The Applicant shall install a 3 sack slurry starting 6 inches above the pipe to the base of the pavement or ground surface and lay strips of warning tape over the top to prevent third-party damage. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach Table 8-9 Noise and Vibration Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-1a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 1). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1b The gates on the east and south sides of the site shall be 24-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2g The acoustical shroud around the drilling mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2h Provide acoustical treatment within the combustor fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2i Eliminate use of the combustor during drilling in Phase 2 or prior to the initiation of production occurring concurrent with drilling in Phase 2, acoustical treatment shall be provided: within the combustor fan housing and/or ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA; and to the combustor stack to limit the power level radiated by the stack to 80 dBA.. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2j During the drilling portion of Phase 2, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 2; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV2a through NV2i in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-3a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-3d Provide acoustical treatment within the combuster fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-4a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 3). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-4b The gates on the east and south sides of the site shall be 25-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-4c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-6a Increase the height of the noise barriers on all sides of the site from 32-feet to35-feet (35-feet is the maximum height allowed by zoning code). Minimum sound insulation performance of the barrier material shall be STC-32. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. In the event that a permanent 35-foot wall is built, the interior surfaces of the wall (i.e. those facing inwards towards the drilling and production operations) shall be treated with exterior grade acoustical panels offering equivalent sound absorption performance to that specified in this Measure above a height of 10-feet from the ground. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6g The acoustical shroud around the drilling rig mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6h During the drilling portion of Phase 4, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 4; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV6a through NV6g in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours of Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-7a Increase the height of the masonry walls on the north and west sides of the site to a minimum of 27-feet. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7b Apply outdoor acoustical panels to all available surfaces of the north and west walls that face the production operations above a height of 10-feet above the ground. The purpose of the acoustical panels is to control reflection of production noise in the direction of the sensitive uses to the east and south. The acoustical panels shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.28, 0.68, 0.95, 0.86, 0.89, 0.72. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7c Well workover rigs shall be powered by electric drive/sources or “ultra-quiet” generators or engines - either diesel or natural gas-powered - that are capable of operating below the noise significance thresholds for daytime operation. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Table 8-10 Transportation and Circulation Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1a For Phases 1-3, the Applicant shall fund, through and in consultation with the School District and Safe Routes to School, an afternoon crossing guard to be stationed at the Project Site area to ensure pedestrians passing nearby the Project Site have assistance in crossing the streets and the entrances/exit of the Project Site. Alternately, the Applicant shall ensure that trucks do not travel to and from the Project Site unless school is in session (i.e. truck travel prohibited on Valley Drive after 2:48 p.m., on Wednesdays after 1:45 p.m. or on school minimum days after 12:45 p.m.). The Applicant shall consult with the School District to ensure timing is current. Review of contracts and site inspections Prior to construction activities City of Hermosa Beach TR-1b For Phases 1-3, the Applicant shall install, subject to the approval of the City Public Works Department, warning signs and blinking yellow lights one block north and south (if applicable with possible one-way on Valley Drive) of the Project Site warning vehicle traffic that trucks may be entering and exiting the roadway. Blinking lights shall only operate when trucks are utilizing the roadway (not 24 hours per day). Review of design documents and site inspections Prior to construction activities City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1c The Applicant shall ensure that all trucks accessing the Project Site and utilizing the Pier Avenue/Valley Drive intersection are less than 65 feet long to prevent safety hazards at the double intersection on Pier Avenue between Valley Drive and Ardmore Avenue. If trucks longer than 65 feet are required, then flagger shall be used at the Pier Avenue and Valley/Ardmore intersection. Review of contracts and site inspections Phase 1-4 Prior to construction activities City of Hermosa Beach TR-1d For Phases 1-3, the Applicant shall, with the approval and coordination of the City Public Works Department, either 1) restripe Valley Drive south of Pier Avenue to be a southerly directed one-way street. No on-street parking shall be allowed on Valley Drive between 6th Street and 8th Street to allow for sufficient line of sight for trucks entering and exiting the Project Site; or 2) restripe the section of Valley Drive between 2nd Street and Herondo Street to make it two- way and direct all truck traffic along Herondo Street to approach the project site from the south. Review of design documents and site inspections Prior to pipeline construction activities City of Hermosa Beach TR-2a Pipeline construction activities within the Pipeline right-of-way shall be limited to weekday between the hours of 9:00 a.m. and 3:00 p.m., unless the applicable municipality approves a specific exception to the time limit for periods of limited duration, subject to measures required by the municipality to protect the public health and safety. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Review of design documents and site inspections Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-2b The applicant shall implement a Construction Traffic Management Plan (CTMP) during Pipeline construction that includes the following pursuant to the procedures and subject to approval of the applicable municipality: 1) Require the Pipeline contractor(s) to obtain and follow street construction permits in the affected areas (Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities - PCH and Hawthorne Boulevard); 2) Develop detour and traffic management plans consistent with the affected City’s standard roadway plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH); 3) Revise Pipeline construction schedules to minimize access impacts to adjacent residents and businesses; and 4) Ensure that all affected residences and business have adequate emergency access during all times and phases of construction. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Approval of CTMP Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-3a The applicant shall be prohibited from routing Proposed Oil Project-related heavy truck exceeding 20,000 pounds on 190th Street between Anza Avenue and PCH, except during Pipeline construction. The Applicant shall comply with all requirements of the applicable city. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3b The applicant shall route inbound and outbound heavy (>20,000 pounds) truck traffic along PCH and Artesia Boulevard, which are designated truck routes. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3c Applicant shall supply private parking sufficient to meet all parking demands and shall direct all employees and contractors to park within Applicant’s private parking areas, or to utilize an alternative parking program approved by the City. Review of Plans and onsite inspections Phase 1-4 City of Hermosa Beach TR-4a The City shall design the permanent Proposed City Maintenance Yard so that it does not enter/exit directly onto Valley Drive. Review of Plans Phase 3 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-4b If the permanent Proposed City Maintenance Yard Project affects the sidewalk, then the design shall incorporate a sidewalk design along Valley Drive which utilizes a landscape buffer to separate the pedestrians from the street. Review of Plans Phase 3 City of Hermosa Beach Table 8-11 Water Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-1 Prior to approval of demolition and new construction, a Registered Civil Engineer in the State of California shall evaluate the capacity of the existing sewer line system, beginning at the proposed tie-ins on Valley Drive for the Proposed City Maintenance Yard Project and 6th Street for the Proposed Oil Project, and continuing downstream to the Sanitation Districts of Los Angeles County sewer system, prior to any connections. A 7-day capacity performance test shall be performed, based on Sanitation Districts of Los Angeles County average wastewater generation factors, to determine baseline and peak flows, and to ensure the sewer has adequate capacity in the downstream areas. The Area study of the proposed sewer line and a 7-day performance capacity test should be performed at select Prior to issuance of permit City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party capacity analysis shall be submitted to the City Public Works Department and the Districts for review and approval. In the event that existing sanitary sewer facilities are insufficient to accommodate increased flows from the Project Site, the Applicant shall provide mobile sanitary facilities (i.e., toilet, sink, and urinal) for onsite personnel, as necessary. downstream locations to verify the adequacy of the existing sewer. WR-2 Implement MM HWQ-2a through HWQ-2d. See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ-2d WR-3a The Applicant shall complete a site-specific Area of Review/Zone of Endangering Influence analysis, per Division of Oil, Gas, and Geothermal Resources requirements, to determine if oil and gas wells are present that might serve as conduits for injected liquids to migrate upward to underground sources of drinking water. In the event that such wells are present, those wells shall be plugged and abandoned such that underground sources of drinking water (i.e., less than 10,000 mg/L total dissolved solids) are protected. Plugging and abandonment of those wells shall include zonal isolation plugs outside all casings and shall be completed per current Division of Oil, Gas, and Geothermal Resources standards. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to initiation of injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-3b The Applicant shall confine injected fluids into the intended zone of injection in order to adequately protect underground sources of drinking water. Injection well cement shall be placed at the base of all underground sources of drinking water, and not just at the base of fresh water, to protect water with total dissolved solids content ranging from 3,000 mg/L to 10,000 mg/L. Coordination with Division of Oil, Gas, and Geothermal Resources During injection well drilling and injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3c The Applicant shall complete step-rate tests, using bottom-hole and surface pressure gauges, such that maximum allowable surface injection pressures are set at a maximum of 95 percent of the fracture pressure of the formation being injected. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-3d The Applicant shall ensure that the hydrostatic pressure in overlying West Coast Basin aquifers is not exceeded during injection over the active life of the disposal wells. To ensure that this does not occur, the static reservoir pressure shall be monitored on a periodic basis, per Division of Oil, Gas, and Geothermal Resources requirements, and injection into the receiving zone shall cease if and when the hydrostatic pressure is exceeded. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3e The Applicant shall meet with Division of Oil, Gas, and Geothermal Resources staff annually to review the status of the waste water injection wells. Any deficiencies identified by Division of Oil, Gas, and Geothermal Resources staff shall be immediately rectified by the Applicant. Coordination with Division of Oil, Gas, and Geothermal Resources Annually following initiation of Phase 2 City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources 1 Development Agreement between City of Hermosa Beach and E&B Natural Resources DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF HERMOSA BEACH AND E&B NATURAL RESOURCES MANAGEMENT CORPORATION THIS DEVELOPMENT AGREEMENT (“Development Agreement” or “Agreement”) is entered into as of the ____ day of ______________, _____, by and between the CITY OF HERMOSA BEACH, a California municipal corporation ("City"), and E&B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation (“E&B”). RECITALS A. The City is the owner of that certain real property in the City of Hermosa Beach, County of Los Angeles, and State of California described in Section 2.4 of this Agreement (Exhibit A to this Agreement), and also known informally as the City Maintenance Yard (“Property” or “City Maintenance Yard”). B. On or about January 14, 1992, the City entered into Oil and Gas Lease No. 2 (“Lease”) with Macpherson Oil Company, a California corporation, for itself and for Windward Associates, a California limited partnership, of which it is the general partner (collectively “Macpherson”). The Lease was approved by the California State Lands Commission (“CSLC”). The Lease authorized Macpherson to perform oil and gas extraction activities in the tidelands granted to the City by the State of California, and also authorized Macpherson to utilize the Property for oil and gas drilling activities (“Macpherson Project”). C. During the 1990s, Macpherson sought and obtained approvals for the Macpherson Project from the City, the CSLC, the California Coastal Commission and the South Coast Air Quality Management District. In 1995, the voters of the City passed Proposition E, an initiative to ban oil drilling in the City. During this time, and subsequently, Macpherson, the City, the CSLC, and opponents to the Macpherson Project were parties to several lawsuits regarding the 2 Development Agreement between City of Hermosa Beach and E&B Natural Resources Macpherson Project, including an action by Macpherson against the City regarding whether Proposition E constituted a breach of the Lease (“Macpherson Lawsuit”). The trial court in the Macpherson Lawsuit determined that the adoption of Proposition E constituted a breach of the Lease, subject to certain City defenses, and scheduled a trial in April 2012 to determine Macpherson’s damages. D. E&B, who had no prior relationship with Macpherson, investigated the Macpherson Project and approached the City and Macpherson with a proposal to settle the Macpherson Lawsuit and to provide E&B with a potential opportunity to proceed with “a state- of-the-art directional well oil drilling project conducted from an urban drill site located on the City’s maintenance yard” and “an opportunity to persuade the City’s electorate that a state-of- the-art directional well oil drilling project conducted from the City’s maintenance yard can be accomplished safely and with financial beneifts to all of the parties.” (Settlement Agreement, p. 2.) On March 2, 2012, the City, Macpherson and E&B entered into a Settlement Agreement and Release (“Settlement Agreement”). E. The Settlement Agreement, among other consideration, provided for the dismissal of the Macpherson Lawsuit, certain payments to Macpherson, and the assignment to E&B of Macpherson’s rights under the Lease and all other permits for the Macpherson Project which would allow E&B to proceed with a redesigned oil development project (“Project”) under certain conditions. Under the terms of the Settlement Agreement, the City is required to place on the ballot, in a manner that comports with all applicable law, a measure that asks the voters whether to approve, among other things, “a development agreement that would afford E&B a vested right to proceed with the Project . . . .” (Settlement Agreement, p. 7.) F. The California Elections Code sets forth the procedures for a local legislative body to submit a measure to the voters of the City. As contemplated in the Settlement Agreement, the City elected to undertake environmental review of the Project referenced in paragraph E above in accordance with the requirements of the California Environmental Quality Act (“CEQA”). On July 8, 2014, the City Council of City certified an Environmental Impact Report in compliance with CEQA by its adoption of Resolution No. 14-6908. Formatted: Highlight 3 Development Agreement between City of Hermosa Beach and E&B Natural Resources G. The California Legislature enacted Section 65864 et seq. of the Government Code, which provides that cities and counties may enter into development agreements with persons having legal or equitable development interests in real property. Section 65867.5 of the Government Code states that a development agreement is a “legislative act” to be approved by ordinance, and the California Constitution establishes the right of voters to approve legislative acts. Elections Code section 9222 authorizes the City Council to submit any ordinance to the voters for their approval. Section 65869 of the Government Code mandates Coastal Commission approval for any development agreement in an area where a local coastal program has not been certified. H. The City has adopted rules and regulations for consideration of development agreements, pursuant to Government Code Section 65865, in Chapter 17.64 of the City’s Municipal Code. I. In compliance with the Settlement Agreement and all other applicable law, the City submitted the [insert title of Ballot Measure] (“Ballot Measure”) to the voters of the City on [insert date] in compliance with California Elections Code Section 9222. The Ballot Measure includes the following legislative approvals: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). These legislative approvals are referred to in this Agreement as “Ballot Measure Approvals.” J. By approving the Ballot Measure and this Agreement, the voters of the City have determined that the public interest is served by entering into this Agreement because the Project, described in Exhibit B to this Agreement, will provide for the remediation of the City Maintenance Yard, and will provide substantial economic benefits to the City and to the Community in the form of royalties as described in the Lease and as further set forth in Exhibit C to this Agreement. 4 Development Agreement between City of Hermosa Beach and E&B Natural Resources K. This Agreement will bind future City Councils to the terms and obligations specified in this Agreement and limit, to the degree specified in this Agreement, the future exercise of the City's ability to regulate development on the Property. L. Upon approval by the voters of the Ballot Measure Approvals, Tthis Agreement and the Project will beis consistent with, and will serve to implement the policies, objectives, and standards of the elements of the City of Hermosa Beach General Plan and will beis consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code)., all as amended by the Ballot Measure Approvals. M. This Agreement and the Project is consistent with, and will serve to implement, the provisions of Article 3 of the California Coastal Act. N. This Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property and generally serve the public interest. AGREEMENT NOW THEREFORE, in consideration of the above recitals, the mutual covenants and conditions herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agrees as follows: 1 DEFINITIONS For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Agreement" means this Development Agreement by and between the City and E&B. "Approval Date" means the date on which the Ordinance approving this Development Agreement becomes effective under Elections Code Section 9217, specifically ten days after the date the vote is declared by the City Council [INSERT DATE]. 5 Development Agreement between City of Hermosa Beach and E&B Natural Resources “Ballot Measure” means the measure that was approved by the voters on the Election Date. “Ballot Measure Ordinance” or “Ordinance” means the ordinance that accomplishes the Ballot Measure Approvals. “Ballot Measure Approvals” means the: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). "CEQA" means the California Environmental Quality Act, Section 21000, et seq., of the California Public Resources Code. "City" means the City of Hermosa Beach, California. "City Council" means the City Council of the City of Hermosa Beach. "Code" or “HBMC” means the Municipal Code of the City of Hermosa Beach. "Commencement Date" means that date when the Commission approves the Development Agreement under Government Code Section 65869; provided, however, if litigation challenging the validity of this Agreement including any Project Approvals and/or environmental review pursuant to CEQA should be brought against the City or the Coastal Commission, the Commencement Date shall be the date such litigation is concluded in a manner that permits the commencement or continuation of the parties' rights and obligations under this Agreement. “Commission” means the California Coastal Commission. “Conditional Use Permit” means the Conditional Use Permit for Oil Development at 6 Development Agreement between City of Hermosa Beach and E&B Natural Resources the City Maintenance Yard, approved by the City in Resolution No. 93-5632, and the validity of which was confirmed by the Settlement Agreement, which is to be abandoned and superseded pursuant to the terms of this Agreement. "Current Land Use Regulations" means the ordinances, resolutions, rules, regulations, requirements and official policies of the City in force as of the date on which the City Council calls the election on the Ballot Measure, as amended by the Ballot Measure Approvals. "Development Agreement Act" means Section 65864 et seq., of the California Government Code. “E&B” means E & B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation in the business of exploring for and producing oil and gas and each of its respective successors and assigns to all or any portion of its interests in the Property during such time as such portion is subject to this Agreement. “Election Date” means March 3, 2015the date that the Ballot Measure was submitted for a vote to the voters. "Event of Default" is defined in Section 5.1.1. "Exactions" means any requirement imposed by the City in connection with or pursuant to any land use regulation or land use approval process for the dedication of land, construction or improvement of public improvements or amenities, payment of development fees, or other mitigation measures required to mitigate the impacts of the development including, without limitation, all development impact fees or linkage fees, utility capacity fees, service or connection fees, major facilities fees, park fees, flood control fees, environmental impact mitigation fees, affordable housing fees, arts fees, transportation fees, child care fees and any similar governmental fees, charges and exactions required for the development of projects or property. "Force Majeure Delay" is defined in Section 6.23. "Future Ministerial Permits" is defined in Section 3.2.1. "General Plan" means the General Plan of the City as of the Effective Date. 7 Development Agreement between City of Hermosa Beach and E&B Natural Resources “Off-site Project Components” or “Off-site Components” means the Project components in the City of Hermosa Beach outside of the Property as described in Exhibit B to this Agreement, including (1) oil and gas pipelines along Valley Drive, Hermosa Beach, California, (2) supply staging/storage at 601 Cypress Avenue, Hermosa Beach, California, (3) a parking lot at 636 Cypress Avenue, Hermosa Beach, California, and (4) various locations outside the jurisdiction of Hermosa Beach. The location of (2) is more particularly described in Exhibit A-2 and the location of (3) is more particularly described in Exhibit A-3. “Oil Code” means the Hermosa Beach Oil Code, Chapter 21A (Oil Production), approved by the City with Ordinance No. 85-803. "Processing Fees" means all routine and generally applicable City-wide fees required by the City for processing applications and permits including, but not limited to, fees for land use applications, project permits, building applications, building permits, grading permits, maps and certificates of occupancy in effect at the time paid. Expressly exempted from Processing Fees are all Exactions. "Project" means the proposed oil and gas drilling and production project development of the Propertyas described in the Project Description contained in Exhibit B. "Project Approvals" means the approvals for the Project as set forth in Section 2.65 of this Agreement. "Public Benefits" means those improvements to be constructed, services to be provided and/or amounts to be paid by E&B to the City as consideration for this Agreement pursuant to Section 2.1 and Exhibit C. "Term" means the term of this Agreement, as provided in Section 6.1 of this Agreement. "Zoning Ordinance" means the comprehensive Zoning Ordinance of the City, found in Chapter 17 of the Code of the City of Hermosa Beach as it exists on the Effective Date. 2 THE DEVELOPMENT AGREEMENT PROCESS 8 Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.1 Statement of Benefits and Consideration. The voters of the City have determined that the Project is a development for which a development agreement is appropriate. Development of the Project in accordance with a development agreement will provide for the orderly development of the Property in accordance with the objectives set forth in the General Plan, including the Land Use Plan of the Local Coastal Program, as amended. Moreover, a development agreement for the Project will eliminate uncertainty in planning for and securing orderly development of the Property, ensure attainment of the maximum efficient utilization of resources within the City at the least economic cost to its citizens, and achieve the provision of public services, public uses, urban infrastructure and other goals and purposes for which the Development Agreement Act was enacted, all in the promotion of the health, safety and general welfare of the City of Hermosa Beach and its residents. In exchange for these and other benefits to the City, E&B will receive the assurance that E&B may develop the Project during the Term of this Agreement, subject to the terms and conditions herein contained. By approving Ballot Measure ___, the voters of the City have found and determined that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and have approved this Agreement. This Agreement does not (1) grant density or intensity in excess of that otherwise established in the Project Approvals, (2) supersede, nullify or amend any condition imposed in the Project Approvals, (3) guarantee to E&B any profits from the Project, or (4) prohibit or, if legally required, indicate E&B’s consent to, the Property's inclusion in any public financing district or assessment district. The City will receive substantial benefits as a result of the development of the Property in accordance with this Agreement, as set forth in Exhibit C, in recognition of and in exchange for this Agreement and the benefits provided to E&B pursuant to this Agreement. The voters of the City acknowledge the adequacy of the consideration provided by E&B to the City pursuant to this Agreement. In consideration of the benefits, commitments and consideration to be provided by E&B pursuant to this Agreement and in order to strengthen the public planning process and reduce the economic costs of development, the voters of the City hereby provide E&B assurance that it can proceed with the development of the Property for the Term of this Formatted: Highlight Formatted: Highlight 9 Development Agreement between City of Hermosa Beach and E&B Natural Resources Agreement pursuant to the land use, density and intensity specified in the Current Land Use Regulations, the Project Approvals and this Agreement. E&B would not enter into this Agreement or agree to provide the public benefits, commitments and consideration described in this Agreement if it were not for the certainty provided by this Agreement that the Property can be developed during the Term of this Agreement in accordance with the Current Land Use Regulations and the Project Approvals including the land use, density and intensity set forth in the Project Approvals. 2.2 Public Hearings. On June 23, 2014, the Planning Commission of the City, after providing notice as required by law, held public hearings on the legislative elements of the Project, including this Agreement and the amendments to the Hermosa Beach Municipal Code and Coastal Land Use Plan and the EIR. The City Council, after providing public notice as required by law, similarly held public hearings on the Project, including this Agreement [insert dates and specific code provisions]. 2.3 City Council and Voter Findings. The City Council adopted findings that review of the environmental impacts of this Agreement and the Project Approvals has been conducted in accordance with the provisions of CEQA and the State and local guidelines adopted thereunder, and the City Council has given consideration to such environmental review prior to placing the Ballot Measure on the ballot and has undertaken all actions necessary to comply with CEQA. In approving the Ballot Measure and this Agreement, the voters of the City have determined and found that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and all other applicable City plans, policies and regulations, and is consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code), all as amended by the Ballot Measure Approvals. 2.4 Property. The Property includes all real property that is subject to this Agreement. The Property as of the Election Date is commonly known as City Maintenance Yard, as more fully described in Exhibit A-1 incorporated herein by reference. 2.42.5 The Project. The Project consists of the development, construction and operations on the Property permitted under this Agreement and the Project Approvals. The description of the Project and its uses are more fully described in the Project Description set forth in Formatted: Outline numbered + Level: 2 +Numbering Style: 1, 2, 3, … + Start at: 1 + Alignment: Left + Aligned at: 0" + Indent at: 0.4" Formatted: Underline 10 Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B which is incorporated herein by reference. The Project includes Off-site Components within the City of Hermosa Beach, and other elements located outside of the City. 2.52.6 Project Approvals. The Project includes, without limitation, all items described in the Project Description contained in Exhibit B and incorporated herein by reference and the following Project Approvals: (a) Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93- 5632 (as set forth in Section 2.76 below, to be abandoned per HBMC Section 17.70.030 and superseded pursuant to the terms of this Agreement); (b) Environmental Impact Report, dated June 2014, prepared pursuant to CEQA and certified by the City Council on July 8, 2014 (with revisions identified in City Council Resolution No. 14-6908); (c) Amendments to the Land Use Plan and Land Use Plan Map of the Local Coastal Program (a component of the City’s General Plan), approved by Ballot Measure __ on ________________, and by Commission [insert Commission action] on ______________________; (d) Amendment to the Municipal Code, approved by Ballot Measure __ on _________________; (e) Franchise for Oil and Gas Pipelines, approved by Ballot Measure __ on _______________; (f) Amendment to the Oil Code, approved by Ballot Measure __ on _______________; and (e) Development Agreement, approved by Ballot Measure __ on _________________, and by Commission [insert Commission action] on _________________. 11 Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.76. Abandonment of Conditional Use Permit. With adoption of the Ballot Measure, oil drilling and production is permitted on the Property subject to a development agreement. The relevant conditions of approval from the 1993 Conditional Use Permit (CUP) for oil development at the Property (Resolution No. 93-5632) are incorporated into this Development Agreement as Exhibit D-1 herein, and E&B shall comply with said conditions as required herein. Thus, upon the Commencement Date, this agreement will supersede the 1993 CUP, which shall no longer serve a regulatory purpose. Hermosa Beach Municipal Code Section 17.70.030 allows for voluntary abandonment of a Conditional Use Permit. This Agreement at the Commencement Date shall serve as both a written request to abandon the CUP and the City’s declaration that the 1993 CUP is abandoned. 3 VESTED DEVELOPMENT RIGHTS 3.1 Vested Rights to Develop. Subject to the terms, conditions, and covenants of this Agreement, including the Reservations of Power in Section 3.4, and the conditions of approval and mitigation measures attached hereto and incorporated herein as Exhibit D, E&B shall, as of the Approval Date, have a vested right to develop the Property and Project, including Off-site Components, in accordance with, and to the extent of, the Project Approvals, and the Current Land Use Regulations. The approved use of the Property, the density and intensity of use, the maximum height, footprint, and square footage of proposed buildings and structures, and provisions for reservation and dedication of land or public purposes shall be those set forth in the Project Approvals and the attached Exhibits. Nothing in this Agreement shall be deemed to obligate E&B to initiate development of the Project or any portion thereof within any period of time or at all. 3.1.1 Certain Changes Prohibited Without Consent of E&B. Except as otherwise provided in this Agreement, during the Term, the City shall not, as to the Property and the Project, including Off-site Components, without the prior written consent of E&B, which may be withheld in E&B’s sole and unfettered discretion: (a) change the Current Land Use Regulations, or Project Approvals as they apply to the Property or Project so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals; or (b) apply to the Property or the Project any new or 12 Development Agreement between City of Hermosa Beach and E&B Natural Resources amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals, so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals, or prevent or adversely affect the operation of the Project as contemplated hereby in accordance with the Current Land Use Regulations or Project Approvals; or (c) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that requires additional discretionary review or approval not otherwise required for the Project by the Current Land Use Regulations or Project Approvals; or (d) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that materially, adversely affects the timing or phasing of construction or development, or which limits the availability of utilities or other infrastructure for the Project. For the purposes of this Section 3.1, “prevent or adversely affect development or construction of the Project” shall include, without limitation, any changes which fundamentally affect the ability of any of the permitted uses to operate within the Project (e.g. prohibit any of the uses in the Project Approvals, change parking standards for any of the uses, etc.). 3.1.2 Rights are Vested. Unless amended or terminated in the manner specified in this Agreement (and subject to the provisions of this Agreement), E&B shall have the rights and benefits afforded by this Agreement and this Agreement shall be enforceable by E&B and the City notwithstanding any growth control measure, initiative, proposition or any development moratorium adopted after the Approval Date, or any change in the General Plan, zoning, or subdivision regulations adopted by the City which alter or amend the Current Land Use Regulations or Project Approvals or the adoption of any new or amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals and so as to prevent or adversely affect development or construction of the Project in accordance with the Current Land Use Regulations or Project Approvals. This Section shall be construed to prohibit the City from applying to the Property or the Project, including any Off-site Components, any development moratorium or growth control measure that is adopted specifically to prohibit the construction or operation of the Project, or as an interim measure pending contemplated General Plan, Specific Plan or zoning changes, or as a general growth control management measure except as provided for pursuant to Section 3.4. 13 Development Agreement between City of Hermosa Beach and E&B Natural Resources 3.1.3 Future Changes to Current Land Use Regulations. Following the Approval Date, if the City modifies the Current Land Use Regulations in a manner that E&B, in its sole discretion, determines is more beneficial than the Current Land Use Regulations, then E&B may choose in its sole discretion to be governed by the modified land use regulations rather than the Current Land Use Regulations, without E&B being deemed to have waived or limited any rights, remedies or privileges under this Agreement. 3.2 Other Rights. 3.2.1 Future Ministerial Permits. E&B will seek additional ministerial permits as required by the City, including, without limitation, excavation only permits, grading permits, demolition permits, building permits, well permits, drilling permits and public works permits, as needed to implement the Project Approvals and to construct and operate the Project. Collectively, these ministerial permit applications are called the "Future Ministerial Permits". The City agrees that it will not unreasonably withhold or unreasonably condition any of the Future Ministerial Permits which must be issued by the City in order for the Project to proceed, provided that E&B reasonably and satisfactorily complies with all preliminary procedures, actions, payment of Processing Fees and criteria generally required for processing such Future Ministerial Permits, and provided further that such Future Ministerial Permits comply with this Agreement, the Current Land Use Regulations and the Project Approvals and approvals of other governmental agencies with jurisdiction over the Project. The City further agrees that no discretionary permits, other than the Project Approvals, are required from the City to construct and operate the Project. 3.3 Reservations of Power. 3.3.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the following subsequent land use regulations shall apply to the development of the Property: (a) Processing Fees (but not Exactions) imposed by the City to cover the estimated actual costs to the City of processing applications for Project Approvals, fees for monitoring compliance with any Project Approvals, inspection fees, or fees for monitoring 14 Development Agreement between City of Hermosa Beach and E&B Natural Resources compliance with environmental mitigation measures. (b) Procedural regulations applied on a City-wide, nondiscriminatory basis relating to City entities required to review petitions or applications, forms of petitions and applications, notice requirements, information requested with petitions or applications, conduct of hearings, form of staff reports, nature and type of recommendations by City entities, appeal procedures and any other similar matters of procedure. (c) Regulations governing building codes and similar construction standards and specifications including, but not limited to, the California and International Codes, as they may be changed from time to time. (d) Regulations that are necessary to protect the public health and safety, including without limitation, development moratorium or limitation on the delivery of City-provided utility services, which meet each of the following requirements: (a) are based on genuine health, safety and general welfare concerns (other than general growth management issues); (b) which arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (c) are based upon its terms or its effect as applied, does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such regulations shall be applied and construed so as to provide E&B with the rights and assurances provided under this Agreement. This subsection governs generally applicable emergencies in the area not specifically related to or caused by the Project. (e) Regulations that are not in conflict with the Project Approvals, Current Land Use Regulations or this Agreement. Any regulation, whether adopted by initiative or otherwise, limiting the rate, timing, phasing or sequencing of development of the Property shall be deemed to conflict with the Project and shall therefore not be applicable to the development of the Property. Any regulation limiting the permitted uses of the Property, limiting the density or intensity of use of the Property, or limiting the size, height or location of improvements on the Property shall be deemed to conflict with the Project Approvals and shall therefore not be applicable to the development of the Property. (f) Regulations that are in conflict with the Project, but as to which the 15 Development Agreement between City of Hermosa Beach and E&B Natural Resources E&B has given its prior written consent for such regulations to be applied to the Property or to the development of the Property. (g) Regulations applied on a City-wide, non-discriminatory basis that do not prevent or adversely affect development or construction of the Project. 3.3.2 Modification or Suspension by State or Federal Law. In the event that state or federal laws or regulations, or those of any regional authority having jurisdiction over the Project or Property, enacted after the Approval Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement or the Project conditions, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state, federal, or regional authority laws or regulations and to effectuate to the extent possible the terms of this Agreement. 3.3.3 Police Power. The parties acknowledge and agree that City is restricted in its authority to limit its police power by development agreement and that the foregoing limitations, reservations and exceptions are intended to reserve to City all of its police power which cannot be so limited. This Agreement shall be construed to reserve to City all such power and authority which cannot be restricted by development agreement. 3.3.4 Taxes, Assessments and Fees. Anything herein to the contrary notwithstanding, City may impose on the Project any new non-discriminatory, City-wide taxes, assessments and fees, including but not limited to business license taxes or franchise fees, but not including any Exaction or other fee designated to mitigate the impact of development of the Project. 3.4 Regulation by Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of the City may possess authority to regulate aspects of the development of the Property separately from or jointly with City, and this Agreement does not limit the authority of such other public agencies. Changes to the project mandated by such regulatory agencies shall be automatically included into this Development Agreement as set forthauthorized in Section 10.F of the Ballot Measure and shall supersede any inconsistent provisions herein. 3.5 Agreement and Assurances on the Part of E&B. Without in any way limiting E&B’s 16 Development Agreement between City of Hermosa Beach and E&B Natural Resources rights under Section 5.2.2 not to proceed with development of the Project and, in such an event, to terminate this Agreement in its sole and subjective business judgment, if E&B proceeds with the Project, E&B agrees that it will use commercially reasonable efforts, in accordance with its own business judgment and taking into account market conditions and economic considerations, to develop the Project, in accordance with the terms and conditions of this Agreement, the Current Land Use Regulations, the Lease and the Project Approvals. 3.6 Public Benefits. 3.6.1 The parties acknowledge and agree that development of the Project will result in public benefits as set forth in Exhibit C. The voters of the City acknowledges the adequacy of the consideration, including the Public Benefits, provided by E&B to the City pursuant to this Agreement. 3.6.2 Exactions and Processing Fees. 3.6.2.1 Exactions. No Exaction may be imposed on this Project except as specifically articulated in this Agreement, and except as required by the conditions of approval and the Mitigation Monitoring and Reporting Program contained in Exhibit D. 3.6.2.2 Processing Fees. E&B shall pay to the City all applicable Processing Fees regularly charged by the City and the amount of such Processing Fees may be increased from time to time on a non-discriminatory City-wide basis. 3.7 Public Improvements and Utilities 3.7.1 Installation Obligations. The parties hereby agree that the obligations to install public improvements and utilities necessary for the development of the Property shall be as provided for in the Project Approvals. 3.7.2 City-Provided Utilities: Reservation of Sufficient Capacity. To the extent that it is within the control of the City, the City shall use its best efforts to ensure that there shall be sufficient capacity, facilities and services with respect to City-provided utilities to complete construction of the Project, provided that E&B bear all costs incurred by the City in doing so. 17 Development Agreement between City of Hermosa Beach and E&B Natural Resources and open the uses thereon to the public. The City agrees that if limitations in the provision of utilities become necessary due to the existence of an emergency situation, they shall be applied only to the extent necessary to respond to such emergency, and shall not be applied against the Property or the Project in a discriminatory manner. 3.7.3 City-Provided Utilities: Nondiscriminatory Rates and Provision of Service. The City agrees that rates and charges for City-provided utilities for the Property and Project shall not be set or imposed in a discriminatory manner, but shall be those rates and charges that are or would be generally applicable to any user of a comparable quantity and quality of the utility use in the City (i.e., any other entity whose use or consumption of the utility is comparable to that of E&B), and that the City shall not discriminate against the Property or the Project in the provision of any City-provided utilities (such as potable and reclaimed water, sewer and drainage). 3.7.4 Dedications, Reservations and Conditions of Development. The portions of Property to be reserved or dedicated for public purposes pursuant to this Agreement, if any, shall be that property described in the Project Approvals. Unless otherwise indicated herein, the property described in the Project Approvals to be reserved or dedicated for public use shall be dedicated by E&B as provided in the Project Approvals. The City shall take such actions as may be necessary to vacate any prior dedications, offers to dedicate and grants of easements that are no longer necessary for the development of the Project in accordance with this Agreement. 3.8 Mitigation Measures and Conditions of Approval. E&B shall at its own expense timely perform all mitigation measures identified in the environmental documentation for the Project and conditions of approval identified in the Project Approvals as set forth in Exhibit D. E&B shall have no duty to complete the mitigation measures or conditions of approval, except as otherwise set forth in this Agreement, if the contemplated development fails to occur. 4 ASSIGNMENT, AMENDMENT AND REVIEW 18 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.1 Assignment 4.1.1 Right to Assign. E&B shall have the right to sell, transfer or assign its rights or interests in the Property in whole or in part (provided that no such partial transfer shall be permitted to cause a violation of the Subdivision Map Act, Government Code Section 66410 et seq.) to any person, partnership, joint venture, firm or corporation at any time during the Term, subject to the City’s consent, as provided in Subsection 4.1.2. The conditions and covenants set forth in this Agreement and incorporated herein shall run with the land and the benefits and burdens shall bind and inure to the benefit of the parties. Any such sale, transfer or assignment shall include the assignment and assumption of the rights, duties and obligations arising under or from this Agreement with respect to the property transferred and shall be made in strict compliance with the following requirements: (a) Except as provided in Section 6.17 of this Agreement, no sale, transfer or assignment of any right or interest under this Agreement shall be made unless made together with the sale, transfer or assignment of all or a part of the Property and then, only in accordance herewith. (b) Concurrently with the closing of such sale, transfer or assignment, E&B shall provide the City with an executed agreement by the purchaser, transferee or assignee and providing therein that the purchaser, transferee or assignee expressly and unconditionally assumes the duties and obligations of E&B under this Agreement to the extent of such transfer or assignment, in a form satisfactory to the City Attorney. (c) The purchaser, transferee or assignee shall provide the City with security equivalent to any security previously provided by E&B to secure performance of its obligations hereunder, if any, or under any of the Project Approvals. Any sale, transfer or assignment under Section 4.1 of this Agreement not made in strict compliance with the foregoing conditions shall constitute a default by E&B under this Agreement and any such assignment shall be void and of no effect. Notwithstanding the failure of any purchaser, transferee or assignee to execute the agreement required by subparagraph (b) of this Subsection 4.1.1, the burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the benefits of this Agreement shall not inure to Formatted: Highlight 19 Development Agreement between City of Hermosa Beach and E&B Natural Resources such purchaser, transferee or assignee until and unless such agreement is executed. 4.1.2 City’s Reasonable Consent Required. E&B may sell, transfer or assign its rights or interests in the Property in whole or in part and this Agreement to any other person, partnership, joint venture, firm, corporation, trust or other lawful entity with the City’s consent, which consent shall not be unreasonably withheld or conditioned (“Transfer”). In the event E&B desires to make such Transfer, E&B shall submit to the City a request for approval at least forty- five (45) days prior to such Transfer, which approval shall not be unreasonably withheld, conditioned or delayed by the City. The City may withhold, condition or delay its approval upon finding of any of the following: (a) The proposed purchaser, transferee or assignee lacks the financial ability to perform the obligations of this Agreement; (b) The proposed purchaser, transferee or assignee lacks the necessary qualifications, competence, experience or capability to implement the development plan contemplated by the Project Approvals with the skill, expertise and quality equivalent to that of E&B; provided, however, if the proposed purchaser, transferee or assignee is a nationally or regionally recognized, or regionally known in Southern California, as an owner or developer of oil and gas facilities, such proposed purchaser, transferee or assignee shall be deemed to have met this requirement; or (c) An Event of Default by E&B as defined in Section 5.1.1 has occurred and is continuing under this Agreement. E&B shall provide to the City such information that the City reasonably requests in order for the City to make any determinations provided for by this Subsection 4.1.2. E&B agrees to provide such information on a timely basis sufficient to permit the City to make its determinations within the forty-five (45) day time period. 4.1.3 Applicability. The provisions of Sections 4.1.1 and 4.1.2 shall not be applicable to a Transfer as a result of which E&B retains at least a fifty (50) percent interest in the Property. or as a result of which E&B retains at least twenty-five (25) percent interest in the Property and maintains effective management control of the Project. 4.2 Changes and Amendments to Project Formatted: Highlight 20 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.2.1 In the event E&B reasonably finds that a change or amendment in the Project Approvals is reasonably necessary or appropriate, E&B shall apply for any required changes to the Project Approvals. Any such application that does not require an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the Current Land Use Regulations, except as otherwise provided by this Agreement, including the Reservations of Power. Any application that requires an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the land use regulations in effect at the time the application is filed. 4.2.2 Minor Changes to Project - No Amendment of Agreement The parties acknowledge that refinements or modifications of the Project may be required during the Term. The parties agree that refinements and modifications which constitute a "Minor Change” in the Project or Project Approvals shall not require an amendment to this Agreement or public notice and a hearing. For any such Minor Change, the City shall not impose as a condition to approval any Exaction, except as authorized in this Agreement. The City Manager, subject to the City Council’s approval, shall be authorized to make the determination on behalf of the City whether a requested refinement or modification may be effectuated pursuant to this Section 4.2.2 or whether the requested refinement or modification is of such a character to require an amendment hereof pursuant to Section 4.2.3. The City Manager, subject to the City Council’s approval, shall be authorized to approve any Minor Changes hereunder on behalf of the City. If and when the parties find that Minor Changes are necessary or appropriate, they shall, unless otherwise required by law, effectuate such changes or adjustments through a letter prepared by the City Manager and approved by the City Council, which, after execution, shall be attached hereto as addenda and become a part hereof. The City Manager may consult with technical experts in making the determination that a requested refinement or modification is a “Major” or “Minor Change.” The City Manager shall not unreasonably withhold or delay its determination that a requested refinement or modification is a “Minor Change” as that term is used herein. The changes described below shall not be deemed Minor Changes; however, the examples listed below are listed for reference only, and are not intended to provide a complete list of changes that may not be deemed as Minor Changes: A change to the Project Approvals shall not be deemed “Minor Change” if such change: 21 Development Agreement between City of Hermosa Beach and E&B Natural Resources (a) Alters the permitted uses of the Property as a whole; (b) Requires an amendment to the Zoning Ordinance, or General Plan, or other legislative acts not contemplated in this Agreement; (c) Increases the density or intensity of use of the Property as a whole; (d) Constitutes a project requiring a subsequent or supplemental environmental impact report pursuant to Public Resources Code Section 21166; (e) Creates a situation adverse to public health or safety. 4.2.3 Other Changes. Any change in the Project which does not qualify as a "Minor Change" as defined herein shall require an amendment to this Agreement as provided in Section 6.9, and compliance with CEQA as applicable. 4.3 Annual/Special Review. 4.3.1 Annual Review. The City shall, at least every twelve (12) months during the Term of this Agreement, review the extent of good faith substantial compliance by E&B with the terms of this Agreement. Subject to the notice and cure procedure set forth in Section 5.1.2, such a periodic review may result in amendment or termination of this Agreement, provided a default has been established under the terms of this Agreement. Pursuant to Government Code Section 65865.1, as amended, E&B shall have the duty to file an annual review request with the City, pay any applicable Processing Fees for such annual review and demonstrate its good faith compliance with the terms of this Agreement at such periodic review. Processing fees for such review are to include, but are not limited to, all costs incurred by the City in retaining the necessary professionals and experts to provide the City with the necessary input regarding the annual review, including but not limited to City Attorney, consultant and other third parties the City deems necessary to conduct the annual review. Upon request by the City, E&B shall provide such information as may be necessary or appropriate in order to ascertain compliance with this Agreement. , provided however, that the parties recognize that this Agreement and the 22 Development Agreement between City of Hermosa Beach and E&B Natural Resources documents incorporated herein could be deemed to contain many requirements (i.e., construction standards, landscape standards, etc.) and that evidence of each and every requirement would be a wasteful exercise of the parties' resources. Accordingly, E&B shall be deemed to have satisfied its duty of demonstration if it presents evidence satisfactory to the City of its good faith and substantial compliance with the major provisions of this Agreement. 4.3.1.1 Any party may address any requirement of this Agreement during the review. However, ten (10) days’ written notice of any requirement to be addressed shall be made by the requesting party. If at the time of review an issue not previously identified in writing is required to be addressed, the review at the request of either party shall be continued to afford sufficient time for analysis and preparation. 4.3.2 Special Review. The City Council may order a special review of compliance with this Agreement at any time. The Director of Community Development or City Council, as determined from time to time by the City Council, shall conduct such special reviews. Any special review shall comply with the procedural provisions and Processing Fees of an annual review as provided by Section 4.3.1. 4.3.3 Opportunity to be Heard. Upon written request to the City by E&B, E&B shall be permitted an opportunity to be heard orally and/or in writing at a hearing before the City Council regarding its performance under this Agreement. E&B shall also be heard before the City Council at any required public hearing concerning a review of action on the Agreement. Such hearings requested by E&B shall be subject to the Processing Fees provision of Section 4.3.1. 4.3.4 Information to be Provided E&B. The City shall, to such an extent as is practical, deposit in the mail to E&B a copy of staff reports and related exhibits concerning contract performance a minimum of seven (7) business days prior to any such review or action upon this Agreement by the Planning Commission or the City Council. 5 DEFAULT, REMEDIES AND TERMINATION 5.1 Enforceability. 23 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5.1.1 Default. Subject to Sections 5.1.2 and 5.1.3, failure by any party to perform any term or provision of this Agreement required to be performed by such party shall constitute an event of default ("Event of Default”). In the event that E&B files for reorganization or other relief under any Federal or State bankruptcy or insolvency law, whether voluntarily or by involuntary bankruptcy or insolvency action, all provisions of this Agreement shall remain in full force and effect unless E&B engages in an Event of Default. For purposes of this Agreement, a party claiming another party is in default shall be referred to as the "Complaining Party", and the party alleged to be in default shall be referred to as the "Party in Default". 5.1.2 Procedure Regarding Defaults. 5.1.2.1 Notice of Default. The Complaining Party shall give written notice of default to the Party in Default, specifying the default complained of by the Complaining Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. The Party in Default shall diligently endeavor to cure, correct or remedy the matter complained of, provided the such cure, correction or remedy shall be completed within the applicable time period set forth herein after receipt of written notice (or such additional, time as may be deemed by the Complaining Party to be reasonably necessary to correct the matter). Any failures or delays by a Complaining Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by a Complaining Party in asserting any of its rights and remedies shall not deprive the Complaining Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. If an Event of Default occurs, prior to exercising any remedies, the Complaining Party shall give the Party in Default written notice of such default. Without limitation, evidence of default may arise in the course of the regularly scheduled annual review or a special review described in Section 4.3. 5.1.2.2 Cure Periods. If the default is reasonably capable of being cured within thirty (30) days, the Party in Default shall have such period to effect a cure prior to exercise of remedies by the Complaining Party. If the nature of the alleged default is such that it cannot practicably be cured within such thirty (30) day period, the cure shall be deemed to have occurred within such thirty (30) day period if (i) the cure is commenced at the earliest practicable date following receipt of the notice; (ii) the cure is diligently prosecuted to completion at all times thereafter; (iii) at the earliest practicable date (in no event later than thirty (30) days after 24 Development Agreement between City of Hermosa Beach and E&B Natural Resources the curing party's receipt of the notice), the curing party provides written notice to the other party that the cure cannot practicably be completed within such thirty (30) day period; and (iv) the cure is completed at the earliest practicable date. In no event shall the Complaining Party be precluded from exercising remedies, subject to the preceding sentence if a default is not cured within sixty (60) days after the first notice of default is given. Subject to the foregoing, if a party fails to cure a default in accordance with the foregoing, the Complaining Party, at its option, may terminate this Agreement pursuant to this Agreement and California Government Code Section 65868, and/or institute legal proceedings pursuant to this Agreement. 5.1.2.3 Procedures Regarding City Termination. Notice of intent to terminate shall be by certified mail, return receipt requested. Upon delivery by the City of notice of intent to terminate, the matter shall be scheduled for consideration and review by the City Council within thirty (30) days in accordance with Government Code Sections 65867 and 65868. Upon consideration of the evidence presented in said review and a determination by the City Council based thereon, the City may give written notice of termination of this Agreement to E&B. Any determination of default (or any determination of failure to demonstrate good faith compliance as a part of annual review) made by the City against E&B, or any person who succeeds to E&B with respect to any portion of the Property, shall be based upon written findings supported by substantial evidence in the record. Any purported termination of this Agreement for alleged default shall be subject to review in the Superior Court of the County of Los Angeles pursuant to Code of Civil Procedure § 1094.5(c). 5.1.3 Institution of Legal Action. Subject to notice of default and opportunity to cure under Section 5.1.2, and subject further to the limitation on remedies set forth in Section 5.1.4, in addition to any other rights or remedies, any party to this Agreement may institute legal action to cure, correct or remedy any default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation hereof, or to obtain any other remedies consistent with this Agreement. If a legal action or proceeding is brought by any party to this Agreement because of an Event of Default under this Agreement, or to enforce a provision hereof, the prevailing party shall be entitled to reimbursement of all costs and expenses, including reasonable attorneys’ fees, incurred in prosecuting such legal action or proceeding. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement. Additionally, in the event of a court finding (1) a violation of this Formatted: Highlight 25 Development Agreement between City of Hermosa Beach and E&B Natural Resources development agreement or the conditions of approval in Exhibit D to this agreement, or (2) a violation of an order issued under Hermosa Beach Oil Code Section 21-A-10.1, a court may impose civil penalties up to $10,000/per day for each day in which E&B is determined to be non- compliant. 5.1.4 Remedies. 5.1.4.1 E&B’s Remedies. It is acknowledged by the parties that the City would not have entered into this Agreement if it were liable in damages under or with respect to this Agreement or the application thereof. In addition, the parties agree that monetary damages are not an adequate remedy for E&B if the City should be determined to be in default under this Agreement. The parties further agree that specific performance shall be E&B’s only remedy under this Agreement and E&B may not seek monetary damages in the event of a default by City under this Agreement. E&B covenants not to sue for or obtain monetary damages for the breach by City of any provision of this Agreement. 5.1.4.2 City's Remedies. The parties agree that the City shall have limited remedies for monetary damages and specific performance as specifically provided for in this Section 5.1.4.2. The City shall not have any right to compel specific performance with respect to the construction of the Project, or any obligation to construct the Project, including without limitation Section 3.7. Further, the City shall have no right to monetary damages as a result of E&B's failure to construct the Project or its failure to comply with Section 3.7. The City shall have the right to sue for monetary damages for failure by the E&B to pay any amounts owing under this Agreement including without limitation any amounts owing pursuant to Section 6.5.1. In no event shall the City be entitled to consequential damages or punitive damages for any breach of this Agreement. City also shall have the right to seek monetary damages for reimbursement of the actual cost to the City incurred by the City to construct, complete, demolish, remove or restore any physical infrastructure improvement in the public right of way which E&B commences construction of but fails to complete. If E&B’s failure or refusal to perform any provision of this Agreement causes an immediate and serious threat to life, health, property or natural resources, the City may pursue all remedies including but not limited to remedies available under the Hermosa Beach Oil Code Chapter 21-A (including the provisions of Article X, which allow for immediate cessation of operations) and Section 21 of the Lease. Formatted: Highlight 26 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5.1.4.3 Other Actions. Nothing in this Agreement shall be deemed to waive or limit any rights and remedies that the parties would otherwise have against the other relating to matters not covered by this Agreement. 5.2 Termination of Agreement. 5.2.1 As to the Property and all of the rights of E&B hereunder, and except as otherwise provided in this Agreement, this Agreement shall be deemed terminated and of no further effect upon the expiration of the Term of this Agreement unless earlier terminated pursuant to this Agreement. Subject to the notice and cure provisions set forth in Section 5.1.2, the City shall have the right to terminate this Agreement as to the Property and the rights of E&B hereunder, in the event E&B defaults and fails to cure such default within the respective cure period. Subject to the notice and cure provisions set forth in Section 5.1.2, E&B shall have the right to terminate this Agreement and the rights of the City hereunder in the event the City defaults and fails to cure such default within the respective cure period. Upon the termination of this Agreement, neither party shall have any further right or obligation with respect to the Property hereunder except with respect to any obligation to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination (other than commencement of construction of either phase) or with respect to any obligations which are specifically set forth as surviving this Agreement. Termination of this Agreement pursuant to this Section 5.2 shall cause the rights and benefits afforded by this Agreement to no longer be vested (subject to planning and zoning law) and as a result, the City shall no longer be limited from taking any action which may adversely affect the Property or the Project. 5.2.2 Termination by E&B Prior to Development. E&B is free, in its sole and subjective business judgment, not to proceed with development of the Project and, in such an event, to terminate this Agreement. The City acknowledges that such a right is consistent with the intent, purpose and understanding of the parties to this Agreement. In the event E&B decides not to proceed with development of the Project and to terminate this Agreement, E&B shall provide written notice to the City of that decision and of the final, irrevocable termination of this Agreement. Immediately upon the giving of such written notice to the City, the parties’ rights and obligations under this Agreement shall cease, except with respect to any obligations which are specifically set forth as surviving this Agreement. In the event of such written notice to the 27 Development Agreement between City of Hermosa Beach and E&B Natural Resources City terminating this Agreement, all Project Approvals (but not the Lease, Settlement Agreement and those included in the City’s General Plan and/or the Municipal Code), shall terminate and be extinguished. Termination by E&B shall not affect any of E&B’s obligations to pay assessments, liens or taxes incurred prior to the effective date of termination. 6 GENERAL PROVISIONS 6.1 Term. 6.1.1 Term. The Term of this Agreement shall commence upon the Commencement Date and shall be coterminous with the term of the Lease, unless terminated, modified or extended pursuant to the provisions of this Agreement or by the voters of the City. The Term of this Agreement shall be tolled during any period of time in which a Force Majeure Delay exists. 6.1.2 Additional Rights. Expiration or termination of this Agreement shall not affect any right vested under law independent of this Agreement. 6.2 Approval, Execution and Recordation Procedure. The following procedure shall govern approval of this Agreement: (a) The voters shall have approved Ballot Measure __ approving this Agreement; (b) Following voter approval, the Hermosa Beach City Council shall declare the vote in accordance with Elections Code Section 9217 and execute the Development Agreement; (c) As provided in Section 65868.5 of the Development Agreement Act, following execution by the City, the City shall cause a copy of this Agreement to be recorded with the County Recorder within ten (10) days. Any recording costs shall be paid by E&B; and (d) Following execution and recordation, the Coastal Commission shall have approved this Agreement (which shall include any revisions to this Agreement authorized by Section 10.F of the Ballot Measure Ordinance); 28 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.3 Cooperation and Implementation. City represents that it will cooperate with E&B to the fullest extent reasonable and feasible to implement this Agreement. Upon satisfactory completion by E&B of all of its preliminary actions and payments of appropriate fees, City shall promptly commence and diligently proceed with reasonable diligence to complete all steps necessary for the implementation of this Agreement and the development of the Property in accordance with the terms of this Agreement, including, but not limited to, the processing and checking of any and all Project Approvals, agreements, covenants and related matters required under the conditions of this Agreement, building plans and specifications, and any other plans necessary for the development of the Property, requests for inspections and certificates of occupancy, filed by or on behalf of E&B. E&B shall, in a timely manner, provide City with all documents, plans and other information necessary for the City to carry out its obligations hereunder, and pay for all necessary fees, costs, and expenses incurred by the City to facilitate implementation of this agreement that are not identified as the City’s responsibility. 6.4 Legal Challenges. 6.4.1 Defense. If any legal action or other proceeding is instituted by a third party or parties, other governmental entity or official challenging the validity of any provision of the Project Approvals, of the EIR or of this Development Agreement, E&B and the City shall cooperate in defending any such action. The City shall notify E&B of any such legal action against City within ten (10) days after the City receives service of process, except for any petition for a Temporary Restraining Order, in which case the City shall notify E&B immediately upon receipt of notice thereof. 6.4.2 Continued Processing. The filing of any lawsuit(s) by a third party (not a party to this Agreement) after the Approval Date against the City and/or E&B relating to this Agreement or to other development issues affecting the Project shall not delay or stop the processing or issuance of any permit or authorization necessary for development of the Project, unless required by court order. the City in good faith determines that such delay is legally required. 6.5 Indemnity. Formatted: Highlight 29 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.5.1 E&B Indemnity. To the fullest extent permitted by law, and notwithstanding the indemnification provisions set forth in the Lease and notwithstanding the limits of the insurance policies required herein, E&B hereby agrees, at its sole cost and expense, to defend, protect, indemnify, and hold harmless the City and its elected officials, officers, attorneys, agents, employees, consultants, volunteers, successors, and assigns (collectively "Indemnitees") from and against any and all third party damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens, and losses of any nature whatsoever, including reasonable fees of accountants, attorneys, engineers, consultants or other professionals and all costs associated therewith, arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to any act, failure to act, error, or omission of E&B or any of its officers, agents, servants, lessees, employees, contractors, subcontractors, materialmen, suppliers or their officers, agents, servants, lessees, or employees, or arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to this Agreement or Project Approvals, or any approval subsequently granted by the City for the development of the Property, any construction permitted pursuant to this Agreement or Project Approvals, or any subsequent use of the Property, or any portion thereof, permitted by this Agreement or Project Approvals except for any actions resulting from the gross negligence or intentional acts of an Indemnitee. The City may elect to participate in the litigation, in which case E&B agrees to reimburse the City for its litigation costs and fees, including the retention of outside counsel to be selected by the City at the City’s sole discretion. Neither party shall settle any such lawsuit without the consent of the other party. 6.5.2 Survival of Indemnity. The indemnity provisions contained in Sections 6.4 and 6.5 shall survive the termination of the Agreement and are in addition to any other rights or remedies which Indemnitees may have under the law. Payment is not required as a condition precedent to an Indemnitee's right to recover under these indemnity provisions, and an entry of judgment against an Indemnitee shall be conclusive in favor of the Indemnitee's right to recover under these indemnity provisions. E&B shall pay Indemnitees for any reasonable attorneys’ fees and costs incurred in enforcing these indemnification provisions. 6.6 Notices. All notices or other communications required hereunder shall be in writing and shall be personally delivered (including by means of professional messenger service), or sent by registered or certified mail, postage prepaid, return receipt required, or by 30 Development Agreement between City of Hermosa Beach and E&B Natural Resources electronic mail (provided the email transmission is followed by delivery of a "hard" copy), and shall be deemed received on the date of receipt personally, by registered or certified mail or by facsimile. Unless otherwise indicated in writing, such notice shall be sent addressed as follows: If to the City: City Manager City of Hermosa Beach 1315 Valley Drive Hermosa Beach, CA 90254 With a copy to: Michael Jenkins, Esq. Jenkins & Hogin 1230 Rosecrans Avenue, Suite 110 Manhattan Beach, CA 90266 Telephone: (310) 643-8448 Fax: (310) 643-8441 If to E&B: E & B Natural Resources Management Corporation 1600 Norris Road Bakersfield, CA 93308 Telephone: (661) 679-1797 Fax: 31 Development Agreement between City of Hermosa Beach and E&B Natural Resources With a copy to: [name] Telephone: Fax: 6.7 No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the parties to this Agreement and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 6.8 Time of Essence. Time is of the essence for each provision of this Agreement of which time is an element. 6.9 Modification, Amendment or Extension. Subject to any notice and hearing requirements imposed by law, this Agreement may be modified, amended and/or extended from time to time by mutual written consent of the City Council and E&B as set forth in Government Code Sections 65867, 65867.5 and 65868 and as authorized by Section 10.G of the Ballot Measure Ordinance and Chapter 19.66 of the Municipal Code. 6.10 Conflicts of Law. In the event that state, regional or federal laws or regulations enacted after the Approval Date or the action or inaction of any other affected governmental jurisdiction prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, the parties shall (a) provide the other party with written notice of such state, regional or federal restriction, provide a copy of such regulation or policy and a statement of conflict with the provisions of this Agreement, and (b) E&B and the City staff shall, within thirty (30) days, meet and confer in good faith in a reasonable attempt to modify this Agreement, but only to the minimum extent necessary to comply with such federal, regional or state law or regulation. Thereafter, regardless of whether the parties reach an agreement on the effect of such federal, regional or state law or regulation upon this Agreement, the matter shall be 32 Development Agreement between City of Hermosa Beach and E&B Natural Resources scheduled for hearings before the Council. Ten (10) days’ written notice of such hearing shall be given, pursuant to Government Code Sections 65090 and 65867. The Council, at such hearing, shall determine the exact modification or suspension which shall be necessitated by such federal, regional or state law or regulation. E&B, at the hearing, shall have the right to offer oral and written testimony. Any modification or suspension shall be taken by the affirmative vote of not less than a majority of the authorized voting members of the Council. Any suspension or modification may be subject to judicial review. The City shall cooperate with E&B in the securing of any permits which may be required as a result of such modifications or suspensions, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this agreement), and the indemnity provisions in Section 6.5 of this agreement. If E&B and the City do not agree on the modification or suspension, either party may elect to terminate this Agreement pursuant to the provisions of Section 5.2 of this Agreement., upon 30 days’ written notice to the other Party. 6.11 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought and referring expressly to this Section. No waiver of any right or remedy in respect of any occurrence or event shall be deemed a waiver of any right or remedy in respect of any other occurrence or event 6.12 Successors and Assigns. Except as expressly provided to the contrary in this Agreement, the burdens and obligations of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement and all successors in interest to the Property or any portion thereof or any interest therein, and shall be covenants running with the land. 6.13 Governing State Law. This Agreement shall be construed in accordance with the laws of the State of California. 6.14 Constructive Notice and Acceptance. Every person who now or hereafter owns or acquires any right, title or interest in or to any portion of the Property is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person 33 Development Agreement between City of Hermosa Beach and E&B Natural Resources acquired an interest in the Property. 6.15 Statement of Compliance. Within thirty (30) days following any written request, in accordance with the notice provisions of this Agreement, which either party may make from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, the other party shall execute and deliver to the requesting party a statement certifying that: (a) this Agreement is unmodified and in full force and effect or, if there have been modifications hereto, that this Agreement is in full force and effect, as modified, and stating the date and nature of such modifications; (b) that this Agreement is in full force and there are no current uncured defaults under this Agreement or specifying the dates and nature of any such defaults, and manner of cure; (c) any other information reasonably requested. The failure to deliver such statement within such time shall be conclusive upon the party which fails to deliver such statement that this Agreement is in full force and effect without modification except as may be represented by the requesting party and that there are no uncured defaults in the performance of the requesting party. Said statement(s) shall be in the form reasonably satisfactory to the City, E&B and to any purchaser, lender, title company, governmental agency, or other person reasonably requesting such statement(s) in connection with sale, use, development, construction, financing or marketing of the Property. The City and E&B, for their own respective uses, shall also be entitled to obtain a statement of compliance at any reasonable time. 6.16 Insurance. 6.16.1 E&B shall obtain and maintain insurance required by this Section 6.16, which shall also serve to satisfy the insurance requirements of section 18(b) and Exhibit C to the Lease. All insurance required to be carried by E&B shall be with companies rated A:X or better, in the then most recent edition of Best’s Insurance Guide, and licensed to provide the relevant insurance in the State of California. Certificates of Insurance required to be delivered by this Section 6.16 shall contain liability limits not less than those set forth in this Section 6.16, and shall list the City and the California State Lands Commission as an additional insured. E&B shall give the City an unqualified thirty (30) day notice of cancellation, non-renewal or material amendment thereof. E&B shall deliver the required Certificates of Insurance evidencing the insurance required by this Section 6.16 promptly upon obtaining the same. Formatted: Outline numbered + Level: 2 +Numbering Style: 1, 2, 3, … + Start at: 1 + Alignment: Left + Aligned at: 0" + Indent at: 0.4" Formatted: Font: Times New Roman 34 Development Agreement between City of Hermosa Beach and E&B Natural Resources In the event any insurance (including the limits that are required to be obtained and maintained by E&B pursuant to this Section 6.16 and/or naming the City as an additional insured), other than insurance required to be obtained and maintained by applicable law, shall not be available and commercially feasible to obtain and maintain in the commercial insurance market, E&B shall provide written notice of that occurrence to the City. Said written notice shall be accompanied by a written report prepared by an independent insurance advisor of recognized national standing and reasonably acceptable to City, certifying that such insurance is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, or in the case where any required insurance amount is not so available, certifying as to the maximum amount that is so available, and in each case explaining in detail the basis for such conclusions. [UNDER DISCUSSION] Should this occur, E&B shall have the right to self-insure in order to obtain additional policy limits and/or coverage as long as the financial capability of E&B is sufficient to obtain self-insurance coverage that would be equivalent that required by this Section 6.16. Should E&B be unable to satisfy this requirement for financial capability in order to self-insure, E&B and the City shall negotiate in good faith and attempt to agree upon alternative adequate means of financial assurance to substitute for the insurance or the portion of the insurance that is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, taking into consideration the type and amount of insurance which has become unavailable, the potential magnitude of any loss not covered by insurance. E&B may self-insure and/or provide other alternative adequate means of financial assurance to the City only for so long as and to the extent that any insurance required by this Section 6.16 is not then reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. Said differently, E&B will again be required to obtain and maintain all of the insurance required by this Section 6.16 once the same is reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. 6.16.2 Required Insurance. LESSEE shall procure, pay for and keep in full force and effect during the term of this Agreement each and all of the following insurance. 6.16.2.1 Commercial General Liability Insurance. Commercial General Liability, including: Bodily Injury; Property Damage; Personal Injury; Blanket Contractual Liability, or equivalent; Broad Form Property Damage; Premises and Operations; Fire Legal Liability; Sudden and Accidental Pollution Liability; Products and Completed Operations; Explosion, Collapse and Underground Hazard; and Advertising/Personal Injury Coverage, and pollution occurring from the same in an amount not less than One Million Dollars Formatted: Font: Times New Roman 35 Development Agreement between City of Hermosa Beach and E&B Natural Resources ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate. 6.16.2.2 (Loss Of) Control Of Well And Pollution Liability Coverage. (Loss Of) Control of Well insurance and Operators Extra Expense Coverage with total of Forty Million Dollars ($40,000,000.00) limited liability for Sections 1A (Well Out Of Control Insurance), 1B (Redrill/Extra Expense), and 1C (Seepage, Pollution, Cleanup and Contamination) and a total of Five Million Dollars ($5,000,000.00) limited liability for Section 2 (Care, Custody and Control) and coverage for bodily injury, property damage, including cleanup costs and defense costs resulting from a Well Out Of Control incident. Notwithstanding the foregoing, E&B shall be obligated to maintain the specified Control of Well coverages only during actual drilling of a well, which includes drilling, completing and/or testing of the well. E&B shall provide the City with a copy of E&B’s Control of Well policy prior to commencing any actual drilling, along with the Certificate of Insurance, and such policy shall be maintained throughout the entire course of each actual drilling operation. 6.16.2.3 Worker’s Compensation Insurance. Worker’s Compensation insurance as required by law, together with Employer’s Liability coverage with limits of not less than One Million Dollars ($1,000,000.00). Such coverage shall include a Waiver of Subrogation in favor of the City and an “alternate employer” endorsement. 6.16.2.4 Owned, Non-Owned Or Hired Auto Insurance. Owned, Non-Owned or Hired Auto insurance with limits of not less than One Million Dollars ($1,000,000.00) per occurrence or accident. 6.16.2.5 Following Form Excess Or Umbrella Liability Insurance. Following Form Excess or Umbrella Liability insurance in an amount of not less than Twenty- Five Million Dollars ($25,000,000.00) per occurrence and aggregate per policy period to apply as excess coverage over coverage required by Subsections 6.16.2.1, 6.16.2.3 and 6.16.2.4. 6.16.2.6 Additional Insurance Required To Comply With Law. If the amounts of minimum insurance coverage as specified above in this Section 6.16.2 are insufficient or become insufficient to meet in any respect the minimum insurance coverage requirements set forth in or required by any applicable legal requirements of any governmental entity or regulatory body or agency by statute, case law, rules and/or regulations, then in such event E&B shall procure and maintain sufficient amounts of insurance coverage to satisfy any such minimum insurance coverage requirements in addition to the insurance required by Subsections 6.16.2.1, 6.16.2.2, 6.16.2.3, 6.16.2.4 and 6.16.2.5. 6.16.2.7 [Review of Insurance Amounts During Term of Development Agreement] [UNDER DISCUSSION] 6.16.3 Drilling or Other Contractors. Exhibit C to the Lease states: “Each drilling or other contractor performing work for the joint account shall be required to 36 Development Agreement between City of Hermosa Beach and E&B Natural Resources maintain in force, with respect to the work performed by such contractor, to the extent applicable and possible, the same insurance as specified above.” E&B also agrees to require each contractor to include the City as an additional insured to any such insurance maintained by the contractor. 6.16 E&B shall be subject to the insurance requirements of section 18(b) of and Exhibit C to the Lease, and the additional insurance requirements set forth herein. To the extent that the provisions set forth inconsistent terms, the provisions set forth herein shall prevail. E&B shall demonstrate to the City that it carries on the E&B Project General Liability Insurance, in an aggregate amount of not less than $15,000,000, combined limits, $15,000,000 in Well Control Drilling Insurance, and a policy of Pollution Legal Liability Insurance in an aggregate amount of not less than $30,000,000 combined limits. This insurance shall provide coverage for claims for bodily injury, environmental or property damage that result from pollution conditions at, on or emanating from the E&B facilities. The General Liability Insurance policy shall include the following endorsements or similar endorsement providing equivalent coverage: CG 04 20 (Pollution—Limited Exception for a Short-Term Pollution Event); and CG 22 62 (Underground Resources and Equipment Coverage). There shall be no modification of the General Liability Insurance policy limiting the scope of coverage for liability arising from oil and gas producing operations, using any of the following endorsements or their equivalents: CG 22 73 (Exclusion—Oil or Gas Producing Operations); CG 22 57 (Exclusion—Underground Resources and Equipment); CG 22 47 (Exclusion—Saline Substances Contamination); and CG 21 42 (Exclusion—Explosion, Collapse, and Underground Property Damage Hazard (Specified Operations)) or CH 21 43 (Exclusion—Explosion, Collapse, and Underground Property Damage Hazard (Specified Operations Excepted)). The Pollution Legal Liability Insurance policy may not contain an exclusion of onsite remediation costs if such an exclusion would exclude, remove or impair coverage for onsite remediation performed in response to a governmental order, demand, warning or other legally enforceable requirement. Should an exclusion exist in the policy, E&B shall post a bond to cover costs associated with remediation. The insurance policies must be secured through an insurance company having a Best’s rating of “A – VII” or better. E&B shall submit one or more certificates of insurance to the Formatted: Indent: Left: 0.4", No bullets ornumbering Formatted: Indent: Left: 0.4" 37 Development Agreement between City of Hermosa Beach and E&B Natural Resources Community Development Department to be approved by the City Risk Manager. The General Liability and Pollution Legal Liability Insurance policies shall be in place prior to issuance of the Permit and shall remain in full force and effect until revocation of the permit. E&B shall submit certificates of insurance 30 days in advance of the renewal anniversary of each policy. Such certificate(s) shall evidence the coverages described above, shall name the City of Hermosa Beach as an additional insured as to each policy provided, and shall afford the City 60 days advance notice of cancellation or non-renewal. The City Risk Manager may adjust the aggregate coverage amount specified above over time depending on factors such as inflation, modifications to State and Federal oil spill financial responsibility guidelines, and project modifications. In making such adjustments, the City Risk Manager shall give due regard to the cost and availability of such coverage, and shall allow E&B a reasonable period of time in which to place such coverage. The Well Control Drilling Insurance policy shall only be required to be in effect while drilling operations are being conducted. E&B may satisfy the Well Control Drilling Insurance requirement by having its drilling contractor or subcontractors supply the required insurance, so long as the aggregate insurance maintains the total required. 6.17 Mortgagee Protection. The parties hereto agree that this Agreement shall not prevent or limit the right of E&B at its sole discretion, to encumber its leasehold interest in the Property or any portion thereof or any improvement thereon by any mortgage or other security device (collectively "Mortgage") securing financing of the purchase, development or operation of the Property or any portion thereof (including, without limitation, any combination of purchase financing, construction financing, bridge loans, take-out and permanent financing), as provided in this Agreement; provided, however, that any such Mortgage shall be subordinate to the rights and obligations under this Agreement. The City acknowledges that prospective lenders providing such financing may request certain acknowledgements, estoppels, interpretations and/or modifications of this Agreement, and agrees upon request, from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, to meet with E&B and representatives of such lenders to discuss in good faith any such request for acknowledgements, estoppels, interpretations and/or modifications. The City shall not unreasonably withhold its consent to and/or execution of any such requested 38 Development Agreement between City of Hermosa Beach and E&B Natural Resources acknowledgements, estoppels, interpretations and/or modifications which the City determines is consistent with the intent and purposes of this Agreement and reasonably protects the interests of the City under this Agreement. If the City timely receives a request from a Mortgagee requesting a copy of any notice of default given to E&B under the terms of this Agreement, the City shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of default to E&B, as the case may be. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement. Any Mortgagee who comes into possession of E&B’s interests in the Property, or any part thereof, pursuant to foreclosure of the mortgage, shall take the Property, or part thereof, subject to the terms of this Agreement; in no event shall any such Mortgagee or its successors or assigns be entitled to a building permit or occupancy certificate until all fees and other obligations due by E&B under this Agreement have been performed and/or paid to the City, all defaults have been cured, and all otherwise applicable conditions to such permit or certificate have been satisfied. 6.18 Covenant of Good Faith and Fair Dealing. No party shall do anything which shall have the effect of harming or injuring the right of the other parties to receive the benefits of this Agreement. 6.19 Covenant of Cooperation. E&B and the City shall cooperate with and assist each other in the performance of the provisions of this Agreement, including assistance in obtaining permits for the development of the Property or the Project which may be required from public agencies other than the City, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this Agreement), and the indemnity provisions in Section 6.5 of this Agreement. E&B reserves the right to challenge any ordinance, measure, moratorium or other limitation in a court of law if it becomes necessary to protect the development rights vested in the Property pursuant to this Agreement. 6.20 Justifiable Reliance. The City acknowledges that, in investing money and planning effort in and to the Project and all public improvements and dedication offers required hereunder, 39 Development Agreement between City of Hermosa Beach and E&B Natural Resources and in undertaking commencement of the Project, E&B will be doing so in reliance upon the City's covenants contained in this Agreement and upon the enforceability of this Agreement, and the City agrees that it will be reasonable and justifiable for E&B to so rely. 6.21 Project Is Private Undertaking. It is specifically understood and agreed to by and between the parties hereto that: (1) the subject development is a private development; (2) except for the obligations of the City described herein, if any, the City has no responsibilities for or duty to third parties concerning any public improvement until such time and only until such time that the City accepts the same pursuant to the provisions of this Agreement; (3) E&B shall have full power over and exclusive control of the development of the Project herein described subject only to the limitations and obligations of E&B under this Agreement and the Project Approvals; and (4) the contractual relationship between the City and E&B is such that E&B is not an agent of the City nor is City an agent of E&B. Notwithstanding the foregoing, nothing contained in this Agreement shall be deemed to waive or modify any otherwise applicable obligations the City, acting in its governmental capacity and not as a party to this Agreement, may have to E&B or any other party, under and in accordance with all applicable laws. 6.22 Further Actions and Instruments. The parties to this Agreement shall cooperate with and provide reasonable assistance to the other parties to the extent contemplated in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of any party, the other parties shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. 6.23 Section Headings. All Article and Section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 6.24 Enforced Delay (Force Majeure). 40 Development Agreement between City of Hermosa Beach and E&B Natural Resources (a) In addition to specific provisions of this Agreement, performance by any party hereunder, including making payments, shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, casualties, acts of God, litigation not commenced by a Party to this Agreement claiming the enforced delay (including without limitation, third party legal challenges to the Project, the Project Approvals or the environmental clearance for the Project Approvals and the Project), unavailability of materials, unforeseeable events beyond the control of E&B, governmental restrictions including moratoria imposed or mandated by other governmental entities (as City is prohibited from imposing moratoria under Section 3.1.2) (but only as to delays or defaults on the part of E&B), enactment of conflicting state or federal laws or regulations (but only if the party claiming delay complies at all times with the provisions of this Agreement pertaining to such conflicting laws), delays caused by the delay or failure by any entity other than the party claiming such delay to provide financing for or construction of needed public facilities or infrastructure as contemplated or required by this Agreement, delays due to the enforcement of environmental regulations, litigation brought by third parties, or similar bases for excused performance. Any period of enforced delay provided for in this Section shall run concurrently with any period of enforced delay under the Lease. E&B shall only be required to provide one notice claiming such extension for enforced delay under both this Agreement and the Lease. (b) An extension of time for any such cause including an extension of the Term (a "Force Majeure Delay") shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other parties within thirty (30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within thirty (30) days after it obtains actual knowledge of the event. The time for performance due to a Force Majeure Delay will be extended for such period of time as the cause of such delay exists (whether or not it extends beyond the Term or the Extended Term) but in no event for longer than for such period of time. Formatted: Highlight 41 Development Agreement between City of Hermosa Beach and E&B Natural Resources (c) Notwithstanding the first sentence of paragraph (b), above, the following shall apply: (i) E&B shall be entitled to a Force Majeure Delay for a period longer than the period of enforced delay if the City Council determines that such longer period is reasonably required; and (ii) E&B shall be entitled to a Force Majeure Delay notwithstanding the fact that E&B may not have given timely notice to the City, if the City Council determines that such Force Majeure Delay is reasonably required. (d) A Force Majeure Delay shall not include the existence of any adverse or difficult market or economic conditions. 6.25 Emergency Circumstances. (a) If, as the result of specific facts, events or circumstances, the City believes that a severe and immediate emergency threat to the health or safety of the City or its residents, meeting the requirements of subparagraph (b), below, requires the modification, suspension or termination of this Agreement, the City will, after reasonable notice to E&B (in light of all the circumstances), hold a hearing on such facts, events or circumstances, at which E&B shall have the right to address the City Council. The City shall have the right to modify, suspend or terminate this Agreement, in whole or in part, if, following such hearing, the City Council determines that such modification, suspension or termination is required in order to protect the health and safety of the City and its residents. (b) This Section 6.25 governs generally applicable emergencies in the area not specifically related to or caused by the Project. For purposes of this Section 6.25, an emergency must meet each of the following criteria: (i) it must be based on genuine health, safety and general welfare concerns (other than general growth management issues); (ii) it must arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (iii) based upon its terms or its effect as applied, it does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such action by the City shall be taken in a manner so as to provide E&B with the rights and assurances provided under this Agreement. 6.26 Severability. Invalidation of any of the provisions contained in this Agreement, or of the 42 Development Agreement between City of Hermosa Beach and E&B Natural Resources application thereof to any person, by judgment or court order, shall in no way affect any of the other provisions hereof or the application thereof to any other person or circumstance, and the same shall remain in full force and effect, unless enforcement of this Agreement, as so invalidated, would be unreasonable or inequitable under all the circumstances or would frustrate the purposes of this Agreement and/or the rights and obligations of the parties hereto. 6.27 Interpretation. The language in all parts of this Agreement shall in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against any party. The parties hereto acknowledge and agree that this Agreement has been prepared jointly by the parties and has been the subject of arm's length and careful negotiation over a considerable period of time, that each party has independently reviewed this Agreement with legal counsel, and that each party has the requisite experience and sophistication to understand, interpret and agree to the particular language of the provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement shall not be interpreted or construed against the party preparing it, and instead other rules of interpretation and construction shall be utilized. 6.28 Counterparts. This Agreement may be executed in duplicate counterpart originals, each of which is deemed to be an original and all of which when taken together shall constitute one and the same instrument. 6.29 Entire Agreement. This Agreement consists of __ pages and ______________ exhibits (designated __ through __), which constitute the entire understanding and agreement of the parties, and, with the exception of (1) the Lease; (2) the Settlement Agreement; (3) the Agreement to Implement the Settlement Agreement dated July 23, 2014; and (4) the Reimbursement Agreement dated May 17, 2012 shall supersede any prior agreements, discussions, commitments, representations or agreements, written or oral, between the parties hereto with respect to this Aagreement. IN WITNESS WHEREOF, the parties have each executed this Agreement on the date first written above. 43 Development Agreement between City of Hermosa Beach and E&B Natural Resources CITY OF HERMOSA BEACH E&B NATURAL RESOURCES MANAGEMENT CORPORATION By:____________________________ By:___________________________________ Mayor President ATTEST: By: _____________________________ City Clerk APPROVED AS TO FORM: By: ____________________________ By: _________________________________ City Attorney Attorneys for E&B Natural Resources Management Corporation 44 Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-1” LEGAL DESCRIPTION 555 6TH STREET, HERMOSA BEACH, CALIFORNIA 90254 That portion of APN 4187-031-900 described as: That portion of Lot A lying south of a line commencing at the northeasterly corner of Lot 11, Block U, Tract 2002, as per Map recorded in Map Book 22, Pages 154 and 155, in the Office of the Recorder of the County of Los Angeles, and continuing along the easterly prolongation of the northerly line of said Lot 11, to the easterly line of Lot A; Lots 11 through 18, Block R, Tract 2002; Lots 11 through 18, Block U, Tract 2002; and the vacated portion of Bard Street adjoining said lots. Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-2” LEGAL DESCRIPTION 601 CYPRESS AVENUE , HERMOSA BEACH, CALIFORNIA 90254 APN 4187-030-037 Lots 11 Through 14, Block H, Tract 1686, M.B. 20- 188, City Of Hermosa Beach Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-3” LEGAL DESCRIPTION 636 CYPRESS AVENUE, HERMOSA BEACH, CALIFORNIA 90254 APN 4187-031-022 Lots 5 And Lot 6, Block I, Tract # 1686, M.B. 20- 188, City Of Hermosa Beach . Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “B” PROJECT DESCRIPTION (From Section 2.0 of FEIR) Revised with removal of City maintenance yard discussion The Proposed City Maintenance Yard Project described herein is a separate project that the City will undertake if the voters approve the Proposed Oil Project. This Development Agreement only applies to the Proposed Oil Project described below, and except for any obligations explicitly assigned to E&B herein and payments from E&B for the City Maintenance Yard Project, the Proposed City Maintenance Yard Project is not governed by this Agreement. To the extent feasible, references to the Proposed City Maintenance Yard have been removed from the Project Description. Project Description E&B Natural Resources Management Corporation (E&B), the Applicant, is proposing the E&B Oil Drilling & Development Project (Proposed Oil Project) on a 1.3-acre site located in the City of Hermosa Beach (City). The site for the Proposed Oil Project (Project Site), as shown in Figure 2.1, would be located at 555 6th Street, bounded on the east by Valley Drive and on the south by 6th Street, approximately seven blocks east of the beach and the Pacific Ocean. Oil and gas pipelines constructed and used by the Project would extend from the Project Site to one of four potential valve box locations for the oil line and to a Southern California Gas (SGE) metering station for the gas line. The Project Site is owned by the City and is currently used as the City (Public Works) Maintenance Yard. The Applicant has leased the Project Site from the City for the implementation of the Proposed Oil Project. The Proposed Project is composed of two parts: 1) the relocation of the City Maintenance Yard (called the Proposed City Maintenance Yard Project); and 2) the development of an oil and gas facility on the current City Maintenance Yard site (called the Proposed Oil Project). In order to clear the current City Maintenance Yard site (called the Project Site) for the construction of the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Directional Drilling Drilling wells at multiple angles to better reach and produce oil and gas reserves. Directional drilling allows for multiple wells from the same drilling location. proposed oil and gas facility, the City Maintenance Yard would be temporarily relocated during Phase 1 of the Proposed Project. If it is determined that the production of oil and gas on the Project Site would be economically viable (Phase 2 of the Proposed Project), construction of the permanent City Maintenance Yard would be completed once Phase 3 of the Proposed Project begins. The permanent Proposed City Maintenance Yard Project has two options: a Parking Option, which would add a net 97 parking spaces with a below grade parking garage, and a No Added Parking Option, which would have the same amount of parking as is currently available. This Project Description reflects information contained in the Project Application submitted to the City of Hermosa Beach by the Applicant, along with supporting information provided in conjunction with the Project Application (E&B Natural Resources, Planning Application and Appendices, Volumes 1 – 3, November 14, 2012; Response to Planning Application Completeness Review, April 11, 2013; Response to Requested Clarifications, June 24, 2013; Quantitative Risk Analysis, July 3, 2013; Errata, July 22, 2013).1Information related to the relocation of the City Maintenance Yard and construction and operation of the Proposed City Maintenance Yard is derived from information provided by the City of Hermosa Beach Public Works Department. The description of the Proposed Project incorporates the essential elements of the Project as it is proposed, including all phases and major components as well as the locations of all proposed offsite activities (in addition to those occurring on the Project Site). More detailed information related to some aspects of the Proposed Project (including proposed operational parameters and design features) may be found within individual sections of the Final Environmental Impact Report (EIR), where considered relevant to the discussion of specific environmental issues and/or effects. In addition, a description of the environmental setting and current conditions related to the environmental issues is presented in the Environmental Setting subsection of the individual sections of the Final EIR. 1 Information submitted by the Project Applicant is available for public review at the City of Hermosa Beach Community Development Department. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This section discusses the Project objectives, historical operations on the Proposed Project Sites, the four phases of the Proposed Oil Project, scheduling, vehicle trip and employee requirements, and necessary permitting associated with the Proposed Project. A number of technical drawings related to the Proposed Project design and layout are included in Appendix A to the Final EIR. 2.1 Project Overview The Applicant proposes the development of an onshore drilling and production facility site that would utilize directional drilling of 34 wells (30 oil wells, four wells for water disposal/injection) to access the oil and gas reserves in the tidelands (pursuant to a grant by the State of California to the City) and in an onshore area known as the uplands. Both of these areas are located within the Torrance Oil Field within the jurisdiction of the City. In addition, the Proposed Project would result in the installation of offsite underground pipelines for the transportation of the processed crude oil and gas from the Project Site to purchasers, extending through the Cities of Redondo Beach and Torrance. The Applicant proposes a laydown site for supply staging/storage within the basement level of the industrial building at 601 Cypress Avenue during the construction phases. The Applicant also proposes to construct a parking lot at 636 Cypress Avenue for use by some of its construction employees/contractors on weekdays and by the public at other times. The City Maintenance Yard is proposed to be relocated to a temporary facility to be established on the rear (westerly) portion of the City Hall site (1315 Valley Drive) prior to and during the initial phase of the Proposed Oil Project so that the maintenance operations could be moved when the existing City Maintenance Yard is demolished as part of Proposed Oil Project activities. The construction of the permanent City Maintenance Yard would be undertaken on the site now occupied by the Hermosa Self-Storage (552 11th Place) after the Applicant completes the testing phase of the Proposed Oil Project in Phase 2. As indicated below, the permanent City Maintenance Yard and the oil and gas facility on the Project Site would be constructed at the same time during Phase 3 of the Proposed Project. The timeframe from commencement of the Proposed Project until the permanent oil and gas facility would be operational is estimated to be approximately 3.25 years. The existing lease (Oil and Gas Lease No. 2) allowing drilling into the tidelands provides for a 35-year period. Table 2.1 summarizes events in the Proposed Project timeline. Specifics of each of the Proposed Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Project components are described in the following sections. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.1 Proposed Project Location Source: Project Application, Amendments and Appendices Hermosa Beach Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.1 Proposed Project Schedule Summary Phase Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Temporary City Yard Oil Project Phase 1 Oil Project Phase 2 Drill Test Permanent City Yard Oil Project Phase 3* Oil Project Phase 4* Drill Operate Continuously for 30+ years Re-drills Average 30 days/year, max 150 days/yr** Note: * If the test phase is determined to be successful, Phase 3 and 4 would occur. For construction only. Does not include permitting timeframe. ** These are the maximum proposed by the Applicant. The 150 days per year would occur once every 5 years. Most likely re-drill activity would be lower. 2.2 Proposed Project Objectives Pursuant to Section 15124(b) of the California Environmental Quality Act (CEQA) Guidelines, the description of the Proposed Project is to contain “a clearly written statement of objectives” that would aid the lead agency in developing a reasonable range of alternatives to evaluate in the EIR and would aid decision makers in preparing findings and, if necessary, a statement of overriding considerations. The City is the lead CEQA agency which prepared the EIR, considered the EIR for certification and is placing the Proposed Project on the ballot. Project approvals will be made by the electorate of the City of Hermosa Beach. As part of the Project Application, the Applicant provided its stated objectives for the Proposed Oil Project, which consist of the following: 1. Develop the Proposed Oil Project consistent with the 1993 Conditional Use Permit and the March 2, 2012 Settlement Agreement, with the utilization of directional drilling Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources techniques from the Project Site, which is the current City Maintenance Yard; 2. Maximize oil and gas production from the Torrance Oil Field within the City’s jurisdiction, thereby maximizing the economic benefits to the City; 3. Provide an oil and gas development project on the Project Site that utilizes the latest technology and operational advancements related to safety and production efficiency in order to provide a project that would be safe and would meet the applicable environmental requirements; 4. Conduct construction and drilling activities on the Project Site incorporating technological advancements, operational practices, and design features related to air quality, odors, noise, hazards, and water quality to minimize the potential impacts on the adjacent community and the environment; 5. Provide landscaping, hardscape, signage, lighting, and other design features to minimize the visual effects of the Proposed Oil Project on the adjacent community; and 6. Implement operational practices and incorporate design features to provide safe vehicular ingress and egress during temporary construction activities and the ongoing operation of the Proposed Oil Project. Pursuant to the March 2, 2012 Settlement Agreement between the City of Hermosa Beach, E&B, and Macpherson Oil Co., the City’s primary objective is to comply with the California Environmental Quality Act and place on the ballot a measure allowing the City of Hermosa Beach electorate to decide whether or not to approve the Applicant’s Proposed Oil Project and a Development Agreement to vest the Project so that, if approved, the Project cannot later be invalidated by a vote of the people. In the event that voters approve the Proposed Oil Project, the City would need to relocate the City Maintenance Yard. Under those conditions, the City's objectives for relocation of the City Maintenance Yard would be to: 1. Provide City Yard Maintenance facilities that support provision of high-quality City services in an integrated and cost-efficient manner; 2. Consolidate City facilities and functions for maximum efficiency and flexibility; 3. Minimize disruption of City functions during relocation of the City Maintenance Yard; 4. Ensure the relocated City Maintenance Yard is compatible with surrounding uses; and 5. Ensure there is no net loss of public and employee parking spaces as a result of both the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Proposed Oil Project and the relocation of the City Maintenance Yard consistent with the Preferential Parking Program approved by the Coastal Commission. 2.3 Historical and Current Operations Oil drilling and production in the Los Angeles Basin has a long history. According to the California Division of Oil, Gas, and Geothermal Resources (DOGGR) database, almost 30,000 oil wells have been drilled in the Los Angeles Basin in the last 100 to 150 years. Figure 2.2 shows the location of these wells. The Proposed Oil Project would drill into the western edge of the Torrance Oil Field (see Figure 2.2). Most of the production from the Torrance Oil Field has been generated from wells drilled in the City of Torrance, with some drilling in the Cities of Redondo Beach and Hermosa Beach. There have been approximately 1,500 wells drilled in the Torrance Oil Field historically. Although the Project Site is relatively flat, it is underlain by windblown sand dunes that previously covered the region, resulting in uneven ground due to natural conditions. In the 1920s and 1930s, the northeastern portion of the Project Site had a large depression that was mined for sand. Around 1927, the City’s dump and refuse burner were located on the Project Site, and, by 1947, the depression was filled. The resulting former landfill is approximately 45 feet deep and is filled with glass, porcelain, and ceramic towards the bottom and soils containing miscellaneous metals, wires, glass, and other materials toward the top (i.e., closer to the ground surface). Between the depths of 3 feet and 25 feet below ground surface (bgs), the former landfill contains some soil with lead at concentrations above the Environmental Protection Agency (EPA) Region 9 Industrial Regional Screening levels. In addition, soils impacted with total petroleum hydrocarbons (TPH) were found at depths of 25 to 44 feet bgs within the central portion of the landfill. For a detailed discussion of the soil conditions on the Project Site, refer to Section 4.7, Geological Resources/Soils, of the Final EIR. Figure 2.2 Historical Wells Drilled in the Los Angeles Basin Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: DOGGR In 1930, an oil well (Stinnett Oil Well No. 1) was drilled in the western portion of the Project Site. The oil well was abandoned in 2005, consistent with the then-current standards of the DOGGR. During the mid-1940s, the first building was constructed on the Project Site for City maintenance uses, with the last building constructed in the 1980s. Since the 1990s, with the exception of the addition of trailers, storage containers, and sheds, the Project Site has generally remained unchanged. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The Project Site is currently developed as the City Maintenance Yard, and the Proposed Oil Project would require the relocation of the City Maintenance Yard. As indicated in Figure 2.3, existing development on the Project Site consists of three buildings, two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing, and masonry walls. In addition, within the boundaries of the Project Site, there is an asphalt parking area in the southern portion of the City Maintenance Yard that provides 15 parking spaces for employees (Monday through Thursday between the hours of 6:00 a.m. and 6:00 p.m.) and for the public after hours (6:00 p.m. to 6:00 a.m.) and on weekends and holidays. Existing site contamination from historical site uses is also shown in Figure 2.3. According to an Environmental Site Assessment prepared in 2012 (Brycon 2012), 10 of the 73 soil samples taken exceeded Regional Water Quality Control Board guidelines for total petroleum hydrocarbons, all within the mid range hydrocarbons (C13-C22). Volatile organic carbons were not present in any of the samples at concentrations above the EPA Region 9 Industrial Regional Screening Levels. Six of the samples exceeded the EPA Region 9 Industrial Regional Screening Levels for lead. In addition, a series of groundwater borings conducted in 2013 (Brycon 2013) found the presence of total petroleum hydrocarbons, lead, barium, and arsenic in the groundwater below the City Maintenance Yard that exceeded the Maximum Contaminant Levels (MCLs) established for drinking water by the Regional Water Quality Control Board. The immediately adjoining properties were sparsely developed into the 1940s, with a few residential units located to the northwest of the Project Site. Post 1940s, significant development occurred with industrial buildings being constructed to the south and west of the Project Site by 1953 and to the north of the Project Site by the 1960s. By 1960, the buildings to the west of the Project Site were identified as containing a building material warehouse, a boat repair shop, and a contractor’s storage yard. By 1960, the building to the south was being utilized as a planter mix manufacturing site. Since the 1960s, the various adjoining buildings have been utilized for multiple small businesses as industrial/commercial uses. To the east, from the late 1800s, there was a railroad right-of-way (ROW) that was utilized by the Santa Fe Railway. During the 1960s, the railroad ROW was converted to a greenbelt/park (Veterans Parkway - Hermosa Valley Greenbelt (Greenbelt)), followed by a Council initiative in 1987 directing the City of Hermosa Beach to acquire the Railroad ROW for public use as parkland and open space in perpetuity; the property is zoned Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources O-S-1 Restricted Open Space. Currently, other land uses adjacent to the Project Site (on the same block between 8th and 6thStreet and Cypress Avenue and Valley Drive) are commercial/industrial (Cypress Auto Body, A&B Heating, JB Plumbing, McGivern Surfboard Manufacturing, Buddhist Meditation Center, NUWORK, a recording studio and other various small commercial/industrial businesses), with some residential uses along 8th Street to the north. Adjacent blocks include residential uses located 150 feet to the north of the Project Site, 250 feet to the west and 180 feet to the east (east of the Greenbelt), with small commercial/industrial uses and the Beach Cities Self Storage facility located to the immediate south across 6th Street with its required parking lot abutting the southwest corner of the Project Site. Figure 2.4 shows the southern area of the City of Hermosa Beach along with land uses. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.3 Existing Site Conditions Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant Project Application, DOGGR well database, Phase 2 Environmental Site Assessments Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.4 Project Site and Area Land Uses (Zoning Map) Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: City of Hermosa Beach Zoning Map, November 2013 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 1 Site Preparation 6-7 Months 2.4 Proposed Oil Project Phases The Proposed Oil Project would occur in the following four phases:  Phase 1: Site Preparation;  Phase 2: Drilling and Testing;  Phase 3: Final Design and Construction; and  Phase 4: Development and Operations. Each phase is discussed in the following sections. The Applicant proposes a facility designed for a maximum capacity of 8,000 barrels per day (bpd) of crude oil and 2.5 million standard cubic feet per day (scfd) of produced gas at completion of the drilling stage of the Proposed Oil Project in Phase 4. The operational parameters of the Proposed Oil Project are summarized in Table 2.2. Prior to the initiation of the Proposed Oil Project, it would be required that plans be submitted by the Applicant to the City and other permitting authorities for review and approval. These would include coastal development permits, oil and gas well permits, demolition plans, grading plans, utility and electrical plans, cement/foundation plans, landscaping plans, street and ROW improvement/modification plans, and construction plans, amongst others. Figure 2.5 shows the Project Site along with the electrical and pipeline connections and the Cypress Avenue parking lot. 2.4.1 Phase 1 Site Preparation The purpose of Phase 1 would be to prepare the Project Site for drilling and testing as well as for the subsequent phases of the Proposed Oil Project. It is anticipated that Phase 1 would occur for approximately six months. Prior to Phase 1 activities, the temporary City Maintenance Yard would be installed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.1.1 Phase 1 Construction Activities Phase 1 would consist of the following construction activities:  Underground existing overhead utilities;  Construction of modifications to intersection of 6th Street and Valley Drive;  Relocation of City Maintenance Yard to the temporary site;  Clearance of Project Site;  Construction of retaining walls and rough grading;  Installation of perimeter fencing;  Construction of well cellar;  Installation of offsite electrical conduit and onsite electrical equipment;  Completion of onsite surface and entrance/exit;  Installation of temporary landscaping; and  Installation of 35-foot sound attenuation wall.(per Mitigation Measure NV-3a) Table 2.2 Proposed Oil Project Design Parameters Parameter Value Crude oil production Phase 2: Up to 800 bpd Phase 4: Up to 8,000 bpd Crude oil properties 18 API Natural gas production Phase 2: Up to 250,000 scfd Phase 4: Up to 2.5 million scfd Produced water disposal/injection Phase 2: Up to 1,600 bpd Phase 4: Up to 16,000 bpd Maximum number of wells Phase 2: 4 wells (3 production, 1 water disposal/injection) Phase 4: 34 total (30 production, 4 water disposal/injection) NGL production Up to 1 bpd mixed with crude oil Pipeline length and tie-in, gas Approx. 0.43 miles + 1.4 miles Pipeline length and tie-in, crude Approx. 3.55 miles Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water use, during construction Approx. 2,000 gallons per day during grading and earthwork (potable) Approx. 10,000 gallons per day during pipeline installation (potable) Approx. 20,000 gallons per month during facility construction (potable) Water use, during drilling 130,000 gallons per well (reclaimed water) (Approx. 4,500 gallons per day) Water use, during operations and maintenance (Landscaping- Reclaimed Water) (Domestic-Potable Water) 1,300 gallons per day (1,000 gallons per day for landscaping) (300 gallons per day for domestic use) Electrical use, Phase 2 4.5 megawatts (including drill rig) Electrical use, Phase 3 0.3 megawatts Electrical use, Phase 4 7.0 megawatts (including drill rig) 3.0 megawatts during normal ongoing operations Onsite electrical generation of 1 MW Well workovers, annually 90 days/year Well re-drills (full sized drilling rig, peak annually Up to 5 per year, up to 30 re-drills for the life of the Project Notes:bpd = barrels per day; kW = kilowatts; scfd = standard cubic feet per day; NGL = natural gas liquids; API = American Petroleum Institute; estimated peak values and maximums shown Source: Project Application, Amendments and Appendices. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.5 Project Site and Pipeline/Electrical Connections Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: E&B Supplemental Application materials, January 2014 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is discussed in the following subsections. Figure 2.6 shows the proposed arrangement of the Project Site under Phase 1. Appendix A of the Final EIR provides the conceptual grading plan, site plan, elevations, and landscape concept plan for the Proposed Oil Project at the completion of Phase 1. The laydown area (equipment and supply storage/staging) for the Proposed Oil Project would be in the basement of the building located at 601 Cypress Street on the northwest corner of Cypress Street/6th Street (See Figure 2.3). Underground Existing Overhead Utilities There are currently overhead power lines and communication lines on poles that run overhead through the existing trees along Valley Drive. These existing lines would be removed along the Project frontage and relocated underground adjacent to the Project Site in a location determined by the utility companies and the City. Appendix A of the Final EIR provides drawings showing the general location where the utility lines would be placed underground. Construction of Modifications to Intersection of 6th Street and Valley Drive The Proposed Oil Project would include the construction of modifications to the intersection of 6th Street/Valley Drive to provide the necessary turning radius for Project-related trucks. Appendix A of the Final EIR provides drawings showing the conceptual design of the proposed intersection modifications. These modifications would result in:  Removal of a portion of the landscaped area and entry driveway to the Beach Cities Self Storage facility;  Redesign of the sidewalk on the southwest corner of the intersection;  Relocation of the stop sign and striping for the northbound lanes on Valley Drive to address the redesign of the southwest corner;  Removal of a utility pole and underground utilities on the southwest corner of the intersection;  Removal of a utility pole and underground the utilities on 6th Street; and  The removal of two on-street parking spaces on 6th Street. As a part of the intersection modifications, the stop sign and striping for the southbound lanes on Valley Drive would be relocated to improve the line of sight to and from the intersection with 6th Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Street. This modification would be made concurrently with the addition of the perimeter fencing on the Project Site (See Figure 2.6). In addition, the curb on the northwest corner along 6th Street adjacent to the Project Site would be temporarily provided as a rolled asphalt curb for Phases 1 and 2. The two on-street parking spaces removed from 6th Street would be provided as part of the Project’s overall parking replacement program discussed further below. Relocation of the City Maintenance Yard Prior to Phase 1, a temporary City Maintenance Yard would be built at the New City Maintenance Yard location to the rear of City Hall at 1315 Valley Drive. At this point, the maintenance operations would be moved into the temporary City Maintenance Yard. Clearance of the Project Site Prior to the initiation of the site clearance activities, temporary 24-foot sound attenuation walls (per Mitigation Measure NV-1a) would be erected at the Project Site to reduce noise impacts related to construction. These sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise associated with Phase 1 demolition and construction activities. The temporary sound walls would be removed from the Project Site after the onsite construction activities in Phase 1 are completed. Following the relocation of the City Maintenance Yard , the Project Site would be cleared. The site clearance activities would include the removal of three existing buildings (one of which would be moved to the temporary site), two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing and masonry walls. In addition, the asphalt parking area to the west of the City Maintenance Yard would be removed, resulting in the removal of 15 parking spaces. The building located at 636 Cypress Avenue would also be demolished at this time to clear the parcel for the off-site temporary parking area. Prior to the demolition of both buildings, building materials would be assessed for asbestos content and presence of lead based paint, consistent with the requirements of the South Coast Air Quality Management District (SCAQMD). If asbestos containing materials or lead based paint are detected, the appropriate abatement process would be implemented. The building materials removed from the Project Site would be transported by truck to the recycling facility at Southern Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water Injection Pumping produced water back down the well hole into the oil reservoir from which it was originally extracted. California Disposal in Santa Monica, the recycling facilities at Hanson Aggregates in Long Beach, or another certified facility for recycling or disposal. The Proposed Oil Project would include an overall parking replacement program that meets the intent of the City’s Preferential Parking Program and Coastal Development Permit requirements. Section 2.4.5 discusses the parking plan for the Proposed Oil Project. Three of the four existing mature trees along the frontage of the Project Site on Valley Drive would be retained to help screen construction activities. The Applicant has concluded that the fourth tree should be removed because it is in poor health, and it would limit access to the Project Site (See Figure 2.6). The three remaining trees would be trimmed to keep branches from hanging over onsite equipment and to help prevent trespassing. Construction of Retaining Walls and Rough Grading Once the Project Site is cleared, retaining walls would be constructed along the western boundary of the Project Site and set back 10 feet along the western portion of the southern property boundary (See Figure 2.6). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.6 Proposed Oil Project Phase 1 Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources [need to fix this image] Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Rough grading would occur to allow for:  The construction of a well cellar for three test oil wells and a water disposal/injection well;  Surface drainage towards a temporary retention basin, which would contain a 100-year flood event;  A level area for the set up and movement of the drill rig; and  The installation of temporary production equipment. It is anticipated that the rough grading would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the retaining wall locations and rough grading at the completion of Phase 1. Installation of Perimeter Fencing Following the rough grading, the Project Site would be enclosed by a six-foot temporary perimeter chain link fence covered with green fabric. The fence would include secured gates for the entrance off Valley Drive and the exit to 6th Street. The Applicant proposes to include the appropriate signage consistent with the requirements of the City. Figure 2.6 shows the location of the fencing and gates at the completion of Phase 1, and Appendix A of the Final EIR shows an elevation of the fencing. Construction of Well Cellar A cement well cellar approximately 8 feet wide by 40 feet long by 12 feet deep would be constructed for three test wells and one water disposal/injection well to allow for the drilling of the wells in Phase 2. The well cellar would provide containment of any potential oil spillage during Phase 2. Figure 2.6 shows the location of the well cellar. Installation of Offsite Electrical Conduit and Onsite Electrical Equipment Electrical service for the Proposed Oil Project would be provided by Southern California Edison (SCE). The electrical conduit and onsite electrical equipment for all phases of the Proposed Oil Project would be installed in Phase 1. The electrical load during Phase 2 and Phase 3 would be 4.5 Megawatts (MW) and 0.3 MW, respectively. During Phase 4, the electrical load during Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources drilling would be 7.0 MW and during ongoing operations would be 3.0 MW. According to the Applicant, SCE has determined that the existing 16 kilovolt (kV) circuit running along 8th Street to the north of the Project Site has the necessary capacity to serve the Proposed Oil Project. To receive electrical service from SCE, the Proposed Oil Project would provide for the installation of an underground conduit for a linear distance of 280 feet under Valley Drive from 8th Street to the northeast corner of the Project Site (see Figure 2.6) Electrical equipment consisting of step down transformer(s), switchgear, and variable frequency drive units would be installed in the northeast corner of the Project Site designated as the New SCE Yard in Figure 2.6. The electricity would be used to provide power for well pumps, the temporary production equipment, the temporary construction trailer, safety system controls, onsite lighting, and the drill rig used in Phase 2 and Phase 4 (both drilling and re-drills). An uninterruptable power supply would be installed for critical systems such as the temporary production equipment safety systems and security lights. An emergency generator would be installed to provide power for the safe shutdown of the drilling operation in the event of a loss of power from SCE. Appendix A of the Final EIR provides the general location of the offsite underground conduit. Completion of Onsite Surface and Entrance/Exit The surface of the Project Site would be covered with crushed aggregate base material to serve as a dust inhibitor and driving surface. Temporary berms would be constructed around the areas where the drill rig and associated equipment would be set up and the temporary production equipment installed to provide secondary containment. In addition, a temporary berm would be provided around the well cellar to avoid surface flows from entering the well cellar. The existing driveway access from Valley Drive and 6th Street would be used. On both sides of the driveway on 6th Street, a rolled asphalt curb would be provided. Installation of Temporary Landscaping Landscaping would be provided along the eastern and southern perimeter of the Project Site to provide a visual buffer. The plant materials and irrigation would be consistent with the requirements of the City. The trees and other plant materials would be planted in a manner that Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources allows for their replanting as a part of the permanent landscaping provided in Phase 3. Reclaimed water supplied by West Basin Municipal Water District would be used for irrigation. The reclaimed water line serving the Greenbelt east of Valley Drive would be tapped and extended to the Project Site. Appendix A of the Final EIR includes a conceptual landscape plan and plant materials for the temporary landscaping provided at the completion of Phase 1. Installation of 32-Foot Sound Attenuation Wall Upon completion of the Phase I improvements, a 35-foot sound attenuation wall (per Mitigation Measure NV-3a) would be erected inside the chain link construction fence in order to attenuate noise generated during Phase 2 drilling and testing. The 35-foot sound wall would stay installed through the duration of Phase 2. 2.4.1.2 Phase 1 Site Preparation Detailed Schedule It is anticipated that Phase 1 would occur for a period of approximately six months as indicated in the schedule provided in Table 2.3. As required by the previous Conditional Use Permit and as proposed by the Applicant, the construction activities on the Project Site, including the operation of earthmoving equipment, would be conducted between the hours of 8:00 a.m. and 6:00 p.m. Monday through Friday (except holidays) and 9:00 a.m. and 5:00 p.m. on Saturdays. Offsite construction activities within the public ROW would occur between the hours of 8:00 a.m. and 3:00 p.m. Monday through Friday in the City of Hermosa Beach. Truck deliveries to the Project Site would be limited to the hours between 9:00 a.m. and 3:00 p.m. Monday through Friday, except in the case of an emergency and with the prior approval of the Director of Public Works. The Project-related truck trips would be limited to 18 round trips per day and limited to the designated truck routes. 2.4.1.3 Phase 1 Site Preparation Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 1 are provided in the detailed Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources listing in Appendix A of the Final EIR. Vehicle trips are summarized in Table 2.4. The Project- related personnel would utilize parking spaces in an offsite parking area provided consistent with the proposed parking plan described in detail in Appendix A. Table 2.3 Phase 1 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Construction of Temporary City Yard Underground overhead utilities 6thStreet & Valley intersection Relocation of Yard Remove buildings Remove other site structures Construct retaining walls Grade, well cellar, aggregate Construct chain link fence Construct well cellar Install electrical service Install landscaping Install 32-foot sound wall Note: relocation of Yard would only include moving of shop materials and equipment. The Temporary City Maintenance Yard would be construction prior to the start of Phase 1 and would take approximately 9 months. See section 2.5. 2.4.1.4 Phase 1 Truck Routes Truck trips would be required in order to deliver and remove construction-related materials and equipment to and from, respectively, the Project Site. Trucks would utilize roads designated as truck routes by the cities of Hermosa Beach, Redondo Beach, Manhattan Beach and Torrance. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Truck routes are shown in Figures 2.13 and 2.14. The routes identified by the Applicant as those utilized for all phases of the Project are as follows: Inbound Trucks 1. Inbound trucks from westbound Artesia Boulevard 2. Left on to southbound Pacific Coast Highway 3. Right on to westbound Pier Avenue 4. Left on southbound Valley Drive 5. Right into the Project driveway on Valley Drive Or 6. Inbound trucks from westbound 190th Street (which becomes Anita Street) 7. Right on northbound Pacific Coast Highway 8. Left on to westbound Pier Avenue 9. Left on to southbound Valley Drive 10. Right into the Project driveway on Valley Drive Outbound Trucks 11. Outbound trucks on to eastbound 6th Street 12. Right on to southbound Valley Drive 13. Left on to eastbound Herondo Street 14. Continue onto Anita Street, then 190th Street to the Interstate 405 (I-405)/ Crenshaw interchange Or 15. Outbound trucks on to eastbound 6th Street 16. Right on to southbound Valley Drive 17. Left on to eastbound Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 2 Drilling and Testing: Drilling for 3-4 Months Testing for 7-9 Months More 18. Left on to northbound Pacific Coast Highway 19. Right on to Artesia Boulevard. 2.4.2 Phase 2 Drilling and Testing The purpose of Phase 2 would be to conduct the drilling and testing of wells in order to determine the potential productivity and economic viability of the Proposed Oil Project. During this phase, up to three test wells and one water disposal/injection well (a total of four wells) would be drilled. These wells would be drilled utilizing directional drilling technology, which enables the wells to be drilled laterally for long distances, so that the bottom-hole locations may be located several thousand feet from the surface location of each wellhead on the Project Site (see Figure 2.7 and 2.8). 2.4.2.1 Phase 2 Site Geology and Drilling Objectives The Proposed Oil Project would utilize directional drilling techniques to access the crude oil and gas reserves in the tidelands (offshore) and uplands (onshore) in the portions of the Torrance Oil Field within the City’s jurisdiction. The Project Application states that "no hydraulic fracturing (or “fracking”) of wells will occur because the geologic zones for the Proposed Project are permeable and capable of yielding oil and gas without hydraulic fracture stimulation." Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.4 Phase 1 Vehicle Trip Summary Activity Trucks, Maximum RT/day* Autos/PU, Maximum RT/day Total, Maximum RT/day Underground overhead utilities 4 10 14 Construct 6th& Valley intersection 3 8 11 Remove buildings 10 8 18 Remove other existing site structures 15 6 21 Construct retaining walls 5 14 19 Grade, well cellar and aggregate 15 10 25 Construct chain link fence 1 4 5 Construct well cellar 4 8 12 Install electrical service 6 15 22 Install landscaping 1 2 3 Install 32-foot sound attenuation wall 3 12 14 Greatest number of trips in one day 18 (during week 9) 31 (during week 12) 43 (during week 10) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during week 9 with the installation of electrical service and the removal of existing structures. Maximum auto activity occurs during week 12 with the installation of electrical service and construction of the retaining wall. Maximum activity trucks and autos combined occur during week 10. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices The approximate extent of the City’s jurisdiction within the Torrance Oil Field is provided in Figure 2.7. Figure 2.8 provides a typical well cross section illustrating how wells can reach the oil reserves, within the tidelands, from the Project Site. The Project Application states the primary target zones are the Upper Main, Lower Main, and Del Amo Zones with some production potential within the Schist Conglomerate. As shown in Figure 2.8, the Upper Main Zone is the uppermost part of the Puente Formation. The Project Application states that it is expected to be the shallowest oil productive zone in the City. Of the three known producing horizons in the Torrance Oil Field, the Upper Main Zone is the most prolific. The Upper Main Zone beneath the Hermosa Beach tidelands and uplands is expected to be 300 feet thick and composed of inter-bedded thin sands and shales. The shales are currently fractured and provide both fractured porosity and permeability. The fractures are Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources critical to the performance of the reservoir in the area due to the fine-grained and thin-bedded nature of the sands. The Lower Main Zone lies below the Upper Main Zone in the Puente Formation. The Project Application states that similar to the Upper Main Zone, the shales of the Lower Main Zone are currently fractured and important for oil production. However, the Lower Main Zone has fewer interbedded fine-grained sands and is over 500 feet thick. Figure 2.7 Proposed Oil Project Lease Areas (below) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Final Environmental Impact Report 2-89 E&B Oil Drilling & Production Project Figure 2.8 Applicant Proposed Oil Project Lease Areas Cross Section Source: Project Application. Representative figure not to scale or reflective of the exact geology of the region. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The Del Amo Zone lies beneath the Lower Main Zone. It contains the least amount of thin- bedded sandstone in the Puente Formation. The Project Application states that similar to the other two zones, the shales of the Del Amo Zone are currently fractured and important for oil production. The Del Amo Zone varies the most in thickness and could be from 200 feet up to 700 feet thick. The Schist Conglomerate underlies the Del Amo Zone and is resting on metamorphic basement rock (Catalina Schist). The Schist Conglomerate could be as much as 400 feet thick and is composed of reworked fragments derived from erosion of the underlying Catalina Schist. The Project Application states that although it is unknown if the Schist Conglomerate is productive beneath the City, it is still a viable exploration target. The production test wells would target areas to the south-west, the north-west and the north areas of the lease (see Figure 2.7). The wells for the Proposed Oil Project would be at a true vertical depth of approximately 3,000 feet and a measured depth of approximately 9,000 feet. The actual well depth would vary depending on the area targeted. The Applicant indicates that the wellhead pressures anticipated during and immediately after drilling would be 0.0 pounds per square inch (psi) and that the wells are not anticipated to be free-flowing. DOGGR must review and approve an engineering study conforming to CCR Section 1724.6 and 1724.7 for operations. No Class II injection wells will be permitted prior to review and approval of the study. A Notice of Intent will need to be submitted for each proposed well. The Notice of Intent will be reviewed for accuracy and completeness and, if appropriate, a drilling permit issued. 2.4.2.2 Phase 2 Construction and Drilling Activities Phase 2 construction and drilling would consist of the following activities and improvements:  Installation of Temporary Construction Trailer  Delivery and Set Up of Drill Rig  Installation of Temporary Production Equipment Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources  Drilling of Wells  Testing and Operational Systems These activities are discussed in the following subsections. Phase 2 Installation of Temporary Construction Trailer A temporary construction trailer would be installed in the northeast portion of the Project Site (see Figure 2.9). In addition, the associated utilities, including potable water and sewer, would be extended from the existing lines currently located along 6th Street that serve the City Maintenance Yard. Water and sewer service would be provided by the California Water Service Company and the City, respectively. Electricity would be provided by Southern California Edison (SCE) as discussed above under Phase 1 construction activities. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.9 Proposed Conceptual Site Plan - Project Phase 2 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Automated Drilling Rig Ground Flare Phase 2 Delivery and Set Up of Drill Rig An electric drilling rig and its associated equipment would be brought to the Project Site on large trucks with trailers to be permitted by the City and the California Highway Patrol (CHP). The drilling rig would be an "automated drill rig" (ADR), which means that many of the drill rig procedures (loading pipe, etc,) would be done by mechanical means automatically. The approximately 87- foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, a generator, which would be a non-road portable diesel-fuel generator certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. Phase 2 Installation of Temporary Production Equipment Temporary oil, water, and gas production equipment would be installed on the Project Site. This temporary equipment would include a well test station, an induced gas flotation/filter skid, a gas combustor (enclosed ground flare), fluid handling tanks, piping, vapor recovery unit, pumps, and vessels. The production equipment would be delivered by trucks to the Project Site. The temporary production equipment would be installed in the eastern portion of the Project Site within an area enclosed by a containment berm as shown in Figure 2.9. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Phase 2 of the Proposed Oil Project would be designed as a closed-loop system, with pressure relief valves venting to a flare and tanks venting to a vapor recovery system. The control system would be computerized and would monitor the closed-loop system, providing warnings, corrective actions, and shutdowns, if necessary. Corrective actions could be closing valves, sounding alarms, shutting down wells or other process related functions. In addition, according to the Applicant, redundancy would be built into the system to provide an extra level of protection, ensuring there would be a backup for each safety device. All safety devices would be tested on a regular basis as per applicable codes and standards. Operators would be onsite 24 hours per day, seven days per week, to monitor all aspects of the Proposed Oil Project’s production process. Phase 2 Drilling of Wells Once the drill rig and associated equipment set up is complete, up to three test wells would be drilled utilizing directional drilling technology. This would enable the wells to be drilled laterally for long distances so that the bottom-hole locations may be located horizontally several thousand feet from the surface location of the well head on the Project Site. All wells would be permitted, drilled and cemented in accordance with the State Division of Oil, Gas, and Geothermal Resources (DOGGR) regulations. Drilling would proceed in the following manner:  Installation of conductor casing;  Drilling of wells;  Placement of casing and cementing of wells (in stages at various depths); and  Completion of the well, including installation of down-hole pumps and tubing. Installation of Conductor Casing The conductor casing is the initial hole drilled into the ground with a large diameter pipe installed to maintain integrity. The subsequent drilling of the well would take place through the conductor casing. Conductor casing would be installed with a small drilling rig, referred to as a dry-hole digger, which would be used to set the conductor casing for all of the intended wells in the Project Site. A large diameter hole, about 18 inches in diameter, would be drilled to an approximately 80-foot depth. This type of drilling is similar to boring a hole with an auger. Usually, no drilling fluid is needed to drill the hole, hence the name dry-hole digger. A large Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources diameter casing, commonly referred to as “conductor pipe”, typically 13-3/8 inches in diameter, is lowered to the bottom of the hole and is cemented in place with construction concrete. This forms the first seal of the near-surface formations and also serves as a steel conduit to allow the drilling fluid used in the next stage of the well drilling to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project test phase would be set at this time and the dry-hole digger moved off before the drilling rig would be mobilized and brought to the Project Site. Drilling, Casing and Completion of Wells The components of the drill rig and all necessary equipment would then be moved onto the Project Site with large specially equipped trucks. The drill rig height would be 87 feet. The drilling setup would include three main parts; the drilling structure (i.e., mast, substructure, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources catwalk, silicon-controlled rectifier (SCR) house, top drive, back-up generator, crown block, traveling block, iron rough neck, drill pipe, control cabin), the blow out preventer (BOP) system (i.e., BOP Stack, Shear Ram, BOP Controller, and Accumulator), and the mud system (i.e., mud tanks, mud shakers, mud pumps, mud return line). The drilling rig would also require other equipment such as a spare parts house, other tanks, and storage areas as needed to support the drilling operation. The substructure of the drill rig would be located over the first well conductor casing, the mast would be raised, and the other equipment would be aligned and connected. The drill pipe would be laid out on racks convenient to the rig floor so they may be used when needed. Water tanks would be filled, and drilling fluid additives would be stored on site. The drill rig for the Proposed Oil Project would be run on electric utility power, so an electrical hookup would be made at this time. Drilling operations would then begin. The initial mobilization and rigging up operation is expected to last about seven to ten working days. “Spudding in” is the term used to begin drilling operations. A large (12 ¼-inch diameter) drill bit is attached to the first joint of drill pipe (usually 30 feet long) and lowered into the conductor casing. As the first length of pipe is completely lowered in, another length of pipe is attached to the end, thereby increasing the length of the drill “string”. When the drill string reaches the bottom of the conductor casing at a depth of 80 feet, the drilling begins. In order to drill downwards through soil and rock, the drill bit requires rotation and downward force, which is provided by the weight of thick-walled pipe on top of the drill bit. A single, 30-foot long drill pipe for a larger diameter drill bit weighs approximately three tons. As the drill bit drills deeper, more drill pipe is placed on top, thereby increasing the downward force; this is collectively known as the drill string. The drill bit turns clockwise as the weight of the drill pipe column forces it downward. Drilling fluid, called mud, is pumped down the inside of the hollow drill pipe, through a hole in the drill bit, and flushes the drilled rock cuttings away from the bit and up the space between the wall of the borehole and the outside of the drill pipe, which is referred to as the “annulus.” When the mud reaches the surface, it circulates to a mud tank where the rock cuttings are separated out of the fluid by using a shaker, and the clean mud is pumped back down the hole in a continuous circuit, constantly circulating the drilled rock cuttings up and away from the drill bit as it penetrates deeper into the earth. The cuttings are analyzed, stored in 20 cubic yard bins, and then hauled offsite. Initially, a large diameter bit is used to drill to a predetermined depth. When the specified depth Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources is reached, drilling is stopped, the drilling string is removed and a large diameter pipe (a casing string) is assembled in 40-foot lengths and lowered to the bottom of the well bore. Cement is then pumped down the inside of the casing, around the bottom of the hole, and up the annulus between the casing and the well bore. When the cement hardens, it ensures that the entire casing and well bore are encased in cement, protecting the fresh water aquifers and surrounding subsurface areas from the production fluids inside of the casing. See Figure 2.10 for a schematic of the well bore and casing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.10 Typical Well Bore and Casing Source:Project Application Next, a piece of equipment known as a blowout preventer (BOP) is attached to the well head. The BOP is a safety system used during drilling operations in oil and gas fields to prevent the uncontrolled release of reservoir fluids and to immediately shut off the flow in the event that abnormal pressure is encountered in the well bore that cannot be controlled by the hydrostatic head of the drilling fluid when drilling resumes beneath the surface casing. Blow out prevention equipment shall conform to DOGGR’s publication M07 “Blowout Prevention in California, Equipment Selection and Testing 2006 edition. If the subsurface pressure begins to cause the well to flow, the BOP is activated, closing in the well and trapping the pressure until it can be bled off safely and drilling can continue. A BOP would be placed on each wellhead during the drilling and removed after the well is completed. A BOP utilizing Blind Shear Rams would be utilized. Blind Shear Rams are a type of BOP common in the offshore environment that allow for the shutting off of flow through the well even if drill pipe is in the wellbore. Pursuant to the requirements of the Code of Federal Regulation on Oil and Gas and Sulphur Operations in the Outer Continental Shelf(30 CFR part 250), the Applicant indicates that the BOP would be certified that the shear rams can actually shear the drill pipe prior to drilling. The surface casing serves three primary functions: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources  It isolates fresh water formations from contact with any fluids coming from deeper in the earth;  It serves as a mounting place for the blowout preventer; and  It serves as the support for the production casing that would be placed in the well if oil is found. Once the surface casing is cemented in, drilling operations resume with a smaller drill bit. This smaller hole is drilled to the total depth decided upon by the Applicant’s geologic and engineering staff. Usually, the only interruptions to drilling operations would be to remove the drill pipe (also known as tripping pipe) from the well to replace a dull drill bit, and then lowering the pipe back to the bottom of the well. In order to achieve the directional aspect of the drill hole, the well bore is bent. The act of “bending” a well out of the vertical axis typically begins after vertical drilling has progressed several hundred feet beneath the surface. Although the specifics of each well proposed for this Project have not been established, it is not uncommon to begin to deviate from vertical at a depth of about 600 feet and still reach a target formation located at a depth of 4,000 feet, but also almost 4,000 to 6,000 feet sideways from the surface spot location. This system would be used on virtually all of the wells drilled for the Proposed Oil Project. When the well reaches total depth (TD), drilling operations are halted and the drill pipe is removed from the well leaving mud in the hole to contain any potential production fluids located at the reservoir depth. A logging tool is then lowered into the hole to record petrophysical data of the formations through which the rig has drilled. If the well looks like it would produce oil, production casing is installed in a similar fashion to the installation of the surface casing. Production casing for the Proposed Oil Project is planned to be 7inches in diameter. Production casing would be cemented similarly to how the surface casing is cemented, as previously described. Once the cement has been allowed to fully harden, another electric logging tool, called a cement bond log, is lowered to the bottom of the well to evaluate the completeness and effectiveness of the cement on the outside of the production casing. If the cement is found to have defects, the casing can be perforated and cement forced into the well at a specific location or the casing can be removed and the well re-drilled. Devices are inserted to ensure any perforations are sealed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The well is then “completed”, which is a series of activities that allow for the production fluids to flow into the well bore inside the casing and to the surface. Table 2.5 shows a list of chemicals that would be used during drilling operations. The amounts listed are the estimated quantities consumed per well drilled. These materials are packaged by the manufacturer for shipping and would be delivered to the job site by conventional delivery or flatbed trucks. Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District from an existing reclaimed water line serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in Baker tanks (enclosed tanks that are approximately 12 feet tall by 40 feet long and hold up to 500 barrels each). Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed of each day by truck at an approved disposal site at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. In addition, all other waste generated by the test drilling would be transported by truck to the appropriate disposal site at Clean Harbors Buttonwillow Landfill, or a similar facility if closer to the Project Site. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.5 Phase 2 Drilling Chemicals Common/Trade Name Use Container Amount per Well Gel Wyoming Bentonite Used to enhance mud viscosity 100-pound sack 525 sacks DMA Sodium Polyacrylate Water absorbent mud additive 50-pound sack 82 sacks Benex Anionic Acrylamide Mud additive 2-pound sack 75 sacks GEOZan Xanthan Gum Mud viscosifier 25-pound sack 40 sacks Omniopol Sodium Polyacrylate Liquid Water absorbent mud additive - 380 gallons CFR Fatty Acid Liquid Mud additive to enhance lubricity - 600 gallons Bicarb Sodium Bicarbonate Mud additive for pH control 50-pound sack 40 sacks Citric Acid Mud additive for pH control 50-pound sack 11 sacks Walnut Hulls Filter medium, used to reduce torque and drag of drill pipe and for plugging of fractures and high porosity formations 50-pound sack 48 sacks Cement Bulk-Truck Used for well sealing - 3 bulk trucks Biotreat 8415 Treatment of water before injection into the oil reservoir Hydrochloric Acid 15%, used for acid washing during completion Bin varies Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Hydrofluoric Acid 3%, used for acidizing muds Bin varies Source: Project Application, Amendments and Appendices The Proposed Oil Project would comply with the 1993 CUP conditions of approval, proposed operational practices, and proposed design features. The noise reduction methods would include the following:  An electric drill rig would be utilized, reducing the need for diesel engines;  The drill rig would have no draw works or cables resulting in less noise;  A 35-foot-high acoustical barrier wall (per Mitigation Measure NV-3a) would be erected around the perimeter of the Project Site during all drilling activities. The wall would have a sound transmission class (STC) rating of at least 32;  The air inlets and vents of the hydraulic power unit would be fitted with silencers;  An acoustical shroud would enclose three sides of the rig mast to reduce the top drive noise (if applicable);  The mud pumps would be enclosed with acoustical barriers having a sound transmission class (STC) rating of at least 25;  An 8-foot high acoustical barrier with an STC rating of at least 25 would be installed around the shaker tables;  Drilling Quiet Mode Plan would be implemented at the drill site between 7:00 p.m. and 8:00 a.m., a plan which would provide for the following: disablement of all audible mobile equipment and truck backup alarms; minimization of pipe handling; cessation of cementing operations, maintenance, and tripping pipe; and limits within the delivery schedule; and  An automated and remotely managed system to connect/disconnect pipe (Iron Roughneck) would be used, which would reduce pipe handling; No processing of gas would occur during Phase 2. The gas separated from the oil and water would be directed to a gas combustor (enclosed ground flare), where disposal of it would occur through burning. The Applicant indicates that low levels of potential “native” hydrogen sulfide (H2S), in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources underlying oil reservoir. Because the produced fluids may contain some H2S, fixed H2S detection systems would be installed around the drilling site and continuous monitoring would be present during all drilling, workover, and well servicing operations. Sensors would be located in areas that are frequently used by personnel, selected drilling area locations, areas where H2S may accumulate, and any other areas determined by hazard analysis to pose a potential risk. Personnel would also carry personal H2S monitors attached to their clothing for immediate H2S detection during drilling. Figures 2.12 and 2.13 provide an outline of the City’s designated truck route for construction trucks through the cities of Hermosa Beach, Redondo Beach and Torrance. Phase 2 Testing and Operational Systems After the completion of the first test well and the water disposal/injection well, the extracted oil would go through production and testing. The temporary production equipment on the Project Site would be used to process the production fluid. The oil would be processed to a standard that would be suitable for sale. The produced water would be processed and re-injected back into the oil-producing reservoir below the oil water contact. Disposal of the gas produced during Phase 2 would occur through burning in the enclosed ground gas flare. Figure 2.11 shows the steps involved in processing the oil, water, and gas produced from the test wells in Phase 2. Processing of Production Fluids During Phase 2, the Proposed Oil Project is designed to handle up to 800 barrels of oil per day and up to 250,000 standard cubic feet of gas per day. After the oil is processed, it would be trucked from the Project Site to an offsite oil receiving facility at 2650 Lomita Boulevard in Torrance. The route used for crude haul trucks is detailed in Appendix A of the Final EIR. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.11 Phase 2 Process Flow Diagram Source: Applicant application The produced fluids would be sent from the wells to a three-phase separator, which would separate the fluid into gas, oil and water streams. The gas exits the top of the separator, the oil exits the middle, and the water exits the bottom of the separator. Each one of these fluids enters a specific system of treatment as follows. Oil Treatment System The produced oil would enter a series of stock tanks after leaving the three-phase separator. The stock tanks would be used if the oil needs to be further processed to remove excess water. The water removed from the oil and water mixture would be sent back to the three-phase separator through a drain system. Once the oil is processed to a standard suitable for sale, the oil from the stock tank would be loaded into a tanker truck and transported to the purchaser. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Gas Treatment System The produced gas would be sent directly to a compressor and then to the gas flare for combustion after leaving the three-phase separator. A vapor recovery system attached to the temporary Baker tanks would be utilized to capture vapors and to direct them to a vapor recovery compressor and to the gas system and flare. The vapor recovery, tank and flare system would be subject to Southern California Air Quality Management District (SCAQMD) permit requirements. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.12 Truck Routes from Highway 405 to Project Site Source:Project Application, Amendments and Appendices Figure 2.13 Truck Routes to Highway 405from theProject Site Source:Project Application, Amendments and Appendices The Proposed Project provides for the disposal of treated stormwater runoff and produced water from the drilling and production process back into the oil reservoir using water disposal/injection Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources wells. The injection of untreated water can result in the creation of H2S concentrations in the oil reservoir above preexisting levels (referred to as the “native” condition). Prior to the injection of produced water from the oil extraction process, or the injection of surface runoff from precipitation that collects on the Project Site, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff water and any other injected water, would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Facility Storm Drain System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for disposal/injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Safety Systems Operators would be onsite 24 hours per day, seven days per week, to monitor the Proposed Oil Project’s production process during Phase 2. A fire protection system as required by Federal, State, and local codes, ordinances and regulations would be installed by the Applicant prior to the drilling and testing activities on the Project Site. The Fire Protection Plan for Phase 2 of the Proposed Oil Project would be provided to the City of Hermosa Beach Fire Department for review and approval prior to the initiation of Phase 2. The design and operation of the Proposed Oil Project would be required to meet provisions Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources within the California Fire Code (CFC) and standards of the National Fire Protection Association (NFPA), including the requirements for the storage of hazardous materials, the installation and use of fire protection systems and devices, and the implementation of safety measures for employees and emergency responders. Onsite personnel and a site security program, including a closed circuit television system, a gate access system, and an intrusion and motion detection system, would control all access to and from the Project Site during Phase 2. In addition, temporary lighting would be provided. The lighting would be shielded/hooded and directed downward, as is consistent with City requirements. All tanks would have containment equal or greater in capacity than at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Water Treatment System The produced water would be pumped into a treatment system, including a gas flotation unit and a filter unit, to remove excess oil after leaving the three-phase separator. The primary objective of both units would be to clean the water of oil and solids such as sand. The water would then enter a water surge tank after leaving the filter unit and would be sent to the water disposal/injection pumps for disposal/injection into the oil-producing reservoir through the disposal/injection well. If determined to be needed, before it enters the water surge tank, the water would be injected with a biocide to eliminate any bacteria that may be in the produced water. Electrical Requirements Approximately 75 kilo-watt hours of electricity would be required to drill each well. Chemicals Project operations would require the use of chemicals. These chemicals would be documented in a required Hazardous Materials Business Plan. Typical chemicals utilized in the temporary production facility are shown in Table 2.6. Table 2.6 Phase 2 Testing Chemicals Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Common/Trade Name Use Maximum Quantity (Gallons) Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter/Cor 7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Source: Project Application, Amendments and Appendices Noise Abatement The Proposed Project would be implemented in compliance with the 1993 Conditional Use Permit conditions of approval. In addition, the applicant proposes to incorporate several operational practices and design features intended to abate noise. The conditions of approval, operational practices and design features that would be incorporated into the production operations include the following:  Heavy/large reciprocating equipment would be mounted on vibration isolators;  Pipe tripping would be restricted to daylight hours only;  Loudspeaker paging systems would be prohibited;  Well workover rigs or any other workover-type rig (not the main drilling rig) that is used would be operated only between 8:00 am and 6:00 pm during daytime weekday hours only, excluding holidays, except in an emergency as defined in the Conditional Use Permit (CUP) and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) would be muffled to reduce noise to an acceptable limit. The operator would use whatever means necessary, including, but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing; Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources  All oil maintenance equipment, vehicles and non-electrical motors would be equipped with manufacturer approved mufflers or housed in a sound-proofing device;  Noise monitoring would be conducted under the supervision of an independent certified acoustical engineer;  Each well pump would produce a sound power level no greater than 83 dBA. This may be achieved by fitting sound attenuating enclosures that provide an insertion loss of at least 15 dB;  The produced oil pumps, produced water pumps, water booster pumps and variable frequency drive electrical (VFD) cabinets would produce a sound power level no greater than 77 dBA;  The water injection pumps would produce a sound power level no greater than 83 dBA.  The vapor recovery compressors would produce a sound power level no greater than 83 dBA; and  The cooler for the compressors would produce a sound power level no greater than 85 dBA. Decision not to Proceed -Abandonment If it is determined that the production of oil and gas on the Project Site would not be economically viable, the Applicant would remove the sound attenuation walls, the temporary production equipment, and the temporary construction trailer and abandon the three test wells and the water disposal/injection well in accordance with the requirements of DOGGR. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. As the temporary City Maintenance Yard would already be constructed under the Proposed Project, the current City Maintenance Yard Site would be empty and would be available for development within the M-1 Light Manufacturing zoned area of Hermosa Beach. The Project Site would then be available for City or other development proposals, or for the temporary City Maintenance Yard to be relocated back to this site. However, any future use would need to be consistent with the lease agreement with the Applicant. Current site contamination would remain as part of the abandonment process and would be removed in accordance with the requirements of any future site use. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.2.3 Phase 2 Drilling and Testing Schedule It is anticipated that Phase 2 would occur for approximately 12 months as indicated in the schedule provided in Table 2.7. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take 120 days for drilling activities, 24 hours a day, which is approximately 30 days per well for four wells. After the drilling of the three oil wells and one water disposal/injection well is complete, the drill rig would be removed from the Project Site. As each well is drilled, the produced fluids from that well would go thorough production and testing, as described above. 2.4.2.4 Phase 2 Drilling and Testing Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 2 are provided in detail in Appendix A of the Final EIR. A summary of the vehicle trips is shown in Table 2.8. Parking for the employees would be provided in an adjacent parking area as previously discussed for Phase 1. Since Phase 1 prepares the Project Site for Phase 2, the conceptual landscape plan and elevations provided above for Phase 1 would also be applicable to Phase 2. Table 2.7 Phase 2 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 thru 54 Install trailer and associated utilities Deliver and set up drill rig/equipment Install oil, water, and gas equipment Drill 3 test wells and water well Testing of wells Remove drill rig and equipment Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.8 Phase 2 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day* 2-axle trucks, Autos, Maximum RT/day Total, Maximum RT/day Install trailer and associated utilities 2 5 7 Deliver and set up drill rig/equipment 7 20 27 Install oil, water, and gas equipment 6 15 21 Drill 3 test wells and water well 9 10 19 Testing of wells 13 5 18 Remove drill rig and equipment 5 20 25 Greatest number of trips in one day 18 (during weeks 15, 17, 19, 21-24) 25 (during weeks 7- 12 ) 37 (during week 7) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during drilling and testing of wells. Maximum auto activity occurs during weeks 7-12 with the installation of oil, water and gas equipment and the drilling of wells. Maximum activity trucks and autos combined occurs during week 7. Testing of wells would involve crude transportation by truck, by way of an average of 7 trucks per day/5 days per week or up to 12 trucks in one day (round trip). Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix A. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources each week. Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 3 Final Design and Construction: 16 Months 2.4.3 Phase 3 Final Design and Construction If it is determined that the production of oil and gas on the Project Site would be economically viable, the Applicant would begin Phase 3 of the Proposed Oil Project. The purpose of Phase 3 would be to utilize the production information from Phase 2 to prepare the final design of the facility, prepare the onsite area for facility installation, install the permanent oil and gas production facilities, and construct offsite Pipelines. 2.4.3.1 Phase 3 Onsite Construction Phase 3 onsite activities would involve the following construction activities:  Preparation of final engineering design;  Removal of temporary production equipment;  Removal of three remaining trees;  Removal of 35-foot sound attenuation wall and perimeter fencing (per Mitigation Measure NV-3a);  Installation of 24-foot sound attenuation wall (per Mitigation Measure NV-4a);  Implementation of remedial action plan;  Construction of remaining retaining walls and final grading;  Completion of construction of well cellars;  Construction of 35-foot block wall (per Mitigation Measure NV-6a);  Removal of 24-foot sound attenuation wall (per Mitigation Measure NV-4a);  Construction of small office building;  Installation of permanent production equipment;  Construction of final site improvements;  Construction of final street improvements along Project frontage;  Installation of final landscaping;  Installation of 32-foot sound attenuation wall;  Setting of conductor pipe; and  Installation of lighting systems. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is detailed in the discussion that follows. A site plan for Phase 3 is shown in Figure 2.14. The conceptual grading plan, site plan, elevations (with the 32-foot sound attenuation wall), and conceptual landscape plan for the Proposed Oil Project at the completion of Phase 3 are shown in Appendix A of the Final EIR. Prepare Final Engineering Design The final design of the permanent oil and gas production facilities, to be implemented during the first few months of Phase 3, would be based on the oil and gas analysis and production results from Phase 2 activities. Final design would include the sizing and development of the exact specifications for the oil, gas, and water separation production equipment and the detailed engineering to prepare the required final construction drawings. Remove Temporary Production Equipment The temporary oil, water, and gas production equipment installed on the Project Site during Phase 2 would be removed. The wells drilled during Phase 2 would be shut in, and steel plating would be placed on top of the well cellar. Remove Remaining Trees The three remaining mature trees along the frontage of the Project Site along Valley Drive would be removed to allow for the construction of final site improvements including a perimeter wall and the installation of permanent landscaping. Remove 32-Foot Sound Attenuation Wall and Perimeter Fencing The 35-foot sound attenuation wall (per Mitigation Measure NV-6a) and the 6-foot perimeter chain link fencing would be removed from the Project Site. Install 16-Foot Sound Attenuation Wall Prior to the initiation of earthmoving activities, a temporary 24-foot sound attenuation wall (per Mitigation Measure NV-4a) would be brought to the Project Site. The sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise and dust associated with the earthmoving activities needed for the implementation of the Remedial Action Plan and the final grading of the Project Site. The temporary sound walls Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources would be removed from the Project Site after the onsite earthmoving and grading activities are completed. Implementation of Remedial Action Plan The Remedial Action Plan would be implemented to address lead, barium, arsenic and total petroleum hydrocarbon (TPH) contaminated soil and groundwater within and beneath the former landfill area in the northeastern portion of the Project Site. It is anticipated that approximately 9,000 cubic yards of lead contaminated soil would be removed from the Project Site in accordance with the Remedial Action Plan and hauled to a Class 1 landfill at the Kettleman Hills Facility, approximately 190 miles from the Project Site. The TPH contaminated soil (approximately 4,500 cubic yards located deeper than 25 feet) would be treated onsite via vapor extraction. For a detailed discussion of the soil remediation that would occur prior to final grading of the Project Site, refer to the Remedial Action Plan provided in Appendix A of the Final EIR. Groundwater contamination attributed to historic use of the site has been documented (Brycon 2013). The RWQCB have indicated that the Regional Water Quality Control Board Site Cleanup Program reviewed the Report on Groundwater Assessment and indicated the matter would go on its large backlog of low priority cases. Construction of Remaining Retaining Walls and Final Grading Retaining walls (up to 6 feet high) would be constructed 10 feet back from the Valley Drive and 6th Street property lines, along the eastern boundary of the Project Site and along the eastern portion of the southern boundary of the Project Site (see Figure 2.14). In addition, retaining walls would be constructed within the Project Site for the containment area associated with the production equipment. After the completion of the retaining walls, the Project Site would be graded to allow for the installation of Project equipment and to allow for proper site drainage. The final grading of the Project Site would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the location of the retaining wall locations and the final grading of the Project Site. Complete Construction of Well Cellars The cement well cellar constructed in Phase 2 would be extended, and a second well cellar would be constructed to allow for the drilling of the remaining wells in Phase 4. At completion, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources the well cellars would be approximately 8 feet wide by 120 feet long by 12 feet deep, with stairs at each end and covered with expanded metal grating. The well cellars would be equipped with storm water collection sumps and pumps to direct the storm water to the drain sump. From the drain sump, water would be directed into the processing system and injected, by the water disposal/injection wells drilled in Phase 4, into the oil-producing reservoir below the oil water contact. Figure 2.14 shows the location of the well cellars. Construction of 16-Foot Split-Face Block Wall A 16-foot split-face block wall would be constructed around the perimeter of the Project Site. The wall would be set back 10 feet from the Valley Drive and 6th Street property lines to allow for a landscape area. The wall would have a gated entrance off Valley Drive (set back 70 feet from the sidewalk) and a gated exit to 6th Street. The gates would be metal and motor operated. The appropriate signage would be provided, as is consistent with City requirements. Remove 16-Foot Sound Attenuation Wall After the completion of the Remedial Action Plan, final site grading, and construction of the well cellars and perimeter wall, the 16-foot temporary sound attenuation wall would be removed from the Project Site. Construction of Small Office Building A small office building approximately 650 square feet in size would be constructed in the northeast portion of the Project Site to house employee offices and control and monitoring equipment. The building would have a restroom and break room. The improvements extended to the Project Site in Phase 1 would provide for associated utilities, including water, sewer, natural gas, and telephone. The California Water Service Company and the City would provide water and sewer service, respectively. Southern California Gas Company (SCGC) would provide natural gas, and electricity would be provided by Southern California Edison (SCE). Verizon would provide telephone service. Office related solid waste services would be provided by Athens Services or a future city franchisee. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.14 Phase 3 Proposed Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Installation of Permanent Production Equipment Permanent oil, water, and gas production equipment would be installed on the Project Site. The permanent oil production facilities would include tanks, vessels, piping, pumps, filters, and supporting metering equipment. These are listed in Table 2.9. A retaining wall around all of the vessels, tanks and other equipment containing oil would provide secondary containment. The design capacity of the secondary containment would exceed the fluid capacity of the largest tank by 110 percent plus the precipitation from a 100-year storm event. In Phase 4, the oil production facility would be used to separate gas, water, and solids from the oil, after which the oil would be stored in tanks prior to transport via pipeline from the Project Site. The separated water would be accumulated in tanks, filtered, and then injected into the oil- bearing reservoir by the four water disposal/injection wells. Gas from each well would be treated on the Project Site and then sold to the SCGC. The permanent gas production facilities would have compressors, vessels, a H2S and carbon dioxide (CO2) removal system, a moisture removal system, and an odorizing system. The use of this equipment is discussed in Section 2.4.4, Phase 4 Development and Operations. Table 2.9 Phase 3 and 4 Processing Equipment Listing Equipment Size and Number Oil Shipping Tanks 40 foot diameter by 16 feet high, 2900 BBLS, 2 tanks Water Clarifier 40 foot diameter by 16 feet high, 2900 BBLS, 1 tank Water Surge 30 foot diameter by 16 feet high, 1120 BBLS, 2 tanks Gas compressors 30 foot by 40 foot - 3 compressors DEA Skid (acid gas removal) 12 foot by 40 foot, 1 skid Low Temperature Separation (LTS) skid (propane refrigerant) 12 foot by 40 foot, 1 skid Flare/Gas Combustor 10 foot diameter by 22 feet high Vapor Recovery Compressor 17 foot by 28 foot IGF Skid 18 foot by 8 foot, 1 skid Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Filter Skid 25 foot by 18 foot, 1 skid Micro Turbines (five turbines) 200 kw each, 30 foot by 40 foot 3-Phase Separator 7 foot diameter by 35 feet long Lease Automatic Custody Transfer (LACT) Skid 5 foot by 12 foot Source: Project Application, Amendments and Appendices. BBLS=barrels (42 gallons), skid=a pre- fabricated unit. Construction of Final Site Improvements In addition to the areas where the concrete well cellar, the containment area, and the oil and gas production equipment have been constructed, the ground surface of the Project Site would be paved with concrete or asphaltic concrete and designed so that no fluids, including rain water up to a 100-year storm event, would leave the Project Site. Liquids, including rainwater, would be captured in the containment areas or in the well cellars, processed through the production facility, and injected into the oil-bearing reservoir via four water disposal/injection wells. Construction of Final Street Improvements Along Project Frontage The Proposed Oil Project would include the construction of street improvements along the frontage of the Project Site on 6th Street and Valley Drive. The improvements would include the installation of new curbs, gutters, and sidewalks. Installation of Final Landscaping Permanent landscaping would be provided along the perimeter of the Project. To the extent feasible, plant materials used in the temporary landscape plan installed in Phase 1 would be reused in the permanent landscaping. Reclaimed water supplied by the West Basin Municipal Water District would be used for irrigation. Appendix A provides the conceptual landscape plan and plant materials for the permanent landscaping that would be provided at the completion of Phase 3. Installation of 32-Foot Sound Attenuation Wall At the completion of the improvements in Phase 3, a 32-foot sound attenuation wall would be Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources erected inside the 16-foot block wall to provide for noise attenuation during Phase 4 drilling. Appendix A of the Final EIR provides the elevations of the Project Site, including the sound attenuation walls with the block walls, from Valley Drive and 6th Street at the completion of Phase 3. Set Conductor Pipe Prior to drilling in Phase 4, a dry-hole digger/auger would be used to set the conductor casing in the well cellars for all of the intended wells on the Project Site in a manner similar to the setting of the conductor pipe in Phase 2. A hole approximately 18 inches in diameter would be drilled to a depth of approximately 80 feet. A conductor pipe would be lowered to the bottom of the hole and cemented in place. This would form the seal of the near-surface formation and serve as a steel conduit to allow the drilling fluid used in the next stage of the well to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project would be set, and the dry hole digger/auger would be moved off the Project Site. Lighting Systems The permanent lighting for the Proposed Oil Project would be installed as a part of Phase 3. The lighting,as proposed in the Applicant’s Lighting Plan, would be designed to be directed downward and shielded in order to avoid obtrusive light spillage beyond the Project Site, reflective glare, and illumination of the nighttime sky. 2.4.3.2 Phase 3 Offsite Pipeline Construction During Phase 3, offsite pipelines for oil and gas would be constructed to transport the oil and gas to markets. Each route is discussed in the following subsections. Gas Pipeline Route As it leaves the Project Site, the offsite underground pipeline for the transport of gas would be constructed for a distance of 0.43 miles in the ROW of southbound Valley Drive (which is a one way street south of 2nd Street) in the City of Hermosa Beach to a tie-in to a SCG gas line in the Southern California Edison(SCE) Utility Corridor east of N. Francisca Avenue in the City of Redondo Beach. See Figure 2.15 for the proposed pipeline routes. Appendix A contains Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources detailed drawings of the route and valve box options. This portion of the gas pipeline would consist of two parallel pipelines, 4 inches in diameter, and located at a depth of approximately 3.5 to 4 feet below ground surface (bgs) within the road ROW until it ties into the SCG line at a proposed metering station immediately to the east of N. Francisca Avenue. The pipeline would be a loop system that allows for the gas to be returned to the Project Site for further treatment in the event that the produced gas does not meet SCG standards. The metering station site, which would be provided as a part of the Proposed Oil Project and is owned by SCG, would be approximately 40 by 60 feet in size and surrounded by an 8-foot high block wall. As shown in Figure 2.15, this first portion of the gas pipeline is bounded to the east by the Greenbelt and Ardmore Park and, further to the east, by Ardmore Avenue and residential development in the City of Hermosa Beach; to the west by the Beach Cities Self Storage facility, light manufacturing land uses, South Park, and residential development in the City of Hermosa Beach; and to the west in the City of Redondo Beach by facilities associated with the AES Power Plant. The gas line is designed for a maximum operating pressure of 465 pounds per square inch gauge (psig), but would typically operate at approximately 225 psig of pressure. Once the proposed gas pipeline from the Project Site ties into the SCG point of receipt at the proposed metering station, SCG would construct a six-inch gas pipeline that extends northeast for approximately 1.4 miles to connect to an existing SCG pipeline transmission facility (Line 1170) located on the south side of 190th Street near its intersection with Green Lane, between Flagler Lane and Beryl Street, in the City of Redondo Beach. After the first portion of the new six-inch gas pipeline leaves the proposed metering station and continues northeast, it would be located in an existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway. The new pipeline would exit the SCE Utility Corridor on the south side of the intersection of Herondo Street/Anita Street with Pacific Coast Highway, extend across Pacific Coast Highway, and continue northeast within the ROW of Anita Street/190th Street to its point of connection with the existing SCG pipeline transmission facility (Line 1170). If for some reason the first portion of the new pipeline could not be located within the existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway, it would leave the proposed metering station and continue for a short distance north within the ROW of N. Francisca Avenue and turn northeast at Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Pigging Passing a device through a pipeline that cleans or inspects the pipeline. A pig is usually a small rubber device slightly smaller in diameter than the pipeline. The pig is forced through it by product flow. Usually cylindrical or spherical, pigs sweep the line by scraping the sides of the pipeline and pushing debris ahead within the ROW until it reaches the intersection of Herondo Street/Anita Street with Pacific Coast Highway. At that point it would continue to the northeast as described previously. Although SCG would obtain the necessary permits and construct the new gas pipeline, the Applicant would pay for the associated costs of construction. The proposed gas line from the proposed metering station to the existing SCG pipeline transmission facility is bounded to the north by commercial land uses and residential development in the City of Redondo Beach and to the south by commercial land uses, residential development, and public facilities including Dominguez Park and Redondo Beach Dog Park in the City of Redondo Beach. Oil Pipeline Route The offsite underground pipeline for the transport of oil to an area refinery via a connection to a valve location in the City of Torrance would be constructed for a distance of approximately 3.55 miles in one of three potential pipeline scenarios that would follow a route through the Cities of Hermosa Beach and Redondo Beach and terminate in Torrance. The selection of the pipeline route would occur after Project approval. Appendix A of the Final EIR shows the pipeline route scenarios in detail. The pipeline would be 8 inches or less in diameter, located at a depth of approximately 3.5 to 4 feet bgs depending on the grade. At one of four potential valve box locations, the pipeline would tie-in to an existing pipeline that transports oil to a refinery. Appendix A of the Final EIR provides the proposed alignments of the three oil pipeline scenarios, the respective jurisdictional boundaries, and the adjacent land uses. Appendix A of the Final EIR provides the four valve box location options that the pipeline could tie into. More details are included in Appendix A. The oil line would be designed for a maximum operating pressure of approximately 500 psig, but would typically operate at approximately 100 to 200 psig of pressure. The pipeline would Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources include pigging stations to send and receive maintenance pigs into and from the pipelines to clean or inspect the pipelines during ongoing operations. This would occur for the lifetime of the Proposed Oil Project. Pigging refers to the practice of using pipeline inspection gauges or 'pigs' to perform various maintenance operations on a pipeline without stopping the flow of the product in the pipeline (refer to sidebar for more information). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.15 Proposed Pipeline Routes Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source:Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources As shown in Figure 2.15, the oil pipeline would be constructed for a distance of 0.39 miles in the ROW of southbound Valley Drive (which is one-way starting at 2nd Street) in the City of Hermosa Beach to the corner of Valley Drive/N. Francisca Avenue and Herondo Street in the City of Redondo Beach. At this point, the oil pipeline would turn to the east along one of the following three pipeline scenarios (see Appendix A of the Final EIR):  Scenario 1 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street, Anita Street, and 190th Street in the City of Redondo Beach to the intersection of 190th Street/Hawthorne Boulevard in the City of Torrance. At this point, Scenario 1 would continue to one of the four valve box options presented later in this discussion;  Scenario 2 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street and Anita Street in the City of Redondo Beach and the ROW of 190th Street in the City of Torrance to the intersection of 190th Street/Hawthorne Boulevard. At this point, Scenario 2 would continue to one of the four valve box options presented later in this discussion; and  Scenario 3 consists of the construction of the oil pipeline towards the east within the SCE Utility Corridor in the Cities of Redondo Beach and Torrance. When the oil pipeline meets Hawthorne Boulevard in the City of Torrance, Scenario 3 would continue to one of the four valve box options presented later in this discussion. The function of the valve box is to house the valve on the new oil pipeline to isolate it from the main oil transmission line and allow for inspection, operation, and maintenance of the valve and line to be performed as required by Federal and State regulations. The site requirement for a valve box for the Proposed Oil Project would be approximately six feet wide by eight feet long by six feet high. The valve box would be a precast concrete box with walls that are typically eight to ten inches thick. The valve box would be located below grade and designed to State of California Highway “traffic-rated” standards to allow for vehicle travel over it. A standard 36-inch or 42-inch manhole cover would provide access down into the valve box from grade. The manhole cover, the weight of which takes two people to remove and replace, would be bolted into place with special tools, providing security for the valve box. The oil pipeline would end at one of the following valve box locations: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources  Valve Option 1 – For Pipeline Scenarios 1 and 2, the pipeline would continue from the Hawthorne Boulevard/190th Street intersection down 190th Street to the Exxon Mobil Refinery, where it would connect with a valve box location within the refinery site. For Pipeline Scenario 3, the pipeline would turn north in Hawthorne Boulevard and east in 190th Street to the refinery site;  Valve Option 2 - For Pipeline Scenarios 1 and 2, the pipeline would turn south in Hawthorne Boulevard to the SCE Utility Corridor where it would turn east to the valve box location. For Pipeline Scenario 3, the pipeline would continue east in the SCE Utility Corridor across Hawthorne Boulevard to the valve box location;  Valve Option 3 – For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location adjacent to the Santa Fe Rail Road line; and  Valve Option 4 - For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location northeast of the intersection of 190th Street/Hawthorne Boulevard. The oil pipeline would be equipped with a supervisory control and data acquisition system (SCADA), which would monitor pipeline pressure and flow and, if a leak is suspected, would notify the operators. The percentage that is set in the SCADA system would notify the operator of potential oil leak. The detection timeframes set by the Applicant would vary depending on the crude oil flow rate in the pipeline. When the flow rate is at the maximum anticipated production rate of 8,000 barrels per day, flowing on a continuous basis, the flow rate would be 5.5 barrels per minute, and the following would apply:  15 minute time interval 5 % or 4.1 barrels  1 hour time interval 2 % or 6.7 barrels  24 hour time interval 1 % or 80 barrels If oil production is considerably less than the 8,000 barrels per day, the percentages would be adjusted upward to maintain essentially the same volume of oil previously noted based on the reduced flow rate in the pipe. Pipeline Construction Methods The gas and oil pipelines would be installed utilizing conventional trenching methods within Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources either one trench or two separate trenches within the roadway ROW. The construction and installation process would occur in stages consisting of approximately 237 feet in length each. Two stages would be constructed per day (a segment of 237 feet would be new construction, and another 237 feet would be the completion of the construction from the previous day). With the addition of approximately 126 feet for lane transitions and safety cones, a total of approximately 600 linear feet of roadway would be affected per day. A construction spread would be used to accomplish most aspects of the gas and oil pipeline construction along the alignments previously discussed. A construction spread is a clustering of construction equipment that moves along the pipeline route, sequentially removing asphalt roadway, trenching, laying pipe, filling, re-paving, and cleaning up. A pipeline construction spread consisting of several units would be organized to proceed in the following order:  Pre-construction activities  Asphalt removal and ditching or ROW grubbing and ditching  Pipe handling/welding  Pipe coating  Pipe lowering, backfilling, and street repair  Pipe testing and inspection  Metering, pigging, odorant station installation If the oil pipeline can be laid within the SCE Utility Corridor (Scenario 3 pipeline route), a construction spread similar in arrangement, but smaller, would be used since the alignment would not have asphalt. In addition, if it is determined that existing sleeves under streets crossing the SCE Utility Easement exist, trenching across some streets may not need to occur. The following describes the activities that would occur for the construction of the pipelines and Figure 2.16 depicts a typical pipeline construction spread. Pre-Construction Activity The pipeline alignment ROW would include roadways and/or land in existing paved streets and other property, potentially including private property. Approval to construct and operate a pipeline would be obtained from or authorized by franchise agreements or permits from the agency with jurisdiction over the roadways and, if needed, from affected property owners. The construction requirements in the municipal codes and ordinances of the Cities of Hermosa Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Beach, Redondo Beach, and Torrance allow for the construction on major roadways during the following weekday hours:  Hermosa Beach: 8:00 a.m. to 6:00 p.m. on weekdays and 9:00 a.m. to 5:00 p.m. on Saturday. No construction on Sundays and holidays;  Redondo Beach: 9:00 a.m. to 3:00 p.m. on weekdays. No construction on weekends and holidays; and  Torrance: 8:30 a.m. to 3:30 p.m. on weekdays. No construction on weekends and holidays. Figure 2.16 Typical Pipeline Construction Spread Note: All activities may not occur simultaneously. The pipeline construction activities would occur on weekdays between the hours of 9:00 a.m. and 3:00 p.m. (as per the CUP requirements), a time frame which is after morning peak commute hours (i.e., 7:00 a.m. to 9:00 a.m.) and before evening peak commute hours (i.e.: 4:00 p.m. to 6:00 p.m.) on the affected roadways. The Applicant proposes no construction activities during weekends and holidays. The Applicant would prepare a Construction Traffic Management Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources (CTMP) that would include the following:  Require the pipeline contractor(s) to obtain and follow Street Construction Permits in the affected Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities (Pacific Coast Highway and Hawthorne Boulevard);  Develop detour and traffic management plans consistent with the affected City’s Standard Roadway Plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH);  Revise pipeline construction segments to minimize access conflicts to adjacent residents and businesses;  Develop truck route plans to reduce traffic on the street network during peak traffic commute hours;  Avoid construction-related traffic to occur during peak travel periods; and  Implementation of staggered construction worker shifts to minimize Project traffic during the peak hours. Underground Service Alert would notify service providers of construction to avoid conflicts with existing utilities and disruptions of service to utility customers. Because construction would occur in either paved streets or an existing utility corridor, extensive grading is not proposed. Asphalt Removal and Ditching Once traffic control measures are in place, trenching operations would begin. Typically, a five- foot deep and 18- to 24-inch wide ditch (single pipe) or 36-inch wide ditch (double pipes) would be excavated (varying depths, depending on the conditions encountered). Backhoes and track hoes would excavate the ditch. However, hand digging would be necessary to locate buried utilities, such as other pipelines, cables, water mains, and sewers. Fugitive dust emissions at the construction site during earthmoving operations would be controlled by water trucks equipped with fine-spray nozzles. Spoils from cuts, including cuts in the streets, would be saved for backfill or would be removed, and the ditch would be backfilled with slurry material as approved by the local jurisdictional agency. Effort would be made to minimize the amount of excess material. Material unsuitable for backfill and not economically useful for other purposes at the pipeline location would be disposed of at a landfill according to local jurisdictional guidelines. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources When used for backfill, the spoils from the trenches would be hauled to previously disturbed sites, as determined by the construction contractor. Pipe Handling Special trucks would transport the pipe in 40- to 80-foot lengths from the shipment point or storage yard to the pipeline installation point. Where sufficient room exists, trucks would carry the pipe along the roadway, and sideboom tractors would unload the joints of pipe from the stringing trucks and lay them end to end beside the ditch-line for future line-up and welding. A portable bending machine would bend the pipe to fit the ditch contour both vertically and horizontally. Construction ROW conditions could occasionally require pipe bends that are not able to be accomplished in the field. In these cases, manufactured or shop-made bends would be used, and pipe would be bent prior to the application of coating. While the line-up crew lays the pipe, line-up clamps would hold the pipe sections in position until approximately 50 percent of the first welding pass is completed. The welding crew would then apply the remaining weld passes to comply with API 1104, ASME B31.4, or ASME 31.8.2 All pipeline welds would be radiographically inspected. Pipe Coating Protecting the pipe from moisture and air helps prevent corrosion, thereby preventing cracks, breaks, and leaks in the pipe. The steel pipeline would be coated externally with fusion-bond epoxy or a corrosion resistant tape wrap system. Pipeline coating would be applied at the mill before delivery to the construction site. However, field coating would be necessary on all field weld joints to provide a continuous coating along the pipeline. After the pipe has been welded and radiographically inspected, one of the following would be applied: two-part epoxy, heat- shrink polyethylene sleeves or polyethylene tape and tape primer. Pipe Lowering, Backfilling, and Street Repair The pipe would be lifted and lowered into the ditch by one or two sideboom tractors spaced so that the weight of unsupported pipe would not cause mechanical damage. Cradles with rubber rollers or padded slings would allow the tractors to lower the pipe without damage as they travel 2 ASME - American Society of Mechanical Engineers; API – American Petroleum Institute Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources along the ditch line. Additional welds could be required in instances where the ditch line is obstructed by other utilities crossing the pipe ditch. These welds would typically be made in the ditch at the final elevation. In addition to normal welding and weld inspection, each weld would require pipe handling for line-up, cutting to exact length, coating, and backfilling. Backfill material in roadways would most likely be slurry material or could be ditch spoils, according to local agency requirements. Slurry material would be delivered by concrete trucks and consist of sand and cement. Concrete trucks would be trucks from local commercial sources. The area would be repaved if it was previously an existing paved street. In areas where the pipeline would be in previously unpaved areas, the backfill would include topsoil preserved from the excavation for re-vegetation where needed. At the time of backfilling, a colored warning tape would be buried approximately 12 to 18 inches above the pipeline to indicate the presence of a buried pipeline to third-party excavators. The backfilled earth would be compacted using a roller or hydraulic tamper. The trench would be filled with slurry where approved or required by local regulations. Steel plates would cover any open trench at the end of each workday. Pipe Testing and Inspection All field welding would be performed by qualified welders that meet the Applicant’s specifications and in accordance with all applicable laws, ordinances, regulations, and standards, including API 1104, the Standard for Welding Pipe Lines and Related Facilities, and the rules and regulations of the U.S. Department of Transportation found in the Code of Federal Regulations. All welds would be visually and radiographically inspected. All rejected welds would be repaired or replaced as necessary and radiographically inspected again. The radiographic reports and a record of the location of welds would be maintained for the life of the pipeline. In addition to standard testing of all pipe and fittings at the mill, hydrostatic testing would be performed after construction and prior to startup. Federal regulations mandate hydrostatic testing of new, cathodically protected pipelines prior to placing the line into operation. This test involves filling a test section of the pipeline with fresh water and increasing pressure to a predetermined level. Such tests are designed to prove that the pipe, fittings, and weld sections would maintain mechanical integrity under pressure without failure or leakage. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Cathodic protection controls the corrosion of a metal surface by making it work as a cathode of an electrochemical cell. This is achieved by placing the cell in contact with the metal surface and another more easily corroded metal to act as the anode of the electrochemical cell. The cathodic protection system consists of power sources called rectifiers, buried anodes (either sacrificial or impressed current), and test stations along the pipelines. Metering and Pigging Station Installation A gas-metering station would be required at the custody transfer location where the Applicant’s proposed gas pipeline interconnects with the existing SCG pipeline. The metering station would measure and record gas volumes, gas quality, and gas characteristics and provide custody transfer of the gas to SCG. The metering station would be located adjacent to N. Francisca Avenue, southeast of the intersection of Herondo Street and N. Francisca Avenue. SCG would then construct a new six-inch pipeline to a tie-in location with the existing SCG pipeline transmission facility (Line 1170) as previously discussed in Section 2.4.3.2, Phase 3 Offsite Pipeline Construction. In addition to the metering station, a pigging station would be installed at the metering station and Project Site for the gas pipeline, as required by SCG, and at the tie-in point for the oil pipeline. An odorant station would be installed at the Project Site consisting of a 500 gallon odorant tank that would be filled approximately annually. The gas would be odorized before it leaves the site. 2.4.3.3 Phase 3 Hazardous Materials Hazardous materials used as part of Phase 3 would be associated with construction activities, including diesel fuels, lubricating oils, pipe coatings, solvents, etc. No storage of hazardous materials beyond standard consumer quantities (a few gallons) is anticipated in this phase. 2.4.3.4 Phase 3 Schedule It is anticipated that Phase 3 would occur for a period of approximately 14 months as indicated in the schedule provided in Table 2.10. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.10 Phase 3 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28- 38 39- 53 54 55 56 57 58 59 60 61 62 63 64 Remove temporary equipment Remove trees along Valley Remove32-foot sound wall Implement RAP Construct retaining walls Final grading Construct well cellars Construct 16-foot block wall Remove 16-foot sound wall Construct/install facilities Construct street improvements Install landscaping Construct offsitepipelines Start-up of equipment Install 32-foot sound wall Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Set conductor Note: Days are weekdaysSource: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.11 Phase 3 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Remove production equipment 6 15 21 Remove trees along Valley Drive 2 4 6 Install 16-foot noise wall 6 8 14 Implement Remedial Action Plan 18 8 28 Construct retaining walls 3 20 24 Final grading (balanced) 4 6 10 Construct well cellars 9 15 25 Construct 16-foot perimeter wall 5 20 25 Remove 16-foot noise wall 5 5 10 Construct/install onsite facilities 18 40 47 Construct street improvements 11 9 20 Install landscaping 1 7 7 Construct pipeline 18 22 54 Start-up production equipment 0 7 7 Install 32-foot sound wall 6 9 16 Set conductor 2 5 7 Greatest number of trips in one day 18 (during weeks 6-13, 23, 54) 62 (during weeks 39-53) 78 (during week 39-53) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips (RT). Maximum truck activity occurs during week 6-13 with RAP activities, week23 with construct well cellars, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 4 Development and Operations: 2.5 years drilling program. Operations - ongoing perimeter wall and onsite facilities and week 54 with construction of onsite facilities, pipeline construction and conductor setting. However, the majority of the pipeline construction traffic would occur away from the Project Site except during the installation of the sections of the pipeline located very close to the Project facility. Maximum auto activity occurs during weeks 39-53 with the facilities construction. Maximum activity trucks and autos combined occurs during weeks 39-53, however, the majority of the vehicles for the pipeline construction would be parked at the contractor’s facilities or near the pipeline alignment. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices 2.4.3.5 Phase 3 Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 3 are provided in Table 2.11. The vehicle trips required to transport employees and equipment for Phase 2 are also provided in Table 2.11. 2.4.4 Phase 4 Development and Operations The purpose of Phase 4 would be to maximize oil and gas recovery from the reservoirs by drilling additional wells and operating the permanent facility. To accomplish this, Phase 4 would involve the drilling of wells; the operation of the permanent oil production equipment; the transport of the oil and gas by pipeline to their respective destinations; and the ongoing Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources maintenance of the Proposed Oil Project. The Proposed Oil Project would be designed for a maximum capacity of 8,000 barrels of oil per day and 2.5 million cubic feet of gas per day. Figure 2.17 provides the conceptual site plan for Phase 4. Elevations and the conceptual landscape plan for the Proposed Oil Project during Phase 4 are included in Appendix A of the Final EIR. 2.4.4.1 Phase 4 Drilling Phase 4 drilling would involve delivery and setup of the drilling rig and the drilling of the remaining wells. Delivery and Set Up of Drill Rig The drilling rig and its associated equipment would be brought to the Project Site by trucks with trailers permitted by the City and the California Highway Patrol. The approximately 87-foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. The crane would be removed from the Project Site after the drill rig and supporting equipment have been set in place. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, the generator, which would be a non-road portable diesel-fuel generators certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. The drill rig and its associated equipment would require the same setup as described under Section 2.4.2, Phase 2 Drilling and Testing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.5 Drill Remaining Wells The drilling of the remaining oil wells and water disposal/injection wells, up to a total of 30 oil wells and four water disposal/injection wells, would involve the same activities as described for Phase 2. As previously discussed regarding Phase 2, once the drilling of a well is complete, the cemented casing would be run from the surface to the bottom of the wellbore where the well penetrates the oil-producing reservoir. The well would be plumbed into the temporary production equipment and pump system that had been installed. The pump system, installed below ground, would bring the oil, gas, and water to the surface for processing. In addition, up to three additional water disposal/injection wells (in addition to the single water disposal/injection well drilled during Phase 2) would be drilled to allow for the injection of processed produced water back into the oil-producing reservoir and at below formation fracture pressure. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take approximately 30 days to drill each well, including the time for placing the drilling rig in position and installing rigging. After the drilling of the wells is complete, the drill rig would be removed from the Project Site. Including set up for each well and removal from the Project Site, the total drilling time for Phase 4 would be about 30 months (2 ½ years). Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District conveyed via extension of an existing waterline serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in tanks. Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. All other waste generated by the test drilling would be transported by truck to Clean Harbors Buttonwillow Landfill or a similar facility closer to the Project Site. Noise abatement would be incorporated into the drilling process in the same manner as described for Phase 2, including a 32-foot high sound attenuation wall. After the drilling of the wells is Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources completed, the 32-foot sound attenuation wall would be removed from the Project Site. Re-Drilling of Wells Re-drilling of a well occurs if production from a well declines substantially or if problems exist with the well, affecting the well’s efficiency or viability. The same activities would be required for re-drills as for initial drilling, except that conductor piping would not have to be installed again, as the same conductor piping would be used for the re-drill. Although the Applicant does not expect the need for the re-drilling of wells, the activity may be required under extraordinary circumstances. Depending on the circumstances, a workover rig might be able to be used to complete a re-drill. However, for the purpose of providing a worst- case analysis, the Applicant estimates that up to 30 re-drills could occur over the life of the Proposed Oil Project, with up to five re-drills occurring during any given year. In the event that a re-drill would occur, noise attenuation design features, including the use of a 32-foot sound attenuation wall and acoustical covers, would be implemented on the Project Site. Re-drills would involve the same activities and equipment as the drilling proposed for Phase 2 and 4. 2.4.5.1 Phase 4 Processing and Operations During the drilling of the remaining oil wells and water disposal/injection wells, the production of the extracted oil would occur. Figure 2.18 shows the steps involved in processing the oil, water, and gas produced from the wells during Phase 4. The permanent production equipment on the Project Site would be used to process the oil and gas to a standard that would be suitable for sale. The produced water would be processed and injected into the oil-producing reservoir. The gas produced would be processed and sold to the gas company. The oil and gas produced would be transported offsite via pipelines constructed during Phase 3. Figure 2.18 Phase 4 Process Flow Diagram Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Noise abatement would be incorporated into operational practices and permanent production equipment. The anticipated personnel on the Project Site would be four personnel for a 12-hour daytime shift, two personnel for an 8-hourgraveyard shift, and two personnel for an 8-hour swing shift. Therefore, personnel would be present 24 hours per day on the Project Site. During the ongoing operation of the Proposed Oil Project, active wells would require periodic routine service. These activities could include the replacement of down-hole pumps, piping, and cleaning. These maintenance activities would typically be accomplished by utilizing a service rig, or “workover” rig, approximately 110 feet high. The workover rig would be operated on the Project Site a maximum of 90 days per year. The workover rig would be operated between the hours of 8:00 a.m. and 6:00 p.m. on weekdays only (excluding holidays). Only a single workover rig would be onsite at one time. In addition, there would be an occasional need for other services such as facilities repair and Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources solid and liquid waste pick-up. Preventative maintenance would be performed on a routine basis to ensure the integrity of the operating equipment. The pipelines would be periodically inspected to ensure their continued integrity. The permanent production facility would be utilized to separate and treat produced oil, gas and water. The separation and treatment of these fluids allows for the oil and gas to be sold and subsequently transported via pipeline and for the water to be injected into the oil-producing reservoir below the oil water contact line. Figure 2.18 provides a simplified flow diagram of the flow of fluids through the permanent production facility. The following describes the steps of production and operational characteristics in Phase 4. Fluids Piped from the Wellhead to the Production Facility After a well has been drilled and completed (final down-hole equipment installed), the extracted fluids would be piped to the permanent production facility on site. The combination of fluids (i.e., oil, gas, and water mixture) is referred to as an emulsion. This emulsion would be sent via pipes to a production header, where it is commingled with the emulsion from all the wells in a gross line before entering a three-phase separator. There is also a test header that allows the diversion of emulsions from a single well through a well test station before the three-phase separator. The well test station allows for the testing of each well quality and flow characteristics. After the emulsion passes through the well test station, it would be directed back to the gross line where it would be commingled back with the emulsion from the production header and then enter the three-phase separator. The three-phase separator separates the oil, gas, and water. The gas exits the top, the oil exits the middle, and the water exits the bottom of the separator. Each of these fluids enters a specific system of treatment, as is discussed in the following subsections. Oil Treatment System After the produced oil leaves the three-phase separator, it would enter a stock tank, where it may need to be heated depending on the quality of the crude oil. This heating would allow excess water to drop from the oil. Heating, if necessary, would be provided by the microturbine exhaust waste heat recovery system. From the stock tank, the oil would be measured using a Lease Automated Custody Transfer Unit (LACT) and transported via pipeline to the purchaser. Any water that drops out of the oil would be routed to the water treatment system. Vapors would be Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources directed to the gas processing systems through the vapor recovery unit. Gas Treatment System During this phase, gas would be treated, sold, and subsequently transported via pipeline to the SCGC. Treatment of the gas would be required to meet gas pipeline specifications. After the gas leaves the three-phase separator, it would be sent to the first stage compressor. The first stage compressor would increase the pressure of the gas for treatment. The first stage of gas treatment is removal of H2S from the gas utilizing triazine using the SulfaScrub system. SulfaScrub is a non-regenerative batch process that requires replacement of the SulfaScrub materials periodically. The SulfaScrub process is a “scavenging” process, meaning it is used to remove H2S in process gas at low concentrations (up to concentrations of approximately 200 ppm). After leaving the SulfaScrub system, the gas would be sent through the amine system. This amine system removes CO2 from the gas. After leaving the amine system, the gas would pass through the second stage compressor, where pressure is increased prior to the gas’ entry into the low temperature separation system. The low temperature separation system removes any remaining moisture (mostly water) and gas liquids from the gas prior to sale. Propane would be utilized as a refrigerant in the low temperature separation system. Before the gas leaves the Project Site, it would be odorized using an odorizing substance (mercaptan or equivalent) as required by law. The gas would then be sent via pipeline through a metering station to a SCG pipeline constructed in Phase 3 located near the corner of Herondo Avenue and N. Francisca Drive to the south of the Project Site. Water Treatment System After the water leaves the three-phase separator, it would be sent to the clarifier tank. This tank would allow solids in the water to drop out. From the clarifier tank, the water would then enter the induced gas flotation unit for the removal of suspended matter, such as oil or solids. The induced gas flotation unit removes oil by injecting gas bubbles into the water. The bubbles adhere to the suspended matter, causing the suspended matter to float to the surface and form a froth layer, which is then removed by a skimmer. From the induced gas flotation unit, the water would then pass through a filter unit. The filter Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources unit would be used to clean the water of any remaining oil and solids, such as sand. After the water has left the filter unit, it would enter the water surge tanks for storage before disposal/injection. From the water surge tank, the water would then flow through pumps and be sent to the disposal/injection wells for injection into the oil producing reservoir. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.17 Phase 4 Site Plan with Drilling Rig Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Vapor Recovery System Gas from all tanks and vessels not part of the gas processing system (the oil and water processing tanks and vessels), as well as pressure relief valves, would be gathered through pipes into a closed-system and directed to a vapor recovery compressor unit. The vapor recovery compressor would compress the gas and then add it to the gas in the gas processing system (from the three- phase separator, etc), where it would be processed and sent via pipeline to the metering station and the SCG system. Process Drain System All equipment would be connected to a drain system that would be directed to a drain tank. Liquids from the drain tank would be sent back to the three-phase separator for reprocessing. Solids from the drain system may periodically be removed to an offsite approved disposal facility. Electrical Generation System The facility would utilize a Microturbine system, which would consist of five 200 kw Capstone turbines configured as a single 1,000 kw package. Anticipated NOx emissions would be 4 ppm. Gas produced on the Project Site would be utilized as fuel for the turbines. Facility Storm Drainage System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the Project Site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation from a 100- year storm event. Waste Waste would be generated as part of the facility operations and the production process. Regular waste would include typical municipal trash such as paper, trash bags, food, and cups. Process waste would include generic oil field waste such as sandy oil (from the tank bottoms), spent H2S scavenger, spent filters, oily cloths (i.e., rags), gloves and Tyvek® suits. Intermittently the facility could generate hazardous waste. These wastes could include empty drums, rinse water, painting supplies, spilled chemicals, spent media, and hydraulic fluids. The Applicant indicates Section 2: Project Description Exhibit B that the Project Site would have an Environmental Protection Agency (EPA) and Department of Toxic Substances Control(DTSC) Identification Number. Phase 4 Safety and Security Systems The Fire Protection Plan for Phase 4 would be provided by the Applicant for review and approval by the City of Hermosa Beach Fire Department (Fire Department) and incorporated into the Phase 4 Site Safety Plan. Emergency access would be incorporated into the design of the Proposed Oil Project. An additional fire hydrant would be provided adjacent to the Project Site as a component of the Proposed Oil Project. The location of the hydrant would be determined by the Fire Department, and installation would occur as a part of the construction completed in Phase 3. A fire suppression system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed during Phase 3. The fire suppression systems would include a foam injection system and automated detection and annunciation systems. Automated alarm systems would be installed for the detection of chemicals and fire hazards to notify onsite personnel that an emergency situation is potentially occurring. If it is determined that a chemical fire or fire emergency exists, the onsite operator would activate the emergency shutdown system and notify the Fire Department. The Fire Department and their allied agencies would respond as indicated in their mutual and automatic aid agreement contracts. The onsite personnel for the Proposed Oil Projectwould be trained for initial spill response and activation of emergency systems at the site as per HAZWOPER requirements, but would not be trained for fire fighting and would rely on the Fire Department for response activities. The fire detection system would consist of thermal fire detection and optical surveillance systems that would monitor potential fire zones and activate warning indicators. The Applicant proposes Subsidence and Induced Seismicity Monitoring Programs to detect subsidence as a result of drilling activities. This would ensure that subsidence would not be tolerated to the degree that it could endanger the facility, offsite structures, and the shoreline. Also, an Induced Seismicity Monitoring Program would be designed to detect seismic activity that might result from drilling activities. The security system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed and initiated during Phase 3. Security on the Project Site would be provided by onsite personnel and a site security program that would include a Closed Circuit Television System, a gate access system, and an intrusion and motion detection system. The security system would Section 2: Project Description Exhibit B control all access to and from the Project Site. During the final design of the Proposed Project and submission of plans to the appropriate agencies for permits, the following plans and programs would be developed by the Applicant as part of the facility drilling and operations phases (Phase 2 and Phase 4 activities):  Odor Minimization Plan;  Air Monitoring Plan;  Fire Protection Plan;  Safety and Environmental Management Program;  Mechanical Integrity Program;  Hazardous Materials Business Plan;  Subsidence and Induced Seismicity Monitoring Programs;  Noise Monitoring Plan;  Quiet Mode Drilling Plan; and  Various plans related to grading, equipment design, electrical design, landscaping, etc. Safety devices would be installed within the piping, vessels, and tanks in the processing system. Safety devices would provide early warning, corrective action, or shut down of a specific segment of the system or the entire facility, if necessary. A number of safety devices are required or recommended by codes, standards and regulations, including:  High level warning systems;  High pressure warning systems;  Automatic shutdown valves;  Vessel and pipe design requirements;  Vapor recovery and component leakage limits; and  Fuel contaminant limits. Detailed piping and instrument diagrams would be provided by the Applicant during the detailed permitting stages, and reviews of the final design would be undertaken at that time. Specific measures to reduce the risk of hazardous material releases are addressed in Section 4.8, Safety, Risk of Upset, and Hazards. Phase 4 Hazardous Materials The operation would require the use of hazardous chemicals. The chemicals would be stored Section 2: Project Description Exhibit B onsite with secondary containment. The chemicals would be documented in a required Hazardous Materials Business Plan and submitted to the Los Angeles County Fire Department as the Certified Unified Program Agency (CUPA) and the Hermosa beach Fire Department. Typical chemicals utilized in the permanent production facility and the maximum quantities that would be onsite at any time are listed in Table 2.12. Hydrogen Sulfide The Applicant indicates that low levels of potential “native” H2S, in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the underlying oil reservoir. In order to have the capability to treat higher levels, the Proposed Oil Project has been planned to treat H2S levels of 15 ppm and has a maximum design capacity to treat H2S levels of up to 100 ppm. After treatment with the SulfaScrub system, the H2S levels of the gas would be reduced to less than 4.0 ppm. SCG’s specifications limit the H2S concentrations in gas delivered to the meter from a producer to less than 4.0 ppm. The Proposed Project provides for the disposal/injection of treated produced water from the drilling and production process back into the oil reservoir using water disposal/injection wells. Untreated produced water can result in the creation of H2S concentrations in the reservoir above the existing levels in the oil reservoir (referred to as the “native” condition). Prior to the disposal/injection of produced water from the oil extraction process, surface runoff from precipitation that collects on the Project Site, or any additional injected water, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff and additional water would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) Odorant/Mercaptan Odorize the sales gas 500 H2S Scavenger/Pertrosweet Gas treatment for H2S 9,000 Section 2: Project Description Exhibit B Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) HSE700 Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter Cor7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Glycol/TEG Gas treatment for water removal 55 Amine/DEA Gas Treatment for H2S removal 110 Methanol For oil treatment 55 Biotreat 8415 Water treatment prior tore- injection 55 Hydrochloric Acid 15%, used for acid washing during completion Varies Hydrofluoric Acid 3%, used for acidizing muds Varies Note: Project Application, Amendments and Appendices 2.4.5.2 Phase 4 Schedule It is anticipated that Phase 4 would occur for a period of approximately 30 to 35 years, as indicated in the schedule provided in Table 2.13. The drilling of the remaining wells would occur during the first 30 months of Phase 4, with periodic re-drills thereafter for the life of the project (averaging 30 days per year with a maximum of 150 days in one single year). The permanent production equipment would operate 24 hours a day, seven days per week. The Section 2: Project Description Exhibit B Project Site would be staffed 24 hours a day, seven days per week. Section 2: Project Description Exhibit B Table 2.13 Phase 4 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 through 131 132 133 134 135 Life of Project Deliver and Set up drill rig Drill remaining 30 wells Remove drill rig Remove 32-foot noise wall Facility operations and maintenance Continuous Re-drills Avg. 30 days/yr Max 150 days/yr* Well workovers Max 90 days per year Source: Project Application, Amendments and Appendices. To re-drill a well, a drilling rig similar to the one initiallyused to drill the wells would be used with the same setup, drilling and removal procedures. Workovers would use an 110-foot tall truck mounted drilling rig and would be conducted a maximum of 90 days per year. * This is the maximum number of days per year proposed by the Applicant. The 150 days per year is predicted to occur once every 5 years. Most likely re-drill activity would be lower. 2.4.5.3 Phase 4 Vehicle Requirements The number of vehicles estimated by the Applicant to be necessary for Phase 4 operations are provided in Table 2.14. During drilling, parking for Project employees would be provided as previously described under Section 2.4.1.1, Phase 1 Construction Activities, under the subsection Clearance of the Project Site. Parking for Project employees would be provided on the Project Site after the drilling of all the wells is completed and the drill rig has been removed from the Project Site. 2.4.6 Parking Requirements The Proposed Project construction and operation activities would result in increased parking demand. The elimination of existing parking would also make necessary the replacement of spaces lost. Parking requirements addressed in this FEIR include the following:  Temporary parking for a maximum of 40 Project employee vehicles, varying between Section 2: Project Description Exhibit B approximately 20 and 40 employee vehicles during construction and/or drilling activities in Phases 1-4, excluding ongoing production in Phase 4;  Long-term parking for four Project employees during the ongoing operation of the Proposed Project and four additional spaces for maintenance workers in Phase 4; Exhibit B Replacement of 15 parking spaces currently located at the City Maintenance Yard that supply free remote public parking on weekends under the City’s Preferential Parking Program approved by the Coastal Commission. These spaces are used by:  Maintenance Yard employees during working hours (i.e., Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays) and by the public at other times; and  Replacement of two on-street public parking spaces that would be eliminated by improvements to the southwest corner of 6th Street and Valley Drive. These spaces are not part of the City’s Preferential Parking Program. Table 2.14 Phase 4 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Deliver and Set up drill rig 6 20 26 Drill remaining 30 wells 12 11 23 Remove drill rig 5 20 25 Remove 32-foot sound wall 4 8 12 Facility operations and maintenance 5 13 18 Well workovers/Major Maintenance 4 14 18 Greatest number of trips in one day 17 (during drilling ) 34 (during drilling) 44 (during drilling) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum activity occurs during drilling of wells with facility operations and maintenance. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simple addition of the two. See Appendix A. Re-drilling would produce the same level of traffic as traffic produced during drilling activities. Exhibit B See Appendix A for details regarding vehicles, employees, trucks and construction equipment necessary for Project operations each week. Source: Project Application, Amendments and Appendices In order to comply with the City’s Preferential Parking Program and Coastal Development Permit requirements and be consistent with the City’s Coastal Land Use Plan (titled Local Coastal Plan) policies,, 17 public parking spaces would have to be generated under the Proposed Oil Project to replace the 15 parking spaces removed at the current City Maintenance Yard and the 2 on-street public parking spaces removed from 6th Street, Table 2.15 provides the Applicant’s assessment of parking demand for each phase of the Proposed Oil Project and the Applicant’s proposal for the development of the required parking as a component of the Proposed Oil Project. As indicated in Table 2.15, Phases 1, 2, and 3 and the drilling portion of Phase 4 would require temporary offsite parking. Exhibit B Table 2.15 Proposed Oil Project Parking Requirements Phase and Peak Activities Peak Number of Employees Number of Offsite Parking Spaces Needed Comments Phase 1: construct fence, wells cellar and install electrical service 27 20 Some employees would park onsite and others would use temporary parking lot. Phase 2: Install equipment and drill test wells. 22 12 Two 5 person shifts for drilling, some carpooling assumed. Phase 3: Construct wall, remove soundwall, construct onsite facilities 30-60 40 Peak employees occurs for constructing onsite facilities. Assumes some carpooling. Phase 4: Drilling and Operations 10 4 5 persons per shift with 2 shifts per day. Carpooling is assumed. Phase 4: Operations Only 2-4 0 No offsite parking needed. Source: Applicant submittals January 2014 The following information summarizes E&B’s proposal in the Project Application to meet parking demands. Cypress Parking Lot: Parking for 20 employees during temporary construction and drilling activities during Phases 1, 2, 3, and the drilling portion of Phase 4 would be provided in an offsite temporary parking lot to be developed at 636 Cypress Avenue adjacent to the western Project boundary (referred to as the temporary parking lot). The Applicant states it has entered into an agreement with the current owner of the subject property at 636 Cypress Avenue (Assessor Parcel No. 4187-031-22) for this use. Access to the parcel is provided from Cypress Avenue. While adjoining the Project Site at 555 6th Street, the temporary parking lot will not be accessible from the Project Site due to an elevation difference between the properties and the need for secured points of entry onto the Project Site. Exhibit B The 6,000-square foot parcel at 636 Cypress Avenue is a relatively level property. Itis currently developed with a single-story building that occupies approximately 75 percent of the parcel and a parking lot with approximately 6 parking spaces. The development of the parcel would comply with all City requirements. Development would require demolition of the existing building, removal of the current asphalt parking area, and minimal grading. The Cypress Parking Lot would be completed before the commencement of construction activities to occur under Phase 1 Site Preparation of the Proposed Project. Improvements that would be made to the new 60-foot by 100-foot parking lot with 20 parking spaces would include drainage, landscaping with irrigation, lighting, a trash container, and other elements to comply with the City of Hermosa Beach Municipal Code. Details of the redeveloped parcel are shown in Figure 2-18. The Applicant has requested that the City supply the required 17 replacement spaces as part of the City Maintenance Yard relocation. If the No Added Parking option is constructed, then the 17 spaces would be provided on a temporary basis at the proposed temporary parking lot at 636 Cypress Avenue and on a permanent basis as indicated below.. The City has not agreed to supply any replacement spaces regardless whether the Parking option or No Added Parking option were to be constructed Additional 20 Temporary Parking Spaces (Phase 3):During peak construction activities in Phase 3, parking for a maximum of 20 temporary parking spaces, in addition to the 20 temporary parking spaces provided at the off-site temporary parking area at 636 Cypress Avenue , would be provided at one or more sites, not yet identified, that would be leased or rented by the Applicant. Employees would walk to or be shuttled to the Project Site. The Applicant proposes to ensure to the City, through the submittal of any required documentation, that the parking spaces would be available during the temporary construction and drilling activities for the Proposed Project. If spaces are “remote,” located farther than 5 to 8 blocks from the Project Site as defined by the Applicant, a van pool shuttle service from the remote parking spaces would be provided to the Project Site by the Applicant. The Applicant proposes to obtain all required approvals and entitlements from the City and to make any required modifications to conform with City codes, identified as mitigation measures in the certified EIR, and any other requirements that may be imposed as a result of the Development Agreement or ballot measure. Construction Vehicle Parking (Phases 1-4 excluding permanent operations): The Applicant Exhibit B indicates that it has an agreement to utilize the below-ground parking area at 601Cypress Street for non-hazardous equipment storage and construction vehicle parking. Parking for construction vehicles and staging would be provided both at the Project Site at 555 6th Street and within the building at 601 Cypress Street during Phases 1-4. Parking for Ongoing Operations in (Phase 4): The long-term parking for a maximum of four Project employee vehicles during ongoing operations and maintenance will be supplied by four marked parking spaces on the Project Site at 555 6th Street. Additional parking required for maintenance activities for ongoing operations would also be accommodated onsite along the perimeter wall as indicated in Figure 2-18. No additional offsite parking would be required for long-term Project operations. Replacement of Spaces Eliminated by the Project: Fifteen parking spaces at the Project Site at 555 6th Street are used by City Maintenance Yard employees during working hours of Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays. These spaces also supply free remote public parking on weekends under the City’s Preferential Parking Program, approved by the Coastal Commission, and are otherwise used by the public when available. The Application proposes to replace 15 spaces for free remote public parking in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The City would be responsible to supply parking for its Maintenance Yard employees as part of its City Maintenance Yard relocation plan. Two on-street public parking spaces would also be eliminated by Project improvements to the southwest corner of 6th and Valley Drive; these spaces are not part of the City’s Preferential Parking Program. The Application proposes to replace these two spaces in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The Application indicates potential overlap with onsite employee scheduling during the drilling portion of Phase 4, requiring four parking spaces at 636 Cypress Avenue to be vacant as one shift arrives and another shift is leaving. This results in the availability of 16, rather than 17, parking spaces for a period of approximately one hour. The Application indicates that relocation of the 17 public parking spaces requires a coordinated approach between the Applicant and the City and proposes that this relocation be governed by the Lease Agreement (Section 13). The Applicant proposes the relocated City Maintenance Yard be developed in a manner which could supply the permanent public parking spaces on weekends Exhibit B and at night, similar to the way in which the existing parking spaces at the current City Maintenance Yard are utilized. If the relocation of the City Maintenance Yard does not become the location for the permanent public parking spaces, then the Applicant proposes to provide 15 replacement public parking spaces as well as the additional 2 public parking spaces, prior to the commencement of Project operations, at the offsite temporary parking lot at 636 Cypress Avenue or to provide other suitable public parking spaces consistent with requirements of the City’s Preferential Parking Program, the California Coastal Act, and a framework proposed by the Applicant. 2.4.7 Project Life and Decommissioning Under the Proposed Oil Project, the oil and gas resources would be developed until they are depleted and developing them is no longer economically viable, for up to 35 years. Currently, the amount of crude oil that could be produced from the field is unknown, and future crude prices are difficult to assess. According to the Lease Agreement, the Proposed Oil Project could operate for up to 35 years. Figure 2.19 shows the estimated crude oil, gas and water production for the life of the Proposed Oil Project. If during Phase 2 the Applicant does not consider the level of production from the Project Site to be economically feasible, then decommissioning of the installed equipment would commence. Decommissioning would involve the removal of the drilling and temporary testing equipment and would include abandonment of wells according to the Division of Oil, Gas and Geothermal Resources (DOGGR) requirements. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. At the end of the Proposed Oil Project, when the owner applies to DOGGR and to the City to abandon the facility, a separate permit process and CEQA environmental review would be required to evaluate decommissioning of the entire Project Site. Since the timing of the decommissioning is unknown, the Applicant has not submitted a detailed decommissioning plan, and therefore any assessment of decommissioning activities would be speculative at this time. Exhibit B Figure 2-18 Cypress Parking Area Source: E&B Updated Parking Plan 1/8/2014 Exhibit B Figure 2.19 Estimated Production Levels Source: Based on Applicant submitted estimates 2.4.8 Project Scheduling Summary Under the Proposed Oil Project, there are a number of different activities with various allowances for time of day, day of week and annual limits. These are summarized in Table 2.16. Table 2.16 Proposed Oil Project Scheduling Summary Activity Allowed Period Annually Days and Hours per Day Workover Rig Maximum 90 days per year 8 am - 6 pm weekdays only Drilling Rig Phase 2 - 120 days 24 hours per day Exhibit B Phase 4 - 30 months Re-drills 30 days per year average, up to 150 per year max 24 hours per day Phase 1 and Phase 3 Construction Any 8 am - 6 pm weekdays and 9 am - 5 pm Saturdays Offsite ROW Construction Any 8 am - 3 pm weekdays only in the City of HB Truck deliveries Any 9am - 3 pm weekdays or emergencies Quiet mode drilling Phase 2 and Phase 4 Drilling, Re-drills 7 pm - 8 am Pipeline construction activities Phase 3 9 am - 3 pm weekdays. Exhibit B Exhibit C EXHIBIT “C” PUBLIC BENEFITS OF PROJECT With the approval of the Project by the voters of the City, the public benefits of the Project provided by the Lease include: a) the royalties as further described in the Lease, that have been recently estimated to range from [insert amount] pursuant to the City’s Cost Benefit Analysis to [insert amount] pursuant to E&B’s Economic Analysis;[UNDER DISCUSSION] and b) the minimum annual royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled as further described in the Lease (“Minimum Royalty”). In addition, and as consideration for the benefits provided to E&B through the approval of this Agreement by the voters of the City, E&B has agreed to provide the additional public benefits as follows: 1) Advances Commencing with Issuance of City Drilling Permit for First Well: E&B shall pay to the City, as an advance, One Million Dollars ($1,000,000) per year, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Drilling Permit Advance” or collectively, “Drilling Permit Advances”). (For clarity, this period is estimated to continue for approximately five years, for a total of Five Million Dollars ($5,000,000).) The Drilling Permit Advances are not restricted and may be used in accordance with applicable City laws. Each $1,000,000 Drilling Permit Advance would be adjusted by any royalties received by the City in that year to ensure that the City receives a minimum of $1,000,000 each year. The Drilling Permit Advances shall be repaid by the City from royalties, including royalties from tidelands, without interest, and will be added to the advance amount and subject to the repayment process set forth in Section 13.d(4) of the Lease. If royalties are not sufficient to repay the Drilling Permit Advances, then the City is not required to repay the Drilling Permit Advances. 2) Additional Payment During Years 4-13 To Ensure $1,000,000 Minimum Amount: The Lease provides for a Minimum Royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled and continuing to the 13th anniversary (“Years 4-13”). If royalties provided to the City during Years 4-13 do not exceed One Million Dollars ($1,000,000), E&B shall pay to the City an additional amount equal to the difference between the Minimum Royalty and One Million Dollars ($1,000,000). For clarity, given that the Minimum Royalty is Five Hundred Thousand Dollars ($500,000), this payment would be an additional amount of up to Five Hundred Thousand Dollars ($500,000), for a total of One Million Dollars ($1,000,000). Exhibit C 3) Remediation of City Maintenance Yard: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, E&B shall implement the proposed Remedial Action Plan as described in Exhibit B to this Agreement in Phase 3 of the Project; however, if E&B determines as a part of Phase 2 not to proceed with Phase 3 of the Project, then E&B shall conduct any necessary remediation activities at the Project site to allow the site to be used for industrial or commercial purposes (e.g., City maintenance or commercial activities), in a manner consistent with its obligations under the Lease, the Settlement Agreement and this Agreement. E&B shall not be obligated to remediate the property for any other future uses, such as commercial or residential uses. [If voters do not approve ballot measure, this document would not be vehicle for determining clean-up, but in any case, E&B is will not remediate site if project is not approved.] 4) Educational Funding: E&B’s Proposal: E&B shall pay 1% of gross revenues (currently estimated to be Thirty Seven Million Dollars ($37,000,000)) to the Hermosa Beach Education Foundation (“Foundation”), and if the Foundation does not accept the donation, the amount shall be provided to the City to be used for any municipal purposes. Councilmember DiVirgilio’s proposal: Education Funding: E&B shall pay 1% of its gross annual revenues directly to the Hermosa Beach School District. In the event that the School District does not accept the funds, E&B shall pay 1% of its gross annual revenues directly to the Hermosa Beach Education Foundation. Payment shall be made monthly each year the Development Agreement is in effect, commencing the month that production commences. The School District and the Education Foundation, as the case may be, are third party beneficiaries of this obligation and may enforce it as though parties to this Development Agreement. The City is not an indispensable party in any such action. In the event neither the School District nor the Education Foundation accepts the funds, this requirement will be deemed satisfied. Councilmember Fangary would delete this paragraph 4. [UNDER DISCUSSION] 5) Relocation of City Maintenance Yard: If the voters approve the Project, the City may determine to relocate the City Maintenance Yard to a temporary location and then to a permanent location or alternatively, to relocate the City Maintenance Yard directly to a permanent location, without a temporary location. With respect to either of these options, E&B agrees as follows: a. $3.5 Million Forgiven Upon Issuance by City of Drilling Permit for First Well: Upon the issuance by the City of the drilling permit for the first well, the City shall not be required to repay the Three Million Five Hundred Exhibit C Thousand Dollars ($3,500,000), plus interest, to E&B as further described in Section 4.6.b of the Lease. b. $6.5 Million Advance for Permanent Relocation: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, then E&B shall advance Six Million Five Hundred Thousand Dollars ($6,500,000) to the City for the permanent relocation of the City Maintenance Yard. 6) Matching Funds to Property Owners for Undergrounding Utility Lines in the City: If E&B determines as a part of Phase II of the Project to proceed with Phase III of the Project, E&B agrees to provide up to Thirty Million Dollars $30,000,000 in matching funds (50% of the costs) to property owners for the purpose of undergrounding utility lines in the City. Property owners in the City may utilize the City process to create a district for this purpose or, alternatively, coordinate directly with the utility to achieve the undergrounding of utilities. The costs would be confirmed through the City process or by the utility, and any costs incurred by the City (that would otherwise be reimbursed by the property owner) would be included in the cost amount. These matching funds would be funded through gross revenues from the Project, with an initial amount of One Million Dollars ($1,000,000) to be contributed by E&B at the commencement of the program. [UNDER DISCUSSION] 7) Hermosa Beach Residential Property Fund: Purpose: To provide owners of residential properties within 600 feet of the Hermosa Beach Oil Recovery Project (Project) with assurance that they will incur no loss, as a result of the Project, to their property’s fair market value (Market Value), in the event of a sale of their property. Such assurance is offered through voluntary participation in a Hermosa Beach Residential Property Fund (Fund). Offer: The Fund will pay the difference between an eligible property's actual negotiated sale price and the appraised Market Value of the property, which will be determined as if the Project had not been built. A predetermined independent appraisal process will demonstrate if there is a loss in the Market Value of an owner's residential property. Participation: Participation in the Fund is entirely voluntary. Eligibility: Owners of residential properties that are located within the “eligibility area” (within 600 feet of the Project, measured property edge to property edge) are eligible to participate. The claim must be made by the then current owner of the property and only one claim per property will be allowed; however, the owner need not own the property when the Fund commences in order to be eligible for a claim. By way of example only, if the original owner of the property does not make a claim in connection with its sale to a buyer, then so long as the sale occurs during the Fund term, the buyer would automatically succeed to the rights of the selling property owner with respect to the Fund, Exhibit C including the right to make any claim, subject to the other requirements for participation in this Fund. Costs: There is no monetary cost to participating residential property owners to receive the benefits of the Fund, now or in the future. All costs, including the costs of obtaining required appraisals, are paid by the Fund. Cap: There will be a $20,000,000 cap (Funding Cap) on the total amount of benefits that the Fund can pay out. Term: The Fund will commence upon issuance of the City Drilling Permit for First Well by the City of Hermosa Beach and will continue in effect until the first to occur of (a) six years from commencement of the Fund, or one year after the completion of the final Project well, whichever is later, or (b) the entire Funding Cap has been disbursed to eligible residential property owners. The six-year aspect of the Fund term described in subpart (a), above, will be extended consistent with any extension of the term of the Development Agreement in accordance with Section 6.24 of the Development Agreement. Administration: E&B Natural Resources (E&B) will establish the Fund and designate a qualified, independent Fund Administrator. The Fund Administrator will not be an officer, employee, or affiliate of E&B. Application: To receive benefits, a selling owner of a residential property within the eligible area will submit to the Fund Administrator: (1) a signed Program Participation Agreement setting forth the terms of the Fund program (Program) and a signed claim form; (2) a copy of an accepted written offer to purchase the residence on arms-length terms from a buyer who is not related to or affiliated with the selling residential property owner and that complies with the Program requirements; and (3) a current (dated not earlier than six months prior to the property owner’s application) appraisal reflecting the Market Value of the property, which will be determined as if the Project had not been built. The appraisal must be prepared by an MAI or RM designated appraiser who is licensed in California and has at least five years of experience appraising similarly-situated residential properties in the South Bay region of Los Angeles County, California. Benefits: Within 14 calendar days after receiving a selling residential property owner’s application materials, the Fund will either agree to pay the amount of the claim, or obtain another appraisal of the residential property using the same criteria as the owner's appraisal. If the Fund obtains an alternate appraisal and the difference between the two appraisals is within 10% of the higher appraised Market Value, the Market Value for purposes of the residential property owner’s claim on the Fund will be equal to the average of the two appraised Market Values. If not, a third appraiser will be selected by the first two appraisers, and the Market Value determination in the Exhibit C third appraisal will be deemed the Market Value of the property. The owner and the Fund will be conclusively bound by the third appraisal. The difference between the Market Value of the residence, as so determined, and the property’s actual negotiated sale price will be paid by the Fund to the selling homeowner either at closing or within 10 calendar days after the Market Value of the residence has been determined, whichever takes place later. Market Value: Each appraisal obtained will determine the Market Value of the homeowner’s residential property as of the date of the appraisal and as if the Project had never been built. Claims: By submitting a claim to the Fund, the homeowner agrees to be bound by the terms of Program, and to accept reimbursement from the Fund for a loss in the Market Value of the owner’s residential property in exchange for foregoing any legal action to receive compensation for a decrease in the Market Value of the owner’s residential property that is caused by or results from the Project. Any offer that a participating owner enters into for sale of its residence must disclose that E&B has a right of first refusal to purchase the property for a price equal to the Market Value determined by the appraisal process without incurring any broker's commission. Any claim against the Fund must be submitted before the sale of the eligible residential property is completed; no claim will be considered or paid by the Fund after the closing of the sale of the residential property. Funding: E&B will ensure that, at all times during the Fund term, there is a minimum balance of $1,000,000 in the Fund, and E&B will ensure that at least $1,000,000 is in the Fund upon expiration of the six-year Fund term. E&B will regularly replenish the Fund up to the Funding Cap, as and if disbursements are made, to ensure that the Fund has readily-available funds to satisfy potential claims asserted by owners of eligible residential properties under the Program. E&B will also provide additional funding totaling a maximum of $4,000,000 from contributions based on 1.5% of gross project revenues on an annual basis until either a total of $4,000,000 has been contributed to the Fund from gross project revenues or the Funding Cap has been reached. Distribution: E&B will ensure that upon expiration of the Fund term, the Fund will have a remaining balance of at least $1,000,000 and up to a maximum sum of $5,000,000, depending on the total amount of claims that have been made against and paid by the Fund. The remaining amount in the Fund at the end of the Term shall be distributed to the then current owners of all otherwise-eligible residential properties located within 300 feet of the Project for which there has not previously been made any claim. The owner of each such residential property will be entitled to an equal, pro rata share of the amount remaining in the Fund at the end of the Fund term (after all appraisal costs and other Fund administrative expenses have been deducted). The pro rata share of the Fund balance to which each owner will be entitled will be based on the total number of properties entitled to share in the distribution. By way of example only, if at the end of the Fund Exhibit C term, there are 60 residential properties within 300 feet of the Project for which no claim has been made against, and no distribution received from, the Fund, then the owner of each such residential property will be entitled to 1/60 of the amount then remaining in the Fund after all appraisal costs and other Fund administrative expenses have been deducted. With the approval of the Project by the voters of the City, the public benefits of the Project include: a) the royalties as further described in the Lease, estimated to range from [insert amount] pursuant to the City’s Cost Benefit Analysis to [insert amount] pursuant to E&B’s Economic Analysis; and b) the minimum annual royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled as further described in the Lease (“Minimum Royalty”). In addition, and as consideration for the benefits provided to E&B through the approval of this Agreement by the voters of the City, E&B has agreed to provide the additional public benefits as follows: 1) Advances Commencing with Issuance of City Drilling Permit for First Well: E&B shall pay to the City, as an advance, Five Hundred Thousand Dollars ($500,000) per year, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Drilling Permit Advance” or collectively, “Drilling Permit Advances”). (For clarity, this period is estimated to continue for approximately five years, for a total of Two Million Five Hundred Thousand Dollars ($2,500,000).) Each $500,000 Drilling Permit Advance would be adjusted by any royalties received by the City in that year to ensure that the City receives a minimum of $500,000 each year. The Drilling Permit Advances shall be repaid by the City from royalties, including royalties from tidelands, without interest, and will be added to the advance amount and subject to the repayment process set forth in Section 13.d(4) of the Lease. If royalties are not sufficient to repay the Drilling Permit Advances, then the City is not required to repay the Drilling Permit Advances. 2) Minimum Royalty Increased by Rental Value of Storage Yard: To compensate the City for the loss of rental income from the Storage Yard (the permanent site for the new City Maintenance Yard), which is estimated to be One Hundred Eighty Thousand Dollars ($180,000) annually, E&B agrees to increase the Minimum Royalty from Five Hundred Thousand Dollars ($500,000) to Six Hundred Eighty Thousand Dollars ($680,000). Exhibit C 3) Remediation of City Maintenance Yard: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, E&B shall implement the proposed Remedial Action Plan as described in Exhibit B to this Agreement in Phase 3 of the Project; however, if E&B determines as a part of Phase 2 not to proceed with Phase 3 of the Project, then E&B shall conduct any necessary remediation activities at the Project site to allow the site to be used for industrial purposes (e.g., City maintenance activities), in a manner consistent with its obligations under the Lease, the Settlement Agreement and this Agreement. E&B shall not be obligated to remediate the property for any other future uses, such as commercial or residential uses. [If voters do not approve ballot measure, this document would not be vehicle for determining clean-up, but in any case, E&B is will not remediate site if project is not approved.] 4) Residential Property Trust: [See attached summary.] 5) Educational Funding: E&B shall pay a percentage of gross revenues [insert percentage] [currently estimated to be Thirty Million Dollars ($30,000,000)] to the Hermosa Beach Education Foundation or to an organization established under Section 501(c)(3) of the Internal Revenue Code for educational purposes to benefit the Hermosa Beach community [insert timing of payment]. 6) Relocation of City Maintenance Yard: If the voters approve the Project, the City may determine to relocate the City Maintenance Yard to a temporary location and then to a permanent location or alternatively, to relocate the City Maintenance Yard directly to a permanent location, without a temporary location. With respect to each of these options, E&B agrees as follows: a. Temporary and Permanent Relocation: i. For the temporary relocation of the City Maintenance Yard, E&B agrees to increase the maximum temporary relocation advance amount of Seventy Five Thousand Dollars ($75,000) and the Rent Reimbursement advance amount of Two Thousand Five Hundred Dollars ($2,500) per month set forth in Section 13.c of the Lease by the applicable Consumer Price Index (“CPI”) at the time the amounts are to be paid. ii. For the permanent relocation of the City Maintenance Yard, E&B agrees as follows: i) E&B agrees to increase the advance amount of Five Hundred Thousand Dollars ($500,000) set forth in Section 13.d of the Lease by the applicable CPI at the time the trust is to be established; and ii) E&B agrees to guarantee the amount to be paid by the City for the permanent relocation of the City Maintenance Yard, whereby the City would utilize its financing capacity to fund the permanent relocation, but if the royalties Exhibit C from the Project were not sufficient to compensate the City for the relocation cost (including financing costs), E&B would pay for any remaining cost of the relocation not covered by royalties. Further, only royalties in excess of the increased Minimum Royalty of Six Hundred Eighty Thousand Dollars ($680,000) shall be considered in the determination of whether the royalties are sufficient to compensate the City for the relocation cost. iii. The base year for the application of the CPI shall be 1992. iv. The advances for the temporary and permanent relocation combined with the guarantee for the permanent relocation described above shall not exceed Ten Million Dollars ($10,000,000), which may be increased in E&B’s discretion, provided that certain criteria are met. v. To the extent that the permanent relocation of the City Maintenance Yard includes excess parking spaces for public purposes, such parking spaces, or some portion of them, may be utilized to satisfy any public parking conditions of the project. b. Permanent Relocation (without a Temporary Relocation): i. E&B agrees to increase following advances by the applicable Consumer Price Index (“CPI”) at the time the amounts are to be paid (described below): i) the maximum temporary relocation advance amount of Seventy Five Thousand Dollars ($75,000) in Section 13.c of the Lease; ii) the Rent Reimbursement advance amount of Two Thousand Five Hundred Dollars ($2,500) per month set forth in Section 13.c of the Lease; and iii) the advance amount of Five Hundred Thousand Dollars ($500,000) set forth in Section 13.d of the Lease. ii. The $500,000 advance (increased by CPI), shall be paid at the same time as the $75,000 advance (increased by CPI), as set forth in the Lease. iii. E&B agrees to guarantee the amount to be paid by the City for the permanent relocation of the City Maintenance Yard, subject to the limit set forth below, whereby the City would utilize its financing capacity to fund the permanent relocation, but if the royalties from the Project were not sufficient to compensate the City for the relocation cost (including financing costs), E&B would pay for any remaining cost of the relocation not covered by royalties. Further, only royalties in excess of the increased Minimum Royalty of Six Hundred Eighty Thousand Dollars ($680,000) shall be considered in the determination of whether the royalties are Exhibit C sufficient to compensate the City for the relocation cost. iv. The base year for the application of the CPI shall be 1992. v. E&B’s guarantee for permanent relocation described above shall not exceed [insert amount], which may be increased in E&B’s discretion, provided that certain criteria are met. vi. To the extent that the permanent relocation of the City Maintenance Yard includes excess parking spaces for public purposes, such parking spaces, or some portion of them, may be utilized to satisfy any public parking conditions of the project. 7) Matching Funds: E&B shall make available matching funds up to an amount of [insert amount] for City projects to underground utilities, to implement green initiatives, to beautify the City or to implement similar projects, where E&B’s matching funds would be provided on a [provide ratio of City dollars to E&B dollars], utilizing the following process: [describe process]. 8) $3.5 Million Forgiven If Project Does Not Proceed to Phase 3: If E&B determines as a part of Phase 2 not to proceed to Phase 3 of the Project, the City shall not be required to repay the Three Million Five Hundred Thousand Dollars ($3,500,000), plus interest, to E&B as further described in Section 4.6.b of the Lease. City may utilize this $3.5 Million to conduct additional remediation activities at the Project site to commercial or residential standards. 9) Fracking: E&B agrees not to engage in any well stimulation activities as defined in Senate Bill 4. 10) Fire Marshal: Mitigation Measure 11) Fire Department Training: Mitigation Measure 12) HIA Recommendations: TBD Exhibit C HERMOSA BEACH RESIDENTIAL PROPERTY FUND ______________________________________________________________________________ Purpose: To provide homeowners who own homes within XXX feet of the Hermosa Beach Oil Recovery Project (Project) with assurance that they will incur no loss, as a result of the Project, to their home’s fair market value (Market Value), in the event of a sale of their property. Such assurance is offered through voluntary participation in a Hermosa Beach Residential Property Fund (Fund). Offer: The Fund will pay the difference between an eligible property's actual negotiated sale price and the appraised Market Value of the property, which will be determined as if the Project had not been built. A predetermined independent appraisal process will demonstrate if there is a loss in the Market Value of a homeowner's residence. Participation: Participation in the Fund is entirely voluntary. Eligibility: Owners of residential properties with up to and including two dwelling units that are located within the “eligibility area” (within XXX feet of the Project, measured property edge to property edge) when the Fund commences are eligible to participate. Costs: There is no monetary cost to participating homeowners to receive the benefits of the Fund, now or in the future. All costs, including the costs of obtaining required appraisals, are paid by the Fund. Cap: There will be a $20,000,000 cap (Funding Cap) on the total amount of benefits that the Fund can pay out. Term: The Fund will commence upon issuance of the City Drilling Permit for First Well by the City of Hermosa Beach and will continue in effect for up to six years or until the entire Funding Cap has been disbursed to eligible homeowners, whichever happens first. The six-year Fund term will be extended consistent with any extension of the term of the Development Agreement in accordance with Section 6.24 of the Development Agreement. Administration: E&B Natural Resources (E&B) will establish the Fund and designate a qualified, independent Fund Administrator. The Fund Administrator will not be an officer, employee, or affiliate of E&B. Application: To receive benefits, a selling homeowner of a residence within the eligible area will submit to the Fund Administrator: (1) a signed Program Participation Agreement setting forth the terms of the Fund program (Program) and a signed claim form; (2) a copy of an accepted written offer to purchase the residence on Exhibit C arms-length terms from a buyer who is not related to or affiliated with the selling homeowner and that complies with the Program requirements; and (3) a current (dated not earlier than six months prior to the homeowner’s application) appraisal reflecting the Market Value of the property, which will be determined as if the Project had not been built and an appraisal with the existing project. Both must be prepared by an MAI or RM designated appraiser who is licensed in California and has at least five years of experience appraising residential properties in the South Bay region of Los Angeles County, California. Benefits: Within 14 calendar days after receiving a selling homeowner’s application materials, the Fund will either agree to pay the amount of the claim, or obtain another appraisal of the residence using the same criteria as the owner's appraisal. If the Fund obtains an alternate appraisal and the difference between the two appraisals is within 10% of the higher appraised Market Value, the Market Value for purposes of the homeowner’s claim on the Fund will be equal to the average of the two appraised Market Values. If not, a third appraiser will be selected by the first two appraisers, and the Market Value determination in the third appraisal will be deemed the Market Value of the property. The owner and the Fund will be conclusively bound by the third appraisal. The difference between the Market Value of the residence, as so determined, and the property’s actual negotiated sale price will be paid by the Fund to the selling homeowner either at closing or within 10 calendar days after the Market Value of the residence has been determined, whichever takes place later. Market Value: Each appraisal obtained will determine the Market Value of the homeowner’s residential property as of the date of the appraisal and as if the Project had never been built. Claims: By submitting a claim to the Fund, the homeowner agrees to be bound by the terms of Program, and to accept reimbursement from the Fund for a loss in the Market Value of the homeowner’s residential property in exchange for foregoing any legal action to receive compensation for a decrease in the Market Value of the homeowner’s property that is caused by or results from the Project. Any offer that a participating homeowner enters into for sale of its residence must disclose that E&B has a right of first refusal to purchase the property for a price equal to the Market Value determined by the appraisal process without incurring any broker's commission. Funding: E&B will ensure that, at all times, there is a minimum balance of $500,000 in the Fund (or if the remaining balance of the Funding Cap is at any time less than Exhibit C $500,000, then E&B shall maintain the entire, remaining balance of the Funding Cap in the Fund), and E&B will regularly replenish the Fund up to the Funding Cap, as and if disbursements are made, to ensure that the Fund has readily- available funds to satisfy potential homeowner claims. E&B will also provide additional funding totaling a maximum of $3,000,000 from contributions based on 1.5% of gross project revenues on an annual basis until a total of $3,000,000 is reached. Distribution: Any remaining amounts in the Fund at the end of the Term shall be distributed to [to be determined]. : Exhibit D EXHIBIT “D” CONDITIONS OF PROJECT APPROVAL Exhibit D includes: 1. Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this agreement) 2. Exhibit D-2 Additional Project Conditions 3. Exhibit D-3 Mitigation Measures/Mitigation Monitoring Plan- from Section 8.0 of Final Environmental Impact Report (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). Exhibit D Exhibit D-1 Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this Agreement) (Amendments to conditions necessary for consistency with Project Description, Mitigation Measures and other conditions and terms are reflected herein) SECTION 1. GENERAL 1. The testing phase for all production shall be a maximum of one year from the date drilling is initiated. 2. A minimum of one annual site audit shall take place to inspect for soil contamination as a result of accidental spills in any area not paved and expose. Auditor shall be hired by City. 3. The maximum number of days the work over rigs or any other rig (other than a drill rig) that is to be used on-site shall be 90 days per year, and shall be operated weekdays 8:00 A.M. to 6:00 P.M. excluding holidays. 4. In the event that a residence with solar panels is affected by shading, a site specific study paid for by the oil contractor shall be conducted to determine economic impact. 5. Pursuant to Assembly Bill 3180 the operation shall be monitored for all condition of the approval of which the City has responsibility which includes (but not limited to) noise monitoring and inspection of the site for proper maintenance. 6. The proposed plans shall be submitted to the State Division of Oil, Gas & Geothermal Resources for their review and recommendation; a. Any recommendation by the State Division of Oil, Gas & Geothermal Resources shall be taken into consideration prior to approval, and may be included as condition of approval. 7. Drill cuttings and other wastes, shall be collected in above ground containers and disposed of at an approved disposal site. Receipts for all disposal of waste product shall be provided within ten (10) days of disposal to the Public Works Director. Exhibit D-1 8. All requirements, standards, conditions stated within the oil Production Code, Chapter 21-A, of the City’s Municipal Code shall be met, unless more restrictive requirements are imposed through mitigation measures; where it cannot be clearly determined whether the City’s Oil Ordinance, Chapter 21-A or mitigation measure are more stringent, the appropriate City staff shall make a determination; appealable to the City Council. 9. Three (3) copies of final building plans including site, elevation, and floor plans shall be submitted for review and approval by the Planning Director prior to the issuance of any Building Permit. 10. The proposed development shall be in substantial conformance with submitted plans. Any minor modification shall be reviewed and may be approved by the Planning Director. 11. All wells must be drilled and completed within 55 months from the start of drilling of the first exploratory well in accordance with the following schedule: PHASE 1 SITE PREPARATION 6 MONTHS PHASE 2 DRILLING AND TESTING PHASE 12 MONTHS (Exploratory drilling, production testing) PHASE 3 FINAL DESIGN AND CONSTRUCTION PHASE 14 MONTHS (Permanent facility construction) PHASE 4 DEVELOPMENT AND OPERATIONS (DRILLING) 34 MONTHS (Development Drilling, 1 month per well) If the Drilling Contractor is delayed at any time in the progress of work by any act or neglect of the City of Hermosa Beach or any other governmental body having authority over this project, or by labor disputes, adverse weather conditions, by law, war, riots, strikes, Exhibit D-1 unavoidable casualties, unusual delays in receiving material or equipment or by an act of God, or causes beyond the control of the Drilling Contractor, when justified, the time period may be extended to a reasonable time to correspond with the delay incurred by the Drilling Contractor. SECTION 2. LAND USE 1. The maximum size for any storage tank of any type shall be forty feet in diameter and sixteen feet in height, appurtenances not included. 2. Prior to construction and prior to obtaining building permits for oil production, a complete soil analysis shall be performed and approved by all applicable governing agencies having jurisdiction over the project. 3. Not more than five tanks shall be installed, and shall be submerged in a concrete basin which contains 10% above the volume required by the State Division of Oil, Gas & Geothermal Resources and the Uniform Fire Code which is as follows: the volumetric capacity of the diked area shall not be less than the greatest amount of liquid that can be released from the largest tank within the diked area. The capacity of the diked areas enclosing more than one tank shall be calculated by deducting the volume of the tanks other than the largest tank below the height of the dike. 4. All wells shall be drilled and cemented in accordance with State Division of Oil, Gas and Geothermal Resources regulations to protect underground aquifers. 5. The electrical service systems shall be designed with sufficient capacity to minimize surging impacts. 6. The well cellars shall be concrete lined and shall be designed to hold contaminated run-off from on-site sources; or a sump shall be provided. 7. Solid state control console linked to a control system to perform energy conservation functions such as start/stop time programming of motor equipment, data logging of energy consumption and maintenance and service scheduling shall be provided. a. All Electrical machinery where possible shall have a minimum coefficient of Exhibit D-1 efficiency of 0.75. SECTION 3. PUBLIC SAFETY 1. The site shall be enclosed by a solid masonry or concrete wall with solid gates during all operations, protecting both against public entry, observation and attraction. A chain link fence to provide security is acceptable only through Phases 1 and 2. 2. Security personnel shall be employed at all times during the drilling stage (24 hours) and emergency phone numbers shall be posted during production Phases 2 and 4. 3. Signs warning of unauthorized entry and safety hazards shall be posted on all sides. 4. Access to facilities shall be limited to authorized personnel only. 5. Trees shall be maintained at a distance from all walls to prohibit children and others from unauthorized entry. 6. All site personnel shall be instructed on required safety procedures if hydrogen sulfide concentrations are encountered. Documentation of training and instruction shall be made available to the City Manager. 7. Both solid and liquid wastes shall be sampled and tested to determine if it needs to be treated as a hazardous waste. 8. An Oil Spill Prevention Control Countermeasures (SPCC) Plan and an Oil Drilling Contingency Plan will be Prepared for the Project and approved by the State Division of Oil, Gas and Geothermal Resources, and the City of Hermosa Beach Fire and Building and Safety Departments. 9. Drillsite and production facilities shall be constructed in accordance with the State seismic standards, and designed in accordance with U. B.C. seismic requirements for hazardous facilities. 10. A soils engineering report and engineering geology report prepared by a licensed Exhibit D-1 geologist and engineer shall be prepared and reviewed in conjunction with the plans for all physical improvements. Said report shall address potential seismic hazards, such as liquefaction, due to soils or geologic conditions. All recommendations contained in said reports shall be incorporated in the construction documents. 11. An emergency response plan, including a blowout prevention and control plan, shall be prepared for review and approval by the State Division of Oil, Gas & Geothermal Resources and the Hermosa Beach Fire Department. 12. When a leak or spill occurs, it shall be contained, the fluid shall be recovered and the area restored to its original condition. SECTION 4. FIRE SAFETY 1. Adequate fire detection and fighting equipment and supplies, approved by the Fire Department, shall be maintained on the drillsite and tank production facility at all times. 2. A supplementary analysis by a professional consultant shall be provided detailing any necessary improvements the Fire Department may need to prevent, and to halt oil related fires and shall also include the following: public notification, warning and evacuation plan. 3. Oil sumps, drip pans, etc. shall be cleaned at regular intervals to reduce fire hazards and prevent minor spills. 4. Oily rags, paper and miscellaneous waste shall be disposed of in an appropriate manner to reduce fire hazards 5. Signs warning of flammable fluids and prohibiting smoking shall be installed where appropriate. 6. The drillsite and production facility shall be protected by automatic fire detection sensors and suppression systems. The fire suppression systems shall include a tank- cooling sprinkler system. Exhibit D-1 7. Drilling operations shall be conducted in accordance with appropriate State Division of Oil, Gas & Geothermal Resources regulations and shall utilize all required blowout prevention equipment and safety devices. 8. Fire flows to service the operation shall meet Fire Department regulations. 9. All equipment necessary to contain an oil fire or blowout shall be provided and/or maintained on site and all fire personnel shall be trained on its use. SECTION 6. VEHICLE TRAFFIC AND CIRCULATION ON AND OFF SITE 1. All truck deliveries shall be limited to daylight hours (9:00 AM – 3:00 PM), Monday through Friday, except for an emergency situation, as defined by this agreement and reported to the City in accordance with the notification requirement, which have been reported to the Director of Public Works in advance of the delivery. 2. Operation of earthmoving equipment shall be limited to daytime hours between 8 AM and 6 PM. 3. Equipment deliveries shall be made only during daytime hours between 9 AM and 3 PM. 4. Project related truck travel shall be restricted to specific truck routes and access points as approved by the Public Works Department. 5. Signs shall be installed to direct detour traffic as approved by the Public Works Director. 6. The number of truck trips shall be limited to a maximum of 18 round trips per day, except in an emergency, as defined by this agreement and reported to the City in accordance with the notification requirement. 7. Maintenance Yard site access shall be designed to enable trucks to turn into the site without inhibiting traffic movement on Valley Drive or Sixth Street. 8. Minor curb radii reconstruction shall be done by the operator as determined by the Exhibit D-1 City Public Works depending on the length and necessary turning radii for project related trucks. 9. Area residents shall be notified of pipeline construction prior to commencement. Signs shall be installed to direct detour traffic. 10. All trucks arriving or departing the drill site shall be washed to prevent spillage of earth and all routes shall be swept and washed by the driller as required by the City. 11. An evaluation of the structural condition of the existing pavement shall be performed by a soils engineer on all access streets and the proposed truck routes prior to commencing any site preparation or construction and prior to the issuance of any necessary permits. The evaluation shall include as a minimum: a) the number, type, size and weight of trucks for export of materials or product, b) the number, type, size and weight of truck deliveries of building supplies, drilling supplies etc., c) the number, type, size and weight of equipment transported to the site, d) other associated transportation items, e) other anticipated loading. The evaluation shall contain recommendations as to the actions required to maintain said streets and routes in their current condition throughout the planned development phase, planned production phase, and in the close out phase. 12. The operator shall perform the actions on the existing pavement as recommended by the soils or highway engineer, the operator will hire a licensed contractor and provide street profiles, drawings, and engineering to the satisfaction of the Public Works Department prior to work commencing. 13. The City Council may restrict the use of certain street, alleys, or roadways in connection with the permittee’s operation. In the event any street, alley or roadway is Exhibit D-1 damaged by the permittee’s operations, such damages shall be paid for by the permittee upon demand by the City, and the failure to pay such damages, being the reasonable cost of the repair of any such damaged portions, shall be grounds for the revocation of the permit and the collection of such damages. SECTION 7. SANITARY SEWER 1. Use of sanitary sewer is prohibited, except for the minimal use associated with the office and restroom facilities. Any water from oil production shall be disposed in the four disposal wells. SECTION 8. NOISE /VIBRATION 1. Tripping will be restricted to daylight hours only. 2. Loudspeaker paging systems shall be prohibited. 3. Well workover rigs or any other rig that is used shall be operated only between the hours of 8:00 A.M. and 6:00 P.M. during daytime weekday hours only, excluding holidays, except in an emergency, as defined herein and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) shall be muffled to reduce noise to an acceptable limit. The operator shall use whatever means necessary, including but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing. 4. All oil maintenance equipment, vehicles and non-electrical motors shall be equipped with manufacturer approved mufflers or housed in a sound-proofing device. 5. Noise monitoring shall be conducted under the supervision of an independent certified acoustical engineer paid for by the permittee. Reports shall be submitted to the Planning Director within three working days after the completion of each phase of the monitoring. The monitoring shall include the following: a. Pre-drilling phase monitoring. Prior to the start of the drilling phase, noise measurements shall be obtained during the operation of the specific drilling rig which has been selected and the measurements shall be related to those Exhibit D-1 experienced at the nearest residential boundaries to the drilling site. In addition, the noise control measures which have been (or will be) applied to the rig as needed for compliance with the City of Hermosa Beach noise ordinances shall be identified. b. Start of Drilling. Noise measurements shall be obtained during the nighttime hours (10:00 P.M. to 7:00 A.M.) for at least six hours on each of the three nights within the five day period from the start of the drilling phase. Monitoring is to occur at the nearest residential boundary to the actual drilling operation. c. During the drilling phase. Noise monitoring shall occur during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each month during the drilling phase of the project. The noise level data obtained shall be compared to the City of Hermosa Beach Noise Ordinance standards by the Planning Department. Where an exceedence of the standards is identified, noise control measures shall be required. Production phase. Noise measurements shall be obtained during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each year during the production and completion phase.SECTION 9. LANDSCAPING 1. A Detailed Landscape Plan for Phases 2 (exploratory drilling and testing) and Phase 4, indicating the type, size and quantity of plant materials shall be submitted to the Planning Commission, and shall comply with Section 21A-2.9 of the Oil Code. 2. During Phase 2, test facility, landscaping consisting of 24” box, or larger size trees may be installed without permanent planting. 3. Minimum 24” boxed trees for Phases 2 and 4 shall be adequate in size to create a buffer effect to obscure visibility of oil production activity. Permanent trees planted around the perimeter of the site for Phase 4 shall be a minimum sixteen (16) feet high at planting. 4. Trees along the lot perimeter shall be provided to create a dense landscape buffer to the satisfaction and field review of the Planning Director. Exhibit D-1 5. The aesthetic impact of the exposed masonry walls on the west and northern sides shall be softened with the planting of climbing vines to the satisfaction and review of the Planning Director. 6. Landscaping shall be maintained in a neat and clean condition. 7. A complete automatic sprinkler system shall be provided prior to commencement of Phases 2 and 4. SECTION 10. AESTHETICS 1. The tanks, acoustical wrap and wall, and production facility shall be painted a neutral color to blend in with in with the surroundings; color shall be reviewed and approved the Planning Commission. 2. The use of architectural lighting beyond safety and security requirements shall be prohibited. 3. The site for drilling equipment and the storage facilities shall be depressed in combination with walls so that the visual impact is minimized. 4. All outdoor lighting shall be shielded and directed inward of the site. 5. Lighting shall be limited solely to the amount and intensities necessary for safety and security purposes. 6. Certain activities which might involve unshielded lighting (i.e., site preparation and restoration) activities shall be limited to daylight hours and thus not require nighttime lighting. 7. A wall maintained graffiti free of a minimum of 12 feet in height shall be provided; wall materials shall be reviewed and approved by Planning Director. During test drilling minimum 6’high fencing shall be provided. See Mitigation Measures for Noise and Vibration in D-3 below for additional requirements for this wall. Exhibit D-1 8. Tanks shall be submerged 6 to 8 feet or more below grade and will be adjacent to the 35-foot high privacy wall. 9. If the drill derrick remains idle for more than one year, review and approval by the City Planning Commission or the City Council shall be required, or the derrick shall be dismantled at the expense of the operator. 10. All production equipment and structures shall be painted to blend with the surrounding environment with review and approval by the Planning Director. 11. On-site signs shall be limited to those needed for public health and safety. 12. All derricks masts hereafter erected for drilling, re-drilling or remedial operations or for use in production operations shall be removed within 45 days after completion of the work unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources of the state. 13. The operator shall diligently and continuously pursue drilling operations until the all 30 oil wells and all four (4) water disposal wells are completed or abandoned to the satisfaction of the Division of Oil, Gas & Geothermal Resources of the state and upon completion or abandonment shall remove all drilling equipment from the drill site within 45 days following completion or abandonment of the well unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources. SECTION 11. ODORS/VAPOR/AIR POLLUTION 1. A vapor recovery system shall be installed to recover 99% of hydrocarbon emission during storage and transfer of crude oil. 2. Raw gas shall not be allowed into the atmosphere. 3. Gas and vapor detection systems shall be installed at appropriate locations. 4. All project site activities shall be conducted such as to eliminate escape of gas in accordance with best available control technology and practices which shall be reviewed and approved by the City. Exhibit D-1 5. All requirements of AQMD shall be met at all times. 6. A state-of-the-art scrubber shall be employed for the exploratory phase to eliminate odors from waste gases, and any flame shall be enclosed. 7. Tanks shall be designed and located so that no odors or fumes can be detected from the adjacent areas outside the exterior walls of the project. 8. Operators shall not blow lines to the atmosphere, except in an emergency, as defined below in Section 14. and reported to the City in accordance with the notification requirement. 9. Construction equipment and vehicles shall be maintained in proper tune. 10. Odorless drilling muds shall be used. 11. Well tubing and rods shall not remain out of the well during workover operation less than 8-hours. The tubing will be surface washed with a detergent solution to remove odor bearing residual hydrocarbons if exposed longer than 8-hours. 12. Odor control will be further enforced by the SCAQMD under Rules 402, 466.1 of their regulations, and the commercial recovery system shall be employed for the permanent facility. 13. There shall be no open flames allowed. 14. The permittee shall monitor drilling mud during drilling on the site for odorous substances and take such measures to eliminate any odor which would be perceptible outside the drill site. 15. The permittee shall undertake no refining process or any process for the extraction of products from natural gas, except for such minor processeds as necessary to make natural gas acceptable to the City gas mains for domestic use. [correction of typo] 16. Well cellars shall be maintained in a clean and efficient manner to prevent waste accumulation and shall be frequently steam cleaned. Exhibit D-1 SECTION 12. GRADING/STORM WATER/SITE RUNOFF 1. Grading shall not be performed when wind speeds exceed 20 mph. The contractor shall maintain a wind speed monitoring device on site during grading operations. The contractor shall continually keep the soil moist during grading operations. At no time shall any dust be allowed to leave the work site. 2. Normal wetting procedures shall be employed during grading. Review and approval of procedure shall be by Public Works Director. 3. Graded surfaces shall be paved or landscaped per approved plan. 4. Project site shall be graded so that all contaminated runoff is collected and treated on-site and disposed of according to all laws. 5. Site shall be graded in a manner so that all hazards or contaminated fluids and runoff are directed toward a cellar and approved pit and disposed of properly. 6. No water from the site shall be allowed to enter the storm drainage system or any public area. 7. No water from the site shall be allowed to surface flow across the public beach. SECTION 13. PIPELINE CONSTRUCTION 1. The pipeline operators shall adhere to all applicable federal, state, regional, and local statutes governing design, construction, operation, and maintenance of the pipelines and related equipment. 2. A detailed pipeline survey shall be conducted in order to locate existing pipelines prior to excavation for pipeline construction. 3. A responsible agent paid for by the applicant shall be present during excavations. 4. Areas of construction and maintenance activities shall be delineated by signs, Exhibit D-1 flagmen, pavement markings, barricades, and lights, as determined by permit requirements of all local agencies. 5. Where pedestrian activities are affected during construction, appropriate warning signs shall be installed and pedestrians will be diverted. Pedestrian access to businesses and residences will be maintained during construction. Special facilities, such as handrails, fences, and walkways shall be provided, if necessary, for the safety of pedestrians. 6. Obstruction of emergency vehicle operations will be partially mitigated by ensuring that providers of emergency services are kept informed of the location, nature, and duration of construction activities so alternate routes can be chosen. It is essential that fire department access is maintained to all buildings adjacent to construction activities. For this reason, a minimum of at least one lane for streets undergoing construction will be kept open at all times, and fire hydrants in construction areas will remain accessible. 7. If public transit stops along pipeline routes need to be temporarily relocated during construction, the applicant shall provide signs directing riders to the temporary stop location. 8. When hauling excavated and waste materials from construction sites, substandard roadways will be avoided and local jurisdiction regulation governing hauling vehicles will be adhered to. 9. Pipeline construction and operation of earth moving equipment shall be limited to daylight hours between 8:00 AM and 3:00 PM and shall not be permitted during weekend periods. Additionally, construction-related trucks should not be operated during peak traffic hours of 7 to 9 AM and 3 to 7 PM. Pipeline construction at major intersections shall be limited to daylight hours between 9:00 AM and 3:00 PM to avoid peak traffic periods. 10. Equipment deliveries shall be made only during daytime hours between 8 AM and 3 PM. 11. In order to reduce visual impacts and possible safety hazards, storage of pipes and Exhibit D-1 other materials, as well as construction equipment, shall not be permitted on any street during non-construction hours. 12. Area residents within 300’ shall be notified about the pipeline construction operation prior to commencement of construction. 13. Detour signs on pipeline construction routes shall be placed at appropriate locations. 14. Steel plates covering pipeline excavation trenches shall be placed to permit traffic movement during non-construction hours. 15. Pipelines shall be designed with ample safety factors, pressure-tested prior to being placed in operation, and monitored for corrosion once in operation. 16. Safety shut-down devices that respond to drops in pipeline pressure shall be incorporated into the project in order to stop the flow of the pipeline contents in case of a pipeline rupture. 17. Groundwater level and land subsidence shall be monitored to insure that pipeline damage does not occur as a result of geologic and hydrologic phenomena. The annual subsidence survey shall include a report to the City on monitoring efforts to insure pipelining damage has not occurred. 18. Pipeline construction along Valley Drive shall be approved by the Director of Public Works prior to issuance of a permit. 19. Pipeline construction shall not occur in the area known as the Hermosa Valley Greenbelt except that the permittee may connect to West Basin Municipal Water District’s existing reclaimed water line for the purposes and as described in Exhibit B to this Agreement. 20. Storage of materials shall not be allowed on the Hermosa Valley Greenbelt. The storage or dumping upon the greenbelt of any materials, construction equipment, debris, oil drilling equipment, drilling rigs, piping, etc., and any and all equipment and vehicles necessary for the construction and maintenance of the pipeline and oil development site shall be prohibited. The use of the greenbelt as a staging area for Exhibit D-1 construction of the oil facility or pipeline shall be prohibited. There shall be no parking or standing of any vehicles on the greenbelt for any time period. 21. Trenches shall be covered during non-working hours to minimize traffic circulation problems. SECTION 14 Definition and notification requirements for emergency situations: I. For purposes of these conditions, “Emergency” is defined as follows: A threat to the health and safety of persons in the surrounding area to the drill site and the following conditions which require immediate action: A. Conditions which could lead to potential spill or well blowout: 1. Entry of oil and gas into the wellbore while drilling, tripping or out of the hole which may be indicated by one or more of the following: a. Pit volume gain b. Well flowing with pumps off c. Flow rate increases with circulation d. Improper hole fill-up on trips e. Sudden increase in drilling rate f. Pump pressure decreases and pump rate increases g. Decrease in returning mud rate h. Sloughing shale i. Changes in mud salinity and/or mud flow properties 2. Lost circulation or loss of ability to circulate 3. Casing or wellhead failure while drilling 4. Stuck pipe and/or equipment during any of the following operations: Exhibit D-1 a. Drilling b. Tripping drill pipe and tools c. Wireline logging d. Drill stem testing e. Running casing f. Perforating and stimulating completion interval 5. Loss of rig power or equipment failure while drilling or tripping. B. Injuries to personnel at the Drill Site C. Conditions which could reduce the stability and safety of the rig and production equipment: 1. Natural events: a. Excessive winds, rain and lightning b. Floods c. Subsidence d. Earthquakes 2. Other events a. Riots/Demonstrations b. Fire II. Notification Required: In the case of an emergency, as defined above, the permittee shall give immediate notice to the City of the occurrence of the emergency event. The City will provide the permittee with a list of phone numbers of City personnel to call for notification purposes. A written notice, including a detailed description of the emergency condition, and the actions take and/or proposed to be taken to correct the situation, shall be provided within 24 hours of the occurrence of the emergency event. SECTION 15 Exhibit D-1 1. Each of the above conditions is separately enforced, and if any of the conditions of approval is found to be invalid by a court of law, all the other conditions shall remain valid and enforceable. 2. The subject property shall be developed, maintained and operated in full compliance with the conditions of this grant and any law, statute, ordinance or other regulation applicable to any development or activity on the subject property. Failure of the permittee to cease any development or activity not in full compliance shall be a violation of these conditions. Exhibit D-2 Exhibit D-2 ADDITIONAL PROJECT CONDITIONS A. GENERAL E&B (herein “Operator”) is the owner and Operator of this project, responsible for implementing and complying with all applicable conditions. A-1 Project Description This Development Agreement, and associated conditions, is based upon and limited to the project described in Exhibit B to the Development Agreement. A-2 Acceptance of Conditions Execution of this agreement shall be deemed as acceptance of all conditions herein and waiver of any objections thereto. A-3 Costs of Implementing and Enforcing Conditions The Operator shall be fully responsible for all reasonable costs and expenses incurred by the City or any City contractors, consultants, or employees, in implementing, monitoring, or enforcing this approval, including but not limited to, costs for permitting, permit conditions implementation, mitigation monitoring, compliance monitoring, reviewing and verifying information contained in reports, undertaking studies, research and inspections, administrative support, and including the fully burdened cost of time spent by City employees on such matters. Draw-Down Account. The Operator shall maintain a draw-down account with the City, from which actual costs will be billed and deducted for the purpose of defraying the expenses involved in the City’s review and verification of the information contained in any required reports or plans and any other activities of the City, including but not limited to: enforcement, permitting, inspection, coordination of compliance monitoring, administrative support, technical studies, and the hiring of independent consultants. The initial amount to be deposited by the Operator shall be $500,000. In the first year, if withdrawals from the Exhibit D-2 account have reduced its balance to less than 50 percent of the amount of the initial deposit ($250,000), the Operator shall deposit $50,000 in supplemental funds within 30 business days of notification. After the first year, if the balance in the draw-down account is reduced at any time to $50,000 or less, the Operator shall deposit $50,000 in supplemental funds on each occasion that the account is reduced to $50,000 or less within 30 business days of notification. There is no limit to the number of supplemental deposits that may be required. At the discretion of the Operator, the amount of an initial or supplemental deposit may exceed the minimum amounts specified in this subsection. The City Manager or Designee may, from time to time, increase the minimum $50,000 figure to account for inflation or the City’s experience in obtaining funds from the account. Operator shall be entitled to reasonably review during normal business hours the expenditures from the deposit to ensure the expenditures are related to the Project. Should Operator object to an expenditure, Operator shall submit a request in writing to the City Manager for a detailed written explanation of the expenditure. Following receipt of the written explanation from the City and should Operator continue to object to payment of the expenditure, it shall file such objection in writing with the City Council explaining why such expenditure is not appropriate from the draw down account or why the amount of the expenditure is not appropriate for the work. Following City Council consideration of the matter and decision, the Council’s determination on the expenditure shall be final and binding on the parties. A-4 Substantial Conformity The Project shall be designed, constructed, and operated in substantial conformity with the Project Description in Exhibit B and all conditions of approval set forth in this Exhibit D. A-5 Conflicts Between Conditions In the event that any condition or mitigation measure contained in this development agreement is determined to be in conflict with any other condition contained herein, then where principles of law do not provide to the contrary, the condition most protective of natural environmental resources and public health and safety shall prevail to the extent feasible. A-6 Facility Throughput and Source Limits All facilities constructed under this approval shall be limited to the following maximum Exhibit D-2 production volumes: Phase 2 shall be limited to 800 barrels of oil and up to 250,000 standard cubic feet per day of gas. Phase 4 shall be limited to 8,000 barrels of oil per day and 2.5 million standard cubic feet of gas per day. A-7 Alternative Mitigation if Condition Invalidated If any condition of this project is invalidated by a court of law in a final adjudication, this approval shall be suspended pending imposition of a substitute condition or mitigation measure that will achieve equivalent results or reduction of impacts. A substitute condition or mitigation measure shall be incorporated into the Development Agreement in accordance with Section 4.2 of the Agreement- Changes and Amendments to Project before the suspension shall be lifted and the project is allowed to proceed. A-8 Applicability of Conditions to Construction and Operations These conditions are intended to apply to the E&B Project during both the construction and the operation of the permitted facilities. The term "operations" shall be understood to encompass both construction and operation phases unless such an interpretation would be inappropriate. A-9 Compliance Plans to have Same Force and Effect as Conditions All elements of the plans and programs required under this Exhibit D shall have the force and effect of a project condition. The remedies available to the City upon Operators failure to comply with such plans and programs includes but is not limited to those remedies which are available to the City upon Operator’s failure to comply with a project condition. A-10 Performance Security The Operator shall be subject to the following provisions: a. Performance Bond. Prior to issuance of the first drilling permit, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in a commercially reasonable amount to be determined by the City Manager taking into account existing bonds to the extent they overlap, payable to the City and executed by a corporate surety acceptable Exhibit D-2 to the City and licensed to transact business as a surety in the State of California to cover the exploratory phase of the Project. The exploratory phase performance bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, financing spill response connected with exploration. Should the Project proceed to the oil production phases of the Project, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in the sum to be determined by the City Manager, payable to the City and executed by a corporate surety acceptable to the City and licensed to transact business as a surety in the State of California Such bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, financing spill response and shall be in a format and include terms approved by the City Manager connected with the production phases of the project. These bonds shall be in addition to any other bond required by law (including without limitation Public Resources Code Sections 3202, 3204, 3205, 3205.2 and 3206 and 14 C.C.R. § 1722.8. These bonds shall satisfy the bond requirement in Section 23 of the Lease, and in the City Manager’s discretion, may satisfy the bond requirement in Condition E-1 below. b. Change of Operator. The performance bond(s) required above shall continue in force for one (1) year following any sale, transfer, assignment, or other change of Operator of the Project Site, or of the current Operator’s termination of activities at the Project Site. The City may release said bond prior to the end of the one (1) year period upon satisfaction by said Operator of all its obligations. Notwithstanding the foregoing, the performance bond shall not be terminated or released upon the sale, transfer, assignment, or other change of Operator until the new Operator has delivered a replacement bond complying with the provisions of this section. c. Funding Options. At its sole option, the City may accept Certificates of Deposit, Cash Deposits, or U.S. Government Securities in lieu of commercial bonds to meet the above bonding requirements on terms approved by the City Manager. B. PROJECT REVIEW B-1 Review by Community Development Director Prior to commencement of construction or operation for Phase 1, 2, 3 and 4, and for subsequent modifications, Operator shall submit to Community Development Department Exhibit D-2 relevant construction plans, engineering drawings and supporting text demonstrating compliance with the relevant conditions of this approval. Construction or operation may not commence until City has reviewed and approved the appropriate submittal, consistent with applicable conditions. The City agrees to make a good faith attempt to review the submittal for completeness as expeditiously as possible, which may involve retaining consultants with the appropriate technical expertise to review the submittal, and to provide a list of deficiencies. When the submittal is deemed complete, the City agrees to provide written notice of approval of construction plans as expeditiously as possible, or indicate in writing the conditions which have not been met, or notify the permittee that the Community Development Director review shall be completed within a period of time specified by the City, based on sound engineering practices. When such conditions have been met and city confirms in writing, construction or operation may be commenced. The City may require post-construction inspections or review of as-built drawings, as necessary to confirm consistency with the approved submittal. B-2 Condition Scheduling Conflicts In the event that scheduling requirements among or between conditions in this approval (or with this approval and conditions imposed by other agencies) conflict with respect to timing, Community Development Department (in consultation with other departments, agencies, and Operator as appropriate) shall resolve such conflict. B-3 Authority to Begin Construction Operator shall not commence construction without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to construction of Phase 1, Phase 2, and Phase 3, as specified by this approval, have been satisfied. B-4 Authority to Begin Operations After construction and prior to start-up, Operator shall not commence operations without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to start-up, as specified by this approval, have been satisfied. Start-up, for purposes of this condition, is defined as the introduction of hydrocarbons into Exhibit D-2 the facility production equipment for both Phase 2/4. C. MANAGEMENT AND MONITORING C-1 Environmental Quality Assurance Program (EQAP) Under EM-1 below in Exhibit D-3, Operator is required to provide funding for implementation and administration of an environmental monitoring program, including an environmental monitor (“Monitor”), to ensure compliance with the environmental conditions of approval. The Monitor shall assist in condition compliance and mitigation monitoring for all applicable construction and operational stages of the project. The monitor shall be under contract with the City and funded by the Operator. 1. In accordance with EM-1, the Monitor will create a monitoring program for the project that includes a post-construction component to monitor measures that extend beyond the construction period and the operational phase of the project. 2. The Monitor will prepare a working monitoring plan that reflects the approved environmental mitigation measures and conditions of approval. The monitor’s plan will include: a. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; b. Lines of communication and reporting methods; c. Daily and weekly reporting of compliance; d. Construction crew training regarding environmental sensitivities; e. Authority to stop work; and f. Action to be taken in the event of non‐compliance. 3. Under EM-1 and other conditions, Operator is also responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, noise engineer, etc.). The Monitor will coordinate the monitoring efforts of the specialists, including communication with the City and responsible Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). To assist the Monitor in creating and implementing its working monitoring plan, Operator shall prepare and obtain Community Development Department approval of an Environmental Quality Assurance Program (EQAP) prior to commencement of Phase 1 construction activities, and obtain Community Development Department approval of a revised EQAP Exhibit D-2 prior to commencement of Phase 2, Phase 3, construction activities and Phase 4, Operations. The approved EQAP and all approved revisions to the EQAP shall be submitted to the Monitor prior to commencement of each Project phase. This EQAP shall encompass both construction and operations phases of the E&B Project, and shall describe the steps Operator will take to assure compliance with the conditions contained in the approval for this project. The EQAP is intended to provide a monitoring and reporting framework for compliance with all conditions, programs and plans specified by these conditions and the mitigation measures. As such, it will become a comprehensive reference document for the City, the Monitor, other agencies, and the public regarding the E&B Project. The EQAP shall include, without limitation: a. All plans, as required by these conditions and mitigation measures, relevant to construction and operation of the permitted facilities (including the Risk Management Program, SIMQAP, Emergency Response Plan, Hazardous Material and Waste Management Plan, Site Security Plan, and Fire Protection Plan). To the extent there is any overlap or redundancy between plans required under Exhibits D-2 and D-3, upon E&B request the Monitor may in its discretion authorize E&B to combine required plans into one submittal; b. Provisions for regularly communicating with and reporting to the Monitor; c. Provisions for ensuring knowledge of and compliance with these conditions; d. Provisions for the submittal to Community Development Department and the Monitor of monthly compliance reports throughout construction and annual summary reports during operations unless more frequent reporting is deemed necessary by Community Development or the Monitor. Upon receipt of compliance reports, Community Development Department or the Monitor shall advise Operator of what additional compliance items require reporting prior to the next report. These compliance reports shall describe: 1. Project status, including but not necessarily limited to: i. the extent to which construction has been completed on various project phases ii. the background and experience of the construction labor force Exhibit D-2 iii. the rate of production/throughput during operation, iv. environmental planning and implementation efforts, and v. any revised time schedules or timetables of construction and/or operation that will occur in the next one-year period. 2. Condition compliance, including but not necessarily limited to the results of the specific mitigation requirements identified in these conditions and any compliance plans. 3. Results and analyses of all data collection efforts being conducted by Operator pursuant to these permit conditions. d. Copies of all local, state, and federal permits relative to the E&B Project, and any amendments thereto. The EQAP shall be updated regularly to include all up-to-date compliance plans required under these conditions of approval. C-2 24-Hour Emergency Contact Prior to issuance of the Permit for Phase 1, Operator shall provide to the Community Development Department and the City Fire Department the current name and position, title, address, and 24-hour telephone numbers of the person in charge of the facility, person in charge of construction, and other representatives who shall receive all orders and notices, as well as all communications regarding matters of condition and permit compliance at the site and who shall have authority to implement a facility shutdown pursuant to this agreement or other City ordinances. There shall always be such a contact person(s) designated by the Operator. One contact person shall be available 24 hours a day in order to respond to inquiries received from the City, or from anyone in case of an emergency. If the address or telephone number of Operator’s agent should change, or the responsibility be assigned to another person or position, Operator shall provide to Community Development Department the new information within 24 hours of the effective date of such change. Exhibit D-2 C-3 Operator to Provide Copies of Permits to Community Development Department Operator shall furnish to Community Development Department and Monitor copies of all local, state, and federal permits relative to the E&B Project within 30 days of receipt by Operator. C-4 Pipeline Construction Confined to Right-of-Way All pipeline construction activities, including work areas and staging and storage areas of pipe, shall be confined to the area defined in the encroachment permit. C-5 Capacity and Throughput Reports Operator shall report to Community Development Department and Monitor the volumes and rates of: (1) inlet volumes; (2) transferred for sales into the Southern California Gas Company transmission line; and (3) Oil volumes transported to Pipeline. Reports shall be made on at least a monthly and annual basis and supporting documentation will be provided upon request from Community Development Department or Monitor. Upon approval from the Community Development Director and the Monitor, these reports may be combined with and submitted at the same time as Royalty Statements under Section 4 of the Lease. C-6 Risk Mitigation Program A Risk Management Program to substantially reduce the risks of project-related accidents which may result in loss of life and/or injury, and damage to property and/or the natural environment shall be submitted for approval to the Hermosa Beach City Community Development, Fire and Public Works Departments. Other City departments, as deemed necessary, may be consulted. All reasonable costs associated with this City review shall be borne by Operator. Operator shall be entitled to participate fully in the review process. The Program shall include all appropriate construction plans, Process Hazards Analyses (PHA), and Hazard and Operability Studies (HAZOPs) for the proposed facility and ancillary equipment to the City who may employ a third-party technical review in order to evaluate project design and help identify possible design hazards prior to issuance of ministerial permits. The HAZOPs shall be reviewed and approved by the City prior to construction for each Phase of the project. This review shall also evaluate all mitigation identified in the EIR. Exhibit D-2 The City may require as-built inspections and the submittal of as-built drawings for approval prior to the operation of any plant modifications. C-7 Safety Inspection, Maintenance And Quality Assurance Program Operator shall submit a detailed Safety Inspection, Maintenance and Quality Assurance Program (SIMQAP) for all facilities and pipelines which shall be implemented during construction and operations. Separate SIMQAP plans may be submitted for Phase 1 and Phase 2/3/4 activities. The SIMQAP shall be reviewed and approved by the City, including the Hermosa Beach City Community Development Department, Hermosa Beach Fire Department and the Monitor. Other City departments, as deemed necessary, may be consulted. The SIMQAP for construction shall be approved prior to construction, and the SIMQAP for operation shall be approved prior to operation for each Phase of the project. The plan is a dynamic document and, as such, updates including new procedures, safety and maintenance technologies and processes, shall be reviewed jointly by Operator and the City. The SIMQAP shall be revised as appropriate. The SIMQAP shall include, but not be limited to, evaluation of staffing levels for safe operation of the plant in emergency situations, establishing procedures for review of safety inspection records, regular maintenance and safety inspections, periodic safety audits, development of safety system testing protocols, training and experience standards for personnel and use of simulation techniques in training programs, inspections of all trucks carrying hazardous and/or flammable material prior to loading, monitoring of critical safety devices and systems, and review of the routing of all trucks carrying hazardous material. Operator shall implement the approved plan and shall provide for involvement of the Monitor, City staff, or its consultants in all inspections as appropriate. Prior to construction and operations, Operator shall demonstrate that employees (and subcontractors) are trained in the safety, inspection, maintenance and operations requirements of the project. All costs associated with this review process shall be borne by Operator. C-8 Emergency Response Plan Operator shall submit to the applicable City Departments and the City Fire Department an Emergency Response Plan (ERP) that addresses response procedures to be implemented by Operator for accidental events that pose significant threats to public health and safety, property, or the environment. Exhibit D-2 The ERP shall be reviewed and approved by the City Fire, Community Development and Public Works Departments prior to commencement of drilling operations. Separate ERPs may be required for Phase 1 and Phase 2/3/4 activities. The ERP shall include specific measures to avoid impacts on cultural resources, sensitive habitats, and sensitive biological resources identified in the project EIR whenever possible without affecting emergency response. Operator shall demonstrate the effectiveness of its ERP by responding effectively as determined by Fire to one emergency response drill prior to Phase 1 and prior to approval of the Plan by Fire. The ERP shall be submitted sufficiently prior to Operator’s projected start-up date so as to allow reasonable time for review and the planning of a drill required prior to ERP approval. The ERP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when warranted to incorporate new planning strategies or procedural changes, new technologies, and the acquisition of more effective, feasible response equipment as it becomes available. Any changes shall be submitted to the City Fire, Community Development and Public Works Departments for their review and approval, prior to implementation. Operator shall demonstrate the ongoing effectiveness of the ERP by responding to no more than two surprise drills each year which may be called by the City. If critical operations are underway, Operator need not respond to the drill at that time but shall explain the nature of the critical operations and why response is not possible. The City may then call for an additional surprise drill in the same year. Operator shall implement all reasonable changes based on review of drill performance, which will further enhance overall emergency response planning and capabilities. Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-9 Hazardous Material and Waste Management Plan Prior to start-up, Operator shall submit a Hazardous Material and Waste Management Plan (HMWMP) to the City Fire Department and Community Development Department for all facilities. The HMWMP shall be reviewed and approved by Fire and Community Development prior to start-up. The Plan shall demonstrate compliance with the provisions of the Uniform Fire Code as adopted in Chapter 15 of the Hermosa Beach Municipal Code and the provisions of the Health and Safety Code §25500 et seq, Chapter 6.95 Business Plan Requirements, with the Exhibit D-2 exception of emergency response procedures which are complied with above. The Hazardous Material and Waste Management Plan shall include but not be limited to the following: a. Locations and methods for storing hazardous materials and wastes, both within the facility and along the OIL pipeline right-of-way. b. Treatment procedures, or justification where none are used, to reduce the hazardous nature of the materials before they are permitted to leave the site. c. Specific routes for transportation of hazardous waste materials to Class I disposal sites consistent with City policy. d. Letter of commitment that the materials are transferred by a carrier licensed in hazardous material transport. e. Letter of commitment ensuring complete accounting of intake, processing, and exit of hazardous material and wastes. f. Detailed description of a monitoring system to be installed, capable of detecting hazardous material and wastes that may escape from primary storage devices. g. A revised Hazardous Materials Business Plan which accurately reflects the revised chemical inventory of the project site to Environmental Health Services for review and approval, in accordance with the California Health & Safety Code, Chapter 6.95, Section 25,500 et seq. The HMWMP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when parties mutually agree it is warranted to incorporate new planning strategies, changes in procedures, new technologies, or changes in materials, or when required by law. Any changes requested by Operator or City shall be submitted to Fire and Community Development for their review and approval, prior to implementation. C-10 Site Security Plan Exhibit D-2 Prior to issuance of a Permit for Phase 1, Operator shall submit to the Community Development and the Hermosa Beach City Police Department for review and approval a site security plan. The plan shall describe the procedures to be implemented by Operator which will prevent intentional damage to the drilling and production facilities which may result in environmental damage or public safety hazards. The plan shall include placement of security cameras to the satisfaction of the Community Development and Police Departments, and employment of security personnel at all times during drilling stages (24 hours) (see condition 3.2 in D-1) and employment of security personnel from dusk until dawn at all other times. The plan shall be reviewed and revised as warranted to require incorporation of new planning strategies, new technologies or changes in plant operation, and changes in notification procedures. C-11 Fire Protection Plan All E&B Project facilities shall have fire protection features installed in accordance with the provisions of an E&B Project Fire Protection Plan (FPP), and as such features may be required under this Exhibit D. All facilities, construction activities, process equipment, and fire protection equipment shall comply with the standards of the National Fire Protection Association (NFPA), American Petroleum Institute, Uniform Fire Code as adopted in Chapter 15, Building and Construction of the Hermosa Beach Municipal Code, and the Hermosa Beach City Fire Department. In the event of a conflict between these standards, the Fire Marshal, in consultation with the Operator, shall make a cost/benefit decision regarding which standards apply. Prior to construction, Operator shall receive Fire Department approval of an FPP which addresses both construction and operation of the E&B Project. Operator shall distribute copies of the approved contingency plans to applicable City Departments and the City Fire Department. All plan recipients are to be notified of contingency plan changes via formal contingency plan updates. Separate FPPs may be submitted for Phase 1 and Phase 2/3/4 activities. The FPP shall include, but may not be limited to, discussions of the following:  Onsite firefighting equipment and systems  Fire and detection  Access  Vegetation management  Employee training and safe practices Exhibit D-2  Process control and monitoring analysis  Drainage and containment  Safety, inspection (including City inspectors) and maintenance practices Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-12 Prevention of Internal Pipeline Corrosion Operator shall implement techniques to prevent internal corrosion in accordance with the requirements of the California State Fire Marshal (Title 5 §51010-5-019 of the California Government Code), 49 CFR 192 Parts 150, 475 and 477, and 49 CFR 195.418 as part of the Oil and pipeline maintenance procedures. The internal inspection records shall be submitted to and reviewed by the appropriate governmental agencies. Such activities shall include routinely scheduled pigging of the pipeline to remove pockets of accumulated fluids that contribute to internal corrosion (such as hydrogen sulfide, carbon dioxide, and water), the use of corrosion inhibitors and corrosion coupons, and periodic testing by a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents, cracks and other defects have occurred. Specific measures are discussed below: a) Whenever any section of the pipelines are removed for any reason, they shall be inspected for possible internal corrosion and records retained for inspection by the State Fire Marshal. b) The pipeline shall be tested with a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents cracks and other defects have occurred. State-of- the-art pigging will be capable of defining wall-thickness contours around any area of reduced wall thickness. The smart pigging will be done prior to operation of the Oil and natural gas pipelines and at a subsequent interval to be determined by the California State Fire Marshal. A program of maintenance shall be developed to ensure that permits to perform the work are obtained as soon as possible and that pipeline defects are rectified within one month of securing the necessary permits for severe defects, and within six months for moderate defects. This procedure shall be noted in the SIMQAP and receive approval by the SSRRC prior to operations of either the OIL or natural gas pipelines. Exhibit D-2 C-13 Prevention of External Pipeline Corrosion Operator shall undertake the following provisions to avoid external pipeline corrosion: a) The Oil and natural gas pipelines shall be coated to reduce the potential for external corrosion. Final selection of pipeline coating will be demonstrated, to the satisfaction of the California State Fire Marshal, that the selected coating would provide the maximum level of protection of available coatings for all expected operating conditions; and b) A baseline pipe-to-soil cathodic profile and reading shall be obtained after the pipeline has been installed, but before any cathodic protection facilities are connected. Other utilities shall disconnect their bonds as well. This measure shall be included on the construction plans which shall be reviewed by the City. C-14 Pipeline Hydrotesting The oil and natural gas pipelines shall be hydrotested prior to operation, and every five years thereafter or sooner if warranted by major ground movement that has the potential to undermine the structural integrity of the pipeline. This procedure shall be noted in the SIMQAP which shall be reviewed and approved prior to operations. C-15 Structural Support for Underground Utilities Operator shall provide structural support for underground utilities in and near the construction area during work in the trench and backfilling operations to prevent damage to such facilities during construction activities. C-16 Underground Utility Damage Operator shall halt work in the immediate vicinity in the event of inadvertent damage to an underground utility, until the owner of the utility has been contacted and repairs have been effected. C-17 Underground Pipeline Warning Marker A plastic ribbon or other suitable material shall be buried 12 to 18 inches above the oil and Exhibit D-2 natural gas pipelines and shall cover the length of the pipeline. The material shall be brightly colored and be labeled with a warning that this area contains a hazardous liquid pipeline trench. This measure shall be noted on the design and construction plans to be reviewed and approved by the City. C-18 Pipeline Route Warning Signs The entire pipeline route shall be marked with pipeline warning signs a minimum of every 500 feet. Spacing of markers may be greater in agricultural areas provided markers are clearly within sight of each other. Bright colored markers shall be installed above new pipelines that extend offsite of the proposed facility. This type of measure helps reduce the likelihood of external mechanical interference, of which third party damage associated with excavation near the pipelines is the most common cause of pipeline failures. C-19 Underground Service Alert Notification Operator shall notify owners through the office of Underground Service Alert of any underground facilities (including electrical, water, petroleum pipelines, fiber-optics and agricultural water delivery and drainage pipelines) 48 hours in advance of excavation in the vicinity of these facilities. Operator shall have an electrical contractor on-call at all times during construction near the potentially affected facility to repair any circuits if required by the owner in the event they are damaged during construction. The appropriate response to hazards associated with damage to natural gas pipelines will be determined in consultation with Southern California Gas Company. The City Fire Department shall be notified of the schedule for construction activities in the vicinity of natural gas and other oil pipelines. C-20 Finished Pipeline Route Maps Upon completion of pipeline construction, Operator shall provide all jurisdictional agencies with at least two copies of maps showing the finished pipeline route and shall include locations accessible by fire department emergency response vehicles. Said maps shall be 7 1/2 minute quadrate scale, (one inch equals 24,000 inches), and shall represent topographical features. C-21 Supervisory Control and Data Acquisition and Emergency Shutdown Systems Exhibit D-2 The pipeline supervisory control and data acquisition (SCADA) and Emergency Shutdown (ESD) systems, including inspection, maintenance and quality assurance procedures for the SCADA and ESD systems, shall be reviewed and approved by the Fire Department and the Building Department and Public Works Department prior to operations of either the oil or natural gas pipelines, and as appropriate thereafter. The SCADA and ESD systems shall comply with the provisions of Fire Department Development Standard No. 7 and the National Electrical Code Article 760. Operator shall conduct a comprehensive safety and reliability analysis of the SCADA system as well as the processing facility and oil and natural gas pipelines control room prior to commencement of pipeline operations, and as appropriate thereafter. The analysis shall meet or exceed the guidelines developed by the Institute of Electronic and Electrical Engineers. Any improvements identified in the study shall be included in the suggested hardware and software. Results of the study shall be provided to the Community Development Department. Company shall design the project such that the entire project will integrate the supervisory control and data acquisition (SCADA) or other monitoring system for all the components of this project in a manner so as to provide timely and efficient detection, shutdown, notification and response to an emergency involving any of the project components. Any break, rupture, and/or damage to the facilities shall result in the orderly shutdown of the pumping operations, and will activate the shut off valves in a manner which will minimize environmental damage. C-22 Update of Operational Risk Assessment Upon City request, Operator shall fund the updating of the operational risk assessment subject to ministerial permitting, as needed, so that any surrounding land use proposals are aware of existing risk, if any. D. FACILITY DESIGN D-1 Submittal of As Built Drawings Within one year after initial start-up of the E&B Project (Phase 1), and again within one year of commencement of Phase 2 operations, Operator shall submit as-built drawings of the Exhibit D-2 entire facility(s) to City. Any facility modifications required for Phase 3 operations shall also be documented on facility as-built drawings within one year of their construction. Operator shall submit as many sets of drawings (up to ten sets) as requested by the Community Development Department. D-2 Solid Waste Disposal Solid waste generated on the site shall be collected by the City’s franchised commercial trash hauler. Construction waste shall be transported by E&B’s own efforts to a facility authorized to accept construction waste in accordance with the provisions of the Hermosa Beach Municipal Code. Hazardous waste shall be transported by E&B’s own efforts to a facility authorized to accept hazardous waste in accordance with all local, state and federal laws. D-3 Water Conservation Measures The design of all new and/or modified onsite facilities shall incorporate the use of cost- effective water-conserving fixtures, including by way of example indoor and outdoor plumbing fixtures and irrigation. D-4 Energy Conservation Measures Throughout the project life, as equipment is added or replaced, cost-effective energy conservation techniques shall be incorporated into project design, including by way of example indoor and outdoor lighting, HVAC, drill equipment, vehicles, and microturbines. E. ABANDONMENT E-1 Abandonment Procedures In implementing Section 26 of the Lease and Article VII of the Hermosa Beach Municipal Code - Oil Code Chapter 21A, Operator shall secure all necessary permits and proceed in accordance with a City Council approved abandonment and restoration plan within one year of permanent shut down. The abandonment plan shall be processed with environmental review of the plan. Operator shall post a performance bond, or other security device Exhibit D-2 acceptable to City Council, prior to commencement of Phase 1 construction for estimated costs of abandoning Phase 1 facilities. Operator shall also post a performance bond, or other security device acceptable to City Council, prior to commencement of Phase 2 for estimated costs of abandoning Phase 2 facilities. E-2. Abandonment Costs All costs associated with abandonment or removal shall be borne by Operator. E-3. Wellsites Prior to permanent shutdown or termination of this agreement or the lease, any well drilled by Operator shall be plugged and abandoned within three months from the date it is determined that such well is no longer capable of production, subject to weather and rig availability, and capped, in accordance with the rules and regulations of the State Division of Oil, Gas & Geothermal Resources. Thereafter, the wellsite shall be restored as near as practicable to its original condition. F. Miscellaneous Conditions F-1. Hydraulic Fracturing Prohibited The use of hydraulic fracturing as a well stimulation technique for enhanced hydrocarbon production shall be prohibited on the project site. F-2. Pipelines All pipelines installed for the Project shall not go below the depth authorized by the State Division of Oil, Gas & Geothermal Resources. After completion of the construction of any such pipelines, Operator shall restore the surface of the area impacted by the construction of such pipeline as nearly as practicable to its condition immediately prior to such construction. F-4. Fire Marshal Position Operator shall fund a full-time dedicated Fire Marshal position for the Hermosa Beach Fire Department for the full Term of the Development Agreement. Exhibit D-2 F-5. Training Operator shall pay for annual training for Hermosa Beach Fire Department personnel and fire personnel from the City’s automatic aide partners on fighting oil fires. F-6. Odor (from HIA) In the event of frequent reports of odor emanating from the site, Operator shall pay for additional studies and/or periodic air monitoring. If the studies or monitoring indicate that additional control measures should be implemented to reduce the frequency of noticeable odors, Operator shall include those measures as project conditions. F-7. Notice (from HIA) During Phase 3 pipeline construction, Operator shall provide written notification of impending construction activities, including the dates and times of activities that may produce excessive noise, to all residents within 100 feet of the construction activities. Notice shall be provided no less than 72 hours before construction begins. F-8. Light impact reduction (from HIA) Operator shall pay for or provide black-out blinds or curtains for bedrooms with direct line- of-sight to the exposed side of the electric drill rig that will be lit at night. The amount of payment or the brand of blinds/curtains shall be pre-approved by the City Manager, and may be provided through a direct mail program. F-9. Community Relations (from HIA) As recommended in Intrinsik’s Health Impact Assessment for the project, and at the City Council’s discretion, the Operator may be required to pay for the costs associated with (1) organizing a Community Liaison Committee; (2) a follow-up Community Health Assessment; and/or (3) a quality of life health survey. Exhibit D-2 [Continue to following page for Mitigation Measures] Exhibit D-3 EXHIBIT “D-3” Mitigation Measures/Mitigation Monitoring Plan from Section 8.0 of FEIR (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). 8.0 Summary of Mitigation Measures and Mitigation Monitoring Plan 8.1 Mitigation Monitoring Program As the Lead Agency under the California Environmental Quality Act (CEQA), the City of Hermosa Beach (City) is required to adopt a program for reporting or monitoring regarding the implementation of mitigation measures for this Project, if it is approved, to ensure that the adopted mitigation measures are implemented as defined in this Environmental Impact Report (EIR). This Lead Agency responsibility originates in Public Resources Code Section 21081.6(a) (Findings) and the CEQA Guidelines Sections 15091(d) (Findings) and 15097 (Mitigation Monitoring or Reporting). 8.2 Monitoring Authority and Enforcement Responsibility The purpose of a Mitigation Monitoring, Compliance, and Reporting Program (MMCRP) is to ensure that measures adopted to mitigate or avoid significant impacts are implemented. A MMCRP can be a working guide to facilitate not only the implementation of mitigation measures by the Project proponent, but also the monitoring, compliance, and reporting activities of the City and any monitors it may designate. The City may delegate duties and responsibilities for monitoring to other environmental monitors or consultants as deemed necessary, and some monitoring responsibilities may be assumed by responsible agencies, such as affected jurisdictions and cities. The number of monitors assigned to the Project will depend on the number of concurrent activities and their locations. The City or its designee(s), however, will ensure that each person delegated any duties or responsibilities is qualified to monitor compliance. Any mitigation measure study or plan that requires the approval of the City must allow at least 60 days for adequate review time. When a mitigation measure requires that a mitigation program Exhibit D-3 be developed during the design phase of the Project, the Applicant must submit the final program to City for review and approval for at least 60 days before any activity begins. Other agencies and jurisdictions may require additional review time. It is the responsibility of the environmental monitor assigned to the Project to ensure that appropriate agency reviews and approvals are obtained. The City or its designee will also ensure that any deviation from the procedures identified under the monitoring program is approved by the City. Any deviation and its correction shall be reported immediately to the City or its designee by the environmental monitor assigned to the Project. The City is responsible for enforcing the procedures adopted for monitoring through the environ- mental monitor assigned to the Project. Any assigned environmental monitor shall note problems with monitoring, notify appropriate agencies or individuals about any problems, and report the problems to the City or its designee. 8.3 Mitigation Compliance Responsibility The Applicant is responsible for successfully implementing all the mitigation measures in the MMCRP, and is responsible for assuring that these requirements are met by all of its contractors and field personnel. Standards for successful mitigation also are implicit in many mitigation measures that include such requirements as obtaining permits or avoiding a specific impact entirely. Other mitigation measures include detailed success criteria. Additional mitigation success thresholds will be established by applicable agencies with jurisdiction through the permit process and through the review and approval of specific plans for the implementation of mitigation measures. 8.4 General Monitoring Procedures Environmental Monitors. The City and the environmental monitor(s) are responsible for integrating the mitigation monitoring procedures into the construction or operation process in coordination with the Applicant. To oversee the monitoring procedures and to ensure success, the environmental monitor assigned to the Project must be on site during that portion of the construction or operation that has the potential to create a significant environmental impact or other impact for which mitigation is required. The environmental monitor is responsible for ensuring that all procedures specified in the monitoring program are followed. Exhibit D-3 Construction and Operations Personnel. A key feature contributing to the success of mitigation monitoring will be obtaining the full cooperation of construction and operations personnel and supervisors. Many of the mitigation measures require action on the part of the supervisors or crews for successful implementation. To ensure success, the following actions, detailed in specific mitigation measures, will be taken:  Procedures to be followed by construction or operations companies hired to do the work will be written into contracts between the Applicant and any contractors. Procedures to be followed by construction and operations crews will be written into a separate document that all personnel will be asked to sign, denoting agreement.  One or more meetings will be held to inform all and train personnel about the requirements of the monitoring program.  A written summary of mitigation monitoring procedures will be provided to supervisors for all mitigation measures requiring their attention. General Reporting Procedures. Site visits and specified monitoring procedures performed by other individuals will be reported to the environmental monitor. A monitoring record form will be submitted to the environmental monitor by the individual conducting the visit or procedure so that details of the visit can be recorded and progress tracked by the environmental monitor. A checklist will be developed and maintained by the environmental monitor to track all procedures required for each mitigation measure and to ensure that the timing specified for the procedures is adhered to. The environmental monitor will note any problems that may occur and take appropriate action to rectify the problems. Public Access to Records. The public is allowed access to records and reports used to track the monitoring program. Monitoring records and reports will be made available for public inspection by the City or its designee on request. 8.5 Mitigation Monitoring Table The Tables below present a summary of monitoring and reporting plan requirements for the mitigation measures identified in Chapter 4 of the EIR as applicable to the Proposed Project. The Table provides the following information, by column:  Mitigation Measure (description of the mitigation measure identified in Chapter 4);  Monitoring/Plan Requirements (monitoring or plan requirements necessary to verify compliance with the mitigation measure); Exhibit D-3  Method of Verification (this is how the responsible agency can determine if the mitigation measure has been implemented);  Timing (this identifies when action needs to be taken on mitigation measure); and  Responsible Agency (this is the agency that is responsible for assuring compliance with the mitigation measure). Table 8-1 Aesthetics and Visual Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party EM-1 Prior to issuance of the first grading and/or construction permits, the Applicant shall enter into agreements with the City to provide funding for the implementation and administration of an environmental monitoring program, including an environmental monitor, to ensure compliance with each Agency’s environmental Conditions of Approval. The monitor shall assist the Agencies in condition compliance and mitigation monitoring for all applicable construction and operational stages of the Oil Project, as specified in a scope of work, as approved by the Agencies. The monitoring program shall include a post‐construction program to monitor measures that extend beyond the construction period (e.g., success of landscaping, etc.), as well as monitor certain mitigation measures required during the operational phase. The monitor will prepare a working monitoring plan that reflects the Agencies ‐ approved environmental mitigation measures/conditions of approval. This plan will include: 1. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; 2. Lines of communication and reporting methods; 3. Daily and weekly reporting of compliance; 4. Construction crew training regarding environmental sensitivities; 5. Authority to stop work; and 6. Action to be taken in the event of non‐compliance. The environmental monitor shall be under contract to the Agencies. Costs of the monitor, monitoring program, and any Agency administrative fees, shall be paid by the Applicant. The Applicant shall also be responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, Conditions included within the Development Agreement, including administrative measures to ensure bonding, payment methods and insurance Before the start of Phase 1 City of Hermosa Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party noise engineer, etc.). The Agencies’ environmental monitor will coordinate the monitoring efforts of the specialist, including communication with the Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). AE-1a Material choice of electrical drill rig acoustical shroud shall be of neutral sky color which is selected for its ability to reduce visual impact, in coordination with and approval by the City Community Development Director. Approval of Construction Documents and Specifications and field- demonstration Prior to issuance of permits City of Hermosa Beach AE-1b The sound attenuation wall shall be replaced by a permanent wall with design features installed at the end of Phase 3. The intent is to provide stability of views and opportunities for positive visual elements that partially mitigate the visual presence of the walls from the Hermosa Greenbelt and other sensitive views in the immediate Project vicinity. The permanent wall shall be allowed to be provided in lieu of the 16-foot block wall. Landscape design shall be allowed to be adjusted to respond to façade articulations, though quantities and densities shall be maintained. The permanent wall shall be designed with architectural features in coordination with and approval of the City Community Development Director. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2a Design of the sound attenuation wall exterior façade shall be required to include design articulations that are complementary to the character, scale, and quality of the surrounding environment. The intent is to mitigate the visual impact of the wall from the Hermosa Greenbelt and other sensitive views in the immediate project vicinity. The following measures of success shall be met: 1) Articulations of façade decrease scale and proportion of mass into smaller increments that more closely resemble those of adjacent buildings; and 2) Colors, detailing and material use are varied to a level consistent with existing visual environment. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AE-2b Planting area growth medium shall be capable of supporting the long term health and growth of the landscape design. Requirements shall be: 1) Demonstrated free of debris and construction waste (asphalt, concrete, etc) to a minimum depth of 3 feet within all planted areas. Wall footings shall be designed to limit encroachment into planted areas; 2) Soils analysis report shall be conducted by a certified soil scientist. Report shall include recommendations to meet the intent of this mitigation measure; and 3) If soils are determined to be unsuitable to support plant growth, they shall be amended or removed/replaced to meet requirements of soils analysis for plant pallette selected. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2c Vine plantings where used shall meet the following conditions: 1) be self- attaching or structure supported; 2) have demonstrated success in the City; 3) be planted at a density to achieve full coverage at maturity; 4) be planted at a minimum 5 gallon size; and 5) be required on the visible portion of the west wall at the temporary parking facility. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2d All trees shall be required to be a minimum of 20’ in height at installation and meet the American Standard for Nursery Stock (ANSI Z60.1-2004). If a tree species alternate is proposed, it shall be required to be an equal to the species proposed in the Project Application in the following characteristics: 1) Dense evergreen with similar form and habit; 2) Probability of achieving a minimum of 35-40 feet at maturity; and 3) Comply with Municipal Code Chapter 8.60 and 8.56. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-3a Pipeline alignments and valve box locations shall be designed to avoid the removal or modification of trees, hedgerows, and/or large shrubs to the extent feasible. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach, and Torrance Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AE-3b If landscaped areas, streetscapes, plazas and/or parklands are required to be temporarily disturbed, they shall be restored to their previous condition following completion of construction. Avoidance of disturbance shall be the preferred option, especially where landscape elements act to screen views (hedges, large shrubs, etc) or where they act as community gateways (Redondo Beach at Hwy-1). Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach and Torrance AE-3c Block color/s selection and pattern (if applicable) shall be complementary to adjacent buildings. A buffer of shrubs and vines shall be planted to match the existing character and quality of the adjacent properties. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach and Torrance AE-4a Final acoustical cover material selection shall be required to be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4b Colors and finishes of equipment and surfaces within the soundwall (including the interior face of the soundwall, the interior face of the drill rig acoustical cover, and the physical structure of the drill rig within the acoustical shield) shall have a reflectivity rating of 0.3 or lower. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4c All proposed site lighting fixtures associated with the drilling activities shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5a Colors and finishes of surfaces within the facility, including the interior face of the soundwall, ground materials (darker or asphalt), wall paints and equipment Approval of Construction Prior to issuance of City of Hermosa Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party paints to the extent feasible shall have a low reflectivity rating of 0.3 or lower to reduce the potential for glow. Documents and Specifications and Inspection permits and during construction Beach AE-5b Final sound wall material/s selection/s (including gates) shall be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5c All proposed site lighting, including fixtures outside the wall, shall be fully shielded. Fully shielded shall be defined as: A luminaire constructed and installed in such a manner that all light emitted by the luminaire, either directly from the lamp or a diffusing element, or indirectly by reflection or refraction from any part of the luminaire, is projected below the horizontal plane through the luminaire’s lowest light-emitting part (IES/IDA, 2011) Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5d The LZ-2 parameters of the Model Lighting Ordinance (IES/IDA, 2011) shall be used to demonstrate that maximum vertical illuminance for the site are not exceeded. For site lighting inside the wall, Table B allowances shall be used. Lighting outside the wall at site entrances shall not exceed that of existing street lighting, which produces a maximum of 1 footcandle. For the purposes of measuring vertical illumination, the plane of the property line shall be extended to an elevation equal to the height of the electric drilling rig. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5e All proposed site lighting fixtures shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-6a Any proposed metering station site lighting shall be fully shielded and shall incorporate permanent features (shields, hoods, etc.) shall incorporate permanent features which prevent light spillage beyond the property line. Approval of Construction Documents and Prior to issuance of permits and City of Redondo Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Specifications and Inspection during construction AE-6b Light levels and quantities of fixtures shall not exceed that which is needed for security and safety. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Redondo Beach and Torrance Table 8-2 Air Quality and GHG’s Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AQ-1a The Applicant shall submit and implement a Fugitive Dust Control Plan that includes SCAQMD mitigations for fugitive dust mitigation, according to Rule 403, and SCAQMD CEQA Guidelines. Fugitive dust mitigation measures in the plan shall include the following (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - Apply water every 3 hours to disturbed areas and unpaved roads within a construction site (61 percent reduction). - Require minimum soil moisture of 12 percent for earthmoving, by using a moveable sprinkler system or water truck. Moisture content can be verified by lab sample or moisture probe (69 percent reduction). - Limit onsite vehicle speeds on unpaved roads to 15 mph and posting of speed limits. - All trucks hauling dirt, sand, soil, or other loose materials are to be tarped with a fabric cover and maintain a freeboard height of 12 inches (91 Plan review, site inspections Before and during construction Both Oil Project and City Yard SCAQMD City of Hermosa Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party percent reduction). - Install gravel bed trackout apron (3 inches deep, 25 feet long, 12 feet wide per lane, and edged by rock berm or row of stakes) to reduce mud and dirt trackout from unpaved truck exit routes (46 to 80 percent reduction). - Water storage piles by hand or apply cover when wind events are declared, according to SCAQMD Rule 403 when instantaneous wind speeds exceed 25 miles per hour (90 percent reduction). - Appoint a construction relations officer to act as a community liaison concerning onsite construction issues, such as dust generation. AQ-1b The Applicant shall implement a NOx reduction program including the following, or equivalent, measures to the satisfaction of the SCAQMD (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - All off-road construction equipment shall be tuned and maintained according to manufacturers’ specifications. - Any temporary electric power shall be obtained from the electrical grid, rather than portable diesel or gasoline generators. - All off-road diesel construction equipment with greater than 100- horsepower engines shall meet Tier 3 NOx requirements. - Limit onsite truck idling to less than 5 minutes. - A copy of the certified tier specification, best available control technology documentation, or the CARB or SCAQMD operating permit for each piece of equipment shall be kept onsite during all operations. Plan review, site inspections Before and during construction SCAQMD City of Hermosa Beach AQ-3a The Applicant shall limit flaring during Phase 4 to a total of 5 hours per day at the full flaring capacity (or to an equivalent volume of flared gas) during all emergency or routine flaring events in order to ensure that NOx emissions are reduced below the thresholds. Lower NOx emission combustors or other equivalent measures can also be used to satisfy the requirement. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-3b The Applicant shall implement methods to reduce the off-gassing of muds by at Plan review, Before Phase SCAQMD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party least 90 percent through the installation of fully enclosed mud pit areas with vapor control (either through carbon canisters or vapor recovery) and/or the use of mud degassing units routed to vapor control systems. The Applicant shall monitor the muds vapor immediately above the muds exit point from the wellbore and at other areas above the mud pits where muds may be exposed to the atmosphere in order to ensure that hydrocarbon vapors are captured at the minimum rate of 90 percent. site inspections 2 and Phase 4 drilling City of Hermosa Beach AQ-4 The Applicant shall limit the microturbine PM emissions to 0.0035 lbs/mmbtu, or an equivalent reduction in the number and/or size of the microturbines, in order to reduce emissions to below the localized thresholds. The City shall be responsible for ensuring that the applicant will be subject to permit conditions that limit emissions from the set of microturbines, not just individual permit units. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-5a The Applicant shall at all times have a gas buster and SCAQMD-approved portable flare at the site and connected for immediate use to circulate out and combust any gas encountered during drilling. The flare shall be capable of recording the volume of gas that is flared. The operator shall report any flared gas from drilling to the Hermosa Beach Fire Chief and the SCAQMD. Plan review, site inspections Before Phase 2 drilling SCAQMD City of Hermosa Beach AQ-5b The Applicant shall install a compressor seal vent collection system. In the event of a seal leak, vapors shall be collected and sent to the vapor recovery system or flare for destruction. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-5c The Applicant shall develop and implement an Odor Minimization Plan, submitted to and approved by the City and the SCAQMD. The Odor Minimization Plan shall address reducing the frequency from potential sources of odors from all site equipment, including wells and drilling operations, temporary operations such as truck loading, and measures to reduce or eliminate these odors (e.g., containment, design modifications, carbon canisters). The Plan shall address issues such as facility information, buffer zones, signs with contact information, logs of odor complaints, the protocol for Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party handling odor complaints and odor release investigations and methods instituted to prevent a re-occurrence. The Plan shall require that all odor complaints and issues be immediately communicated to the City and that the City shall have the authority to implement and enforce contingency measures to ensure that any nuisance odors from the facility are eliminated. AQ-5d The Applicant shall develop and implement an Air Monitoring Plan. The Plan shall provide for the monitoring of total hydrocarbon vapors and hydrogen sulfide and total hydrocarbon vapors at all perimeter locations of the facility as well as at strategic locations near processing equipment. At all times during operations, drilling, redrilling and workover operations, the Operator shall maintain monitoring equipment that shall monitor and digitally record the levels of hydrogen sulfide and total hydrocarbon vapors. Such monitors shall provide automatic alarms that are audible and visible to the Operator of the drilling equipment, and gas plant, and shall be triggered by the detection of hydrogen sulfide or total hydrocarbon vapors. Alarm points shall be set at a maximum of 1 5 and 5 10 ppm H2S and 500 and 1,000 ppm hydrocarbons, with the higher level requiring shut-down of drilling or plant operations and the lower level requiring notification to appropriate agencies, including the Hermosa Beach Fire Department and SCAQMD. A meteorological station to monitor wind speed and direction under the guidance and specification of the SCAQMD shall be installed at the site. The Air Monitoring Plan shall be reviewed and approved by the City and the SCAQMD. Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach AQ-5e The Applicant shall use an odor suppressant spray system on the mud shaker tables, and shall install carbon capture canisters on all tanks (permanent and portable) that are not equipped with vapor recovery, containing potentially odiferous materials (for example; the mud baker-type tanks) for all drilling operations so that no odor can be detected at the closest receptor. Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach AQ-5f The fugitive component leak detection program under Rule 1173 shall utilize a Leak Detection and Reporting (LDAR) level of monthly detections with an action Plan review, site inspections Before Phase 2 operations SCAQMD City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party level of 100ppm, the installation of bellows valves where applicable (valves 2 inches or smaller) and the use of IR cameras or equivalent during monthly detections to ensure that leaking components are minimized at the facility. Hermosa Beach AQ-6 The Applicant shall provide credits for all GHG emissions generated above the threshold of 10,000 MTCO2e per year. A GHG Reporting and Reduction Plan shall be submitted to the SCAQMD and the City detailing the measures to be implemented to achieve the required reductions, updated annually, and shall include specifications on the protocol, vintage, and registry for any offsite mitigation. The following mitigation credits shall not require prior City or SCAQMD approval: 1. Credits generated within Los Angeles County per an approved SCAQMD protocol; 2. Credits generated within the State of California per an approved SCAQMD protocol; 3. Credits that are generated and verified under the CAPCOA GHG Rx program; 4. Credits that are generated and verified under the voluntary SCAQMD Regulation XXVII; 5. Verified credits registered with the Climate Action Reserve or the American Carbon Registry. In addition, independently verified GHG credits available through other carbon registries that follow specific protocols may be eligible for offsite mitigation, subject to review and prior approval by the City and the SCAQMD. The general criteria for acceptable credits include: • Real: emission reduction must have actually occurred, as the result of a project yielding quantifiable and verifiable reductions or removals. • Additional/Surplus: an emission reduction cannot be required by a law, rule, or other requirement. • Quantifiable: reductions must be quantifiable through tools or tests that Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party are reliable, based on applicable methodologies, and recorded with adequate documentation. • Verifiable: The action taken to produce credits can be audited and there is sufficient evidence to show that the reduction occurred and was quantified correctly. • Enforceable: An enforcement mechanism must exist to ensure that the reduction project is implemented correctly. • Permanent: Emission reductions or removals must continue to occur for the expected life of the reduction project. Operational/drilling GHG emissions from stationary and mobile sources shall be quantified and reported to the City and to the SCAQMD annually. Emissions reporting will follow the same reporting format and procedures as required by the Mandatory Reporting Rule. AQ-7a All diesel equipment used at the site shall meet EPA Tier 3 emission requirements and be equipped with a CARB Level 3 diesel particulate filter to reduce Diesel PM emissions. Workover rigs operated at the project site shall have cumulative total DPM emissions below 1.5 lbs/year or shall utilize electric drive/sources . Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-7b Vapor recovery on crude oil tanks shall achieve a minimum of 99 percent recovery of fugitive emissions. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Table 8-3 Biological Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party BIO-1 To minimize potential impacts to nesting native bird species, and in compliance with the federal Migratory Bird Treaty Act and Sections 3503, 3503.5, or 3513 of the California Fish and Wildlife Code, initial vegetation removal/trimming shall be done outside the breeding season (breeding season is defined herein as January 15 through August 31 for raptors and February 15 through August 31 for all non- raptor species). If vegetation removal/trimming must be completed during this period, then surveys for nesting birds must be conducted by a qualified, City-approved Biologist, within 3 days prior to vegetation removal or other construction-related disturbances. If nesting birds are observed within the project area, then a minimum 100-foot buffer from any non-raptor species and 500 foot buffer from any raptor nest would be established and maintained for the duration of vegetation removal/trimming activities or until nestlings fledge from the nest. Plan review, site inspections Before and during construction City of Hermosa Beach BIO-2 The Applicant shall submit for City approval and shall implement an Emergency Response Plan that would, in compliance with the California State Oil Spill Contingency Plan (CDFW, OSPR 2014),address protection of biological resources and possible revegetation of any areas disturbed during an oil spill or cleanup activities. The Emergency Response Plan shall, at a minimum, include specific measures to avoid impacts to native vegetation and wildlife habitats, plant and animal species, and environmentally sensitive habitat areas during response and cleanup operations. The Emergency Response Plan shall include provisions for containment and cleanup measures and responsibilities. The plan shall contain: • Definition of the authorities, responsibilities, and duties of all entities involved in oil removal operations, and methods of emergency action agency coordination during and after an oil spill; • Agreements and statements from all resource agencies involved in an oil response and removal operation; • Procedures and frequencies for regular monitoring and inspections of Plan review Before construction City of Hermosa Beach OSPR Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party pipelines and facilities; • Procedures for early detection and timely notification of an oil discharge; • A description of the necessary onsite equipment and details on the placement of the material required to quickly control, contain, and remove any discharged oil; • Assurance that full resource capability is known and can be committed following a discharge; • A description of sensitive biological resources in the SMB that should be prioritized for clean-up activities in the case of an oil spill into the marine environment; • Actions for after discovery and notification of a discharge; • Procedures to facilitate recovery of damages and enforcement measures. The Emergency Response Plan shall be approved by the California Department of Fish and Wildlife (CDFW) Office of Spill Prevention and Response (OSPR). When habitat disturbance cannot be avoided, the Emergency Response Action Plan shall provide stipulations for development and implementation of site-specific habitat restoration plans and other site-specific and species-specific measures appropriate for mitigating impacts to local populations of special-status wildlife species and to restore native plant and animal communities to pre-spill conditions. Access and egress points, staging areas, and material stockpile areas that avoid specific habitat areas shall be identified. The Emergency Response Action Plan shall include species- and site-specific procedures for collection, transportation and treatment of oiled wildlife. The Emergency Response Plan shall be approved by the City prior to commencing any construction activities. ______________________________________________________________________________ _______________________________________ Table 8-4 Cultural Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party CR-1 Prior to beginning demolition of the existing City Maintenance Yard Building, guidelines shall be developed for the careful exposure of extant elements of the historic brick and mortar furnace. Once exposed, detailed documentation of the furnace shall be undertaken. Documentation shall be guided by the Historic American Engineering Record (HAER) standards. This documentation shall include production of high quality 35-mm photographs and plan drawings of building elements exposed, including but not limited to, a floor plan, any character-defining building features, and elevation drawings. All work carried out pursuant to the recordation of the furnace building shall be conducted by, or under the direct supervision of a person or persons meeting, at a minimum, the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994) as an architectural historian. A written report detailing the HAER-like documentation shall be provided to the City upon completion the work. This report shall be produced on archivally stable materials and filed with the Hermosa Beach Historical Society. Development and implementation of a monitoring and documentation plan by a qualified archaeologist. During building demolition within areas of recorded historical resources. Project Proponent and Construction Contractor CR-2a The design of the New City Maintenance Yard Building shall be compatible in design, styling, material, and massing of the adjacent City Hall complex. The building design should not attempt to replicate the New Formalist style, but it shall not conflict or contrast with the existing building style. The buildings constructed in the New City Maintenance Yard shall be no more than two stories high. They shall not overpower or overshadow the existing building complex. Design of the New City Maintenance Building and landscape Design Phase Project Proponent and City CR-2b The landscaping associated with the proposed New City Maintenance Yard shall replicate the planting types surrounding the City Civic buildings, to the extent possible, in order to blend the new construction into the existing Complex. The final design of both the new building and landscape should be Design of the New City Maintenance Building and Design Phase Project Proponent and City Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party developed in consultation with an historic architect or architectural historian who meets Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). landscape CR-3a Prior to any ground-disturbing activities or building removal within the Proposed Project sites, an Archaeological Monitoring Plan shall be developed by a qualified archaeologist with provision for review and input by concerned Native Americans and approval by the City. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. The Plan is to include provisions for archaeological and Native American monitoring, detailed documentation of all early twentieth-century artifact-bearing deposits exposed during ground- disturbing site work, and development of a clear collection policy for both prehistoric and historic artifacts, subsequent artifact analysis, reporting of findings, and disposition and/or curation of any significant artifacts recovered. All reports of findings shall be filed with to SCCIC. Development and implementation of a monitoring plan by a qualified archaeologist in consultation with concerned Native American tribes. The monitoring plan shall be submitted for review by the City of Hermosa Beach and approval prior to beginning development. Plan shall be implemented prior to and during construction. Project Proponent and Construction Contractor CR-3b Any significant archaeological deposits remaining in the area of the previous City of Hermosa Beach Dump following over-excavation at the Proposed Oil Development Project site must be protected in place. Stabilization and covering of these archaeological deposits shall be monitored by a qualified historical archaeologist meeting the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). Following construction any remaining archaeological deposits must be stabilized and covered for protection. Following over- excavation Project Proponent and Construction Contractor CR-4 Should Project-related excavations be designed to exceed 45 feet in depth at the City Dump, or depths greater than 15 feet along the pipelines, or otherwise A paleontological The monitoring Project Proponent Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party be shown to have the potential to impact intact San Pedro Sand deposits as described above, a Paleontological Resources Monitoring and Mitigation Plan (PRMMP) shall be developed by a qualified paleontologist in consultation with the City and implemented prior to or during Project-related ground disturbing activities. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. resource monitoring and mitigation program (PRMMP) for treatment of the paleontological resources will be developed and implemented. plan shall be submitted for review by the City of Hermosa Beach and approval prior to beginning development. Plan shall be implemented prior to and/or during construction. and Construction Contractor CR-5 Ground-disturbing activities in the area of the discovery shall immediately be halted or redirected. A temporary construction exclusion zone shall be established surrounding the site to allow for further examination and treatment of the find. A City representative shall immediately notify the Los Angeles County Coroner’s office by telephone. By law, the Coroner will determine within two working days of being notified if the remains are subject to his or her authority. If the Coroner recognizes the remains to be Native American, he or she shall contact the Native American Heritage Commission who will appoint the Most Likely Descendent (MLD). Additionally, if the remains are determined to be Native American, a plan will be developed regarding the treatment of human remains and associated burial objects and the plan will be implemented under the direction of the MLD. The Native American Heritage Commission (NAHC) must be contacted by the Los Angeles County Coroner, and a Most Likely Descendant must be designated. Any further Upon discovery of human remains. Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party treatment of the remains will occur in consultation with the MLD, the NAHC, and a qualified archaeologist. ______________________________________________________________________________ ____________________________ Table 8-5 Fire Protection and Emergency Response Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party FP-1a The Applicant shall ensure adequate (3,000-5,000 gpm) water supplies are available from the existing water lines and hydrant system, by extending the 8 inch water main or some other source for water supplies that provides sufficient water supply rates, pressure and duration to comply with codes, standards and requirements of the LACFD and the HBFD. Installation of a fire pump, or installation of a piping connection to area water mains that can supply the flows, may be required to ensure the appropriate water flow and pressure requirements. The Applicant shall ensure that all area hydrants and water supplies are tested annually as to the NFPA standards for water flows and pressures, and shall ensure that the results are reported to the City of Hermosa Beach and the Hermosa Beach Fire Department. Review of water flow calcs and tests, annual reviews Before Phase 2 City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party FP-1b The Applicant shall coordinate with the HBFD to integrate a community alert notification system for the proposed project into the City's existing alert system to automatically notify area residences and businesses in the event of an emergency at the project site that would require residents to take shelter or take other protective actions. The Applicant shall implement programs to ensure that all immediate neighbors are provide ample opportunity to participate in the notification system. Review and testing of system Before Phase 2 City of Hermosa Beach HBFD FP-1c The Applicant shall fund an additional FTE position at the HBFD, or equivalent, for personnel with specific capabilities in inspection and code compliance associated with oil and gas production facilities. This arrangement shall be to the satisfaction of the HBFD. Training and hiring completed at HBFD Before Phase 2 City of Hermosa Beach HBFD FP-1d The Applicant shall develop emergency response plans addressing the facility's fire-fighting capabilities pursuant to the most recent NFPA requirements, Los Angeles County Fire Code, LACFD, California Code of Regulation, and API requirements, in coordination with and to the satisfaction of the LACFD and the City of Hermosa Beach Fire Department. These plans shall include, but not be limited to, fire monitor placement, water capabilities, fire detection capabilities, fire foam requirements, facility condition relating to fire-fighting ease and prevention, and measures to reduce impacts to sensitive resources. The plan should also address coordination with local emergency responders and area schools and daycare facilities. Review and approval of plans Before Phase 2 City of Hermosa Beach HBFD FP-1e The Applicant shall ensure that the emergency response planning includes development of evacuation plans of neighbors for an emergency scenario at the facility,. The plan shall be reviewed by the LACFD, HBFD and the City annually and updated as needed. The relevant portions of the plan shall be distributed to the public utilizing a method determined by the reviewing Agencies. Review of plan revision Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-1f The Applicant shall ensure and make funding available to 1) upgrade the dispatch system and procedures within Hermosa/Torrance/Redondo to implement a CAD-to-CAD system to improve dispatch times; and 2) extend the Review of Mutual Aid agreement Before Phase 2 and Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party mutual aid agreements to become automatic aid agreements between the Hermosa Beach Fire Department, Redondo Beach Fire Department and the Torrance Fire Department and to include the Torrance HAZMAT unit, or provide for funding to provide additional equipment and to train a sufficient number of Hermosa Beach, Redondo Beach and/or Manhattan Beach Emergency Response personnel to provide first response HAZMAT capabilities. revision HBFD FP-1g The Applicant shall ensure, during Phase 2 and Phase 4, that the site shall have sufficient water containment capabilities, as per guidance and approval of the Fire Department. Area storm drains along 6th Street and Cypress Avenue shall be equipped with flapper-type valves to enable the closure of the storm drain system in the event of potential overflow. Review of plan and onsite inspections Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-2a The Applicant shall ensure that design and construction comply with applicable codes and standards for equipment spacing, particularly those related to flare location and distances to public areas and distances from well drilling equipment to buildings. If this cannot be achieved, additional requirements shall include the construction of thermal radiation barriers or insulation on the crude oil tanks, installation of thermal barriers/walls around the flare stack, increasing the height of the flare stack during drilling, relocation of the flare stack, providing thermal radiation modeling to estimate the impacts of equipment on the crude tanks and process piping and public areas and the design and construction of blast walls as per API 752. Fire rated barriers shall be established, as per LACFD requirements, to ensure that all buildings within 100 feet of well drilling would be protected from thermal radiation. Thermal assessments shall be completed to ensure that the thermal radiation from the flare is within acceptable levels (as per API RP 521) and does notproduce damage to other equipment or nearby walls/soundwalls. The design and construction compliance status shall be verified by third-party audits under the direction of the City. Third party audit report review Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-2b Fire protection measures specific to the crude oil containment system shall be Review of Before Phase City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party provided, including the installation of manual fire foam systems with automatic detection and notification (to both the operators and the HBFD) capable of foaming in the perimeter of the crude oil containment system, wellhead area and the area immediately adjacent to combustion or spark producing equipment within or immediately adjacent to the crude oil containment area. The system shall be capable of being remotely activated from a safe location in the event of a crude oil fire. The highest level electrical classification achievable shall be designated for all equipment located within the crude oil containment and wellhead area. design documents 2 and Phase 4 Hermosa Beach HBFD ______________________________________________________________________________ _______________________________________ Table 8-6 Geological Resources/Soils Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party GEO-1a In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds a ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil field infrastructure is structurally sound. Inspection by a California Registered Civil Engineer Following any seismic event that results in substantial ground accelerations at the Project Site, as pre- determined by a California- licensed geotechnical City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party engineer. GEO-1b All seismic related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. These measures shall include, but not be limited to the following: - Drilled-in-place piles or cast-in-drilled-hole piles shall be constructed for foundations in the landfill area, i.e., northeast Project Site, to reduce seismically induced settlement. - Ground improvement techniques, including high pressure grout injection, i.e., compaction grouting, shall be used in the landfill area to reduce seismically induced settlement and allow construction of conventional shallow foundations. - Seismic design criteria for horizontal and vertical accelerations, identified in Tables 10 and 11 of the geotechnical report, shall be used during Proposed Project design (including incorporation of updated seismic design criteria from the 2013 California Building Code). - During Phase 1, the upper 2 to 4 feet of soil in the vicinity of the proposed well cellars shall be excavated and replaced with compacted fill. In addition, the basement under the maintenance building shall be removed and filled in with compacted fill. In addition, the basement under the maintenance building shall be removed and filled in with compacted fill. - During Phase 3, the eastern portion of the site shall be excavated approximately 7 feet deeper than the majority of the proposed building pad, with a minimum of 3 feet of overexcavation below design grades, and recompacted to provide a uniform fill blanket below proposed tanks, compressors, and other equipment. - Asphalt pavement and underlying subgrade soils shall be designed to accommodate the proposed drill rig. Positive surface drainage shall be provided to direct runoff away from slopes and structures and toward suitable drainage devices. Ponding of water on structural pads shall not be allowed. Review and approval of geotechnical report. Approve geotechnical report prior to issuance of grading permit. City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party GEO-2a Injection pressures associated wastewater injection shall not exceed reservoir fracture pressures as specified in California Code of Regulations Title 14, Division 2, Section 1724.10, and as approved by the California Division of Oil, Gas, and Geothermal Resources.. Comparing pressure measurements on each injection well to formation fracture pressure During waste water injection operations California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Department GEO-2b In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). Readings from the accelerometer shall be recorded at the Oil Field and transmitted in real-time to the Caltech Seismological Laboratory. The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil field infrastructure is structurally sound. Monthly City of Hermosa Beach GEO-2c In the event that monitoring indicates that Proposed Oil Project-induced seismicity is occurring, wastewater injection operations shall be adjusted to alleviate such seismicity. The drilling operator shall first receive approval from the California Division of Oil, Gas, and Geothermal Resources prior to any change (increase) in the injection operations. Seismicity monitoring Following monthly monitoring, as necessary City of Hermosa Beach GEO-3 All slope stability related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. Temporary Submit temporary Prior to permit issuance City of Hermosa Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party excavations shall be stabilized per the latest edition of Cal/OSHA requirements for loose sands, including shoring or laying back of trench walls. Shoring along the northern perimeter of the Project Site shall be designed by an experienced structural engineer due to the proximity to existing buildings that must be protected from potential settlement and lateral movements. shoring plans and calculations. Beach GEO-4a Prior to approval of the first Phase 4 drilling permit, the Applicant shall have submitted and the City of Hermosa Beach and the California Coastal Commission shall have approved a Subsidence Monitoring and Avoidance Program, for both onshore and offshore areas. The onshore monitoring plan shall be completed throughout the life of this project, in accordance with Appendix A, Subsidence Monitoring Program, of the Subsidence and Induced Seismicity Technical Report, E&B Oil Development Project (Geosyntec Consultants 2012), included as Appendix _F of this EIR. The offshore monitoring plan shall be completed throughout the life of this project in accordance with the Offshore Subsidence Monitoring Program and Possible Mitigation Measures, Hermosa Beach, California (Coastal Environments 1998), included as Appendix _F of this EIR. The latter shall be updated, as applicable, to reflect advances in science since 1998. In addition, Section 7.6, Mitigation of Onshore Subsidence, of the latter report, shall not be applied to this mitigation measure, as the onshore monitoring program would be completed in accordance with the Geosyntec Consultants (2012) report. Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department GEO-4b The Subsidence Monitoring Program shall include: Ground elevation survey methodologies with high vertical resolution; including onshore surface elevations and offshore bathymetric elevations; Prior to Phase 4 II drilling, establishment of a network of onshore and offshore survey or subsidence monitoring locations, including continuous GPS stations, GPS benchmarks, and tautly anchored offshore monitoring points, positioned within the City, outside the City, and in offshore areas, that are sufficiently Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party spaced to draw conclusions about subsidence within the zone of influence of the Project; Because subsidence can occur for a variety of reasons, establishment of control points outside the zone of influence to allow differentiation of possible subsidence effects related to other activities; Use of InSAR imagery technology to evaluate regional subsidence patterns both within and beyond the proposed oil field; Sufficient monitoring frequency to establish trends in subsidence in order to distinguish background ground movement from any subsidence caused by proposed oil field operations; Reservoir monitoring, including documentation of produced fluid volume (oil, gas and water) and reservoir pressures at similar frequency to ground elevation measurements; Reporting requirements; and Action levels, as specified in the onshore and offshore subsidence monitoring reports. Surveying for both vertical and horizontal ground movement shall be completed along the perimeter and throughout the interior of the oil field, including both onshore and offshore areas, utilizing Global Positioning System technology in combination with a network of ground stations. The onshore continuous monitoring GPS stations shall include: Hermosa Beach Pier. The pier will serve as the furthest offshore point in the onshore monitoring program. Longfellow Outfall. This Outfall is larger and more structurally stable than some of the other outfalls along the City’s coast. King Harbor Jetty. This location was selected to achieve a distribution of continuous monitoring points along the coast of Hermosa Beach. This will help provide a limited regional picture of the subsidence between survey events. GEO-4c An onshore and offshore baseline subsidence report shall be completed and Coordinate with At least two Hermosa Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party made available to the City of Hermosa Beach and the California Coastal Commission at least two months and no more than six months prior to planned commencement of Phase 4 II drilling operations. Subsidence monitoring reports shall be completed annually and the results shall be forwarded to the California Coastal Commission and the City of Hermosa Beach for review, no more than one month following the end of each annual monitoring cycle. In addition, results shall be forwarded to the adjoining City of Redondo Beach and City of Manhattan Beach. Hermosa Beach Public Works Department months prior to Phase 4 2 drilling operations Beach Public Works Department GEO-4d In the event that the Global Position System monitoring indicates that significant subsidence, as defined by the onshore and offshore subsidence monitoring reports described in GEO-4a, is occurring in and/or around the Proposed Project area, wastewater or water reinjection operations shall be increased to alleviate such subsidence. The Applicant shall coordinate with the California Division of Oil, Gas and Geothermal Resources, which will approve increased levels of wastewater or water reinjection operations in accordance with the approved Subsidence Monitoring Program. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. Coordinate with California Division of Oil and Gas and Geothermal Resources (DOGGR) Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Department GEO-4e In the unlikely event that subsidence related mitigation induces seismicity, corrective actions related to subsidence shall proceed until baseline surface elevations have been achieved, as subsidence related damage would likely be more pronounced in comparison to damage associated with Project related micro-seismicity. Upon reestablishment of baseline elevations, drilling operations shall cease until a balance between subsidence avoidance and induced seismicity avoidance can be established, as agreed upon by the California Division of Oil, Gas and Geothermal Resources, the California Coastal Commission, and the City of Hermosa Beach. Coordinate with California Division of Oil and Gas and Geothermal Resources (DOGGR) Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Department GEO-6 A Registered Civil Engineer shall analyze surficial and near-surface soils at the Project Site subsequent to grading and prior to on-site construction, to determine whether expansive soils are present. Similarly, soils at the Proposed City Maintenance Yard Project Site and along the proposed pipeline route shall be analyzed for soil expansion potential. In the event that clay-rich, expansive soils are present, foundations shall be designed to accommodate expansive soils and pipelines shall be placed within a blanket of non-expansive soils to prevent structural damage and/or failure. Foundation and pipeline design shall be reviewed and approved by a Registered Civil Engineer. Soil auger and analytical laboratory Prior to final design City of Hermosa Beach GEO-7a Proposed Oil Project design must conform to the recommendations of HDR Schiff (2012), included within Appendix C in NMG Geotechnical (2012), or as per the City Engineer, and should occur prior to completion of the final Project design. Design for protection against corrosion Prior to final design City of Hermosa Beach GEO-7b All buried metal pipelines shall be coated and placed under impressed cathodic protection. To monitor for internal corrosion, corrosion coupons or equivalent measures can be utilized. Under impressed cathodic protection Prior to final design City of Hermosa Beach GEO-7c External pipe inspections shall be conducted for the exposed pipeline sections to ensure atmospheric coatings are in good conditions. All external inspections shall be documented and reviewed by the operations management and repairs documented, when necessary. Visual inspections Monthly City of Hermosa Beach GEO-7d In accordance with California Division of Oil, Gas, and Geothermal Resources pipeline regulations (Public Resources Code Sections 3013 and 3782), a pipeline management plan shall be implemented for the Project Site. Similarly, in accordance with United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration regulations, a pipeline management plan shall be implemented for proposed pipelines located beyond the perimeter of the Project Site. These plans shall include, but not be limited to mechanical Prepare under guidance of California Department of Conservation Division of Oil, Gas, and Prior to final design California Division of Oil and Gas and Geothermal Resources (DOGGR), United States Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party testing, including ultrasonic and hydrostatic testing. Geothermal Resources and United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration Department of Transporta- tion, Pipeline and Hazardous Materials Safety Administra- tion, and Cities of Hermosa Beach, Redondo Beach, and Torrance GEO-7e All concrete in contact with the high sulfate or corrosive soils shall be Type V concrete in accordance with the 2010 California Building Code. Pour proper concrete adjacent to corrosive soils During construction City of Hermosa Beach ______________________________________________________________________________ _____________________________ Table 8-7 Safety, Risk of Upset and Hazards Proposed Oil Project and Pipeline Mitigation Measures Mitigation Requirements Compliance Verification Measure Method Timing Responsible Party SR-1a The Applicant shall cause to be prepared an independent third-party audit, under the direction and supervision of the City, of the gas and crude oil plants and pipelines, once constructed, including the well pads, to ensure compliance with Fire Code, applicable API and NFPA codes, EPA RMP, OSHA PSM, DOGGR and SPCC and emergency response plans requirements. All audit items shall be implemented in a timely fashion, and the audit shall be updated annually, as directed by the City and the Los Angeles County Fire Departments. The final installation of the facilities shall include a seismic assessment, including walkthroughs, of equipment to withstand earthquakes prepared by a registered Structural Engineer in compliance with Local Emergency Planning Committee Region 1 CalARP guidance and the seismic assessment shall be updated, with walkthrough inspections, annually to ensure compliance with the codes and standards at the time of installation. Review of audit reports Before Phase 4 operations and annually thereafter LACFD HBFD Cities of Redondo Beach and Torrance SR-1b The Applicant shall ensure that the crude oil spill containment areas shall be designed as Class I Division I areas according to NFPA and NEC, or that spark producing equipment (such as the flare) would be isolated from the containment area, in order to reduce the potential for crude oil fires. The refrigeration system shall utilize non-flammable refrigerant. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1c The Applicant shall ensure that all crude-oil truck haulers and a sufficient number of onsite personnel (at least two per shift) are trained in HAZMAT (to the HAZWOPER technician level at least) spill response and that each truck carries a spill response kit. Site inspections, review of contracts Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1d The Applicant shall install automatic valves on the gas pipeline that will automatically shut down under a low pressure scenario at the Processing Facility Area for all pipelines leaving the processing plant, and shall install a backflow prevention device at the main gas pipeline tie-in location, to prevent the release of gas from the main transmission pipeline in the event of a rupture in the gas pipeline. The second, return pipeline shall remain isolated from the main gas pipeline during normal operations. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1e The Applicant shall ensure that warning tape is installed above the pipelines within the pipeline trench to warn third parties that pipelines are located below the warning tape and that the pipelines are capable of utilizing a smartpig. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1f The odorant system shall have its own, smaller containment area around it limiting the spilled pool size to the minimum size attainable, in order to prevent any offsite impacts. Transfer of odorant shall utilize carbon canisters and a canister change-out/maintenance program to ensure that filling of odorant tanks do not cause offsite impacts. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1g The comingled produced gas shall be continuously monitored for hydrogen sulfide. If H2S levels in the produced gas from any individual well exceeds 100 ppm, then that well shall be shut in and abandoned as per DOGGR requirements. Wells shall be tested when fluids first flow, when the well is placed into production and periodically thereafter in order to ensure that all wells operate below 100 ppm H2S. Review of design documents and in-field inspections Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-2 The Applicant shall sample soil during Phase 1 grading to ensure that soil lead contamination levels are below 9,500 mg/kg and that soil contaminated with TPH are below the regulatory guidelines. If soils are encountered above these levels, then those soils shall be removed from the site and transported to a disposal site. This may necessitate implementing the RAP during Phase 1 if substantial amounts of contamination are encountered. Review of design documents and in-field inspections Phase 1 City of Hermosa Beach ______________________________________________________________________________ _______________________________________ Table 8-8 Hydrology and Water Quality Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2a The Applicant shall properly maintain the associated crude oil pipelines, storage tanks, and processing facilities within and outside the Project Site, including smart-pigging according to State of California Office of the State Fire Marshal requirements and the standards outlined by the Department of Oil, Gas and Geothermal Resources, and the Los Angeles Regional Water Quality Control Board. The Applicant shall visually inspect onsite storage tank and processing equipment at least daily and provide a visual inspection of the crude oil pipeline right-of-way inspections on a weekly basis. Review of maintenance reports Before Phase 4 operations Annually Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2b The Applicant shall install a leak detection system for crude pipelines to the Exxon Mobil Refinery transfer of custody location. The system shall include pressure and flow meters, flow balancing, supervisor control and data acquisition system, and a computer alarm system in the event of a suspected leak. Temperature, pressure, and flow shall be monitored at each pipeline entry and exit. If any variable deviates by more than 10 percent of the normal operating range, the system shall trigger both audible and visual alarms. Flow balancing shall be conducted every 5 minutes, 1 hour, 24 hours, and 48 hours with the accuracy defined once the system is established and tested. Review of system design and testing results Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2c Personnel at the site shall be trained in equipment use and containment and cleanup of an oil spill. Dry cleanup methods, such as absorbents, shall be used on paved and impermeable surfaces and shall be included in a spill trailer maintained onsite. Spills in dirt areas shall be immediately contained with an earthen dike and the contaminated soil shall be dug up and discarded in accordance with local and state regulations. Review of training and equipment Before Phase 2 and Phase 4 operations and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2d Oil spills shall be contained and cleaned according to measures outlined in the then-current California Stormwater Quality Association Best Management Practice Handbook. Review of training and incident reports Before Phase 2 and Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2e A United States Environmental Protection Agency, Spill Prevention, Control, and Countermeasure Plan, approved by the City of Hermosa Beach Fire Department, shall be implemented in the event of a spill. The Plan, which shall include a spill response trailer, equipment, and personnel training shall be completed prior to Phase 2 and Phase 4, and in compliance with the California State Oil Spill Contingency Plan (California Department of Fish and Game, Office of Spill Prevention and Response 2010) and the Los Angeles/Long Beach Oil Spill Contingency Plan (California Department of Fish and Wildlife 2011). Spill cleanup shall be completed under the oversight of the lead regulatory agency, with respect to oil spills, as identified in the Spill Prevention, Control, and Countermeasure Plan. Review of reports Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2f The well cellar shall be lined with an impermeable membrane to prevent oil- based substances from seeping into groundwater supplies. All drilling muds storage shall be contained within Baker-type enclosed tanks, which shall be sized to accommodate high intensity rainfall events without overtopping. Review of design documents, field inspection Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2g The Applicant shall install a check valve in the crude oil pipeline at the Herondo and Valley drive where the crude oil pipeline turns eastward and starts uphill. Review of design documents, field inspection Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2h The Applicant shall fund and install, under the direction of the Hermosa Beach Public Works Department, an oil/grit separators or oil/water separator located along Herondo Street downstream of Valley Drive, in order to capture small to medium sized spills before they reach the ocean. Installation and maintenance costs shall be provided by the Applicant and the devices shall be inspected by the Applicant to ensure that the "trap" is operational before any storm events. Review of design documents, field inspection Before Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2i The Applicant shall utilize a smaller 6" ERW pipe and a heat and impact resistant coating at a minimum comparable to a 3-layer fusion bonded epoxy (such as BrederoShaw 3LPP) and weld coverings equivalent to sleeves with epoxy primer. Specification of the pipe and coating shall approved by the City. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach, CSFM HWQ-2j The Applicant shall install a 3 sack slurry starting 6 inches above the pipe to the base of the pavement or ground surface and lay strips of warning tape over the top to prevent third-party damage. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach Table 8-9 Noise and Vibration Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-1a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 1). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1b The gates on the east and south sides of the site shall be 24-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-2a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2g The acoustical shroud around the drilling mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2h Provide acoustical treatment within the combustor fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2i Eliminate use of the combustor during drilling in Phase 2 or prior to the initiation of production occurring concurrent with drilling in Phase 2, acoustical treatment shall be provided: within the combustor fan housing and/or ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA; and to the combustor stack to limit the power level radiated by the stack to 80 dBA.. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2j During the drilling portion of Phase 2, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 2; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV2a through NV2i in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-3a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3d Provide acoustical treatment within the combuster fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-4a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 3). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-4b The gates on the east and south sides of the site shall be 25-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-4c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-6a Increase the height of the noise barriers on all sides of the site from 32-feet to35-feet (35-feet is the maximum height allowed by zoning code). Minimum sound insulation performance of the barrier material shall be STC-32. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. In the event that a permanent 35-foot wall is built, the interior surfaces of the wall (i.e. those facing inwards towards the drilling and production operations) shall be treated with exterior grade acoustical panels offering equivalent sound absorption performance to that specified in this Measure above a height of 10-feet from the ground. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6g The acoustical shroud around the drilling rig mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6h During the drilling portion of Phase 4, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 4; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV6a through NV6g in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours of Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7a Increase the height of the masonry walls on the north and west sides of the site to a minimum of 27-feet. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7b Apply outdoor acoustical panels to all available surfaces of the north and west walls that face the production operations above a height of 10-feet above the ground. The purpose of the acoustical panels is to control reflection of production noise in the direction of the sensitive uses to the east and south. The acoustical panels shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.28, 0.68, 0.95, 0.86, 0.89, 0.72. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-7c Well workover rigs shall be powered by electric drive/sources or “ultra-quiet” generators or engines - either diesel or natural gas-powered - that are capable of operating below the noise significance thresholds for daytime operation. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Table 8-10 Transportation and Circulation Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1a For Phases 1-3, the Applicant shall fund, through and in consultation with the School District and Safe Routes to School, an afternoon crossing guard to be stationed at the Project Site area to ensure pedestrians passing nearby the Project Site have assistance in crossing the streets and the entrances/exit of the Project Site. Alternately, the Applicant shall ensure that trucks do not travel to and from the Project Site unless school is in session (i.e. truck travel prohibited on Valley Drive after 2:48 p.m., on Wednesdays after 1:45 p.m. or on school minimum days after 12:45 p.m.). The Applicant shall consult with the School District to ensure timing is current. Review of contracts and site inspections Prior to construction activities City of Hermosa Beach TR-1b For Phases 1-3, the Applicant shall install, subject to the approval of the City Public Works Department, warning signs and blinking yellow lights one block north and south (if applicable with possible one-way on Valley Drive) of the Project Site warning vehicle traffic that trucks may be entering and exiting the roadway. Blinking lights shall only operate when trucks are utilizing the roadway (not 24 hours per day). Review of design documents and site inspections Prior to construction activities City of Hermosa Beach TR-1c The Applicant shall ensure that all trucks accessing the Project Site and utilizing the Pier Avenue/Valley Drive intersection are less than 65 feet long to prevent safety hazards at the double intersection on Pier Avenue between Valley Drive and Ardmore Avenue. If trucks longer than 65 feet are required, then flagger shall be used at the Pier Avenue and Valley/Ardmore intersection. Review of contracts and site inspections Phase 1-4 Prior to construction activities City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1d For Phases 1-3, the Applicant shall, with the approval and coordination of the City Public Works Department, either 1) restripe Valley Drive south of Pier Avenue to be a southerly directed one-way street. No on-street parking shall be allowed on Valley Drive between 6th Street and 8th Street to allow for sufficient line of sight for trucks entering and exiting the Project Site; or 2) restripe the section of Valley Drive between 2nd Street and Herondo Street to make it two- way and direct all truck traffic along Herondo Street to approach the project site from the south. Review of design documents and site inspections Prior to pipeline construction activities City of Hermosa Beach TR-2a Pipeline construction activities within the Pipeline right-of-way shall be limited to weekday between the hours of 9:00 a.m. and 3:00 p.m., unless the applicable municipality approves a specific exception to the time limit for periods of limited duration, subject to measures required by the municipality to protect the public health and safety. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Review of design documents and site inspections Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance TR-2b The applicant shall implement a Construction Traffic Management Plan (CTMP) during Pipeline construction that includes the following pursuant to the procedures and subject to approval of the applicable municipality: 1) Require the Pipeline contractor(s) to obtain and follow street construction permits in the affected areas (Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities - PCH and Hawthorne Boulevard); 2) Develop detour and traffic management plans consistent with the affected City’s standard roadway plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH); 3) Revise Pipeline construction schedules to minimize access impacts to adjacent residents and businesses; and 4) Ensure that all affected residences and business have adequate emergency access during all times and phases of construction. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Approval of CTMP Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-3a The applicant shall be prohibited from routing Proposed Oil Project-related heavy truck exceeding 20,000 pounds on 190th Street between Anza Avenue and PCH, except during Pipeline construction. The Applicant shall comply with all requirements of the applicable city. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3b The applicant shall route inbound and outbound heavy (>20,000 pounds) truck traffic along PCH and Artesia Boulevard, which are designated truck routes. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3c Applicant shall supply private parking sufficient to meet all parking demands and shall direct all employees and contractors to park within Applicant’s private parking areas, or to utilize an alternative parking program approved by the City. Review of Plans and onsite inspections Phase 1-4 City of Hermosa Beach TR-4a The City shall design the permanent Proposed City Maintenance Yard so that it does not enter/exit directly onto Valley Drive. Review of Plans Phase 3 City of Hermosa Beach TR-4b If the permanent Proposed City Maintenance Yard Project affects the sidewalk, then the design shall incorporate a sidewalk design along Valley Drive which utilizes a landscape buffer to separate the pedestrians from the street. Review of Plans Phase 3 City of Hermosa Beach Table 8-11 Water Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-1 Prior to approval of demolition and new construction, a Registered Civil Engineer in the State of California shall evaluate the capacity of the existing sewer line system, beginning at the proposed tie-ins on Valley Drive for the Proposed City Maintenance Yard Project and 6th Street for the Proposed Oil Project, and continuing downstream to the Sanitation Districts of Los Angeles County sewer system, prior to any connections. A 7-day capacity performance test shall be performed, based on Sanitation Districts of Los Angeles County average wastewater generation factors, to determine baseline and peak flows, and to ensure the sewer has adequate capacity in the downstream areas. The capacity analysis shall be submitted to the City Public Works Department and the Districts for review and approval. In the event that existing sanitary sewer facilities are insufficient to accommodate increased flows from the Project Site, the Applicant shall provide mobile sanitary facilities (i.e., toilet, sink, and urinal) for onsite personnel, as necessary. Area study of the proposed sewer line and a 7-day performance capacity test should be performed at select downstream locations to verify the adequacy of the existing sewer. Prior to issuance of permit City of Hermosa Beach WR-2 Implement MM HWQ-2a through HWQ-2d. See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ-2d WR-3a The Applicant shall complete a site-specific Area of Review/Zone of Endangering Influence analysis, per Division of Oil, Gas, and Geothermal Resources requirements, to determine if oil and gas wells are present that might serve as conduits for injected liquids to migrate upward to underground sources of drinking water. In the event that such wells are present, those wells shall be plugged and abandoned such that underground sources of drinking water (i.e., less than 10,000 mg/L total dissolved solids) are protected. Plugging and abandonment of those wells shall include zonal isolation plugs outside all casings and shall be completed per current Division of Oil, Gas, and Geothermal Resources standards. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to initiation of injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-3b The Applicant shall confine injected fluids into the intended zone of injection in order to adequately protect underground sources of drinking water. Injection well cement shall be placed at the base of all underground sources of drinking water, and not just at the base of fresh water, to protect water with total dissolved solids content ranging from 3,000 mg/L to 10,000 mg/L. Coordination with Division of Oil, Gas, and Geothermal Resources During injection well drilling and injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3c The Applicant shall complete step-rate tests, using bottom-hole and surface pressure gauges, such that maximum allowable surface injection pressures are set at a maximum of 95 percent of the fracture pressure of the formation being injected. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3d The Applicant shall ensure that the hydrostatic pressure in overlying West Coast Basin aquifers is not exceeded during injection over the active life of the disposal wells. To ensure that this does not occur, the static reservoir pressure shall be monitored on a periodic basis, per Division of Oil, Gas, and Geothermal Resources requirements, and injection into the receiving zone shall cease if and when the hydrostatic pressure is exceeded. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3e The Applicant shall meet with Division of Oil, Gas, and Geothermal Resources staff annually to review the status of the waste water injection wells. Any deficiencies identified by Division of Oil, Gas, and Geothermal Resources staff shall be immediately rectified by the Applicant. Coordination with Division of Oil, Gas, and Geothermal Resources Annually following initiation of Phase 2 City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources 5a From: Ian Lee-Leviten [mailto:ileeleviten@yahoo.com] Sent: Monday, October 13, 2014 1:16 PM To: Nanette Barragan; Michael DiVirgilio; Hany Fangary; Carolyn Petty; Peter Tucker; Elaine Doerfling Subject: Comment on the insurance provision of the development agreement. Clause 6.16 Dear Council Members I am writing to comment on the latest draft of the insurance section (clause 6.16) of the Development Agreement that is included In the agenda package for the October 14 Council meeting. 1. The draft requires $40 million of loss of control of well and pollution liability coverage. This is completely inadequate considering there is over $350 million of property within 750 ft of the wellhead as well a large number of people who live in that area. 2. The draft language (clause 6.16.2.2) says the insurance will be required ONLY during drilling. Although the risks of a blowout are highest during drilling, they are not zero during production. The Final EIR specifically discusses these risks in considerable detail. See all of section 4.8 and in particular scenarios 2 to 10 on pages 4.8-64 to 67. 3. Finally the draft language (clause 6.16.1) permits E&B to self insure if they are not able to buy the required insurance commercially. Self insurance is just a fancy way of saying NO INSURANCE. Although we don't know very much about the financial strength of E&B, we do know they aren't Exxon. If the insurance needed for loss of well control and pollution liability isn't available commercially, then all drilling and production should stop until it is. Moreover, the specific language in the draft "....as long as the financial capability of E&B is sufficient to obtain self insurance coverage..." is meaningless. Self insurance coverage can't be obtained, that's why it's called self insurance. How would the City ever be confident that E&B would have sufficient resources to be "self insured"? As you can probably tell, I am opposed to this project. However, I had hoped that the Development Agreement would give us some measure of protection in the event the project goes ahead and there is a well blowout. The insurance language as presently drafted makes me feel more scared than ever. Ian Lee-Leviten Monterey Boulevard, Hermosa Beach Lael B. Stabler Attorney at Law lael.stabler@verizon.net ▪ 66 – 18th Street, Hermosa Beach, CA 90254 ▪ 310 379-3300 October 14, 2014 VIA EMAIL Honorable Peter Tucker, Mayor Members of the City Council 1315 Valley Drive Hermosa Beach, CA 90254 Re: Proposed Language for Oil Drilling Ballot Measure Dear Mayor and Council Members: I hereby submit my objections to the ballot measure language as currently proposed. I do so not for the purpose of gaining any “political” advantage or to unduly influence voters. Rather, I believe the City has an obligation to fully inform voters about the changes in law they are being asked to approve on March 3, 2015. Although several Council Members have opined that voters are educated and should be well aware of the issues by next March, I think it’s unreasonable to expect that everyone will have a comprehensive understanding of all the incorporated changes. The proposed ordinance is extensive (over 300 pages) and requires voters to approve a number of significant issues about which they have not been fully informed. Specifically, the proposed ordinance authorizes a change to the General Plan so that all property at and immediately adjacent to the maintenance yard, as well as the current storage facility site, is changed from open space to industrial. This is before the EIR is prepared in conjunction with the City’s current project to update its General/Coastal Land Use Plan. Voters need to be made aware that the designated locations will be changed from Open Space to Heavy Industry for many years to come. My other concern is that the ballot language and ordinance identify the site only by street address which means the project could expand beyond the 1.3 acre site currently designated as the maintenance yard. It’s no secret that E & B is purchasing adjacent parcels and will likely seek to expand its area of operation if the ballot measure is approved. The Election Code requires that electors be provided with the information they need in order to intelligently exercise their rights. I think, at a minimum, voters need to be apprised of the significant changes to current law which are contained in the proposed ordinance. Respectfully submitted, /s/ Lael B. Stabler Development Agreement between City of Hermosa Beach and E&B Natural Resources DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF HERMOSA BEACH AND E&B NATURAL RESOURCES MANAGEMENT CORPORATION THIS DEVELOPMENT AGREEMENT (“Development Agreement” or “Agreement”) is entered into as of the day of , , by and between the CITY OF HERMOSA BEACH, a California municipal corporation ("City"), and E&B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation (“E&B”). RECITALS A. The City is the owner of that certain real property in the City of Hermosa Beach, County of Los Angeles, and State of California described in Section 2.4 of this Agreement (Exhibit A to this Agreement), and also known informally as the City Maintenance Yard (“Property” or “City Maintenance Yard”). B. On or about January 14, 1992, the City entered into Oil and Gas Lease No. 2 (“Lease”) with Macpherson Oil Company, a California corporation, for itself and for Windward Associates, a California limited partnership, of which it is the general partner (collectively “Macpherson”). The Lease was approved by the California State Lands Commission (“CSLC”). The Lease authorized Macpherson to perform oil and gas extraction activities in the tidelands granted to the City by the State of California, and also authorized Macpherson to utilize the Property for oil and gas drilling activities (“Macpherson Project”). C. During the 1990s, Macpherson sought and obtained approvals for the Macpherson Project from the City, the CSLC, the California Coastal Commission and the South Coast Air Quality Management District. In 1995, the voters of the City passed Proposition E, an initiative to ban oil drilling in the City. During this time, and subsequently, Macpherson, the City, the CSLC, and opponents to the Macpherson Project were parties to several lawsuits regarding the 1 Development Agreement between City of Hermosa Beach and E&B Natural Resources Macpherson Project, including an action by Macpherson against the City regarding whether Proposition E constituted a breach of the Lease (“Macpherson Lawsuit”). The trial court in the Macpherson’s Lawsuit determined that the adoption of Proposition E constituted a breach of the Lease, subject to certain City defenses, and seeking damages against the City was scheduled a for trial in April 2012 to determine Macpherson’s damages. D. E&B, who had no prior relationship with Macpherson, investigated the Macpherson Project and approached the City and Macpherson with a proposal to settle the Macpherson Lawsuit and to provide E&B with a potential opportunity to proceed with “a state- of-the-art directional well oil drilling project conducted from an urban drill site located on the City’s maintenance yard” and “an opportunity to persuade the City’s electorate that a state-of- the-art directional well oil drilling project conducted from the City’s maintenance yard can be accomplished safely and with financial beneifits to all of the parties.” (Settlement Agreement, p. 2.) On March 2, 2012, the City, Macpherson and E&B entered into a Settlement Agreement and Release (“Settlement Agreement”). E. The Settlement Agreement, among other consideration, provided for the dismissal of the Macpherson Lawsuit, certain payments to Macpherson, and the assignment to E&B of Macpherson’s rights under the Lease and all other permits for the Macpherson Project which would allow E&B to proceed with a redesigned oil development project (“Project”) under certain conditions. Under the terms of the Settlement Agreement, the City is required to place on the ballot, in a manner that comports with all applicable law, a measure that asks the voters whether to approve, among other things, “a development agreement that would afford E&B a vested right to proceed with the Project . . . .” (Settlement Agreement, p. 7.) F. The California Elections Code sets forth the procedures for a local legislative body to submit a measure to the voters of the City. As contemplated in the Settlement Agreement, the City elected to undertake environmental review of the Project referenced in paragraph E above in accordance with the requirements of the California Environmental Quality Act (“CEQA”). On July 8, 2014, the City Council of City certified an Environmental Impact Report in compliance with CEQA by its adoption of Resolution No. 14-6908. 2 Development Agreement between City of Hermosa Beach and E&B Natural Resources G. The California Legislature enacted Section 65864 et seq. of the Government Code, which provides that cities and counties may enter into development agreements with persons having legal or equitable development interests in real property. Section 65867.5 of the Government Code states that a development agreement is a “legislative act” to be approved by ordinance, and the California Constitution establishes the right of voters to approve legislative acts. Elections Code section 9222 authorizes the City Council to submit any ordinance to the voters for their approval. Section 65869 of the Government Code mandates Coastal Commission approval for any development agreement in an area where a local coastal program has not been certified. H. The City has adopted rules and regulations for consideration of development agreements, pursuant to Government Code Section 65865, in Chapter 17.64 of the City’s Municipal Code. I. In compliance with the Settlement Agreement and all other applicable law, the City submitted the [insert title of Ballot Measure] (“Ballot Measure”) to the voters of the City on [insert date] in compliance with California Elections Code Section 9222. The Ballot Measure includes the following legislative approvals: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). These legislative approvals are referred to in this Agreement as “Ballot Measure Approvals.” J. By approving the Ballot Measure and this Agreement, the voters of the City have determined that the public interest is served by entering into this Agreement because the Project, described in Exhibit B to this Agreement, will provide for the remediation of the City Maintenance Yard, and is expected towill provide substantial economic benefits to the City and to the Community in the form of royalties as described in the Lease and as further set forth in Exhibit C to this Agreement. 3 Development Agreement between City of Hermosa Beach and E&B Natural Resources K. This Agreement will bind future City Councils to the terms and obligations specified in this Agreement and limit, to the degree specified in this Agreement, the future exercise of the City's ability to regulate development on the Property. L. Upon approval by the voters of the Ballot Measure Approvals, this Agreement and the Project will be consistent with, and will serve to implement the policies, objectives, and standards of the elements of the City of Hermosa Beach General Plan and will be consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code). M. This Agreement and the Project is consistent with, and will serve to implement, the provisions of Article 3 of the California Coastal Act. N. This Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property and generally serve the public interest. AGREEMENT NOW THEREFORE, in consideration of the above recitals, the mutual covenants and conditions herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agrees as follows: 1 DEFINITIONS For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Agreement" means this Development Agreement by and between the City and E&B. "Approval Date" means the date on which the Ordinance approving this Development Agreement becomes effective under Elections Code Section 9217, specifically ten days after the date the vote is declared by the City Council [INSERT DATE]. 4 Development Agreement between City of Hermosa Beach and E&B Natural Resources Date. “Ballot Measure” means the measure that was approved by the voters on the Election “Ballot Measure Ordinance” or “Ordinance” means the ordinance that accomplishes the Ballot Measure Approvals. “Ballot Measure Approvals” means the: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). "CEQA" means the California Environmental Quality Act, Section 21000, et seq., of the California Public Resources Code. "City" means the City of Hermosa Beach, California. "City Council" means the City Council of the City of Hermosa Beach. "Code" or “HBMC” means the Municipal Code of the City of Hermosa Beach. "Commencement Date" means that date when the Commission approves the Development Agreement under Government Code Section 65869; provided, however, if litigation challenging the validity of this Agreement including any Project Approvals and/or environmental review pursuant to CEQA should be brought against the City or the Coastal Commission, the Commencement Date shall be the date such litigation is concluded in a manner that permits the commencement or continuation of the parties' rights and obligations under this Agreement. “Commission” means the California Coastal Commission. “Conditional Use Permit” means the Conditional Use Permit for Oil Development at 5 Development Agreement between City of Hermosa Beach and E&B Natural Resources the City Maintenance Yard, approved by the City in Resolution No. 93-5632, and the validity of which was confirmed by the Settlement Agreement, which is to be abandoned and superseded pursuant to the terms of this Agreement. "Current Land Use Regulations" means the ordinances, resolutions, rules, regulations, requirements and official policies of the City in force as of the date on which the City Council calls the election on the Ballot Measure, as amended by the Ballot Measure Approvals. "Development Agreement Act" means Section 65864 et seq., of the California Government Code. “E&B” means E & B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation in the business of exploring for and producing oil and gas and each of its respective successors and assigns to all or any portion of its interests in the Property during such time as such portion is subject to this Agreement. “Election Date” means March 3, 2015. "Event of Default" is defined in Section 5.1.1. "Exactions" means any requirement imposed by the City in connection with or pursuant to any land use regulation or land use approval process for the dedication of land, construction or improvement of public improvements or amenities, payment of development fees, or other mitigation measures required to mitigate the impacts of the development including, without limitation, all development impact fees or linkage fees, utility capacity fees, service or connection fees, major facilities fees, park fees, flood control fees, environmental impact mitigation fees, affordable housing fees, arts fees, transportation fees, child care fees and any similar governmental fees, charges and exactions required for the development of projects or property. "Force Majeure Delay" is defined in Section 6.23. "Future Ministerial Permits" is defined in Section 3.2.1. "General Plan" means the General Plan of the City as of the Effective Date. “Off-site Project Components” or “Off-site Components” means the Project 6 Development Agreement between City of Hermosa Beach and E&B Natural Resources components in the City of Hermosa Beach outside of the Property as described in Exhibit B to this Agreement, including (1) oil and gas pipelines along Valley Drive, Hermosa Beach, California, (2) supply staging/storage at 601 Cypress Avenue, Hermosa Beach, California, (3) a parking lot at 636 Cypress Avenue, Hermosa Beach, California, and (4) various locations outside the jurisdiction of Hermosa Beach. The location of (2) is more particularly described in Exhibit A-2 and the location of (3) is more particularly described in Exhibit A-3. “Oil Code” means the Hermosa Beach Oil Code, Chapter 21A (Oil Production), approved by the City with Ordinance No. 85-803. "Processing Fees" means all routine and generally applicable City-wide fees required by the City for processing applications and permits including, but not limited to, fees for land use applications, project permits, building applications, building permits, grading permits, maps and certificates of occupancy in effect at the time paid. Expressly exempted from Processing Fees are all Exactions. "Project" means the proposed oil and gas drilling and production project as described in the Project Description contained in Exhibit B. "Project Approvals" means the approvals for the Project as set forth in Section 2.6 of this Agreement. "Public Benefits" means those improvements to be constructed, services to be provided and/or amounts to be paid by E&B to the City as consideration for this Agreement pursuant to Section 2.1 and Exhibit C. "Term" means the term of this Agreement, as provided in Section 6.1 of this Agreement. "Zoning Ordinance" means the comprehensive Zoning Ordinance of the City, found in Chapter 17 of the Code of the City of Hermosa Beach as it exists on the Effective Date. 2 THE DEVELOPMENT AGREEMENT PROCESS 2.1 Statement of Benefits and Consideration. The voters of the City have determined that the 7 Development Agreement between City of Hermosa Beach and E&B Natural Resources Project is a development for which a development agreement is appropriate. Development of the Project in accordance with a development agreement will provide for the orderly development of the Property in accordance with the objectives set forth in the General Plan, including the Land Use Plan of the Local Coastal Program, as amended. Moreover, a development agreement for the Project will eliminate uncertainty in planning for and securing orderly development of the Property, ensure attainment of the maximum efficient utilization of resources within the City at the least economic cost to its citizens, and achieve the provision of public services, public uses, urban infrastructure and other goals and a purposes for which the Development Agreement Act was enacted, all in the promotion of the health, safety and general welfare of the City of Hermosa Beach and its residents. In exchange for these and other benefits to the City, E&B will receive the assurance that E&B may develop the Project during the Term of this Agreement, subject to the terms and conditions herein contained. By approving Ballot Measure , the voters of the City have found and determined that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and have approved this Agreement. This Agreement does not (1) grant density or intensity in excess of that otherwise established in the Project Approvals, (2) supersede, nullify or amend any condition imposed in the Project Approvals, (3) guarantee to E&B any profits from the Project, or (4) prohibit or, if legally required, indicate E&B’s consent to, the Property's inclusion in any public financing district or assessment district. The City is expected towill receive substantial benefits as a result of the development of the Property in accordance with this Agreement, as set forth in Exhibit C, in recognition of and in exchange for this Agreement and the benefits provided to E&B pursuant to this Agreement. The voters of the City acknowledge the adequacy of the consideration provided by E&B to the City pursuant to this Agreement. In consideration of the benefits, commitments and consideration to be provided by E&B pursuant to this Agreement and in order to strengthen the public planning process and reduce the economic costs of development, the voters of the City hereby provide E&B assurance that it can proceed with the development of the Property for the Term of this Agreement pursuant to the land use, density and intensity specified in the Current Land Use 8 Development Agreement between City of Hermosa Beach and E&B Natural Resources Regulations, the Project Approvals and this Agreement. E&B would not enter into this Agreement or agree to provide the public benefits, commitments and consideration described in this Agreement if it were not for the certainty provided by this Agreement that the Property can be developed during the Term of this Agreement in accordance with the Current Land Use Regulations and the Project Approvals including the land use, density and intensity set forth in the Project Approvals. 2.2 Public Hearings. On June 23, 2014, the Planning Commission of the City, after providing notice as required by law, held public hearings on the legislative elements of the Project, including this Agreement and the amendments to the Hermosa Beach Municipal Code and Coastal Land Use Plan and the EIR. The City Council, after providing public notice as required by law, similarly held public hearings on the Project, including this Agreement [insert dates and specific code provisions] on July 8, 2014 and October 14, 2014. 2.3 City Council and Voter Findings. The City Council adopted findings that review of the environmental impacts of this Agreement and the Project Approvals has been conducted in accordance with the provisions of CEQA and the State and local guidelines adopted thereunder, and the City Council has given consideration to such environmental review prior to placing the Ballot Measure on the ballot and has undertaken all actions necessary to comply with CEQA. In approving the Ballot Measure and this Agreement, the voters of the City have determined and found that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and all other applicable City plans, policies and regulations, and is consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code), all as amended by the Ballot Measure Approvals. 2.4 Property. The Property includes all real property that is subject to this Agreement. The Property as of the Election Date is commonly known as City Maintenance Yard, as more fully described in Exhibit A-1 incorporated herein by reference. 2.5 The Project. The Project consists of the development, construction and operations on the Property permitted under this Agreement and the Project Approvals. The description of the Project and its uses are more fully described in the Project Description set forth in Exhibit B which is incorporated herein by reference. The Project includes Off-site 9 Formatted: Font: Not Bold Development Agreement between City of Hermosa Beach and E&B Natural Resources Components within the City of Hermosa Beach, and other elements located outside of the City. 2.6 Project Approvals. The Project includes, without limitation, all items described in the Project Description contained in Exhibit B and incorporated herein by reference and the following Project Approvals: (a) Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93- 5632 (as set forth in Section 2.7 below, to be abandoned per HBMC Section 17.70.030 and superseded pursuant to the terms of this Agreement); (b) Environmental Impact Report, dated June 2014, prepared pursuant to CEQA and certified by the City Council on July 8, 2014 (with revisions identified in City Council Resolution No. 14-6908); (c) Amendments to the Land Use Plan and Land Use Plan Map of the Local Coastal Program (a component of the City’s General Plan), approved by Ballot Measure on , and by Commission [insert Commission action] on ; (d) Amendment to the Municipal Code, approved by Ballot Measure on ; (e) Franchise for Oil and Gas Pipelines, approved by Ballot Measure on ; (f) Amendment to the Oil Code, approved by Ballot Measure on ; and (e) Development Agreement, approved by Ballot Measure on , and by Commission [insert Commission action] on . 10 Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.7. Abandonment of Conditional Use Permit. With adoption of the Ballot Measure, oil drilling and production is permitted on the Property subject to a development agreement. The relevant conditions of approval from the 1993 Conditional Use Permit (CUP) for oil development at the Property (Resolution No. 93-5632) are incorporated into this Development Agreement as Exhibit D-1 herein, and E&B shall comply with said conditions as required herein. Thus, upon the Commencement Date, this agreement will supersede the 1993 CUP, which shall no longer serve a regulatory purpose. Hermosa Beach Municipal Code Section 17.70.030 allows for voluntary abandonment of a Conditional Use Permit. This Agreement at the Commencement Date shall serve as both a written request to abandon the CUP and the City’s declaration that the 1993 CUP is abandoned. 3 VESTED DEVELOPMENT RIGHTS 3.1 Vested Rights to Develop. Subject to the terms, conditions, and covenants of this Agreement, including the Reservations of Power in Section 3.4, and the conditions of approval and mitigation measures attached hereto and incorporated herein as Exhibit D, E&B shall, as of the Approval Date, have a vested right to develop the Property and Project, including Off-site Components, in accordance with, and to the extent of, the Project Approvals, and the Current Land Use Regulations. The approved use of the Property, the density and intensity of use, the maximum height, footprint, and square footage of proposed buildings and structures, and provisions for reservation and dedication of land or public purposes shall be those set forth in the Project Approvals and the attached Exhibits. Nothing in this Agreement shall be deemed to obligate E&B to initiate development of the Project or any portion thereof within any period of time or at all. 3.1.1 Certain Changes Prohibited Without Consent of E&B. Except as otherwise provided in this Agreement, during the Term, the City shall not, as to the Property and the Project, including Off-site Components, without the prior written consent of E&B, which may be withheld in E&B’s sole and unfettered discretion: (a) change the Current Land Use Regulations, or Project Approvals as they apply to the Property or Project so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals; or (b) apply to the Property or the Project any new or 11 Development Agreement between City of Hermosa Beach and E&B Natural Resources amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals, so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals, or prevent or adversely affect the operation of the Project as contemplated hereby in accordance with the Current Land Use Regulations or Project Approvals; or (c) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that requires additional discretionary review or approval not otherwise required for the Project by the Current Land Use Regulations or Project Approvals; or (d) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that materially, adversely affects the timing or phasing of construction or development, or which limits the availability of utilities or other infrastructure for the Project. For the purposes of this Section 3.1, “prevent or adversely affect development or construction of the Project” shall include, without limitation, any changes which fundamentally affect the ability of any of the permitted uses to operate within the Project (e.g. prohibit any of the uses in the Project Approvals, change parking standards for any of the uses, etc.). 3.1.2 Rights are Vested. Unless amended or terminated in the manner specified in this Agreement (and subject to the provisions of this Agreement), E&B shall have the rights and benefits afforded by this Agreement and this Agreement shall be enforceable by E&B and the City notwithstanding any growth control measure, initiative, proposition or any development moratorium adopted after the Approval Date, or any change in the General Plan, zoning, or subdivision regulations adopted by the City which alter or amend the Current Land Use Regulations or Project Approvals or the adoption of any new or amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals and so as to prevent or adversely affect development or construction of the Project in accordance with the Current Land Use Regulations or Project Approvals. This Section shall be construed to prohibit the City from applying to the Property or the Project, including any Off-site Components, any development moratorium or growth control measure that is adopted specifically to prohibit the construction or operation of the Project, or as an interim measure pending contemplated General Plan, Specific Plan or zoning changes, or as a general growth control management measure except as provided for pursuant to Section 3.4. 12 Development Agreement between City of Hermosa Beach and E&B Natural Resources 3.1.3 Future Changes to Current Land Use Regulations. Following the Approval Date, if the City modifies the Current Land Use Regulations in a manner that E&B, in its sole discretion, determines is more beneficial than the Current Land Use Regulations, then E&B may choose in its sole discretion to be governed by the modified land use regulations rather than the Current Land Use Regulations, without E&B being deemed to have waived or limited any rights, remedies or privileges under this Agreement. 3.2 Other Rights. 3.2.1 Future Ministerial Permits. E&B will seek additional ministerial permits as required by the City, including, without limitation, excavation only permits, grading permits, demolition permits, building permits, well permits, drilling permits and public works permits, as needed to implement the Project Approvals and to construct and operate the Project. Collectively, these ministerial permit applications are called the "Future Ministerial Permits". The City agrees that it will not unreasonably withhold or unreasonably condition any of the Future Ministerial Permits which must be issued by the City in order for the Project to proceed, provided that E&B reasonably and satisfactorily complies with all preliminary procedures, actions, payment of Processing Fees and criteria generally required for processing such Future Ministerial Permits, and provided further that such Future Ministerial Permits comply with this Agreement, the Current Land Use Regulations and the Project Approvals and approvals of other governmental agencies with jurisdiction over the Project. The City further agrees that no discretionary permits, other than the Project Approvals, are required from the City to construct and operate the Project. 3.3 Reservations of Power. 3.3.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the following subsequent land use regulations shall apply to the development of the Property: (a) Processing Fees (but not Exactions) imposed by the City to cover the estimated actual costs to the City of processing applications for Project Approvals, fees for monitoring compliance with any Project Approvals, inspection fees, or fees for monitoring 13 Development Agreement between City of Hermosa Beach and E&B Natural Resources compliance with environmental mitigation measures. (b) Procedural regulations applied on a City-wide, nondiscriminatory basis relating to City entities required to review petitions or applications, forms of petitions and applications, notice requirements, information requested with petitions or applications, conduct of hearings, form of staff reports, nature and type of recommendations by City entities, appeal procedures and any other similar matters of procedure. (c) Regulations governing building codes and similar construction standards and specifications including, but not limited to, the California and International Codes, as they may be changed from time to time. (d) Regulations that are necessary to protect the public health and safety, including without limitation, development moratorium or limitation on the delivery of City-provided utility services, which meet each of the following requirements: (a) are based on genuine health, safety and general welfare concerns (other than general growth management issues); (b) which arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (c) are based upon its terms or its effect as applied, does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such regulations shall be applied and construed so as to provide E&B with the rights and assurances provided under this Agreement. This subsection governs generally applicable emergencies in the area not specifically related to or caused by the Project. (e) Regulations that are not in conflict with the Project Approvals, Current Land Use Regulations or this Agreement. Any regulation, whether adopted by initiative or otherwise, limiting the rate, timing, phasing or sequencing of development of the Property shall be deemed to conflict with the Project and shall therefore not be applicable to the development of the Property. Any regulation limiting the permitted uses of the Property, limiting the density or intensity of use of the Property, or limiting the size, height or location of improvements on the Property shall be deemed to conflict with the Project Approvals and shall therefore not be applicable to the development of the Property. (f) Regulations that are in conflict with the Project, but as to which the 14 Development Agreement between City of Hermosa Beach and E&B Natural Resources E&B has given its prior written consent for such regulations to be applied to the Property or to the development of the Property. (g) Regulations applied on a City-wide, non-discriminatory basis that do not prevent or adversely affect development or construction of the Project. 3.3.2 Modification or Suspension by State or Federal Law. In the event that state or federal laws or regulations, or those of any regional authority having jurisdiction over the Project or Property, enacted after the Approval Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement or the Project conditions, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state, federal, or regional authority laws or regulations and to effectuate to the extent possible the terms of this Agreement. 3.3.3 Police Power. The parties acknowledge and agree that City is restricted in its authority to limit its police power by development agreement and that the foregoing limitations, reservations and exceptions are intended to reserve to City all of its police power which cannot be so limited. This Agreement shall be construed to reserve to City all such power and authority which cannot be restricted by development agreement. 3.3.4 Taxes, Assessments and Fees. Anything herein to the contrary notwithstanding, City may impose on the Project any new non-discriminatory, City-wide taxes, assessments and fees, including but not limited to business license taxes or franchise fees, but not including any Exaction or other fee designated to mitigate the impact of development of the Project. 3.4 Regulation by Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of the City may possess authority to regulate aspects of the development of the Property separately from or jointly with City, and this Agreement does not limit the authority of such other public agencies. Changes to the project mandated by such regulatory agencies shall be automatically included into this Development Agreement as authorized in Section 110.F of the Ballot Measure and shall supersede any inconsistent provisions herein. 3.5 Agreement and Assurances on the Part of E&B. Without in any way limiting E&B’s 15 Development Agreement between City of Hermosa Beach and E&B Natural Resources rights under Section 5.2.2 not to proceed with development of the Project and, in such an event, to terminate this Agreement in its sole and subjective business judgment, if E&B proceeds with the Project, E&B agrees that it will use commercially reasonable efforts, in accordance with its own business judgment and taking into account market conditions and economic considerations, to develop the Project, in accordance with the terms and conditions of this Agreement, the Current Land Use Regulations, the Lease and the Project Approvals. 3.6 Public Benefits. 3.6.1 The parties acknowledge and agree that development of the Project will result in public benefits as set forth in Exhibit C. The voters of the City acknowledge the adequacy of the consideration, including the Public Benefits, provided by E&B pursuant to this Agreement. 3.6.2 Exactions and Processing Fees. 3.6.2.1 Exactions. No Exaction may be imposed on this Project except as specifically articulated in this Agreement, and except as required by the conditions of approval and the Mitigation Monitoring and Reporting Program contained in Exhibit D. 3.6.2.2 Processing Fees. E&B shall pay to the City all applicable Processing Fees regularly charged by the City and the amount of such Processing Fees may be increased from time to time on a non-discriminatory City-wide basis. 3.7 Public Improvements and Utilities 3.7.1 Installation Obligations. The parties hereby agree that the obligations to install public improvements and utilities necessary for the development of the Property shall be as provided for in the Project Approvals. 3.7.2 City-Provided Utilities: Reservation of Sufficient Capacity. To the extent that it is within the control of the City, the City shall use its best efforts to ensure that there shall be sufficient capacity, facilities and services with respect to City-provided utilities to complete construction of the Project, provided that E&B bear all costs incurred by the City in doing so. 16 Development Agreement between City of Hermosa Beach and E&B Natural Resources The City agrees that if limitations in the provision of utilities become necessary due to the existence of an emergency situation, they shall be applied only to the extent necessary to respond to such emergency, and shall not be applied against the Property or the Project in a discriminatory manner. 3.7.3 City-Provided Utilities: Nondiscriminatory Rates and Provision of Service. The City agrees that rates and charges for City-provided utilities for the Property and Project shall not be set or imposed in a discriminatory manner, but shall be those rates and charges that are or would be generally applicable to any user of a comparable quantity and quality of the utility use in the City (i.e., any other entity whose use or consumption of the utility is comparable to that of E&B), and that the City shall not discriminate against the Property or the Project in the provision of any City-provided utilities (such as potable and reclaimed water, sewer and drainage). 3.7.4 Dedications, Reservations and Conditions of Development. The portions of Property to be reserved or dedicated for public purposes pursuant to this Agreement, if any, shall be that property described in the Project Approvals. Unless otherwise indicated herein, the property described in the Project Approvals to be reserved or dedicated for public use shall be dedicated by E&B as provided in the Project Approvals. The City shall take such actions as may be necessary to vacate any prior dedications, offers to dedicate and grants of easements that are no longer necessary for the development of the Project in accordance with this Agreement. 3.8 Mitigation Measures and Conditions of Approval. E&B shall at its own expense timely perform all mitigation measures identified in the environmental documentation for the Project and conditions of approval identified in the Project Approvals as set forth in Exhibit D. E&B shall have no duty to complete the mitigation measures or conditions of approval, except as otherwise set forth in this Agreement, if the contemplated development fails to occur. 4 ASSIGNMENT, AMENDMENT AND REVIEW 17 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.1 Assignment 4.1.1 Right to Assign. E&B shall have the right to sell, transfer or assign its rights or interests in the Property in whole or in part (provided that no such partial transfer shall be permitted to cause a violation of the Subdivision Map Act, Government Code Section 66410 et seq.) to any person, partnership, joint venture, firm or corporation at any time during the Term Term, other than Macpherson or any of its related entities, subject to the City’s consent, as provided in Subsection 4.1.2. The conditions and covenants set forth in this Agreement and incorporated herein shall run with the land and the benefits and burdens shall bind and inure to the benefit of the parties. Any such sale, transfer or assignment shall include the assignment and assumption of the rights, duties and obligations arising under or from this Agreement with respect to the property transferred and shall be made in strict compliance with the following requirements: (a) Except as provided in Section 6.17 of this Agreement, no sale, transfer or assignment of any right or interest under this Agreement shall be made unless made together with the sale, transfer or assignment of all or a part of the Property and then, only in accordance herewith. (b) Concurrently with the closing of such sale, transfer or assignment, E&B shall provide the City with an executed agreement by the purchaser, transferee or assignee and providing therein that the purchaser, transferee or assignee expressly and unconditionally assumes the duties and obligations of E&B under this Agreement to the extent of such transfer or assignment, in a form satisfactory to the City Attorney. (c) The purchaser, transferee or assignee shall provide the City with security equivalent to any security previously provided by E&B to secure performance of its obligations hereunder, if any, or under any of the Project Approvals. Any sale, transfer or assignment under Section 4.1 of this Agreement not made in strict compliance with the foregoing conditions shall constitute a default by E&B under this Agreement and any such assignment shall be void and of no effect. Notwithstanding the failure of any purchaser, transferee or assignee to execute the agreement required by subparagraph (b) of this Subsection 4.1.1, the burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the benefits of this Agreement shall not inure to 18 Formatted: Highlight Development Agreement between City of Hermosa Beach and E&B Natural Resources such purchaser, transferee or assignee until and unless such agreement is executed. 4.1.2 City’s Reasonable Consent Required. E&B may sell, transfer or assign its rights or interests in the Property in whole or in part and this Agreement to any other person, partnership, joint venture, firm, corporation, trust or other lawful entity other than Macpherson or any of its related entities, with the City’s consent, which consent shall not be unreasonably withheld or conditioned or delayed (“Transfer”). In the event E&B desires to make such Transfer, E&B shall submit to the City a request for approval at least forty- five ninety (4590) days prior to such Transfer, which approval shall not be unreasonably withheld, conditioned or delayed by the City. The City may withhold, condition or delay its approval upon finding of any of the following: (a) The proposed purchaser, transferee or assignee lacks the financial ability to perform the obligations of this Agreement; (b) The proposed purchaser, transferee or assignee lacks the necessary qualifications, competence, experience or capability to implement the development plan contemplated by the Project Approvals with the skill, expertise and quality equivalent to that of E&B.; provided, however, if the proposed purchaser, transferee or assignee is a nationally or regionally recognized, or regionally known in Southern California, as an owner or developer of oil and gas facilities, such proposed purchaser, transferee or assignee shall be deemed to have met this requirement; or (c) The proposed purchaser, transferee or assignee has a documented record of performance failures operating oil drilling and production projects at other locations that resulted in environmental damage, injuries to persons or property or other conditions or circumstances detrimental to public health, safety and welfare. (cd) An Event of Default by E&B as defined in Section 5.1.1 has occurred and is continuing under this Agreement. E&B’s request for approval of a Transfer shall be accompanied by all documentation reasonably calculated to allow the City to evaluate the qualifications of the proposed Transferee; that notwithstanding, E&B shall provide to the City such additional information and documentation that the City reasonably requests in order for the City to make any determinations provided for by this Subsection 4.1.2. E&B agrees to provide such information on a timely basis sufficient to permit the City to make its determinations within the ninetyforty-five (4590) day Formatted: Justified, Indent: Left: 0", Right: 0.04", Space Before: 1.45 pt, Line spacing: Multiple 1.3 li Formatted: Justified, Right: 0.04", SpaceBefore: 1.45 pt, Line spacing: Multiple 1.3 li Formatted: Justified, Right: 0.04", SpaceBefore: 1.45 pt, Line spacing: Multiple 1.3 li Development Agreement between City of Hermosa Beach and E&B Natural Resources time period. Should the necessary documentation not be provided timely, or should the information and documents provided reasonably require additional review, evaluation and consideration by the City or the City’s consultants that cannot be completed within the ninety (90) day time period, the City may in its reasonable discretion extend this period as necessary to complete its review of the proposed transfer. 4.1.3 Applicability. The provisions of Sections 4.1.1 and 4.1.2 shall not be applicable to a Transfer as a result of which E&B retains at least a fifty (50) percent interest in the Property. or as a result of which E&B retains at least twenty-five (25) percent interest in the Property and maintains effective management control of the Project. 4.2 Changes and Amendments to Project 19 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.2.1 In the event E&B reasonably finds that a change or amendment in the Project Approvals is reasonably necessary or appropriate, E&B shall apply for any required changes to the Project Approvals. Any such application that does not require an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the Current Land Use Regulations, except as otherwise provided by this Agreement, including the Reservations of Power. Any application that requires an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the land use regulations in effect at the time the application is filed. 4.2.2 Minor Changes to Project - No Amendment of Agreement The parties acknowledge that refinements or modifications of the Project may be required during the Term. The parties agree that refinements and modifications which constitute a "Minor Change” in the Project or Project Approvals shall not require an amendment to this Agreement or public notice and a hearing. For any such Minor Change, the City shall not impose as a condition to approval any Exaction, except as authorized in this Agreement. The City Manager, subject to the City Council’s approval, shall be authorized to make the determination on behalf of the City whether a requested refinement or modification may be effectuated pursuant to this Section 4.2.2 or whether the requested refinement or modification is of such a character to require an amendment hereof pursuant to Section 4.2.3. The City Manager, subject to the City Council’s approval, shall be authorized to approve any Minor Changes hereunder on behalf of the City. If and when the parties find that Minor Changes are necessary or appropriate, they shall, unless otherwise required by law, effectuate such changes or adjustments through a letter prepared by the City Manager and approved by the City Council, which, after execution, shall be attached hereto as addenda and become a part hereof. The City Manager may consult with technical experts in making the determination that a requested refinement or modification is a “Major” or “Minor Change.” The City Manager shall not unreasonably withhold or delay its determination that a requested refinement or modification is a “Minor Change” as that term is used herein. The changes described below shall not be deemed Minor Changes; however, the examples listed below are listed for reference only, and are not intended to provide a complete list of changes that may not be deemed as Minor Changes: (a) Alters the permitted uses of the Property as a whole; 20 Development Agreement between City of Hermosa Beach and E&B Natural Resources (b) Requires an amendment to the Zoning Ordinance, or General Plan, or other legislative acts not contemplated in this Agreement; (c) Increases the density or intensity of use of the Property as a whole; (d) Constitutes a project requiring a subsequent or supplemental environmental impact report pursuant to Public Resources Code Section 21166; (e) Creates a situation adverse to public health or safety. 4.2.3 Other Changes. Any change in the Project which does not qualify as a "Minor Change" as defined herein shall require an amendment to this Agreement as provided in Section 6.9, and compliance with CEQA as applicable. 4.3 Annual/Special Review. 4.3.1 Annual Review. The City shall, at least every twelve (12) months during the Term of this Agreement, review the extent of good faith substantial compliance by E&B with the terms of this Agreement. Subject to the notice and cure procedure set forth in Section 5.1.2, such a periodic review may result in amendment or termination of this Agreement, provided a default has been established under the terms of this Agreement. Pursuant to Government Code Section 65865.1, as amended, E&B shall have the duty to file an annual review request w ith t th e C i t y, p a y any applicable Processing Fees for such annual review and demonstrate its good faith compliance with the terms of this Agreement at such periodic review. Processing fees for such review are to include, but are not limited to, all costs incurred by the City in retaining the necessary professionals and experts to provide the City with the necessary input regarding the annual review, including but not limited to City Attorney, consultant and other third parties the City deems necessary to conduct the annual review. Upon request by the City, E&B shall provide such information as may be necessary or appropriate in order to ascertain compliance with this Agreement. 4.3.1.1 Any party may address any requirement of this Agreement during the review. However, ten (10) days’ written notice of any requirement to be addressed shall be made by the requesting party. If at the time of review an issue not previously identified in 21 Development Agreement between City of Hermosa Beach and E&B Natural Resources writing is required to be addressed, the review at the request of either party shall be continued to afford sufficient time for analysis and preparation. 4.3.2 Special Review. The City Council may order a special review of compliance with this Agreement at any time. The Director of Community Development or City Council, as determined from time to time by the City Council, shall conduct such special reviews. Any special review shall comply with the procedural provisions and Processing Fees of an annual review as provided by Section 4.3.1. 4.3.3 Opportunity to be Heard. Upon written request to the City by E&B, E&B shall be permitted an opportunity to be heard orally and/or in writing at a hearing before the City Council regarding its performance under this Agreement. E&B shall also be heard before the City Council at any required public hearing concerning a review of action on the Agreement. Such hearings requested by E&B shall be subject to the Processing Fees provision of Section 4.3.1. 4.3.4 Information to be Provided E&B. The City shall, to such an extent as is practical, deposit in the mail to E&B a copy of staff reports and related exhibits concerning contract performance a minimum of seven (7) business days prior to any such review or action upon this Agreement by the Planning Commission or the City Council. 5 DEFAULT, REMEDIES AND TERMINATION 5.1 Enforceability. 5.1.1 Default. Subject to Sections 5.1.2 and 5.1.3, failure by any party to perform any term or provision of this Agreement required to be performed by such party shall constitute an event of default ("Event of Default”). In the event that E&B files for reorganization or other relief under any Federal or State bankruptcy or insolvency law, whether voluntarily or by involuntary bankruptcy or insolvency action, all provisions of this Agreement shall remain in full force and effect unless E&B engages in an Event of Default. For purposes of this Agreement, a party claiming another party is in default shall be referred to as the "Complaining Party", and the party alleged to be in default shall be referred to as the "Party in Default". 22 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5.1.2 Procedure Regarding Defaults. 5.1.2.1 Notice of Default. The Complaining Party shall give written notice of default to the Party in Default, specifying the default complained of by the Complaining Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. The Party in Default shall diligently endeavor to cure, correct or remedy the matter complained of, provided the such cure, correction or remedy shall be completed within the applicable time period set forth herein after receipt of written notice (or such additional, time as may be deemed by the Complaining Party to be reasonably necessary to correct the matter). Any failures or delays by a Complaining Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by a Complaining Party in asserting any of its rights and remedies shall not deprive the Complaining Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. If an Event of Default occurs, prior to exercising any remedies, the Complaining Party shall give the Party in Default written notice of such default. Without limitation, evidence of default may arise in the course of the regularly scheduled annual review or a special review described in Section 4.3. 5.1.2.2 Cure Periods. If the default is reasonably capable of being cured within thirty (30) days, the Party in Default shall have such period to effect a cure prior to exercise of remedies by the Complaining Party. If the nature of the alleged default is such that it cannot practicably be cured within such thirty (30) day period, the cure shall be deemed to have occurred within such thirty (30) day period if (i) the cure is commenced at the earliest practicable date following receipt of the notice; (ii) the cure is diligently prosecuted to completion at all times thereafter; (iii) at the earliest practicable date (in no event later than thirty (30) days after the curing party's receipt of the notice), the curing party provides written notice to the other party that the cure cannot practicably be completed within such thirty (30) day period; and (iv) the cure is completed at the earliest practicable date. In no event shall the Complaining Party be precluded from exercising remedies, subject to the preceding sentence if a default is not cured within sixty (60) days after the first notice of default is given. Subject to the foregoing, if a party fails to cure a default in accordance with the foregoing, the Complaining Party, at its option, may terminate this Agreement pursuant to this Agreement and California Government Code Section 65868, and/or institute legal proceedings pursuant to this Agreement. 23 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5.1.2.3 Procedures Regarding City Termination. Notice of intent to terminate shall be by certified mail, return receipt requested. Upon delivery by the City of notice of intent to terminate, the matter shall be scheduled for consideration and review by the City Council within thirty (30) days in accordance with Government Code Sections 65867 and 65868. Upon consideration of the evidence presented in said review and a determination by the City Council based thereon, the City may give written notice of termination of this Agreement to E&B. Any determination of default (or any determination of failure to demonstrate good faith compliance as a part of annual review) made by the City against E&B, or any person who succeeds to E&B with respect to any portion of the Property, shall be based upon written findings supported by substantial evidence in the record. Any purported termination of this Agreement for alleged default shall be subject to review in the Superior Court of the County of Los Angeles pursuant to Code of Civil Procedure § 1094.5(c). 5.1.3 Institution of Legal Action. Subject to notice of default and opportunity to cure under Section 5.1.2, and subject further to the limitation on remedies set forth in Section 5.1.4, in addition to any other rights or remedies, any party to this Agreement may institute legal action to cure, correct or remedy any default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation hereof, or to obtain any other remedies consistent with this Agreement. If a legal action or proceeding is brought by any party to this Agreement because of an Event of Default under this Agreement, or to enforce a provision hereof, the prevailing party shall be entitled to reimbursement of all costs and expenses, including reasonable attorneys’ fees, incurred in prosecuting such legal action or proceeding. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement. Additionally, in the event of a court finding (1) a violation of this development agreement or the conditions of approval in Exhibit D to this agreement in an action brought by the City, or (2) a violation of an order issued under Hermosa Beach Oil Code Section 21-A-10.1 (following disposition of an appeal, if any, filed under Section 21-A-10.2), a court may impose civil penalties up to $10,000/per day for each day in which E&B is determined to be non- compliant. 5.1.4 Remedies. 5.1.4.1 E&B’s Remedies. It is acknowledged by the parties that the City would not have entered into this Agreement if it were liable in damages under or with respect to this Agreement or the application thereof. In addition, the parties agree that monetary damages 24 Development Agreement between City of Hermosa Beach and E&B Natural Resources are not an adequate remedy for E&B if the City should be determined to be in default under this Agreement. The parties further agree that specific performance shall be E&B’s only remedy under this Agreement and E&B may not seek monetary damages in the event of a default by City under this Agreement. E&B covenants not to sue for or obtain monetary damages for the breach by City of any provision of this Agreement. 5.1.4.2 City's Remedies. The parties agree that the City shall have limited remedies for monetary damages and specific performance as specifically provided for in this Section 5.1.4.2. The City shall not have any right to compel specific performance with respect to the construction of the Project, or any obligation to construct the Project, including without limitation Section 3.7. Further, the City shall have no right to monetary damages as a result of E&B's failure to construct the Project or its failure to comply with Section 3.7. The City shall have the right to sue for monetary damages for failure by the E&B to pay any amounts owing under this Agreement including without limitation any amounts owing pursuant to Section 6.5.1. In no event shall the City be entitled to consequential damages or punitive damages for any breach of this Agreement. City also shall have the right to seek monetary damages for reimbursement of the actual cost to the City incurred by the City to construct, complete, demolish, remove or restore any physical infrastructure improvement in the public right of way which E&B commences construction of but fails to complete. If E&B’s failure or refusal to perform any provision of this Agreement causes an immediate and serious threat to life, health, property or natural resources, the City may pursue all remedies including but not limited to remedies available under the Hermosa Beach Oil Code Chapter 21-A (including the provisions of Article X, which allow for immediate cessation of operations) and Section 21 of the Lease. 5.1.4.3 Other Actions. Nothing in this Agreement shall be deemed to waive or limit any rights and remedies that the parties would otherwise have against the other relating to matters not covered by this Agreement. 5.2 Termination of Agreement. 5.2.1 As to the Property and all of the rights of E&B hereunder, and except as otherwise provided in this Agreement, this Agreement shall be deemed terminated and of no further effect upon the expiration of the Term of this Agreement unless earlier terminated pursuant to this Agreement. Subject to the notice and cure provisions set forth in Section 5.1.2, 25 Development Agreement between City of Hermosa Beach and E&B Natural Resources the City shall have the right to terminate this Agreement as to the Property and the rights of E&B hereunder, in the event E&B defaults and fails to cure such default within the respective cure period. Subject to the notice and cure provisions set forth in Section 5.1.2, E&B shall have the right to terminate this Agreement and the rights of the City hereunder in the event the City defaults and fails to cure such default within the respective cure period. Upon the termination of this Agreement, neither party shall have any further right or obligation with respect to the Property hereunder except with respect to any obligation to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination (other than commencement of construction of either phase) or with respect to any obligations which are specifically set forth as surviving this Agreement. Termination of this Agreement pursuant to this Section 5.2 shall cause the rights and benefits afforded by this Agreement to no longer be vested (subject to planning and zoning law) and as a result, the City shall no longer be limited from taking any action which may adversely affect the Property or the Project. 5.2.2 Termination by E&B Prior to Development. E&B is free, in its sole and subjective business judgment, not to proceed with development of the Project and, in such an event, to terminate this Agreement. The City acknowledges that such a right is consistent with the intent, purpose and understanding of the parties to this Agreement. In the event E&B decides not to proceed with development of the Project and to terminate this Agreement, E&B shall provide written notice to the City of that decision and of the final, irrevocable termination of this Agreement. Immediately upon the giving of such written notice to the City, the parties’ rights and obligations under this Agreement shall cease, except with respect to any obligations which are specifically set forth as surviving this Agreement. In the event of such written notice to the City terminating this Agreement, all Project Approvals (but not the Lease, Settlement Agreement and those included in the City’s General Plan and/or the Municipal Code), shall terminate and be extinguished. Termination by E&B shall not affect any of E&B’s obligations to pay assessments, liens or taxes incurred prior to the effective date of termination. 6 GENERAL PROVISIONS 6.1 Term. 6.1.1 Term. The Term of this Agreement shall commence upon the 26 Development Agreement between City of Hermosa Beach and E&B Natural Resources Commencement Date and shall be coterminous with the term of the Lease, unless terminated, modified or extended pursuant to the provisions of this Agreement or by the voters of the City. The Term of this Agreement shall be tolled during any period of time in which a Force Majeure Delay exists. 6.1.2 Additional Rights. Expiration or termination of this Agreement shall not affect any right vested under law independent of this Agreement. 6.2 Approval, Execution and Recordation Procedure. The following procedure shall govern approval of this Agreement: Agreement; (a) The voters shall have approved Ballot Measure approving this (b) Following voter approval, the Hermosa Beach City Council shall declare the vote in accordance with Elections Code Section 9217 and execute the Development Agreement; (c) As provided in Section 65868.5 of the Development Agreement Act, following execution by the City, the City shall cause a copy of this Agreement to be recorded with the County Recorder within ten (10) days. Any recording costs shall be paid by E&B; and (d) Following execution and recordation, the Coastal Commission shall have approved this Agreement (which shall include any revisions to this Agreement authorized by Section 10.F of the Ballot Measure Ordinance); 6.3 Cooperation and Implementation. City represents that it will cooperate with E&B to the extent reasonable and feasible to implement this Agreement. Upon satisfactory completion by E&B of all of its preliminary actions and payments of appropriate fees, City shall promptly commence and proceed with reasonable diligence to complete all steps necessary for the implementation of this Agreement and the development of the Property in accordance with the terms of this Agreement, including, but not limited to, the processing and checking of any and all Project Approvals, agreements, covenants and related matters required under the conditions of this Agreement, building plans and 27 Development Agreement between City of Hermosa Beach and E&B Natural Resources specifications, and any other plans necessary for the development of the Property, requests for inspections and certificates of occupancy, filed by or on behalf of E&B. E&B shall, in a timely manner, provide City with all documents, plans and other information necessary for the City to carry out its obligations hereunder, and pay for all necessary fees, costs, and expenses incurred by the City to facilitate implementation of this agreement that are not identified as the City’s responsibility. 6.4 Legal Challenges. 6.4.1 Defense. If any legal action or other proceeding is instituted by a third party or parties, other governmental entity or official challenging the validity of any provision of the Project Approvals, of the EIR or of this Development Agreement, E&B and the City shall cooperate in defending any such action. The City shall notify E&B of any such legal action against City within ten (10) days after the City receives service of process, except for any petition for a Temporary Restraining Order, in which case the City shall notify E&B immediately upon receipt of notice thereof. 6.4.2 Continued Processing. The filing of any lawsuit(s) by a third party (not a party to this Agreement) after the Approval Date against the City and/or E&B relating to this Agreement or to other development issues affecting the Project shall not delay or stop the processing or issuance of any permit or authorization necessary for development of the Project, unless required by court order. 6.5 Indemnity. 6.5.1 E&B Indemnity. To the fullest extent permitted by law, and notwithstanding the indemnification provisions set forth in the Lease and notwithstanding the limits of the insurance policies required herein, E&B hereby agrees, at its sole cost and expense, to defend, protect, indemnify, and hold harmless the City and its elected officials, officers, attorneys, agents, employees, consultants, volunteers, successors, and assigns (collectively "Indemnitees") from and against any and all third party damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens, and losses of any nature whatsoever, including reasonable fees of accountants, attorneys, engineers, consultants or other professionals and all costs associated therewith, arising or claimed to arise, 28 Development Agreement between City of Hermosa Beach and E&B Natural Resources directly or indirectly, out of, in connection with, resulting from, or related to any act, failure to act, error, or omission of E&B or any of its officers, agents, servants, lessees, employees, contractors, subcontractors, materialmen, suppliers or their officers, agents, servants, lessees, or employees, or arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to this Agreement or Project Approvals, or any approval subsequently granted by the City for the development of the Property, any construction permitted pursuant to this Agreement or Project Approvals, or any subsequent use of the Property, or any portion thereof, permitted by this Agreement or Project Approvals except for any actions resulting from the gross negligence or intentional acts of an Indemnitee. The City may elect to participate in the litigation, in which case E&B agrees to reimburse the City for its litigation costs and fees, including the retention of outside counsel to be selected by the City at the City’s sole discretion. Neither party shall settle any such lawsuit without the consent of the other party. 6.5.2 Survival of Indemnity. The indemnity provisions contained in Sections 6.4 and 6.5 shall survive the termination of the Agreement and are in addition to any other rights or remedies which Indemnitees may have under the law. Payment is not required as a condition precedent to an Indemnitee's right to recover under these indemnity provisions, and an entry of judgment against an Indemnitee shall be conclusive in favor of the Indemnitee's right to recover under these indemnity provisions. E&B shall pay Indemnitees for any reasonable attorneys’ fees and costs incurred in enforcing these indemnification provisions. 6.6 Notices. All notices or other communications required hereunder shall be in writing and shall be personally delivered (including by means of professional messenger service), or sent by registered or certified mail, postage prepaid, return receipt required, or by electronic mail (provided the email transmission is followed by delivery of a "hard" copy), and shall be deemed received on the date of receipt personally, by registered or certified mail or by facsimile. Unless otherwise indicated in writing, such notice shall be sent addressed as follows: If to the City: City Manager 29 Development Agreement between City of Hermosa Beach and E&B Natural Resources City of Hermosa Beach 1315 Valley Drive Hermosa Beach, CA 90254 With a copy to: Michael Jenkins, Esq. Jenkins & Hogin 1230 Rosecrans Avenue, Suite 110 Manhattan Beach, CA 90266 Telephone: (310) 643-8448 Fax: (310) 643-8441 If to E&B: E & B Natural Resources Management Corporation 1600 Norris Road Bakersfield, CA 93308 Telephone: (661) 679-1797 Fax: With a copy to: [name] Telephone: Fax: 6.7 No Third Party Beneficiaries. This Agreement is made and entered into for the sole 30 Development Agreement between City of Hermosa Beach and E&B Natural Resources protection and benefit of the parties to this Agreement and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 6.8 Time of Essence. Time is of the essence for each provision of this Agreement of which time is an element. 6.9 Modification, Amendment or Extension. Subject to any notice and hearing requirements imposed by law, this Agreement may be modified, amended and/or extended from time to time by mutual written consent of the City Council and E&B as set forth in Government Code Sections 65867, 65867.5 and 65868 and as authorized by Section 110.G of the Ballot Measure Ordinance and Chapter 19.66 of the Municipal Code. 6.10 Conflicts of Law. In the event that state, regional or federal laws or regulations enacted after the Approval Date or the action or inaction of any other affected governmental jurisdiction prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, the parties shall (a) provide the other party with written notice of such state, regional or federal restriction, provide a copy of such regulation or policy and a statement of conflict with the provisions of this Agreement, and (b) E&B and the City staff shall, within thirty (30) days, meet and confer in good faith in a reasonable attempt to modify this Agreement, but only to the minimum extent necessary to comply with such federal, regional or state law or regulation. Thereafter, regardless of whether the parties reach an agreement on the effect of such federal, regional or state law or regulation upon this Agreement, the matter shall be scheduled for hearings before the Council. Ten (10) days’ written notice of such hearing shall be given, pursuant to Government Code Sections 65090 and 65867. The Council, at such hearing, shall determine the exact modification or suspension which shall be necessitated by such federal, regional or state law or regulation. E&B, at the hearing, shall have the right to offer oral and written testimony. Any modification or suspension shall be taken by the affirmative vote of not less than a majority of the authorized voting members of the Council. Any suspension or modification may be subject to judicial review. The City shall cooperate with E&B in the securing of any permits which may be required as a result of such modifications or suspensions, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this agreement), and the indemnity provisions in Section 6.5 of this agreement. If E&B and the 31 Development Agreement between City of Hermosa Beach and E&B Natural Resources City do not agree on the modification or suspension, either party may elect to terminate this Agreement pursuant to the provisions of Section 5.2 of this Agreement. 6.11 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought and referring expressly to this Section. No waiver of any right or remedy in respect of any occurrence or event shall be deemed a waiver of any right or remedy in respect of any other occurrence or event 6.12 Successors and Assigns. Except as expressly provided to the contrary in this Agreement, the burdens and obligations of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement and all successors in interest to the Property or any portion thereof or any interest therein, and shall be covenants running with the land. 6.13 Governing State Law. This Agreement shall be construed in accordance with the laws of the State of California. 6.14 Constructive Notice and Acceptance. Every person who now or hereafter owns or acquires any right, title or interest in or to any portion of the Property is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Property. 6.15 Statement of Compliance. Within thirty (30) days following any written request, in accordance with the notice provisions of this Agreement, which either party may make from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, the other party shall execute and deliver to the requesting party a statement certifying that: (a) this Agreement is unmodified and in full force and effect or, if there have been modifications hereto, that this Agreement is in full force and effect, as modified, and stating the date and nature of such modifications; (b) that this Agreement is in full force and there are no current uncured defaults under this Agreement or specifying the dates and nature of any such defaults, and manner of cure; (c) any other information reasonably requested. The failure to deliver such statement within 32 Development Agreement between City of Hermosa Beach and E&B Natural Resources such time shall be conclusive upon the party which fails to deliver such statement that this Agreement is in full force and effect without modification except as may be represented by the requesting party and that there are no uncured defaults in the performance of the requesting party. Said statement(s) shall be in the form reasonably satisfactory to the City, E&B and to any purchaser, lender, title company, governmental agency, or other person reasonably requesting such statement(s) in connection with sale, use, development, construction, financing or marketing of the Property. The City and E&B, for their own respective uses, shall also be entitled to obtain a statement of compliance at any reasonable time. 6.16 Insurance. 6.16.1 E&B shall obtain and continuously maintain throughout the term of this lease, insurance required by this Section 6.16, which shall also serve to satisfy the insurance requirements of section 18(b) and Exhibit C to the Lease. All insurance required to be carried by E&B shall be with companies rated A:X or better, in the then most recent edition of Best's Insurance Guide, and licensed to provide the relevant insurance in the State of California. E&B’s indemnification and defense obligations under the Lease are not limited to the type or amount of insurance coverage that E&B is required to provide hereunder. Certificates of Insurance required to be delivered by this Section 6.16 shall contain liability limits not less than those set forth in this Section 6.16. ,Commercial general liability and control of well insurance policies shall include the City and the California State Lands Commission and their elected and appointed officials, employees, agents, consultants and representatives as additional insureds. All endorsements or policy provisions adding insureds to required insurance policies shall contain no added limitations, conditions, restrictions or exceptions to coverage in addition to those that apply under the insurance policy generally. E&B shall deliver the required Certificates of Insurance and endorsements evidencing the insurance required by this Section 6.16 prior to commencement of this Lease. Evidence for renewals of required policies shall be submitted to City not later than ten (10) business days prior to the expiration date of each insurance policy, or at such later date as E&B may request for City’s approval, but in no even later than one business day prior to the expiration date of such Insurance Policy. The general liability policy shall be endorsed to state that coverage cannot be canceled, voided, suspended, adversely modified, or reduced in coverage or in limits Development Agreement between City of Hermosa Beach and E&B Natural Resources (including for non-payment of premium) except after thirty (30) days’ prior notice (or ten (10) days in the case of cancellation for non-payment of premium) has been given to City; provided that E&B may obtain as comparable an endorsement as possible, so long as such endorsement does not include any limitation of liability of the insurer for failure to provide such notice. E&B shall give the City an unqualified thirty (30) day notice of cancellation, non-renewal or material amendment thereof. In the event that an insurer providing any of the insurance policies becomes the subject of bankruptcy proceedings, becomes insolvent, or is the subject of an order or directive limiting its business activities given by any regulatory authority, including the State Department of Insurance, E&B shall exercise best efforts to promptly, and at its sole cost and expense, secure alternative coverage in compliance with the insurance requirements contained in this Section 6 so as to avoid any lapse in insurance coverage. Each insurance policy required herein shall provide that the coverage is primary and noncontributory coverage with respect to all insureds, except for coverage that by its nature cannot be written as primary. Any insurance or self-insurance beyond that specified in this Lease that is maintained by the City or the California State Lands Commission shall be excess of such insurance and shall not contribute with it. Each insurance policy shall be written or endorsed so that (i) no acts or omissions of an insured shall impair or otherwise affect coverage of the other insureds and (ii) insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer’s liability. All insurance coverage maintained or procured pursuant to this Lease shall be endorsed to delete the subrogation condition as to City, or shall specifically allow E&B or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. E&B waives all rights of recovery against City, California State Lands Commission, and their elected and appointed officials, employees, agents, consultants and representatives. E&B acknowledges and agrees that any actual or alleged failure on the part of City to inform E&B of non-compliance with any requirement imposes no additional obligations on City nor does it waive any rights hereunder. In the event any insurance (including the limits that are required to be obtained and maintained by E&B pursuant to this Section 6.16 and/or naming the City as an Development Agreement between City of Hermosa Beach and E&B Natural Resources additional insured), other than insurance required to be obtained and maintained by applicable law, shall not be available and commercially feasible to obtain and maintain in the commercial insurance market, E&B shall provide written notice of that occurrence to the City. Said written notice shall be accompanied by a written report prepared by an independent insurance advisor of recognized national standing and reasonably acceptable to City, certifying that such insurance is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, or in the case where any required insurance amount is not so available, certifying as to the maximum amount that is so available, and in each case explaining in detail the basis for such conclusions. Should commercial unavailability or commercial unfeasibility occur, subject to City approval, E&B shall have the right to self-insure a portion of the risk in order to obtain additional policy limits and/or coverage (i.e., “excess” insurance), as long as the financial capability of E&B to retain a portion of the risk is sufficient to obtain limits of coverage that would be equivalent to that required by this Section 6.16. Should E&B be unable to satisfy this requirement for financial capability in order to self-insure a portion of the risk, E&B and the City shall negotiate in good faith and attempt to agree upon alternative adequate means of financial assurance to substitute for the insurance or the portion of the insurance that is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, taking into consideration the type and amount of insurance which has become unavailable, the potential magnitude of any loss not covered by insurance. Other than as provided in the preceding paragraph, no self-insured retentions are permitted with respect to any risk or occurrence required by this Lease to be covered by insurance without the prior, written consent of City, exercised in its sole discretion. Subject to City’s written approval, E&B may self-insure a portion of the risk and/or provide other alternative adequate means of financial assurance to the City only for so long as and to the extent that any insurance required by this Section 6.16 is not then reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. Said differently, E&B will again be required to obtain and maintain all of the insurance required by this Section 6.16 once the same is reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. E&B agrees to test the commercial insurance market through its insurance broker to confirm unavailability or commercial unfeasibility of a required coverage no less often than quarterly during any period of commercial unavailability or Development Agreement between City of Hermosa Beach and E&B Natural Resources commercial unfeasibility for any particular coverage. 6.16.2 Required Insurance. Subject to the provisions of Section 6.16.1, LESSEE shall procure, pay for and keep in full force and effect during the term of this Lease each and all of the following insurance policies. 6.16.2.1 Commercial General Liability Insurance. Commercial General Liability, including: Bodily Injury; Property Damage; Personal Injury; Blanket Contractual Liability, or equivalent; Broad Form Property Damage; Premises and Operations; Fire Legal Liability; Sudden and Accidental Pollution Liability; Products and Completed Operations; Explosion, Collapse and Underground Hazard; and Advertising/Personal Injury Coverage, and pollution occurring from the same in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate. E&B shall provide the City with a copy of E&B's commercial general liability policy prior to the commencement of this Lease. 6.16.2.2 (Loss Of) Control Of Well And Pollution Liability Coverage. (Loss Of) Control of Well insurance and Operators Extra Expense Coverage with total of Forty Million Dollars ($40,000,000.00) limited liability for Sections 1A (Well Out Of Control Insurance), IB (Redrill/Extra Expense), and 1C (Seepage, Pollution, Cleanup and Contamination) and a total of Five Million Dollars ($5,000,000.00) limited liability for Section 2 (Care, Custody and Control) and coverage for bodily injury, property damage, including cleanup costs and defense costs resulting from a Well Out Of Control incident. Notwithstanding the foregoing, E&B shall be obligated to maintain the specified Control of Well coverages only during actual drilling of a well, which includes drilling, completing and/or testing of the well. E&B shall provide the City with a copy of E&B's Control of Well policy prior to commencing any actual drilling, along with the Certificate of Insurance, and such policy shall be maintained throughout the entire course of each actual drilling operation. 6.16.2.3 Worker's Compensation Insurance. Worker's Compensation insurance as required by law, together with Employer's Liability coverage with limits of not less than One Million Dollars ($1,000,000.00). Such coverage shall include a Waiver of Subrogation in favor of the City and an "alternate employer" endorsement. 6.16.2.4 Auto liability insurance (Symbol 1 – Any Auto) with limits of not less than One Million Dollars ($1,000,000.00) combined single limit. 6.16.2.5 Following Form Excess Or Umbrella Liability Insurance. Development Agreement between City of Hermosa Beach and E&B Natural Resources Following Form Excess or Umbrella Liability insurance in an amount of not less than Twenty- Five Million Dollars ($25,000,000.00) per occurrence and aggregate per policy period to apply as excess coverage over coverage required by Subsections 6.16.2.1, 6.16.2.3 and 6.16.2.4. 6.16.2.6 Additional Insurance Required To Comply With Law. If the amounts of minimum insurance coverage as specified above in this Section 6.16.2 are insufficient or become insufficient to meet in any respect the minimum insurance coverage requirements set forth in or required by any applicable legal requirements of any governmental entity or regulatory body or agency by statute, case law, rules and/or regulations, then in such event E&B shall procure and maintain sufficient amounts of insurance coverage to satisfy any such minimum insurance coverage requirements in addition to the insurance required by Subsections 6.16.2.1, 6.16.2.2, 6.16.2.3, 6.16.2.4 and 6.16.2.5. 6.16.2.7 Review of Insurance Amounts During Term of Development Agreement. At each five-year anniversary of this Agreement, the parties will meet and confer in good faith regarding the sufficiency of the insurance limits set forth in this section. The parties will consider the intervening changes in the consumer price index, industry standards, improvements in technology affecting the Project operations and other relevant considerations. The parties will mutually agree to any modifications to the insurance requirements and limits as are prudent and commercially reasonable under the circumstances. Should the parties be unable to agree, they will mediate the matter before a neutral third party, each party to bear one-half the costs of the mediator. 6.16.3 Drilling or Other Contractors. Exhibit C to the Lease states: "Each drilling or other contractor performing work for the joint account shall be required to maintain in force, with respect to the work performed by such contractor, to the extent applicable and possible, the same insurance as specified above." E&B also agrees to require each contractor to include the City as an additional insured to any such insurance maintained by the contractor. 6.16.4 Requirements Not Limiting. The Parties acknowledge and agree that (i) requirements of specific coverage features or limits contained in this Section 6 are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance policy (ii) specific reference to a given coverage feature is not intended by to be all inclusive, or to the exclusion of other coverage, or a waiver of any type and (iii) all insurance coverage and limits provided by E&B, or by third parties pursuant to obligations of E&B hereunder, and, in each case, available or applicable to this Lease are Development Agreement between City of Hermosa Beach and E&B Natural Resources intended to apply to the full extent of the insurance policies, and nothing contained in this Lease limits, or shall be deemed to limit, the application of such insurance coverage. 6.16.5 Remedies. Failure on the part of E&B to maintain the insurance as required hereunder shall constitute a material breach of this Agreement and the Lease, upon which the City may, after giving five working days-notice to E&B to correct the breach, if not timely cured by E&B, immediately terminate this Agreement and the Lease or suspend this Agreement and the Lease until E&B remedies the failure to maintain insurance. 6.16.1 E&B shall obtain and maintain insurance required by this Section 6.16, which shall also serve to satisfy the insurance requirements of section 18(b) and Exhibit C to the Lease. All insurance required to be carried by E&B shall be with companies rated A:X or better, in the then most recent edition of Best’s Insurance Guide, and licensed to provide the relevant insurance in the State of California. Certificates of Insurance required to be delivered by this Section 6.16 shall contain liability limits not less than those set forth in this Section 6.16, and shall list the City and the California State Lands Commission as an additional insured. E&B shall give the City an unqualified thirty (30) day notice of cancellation, non-renewal or material amendment thereof. E&B shall deliver the required Certificates of Insurance evidencing the insurance required by this Section 6.16 promptly upon obtaining the same. In the event any insurance (including the limits that are required to be obtained and maintained by E&B pursuant to this Section 6.16 and/or naming the City as an additional insured), other than insurance required to be obtained and maintained by applicable law, shall not be available and commercially feasible to obtain and maintain in the commercial insurance market, E&B shall provide written notice of that occurrence to the City. Said written notice shall be accompanied by a written report prepared by an independent insurance advisor of recognized national standing and reasonably acceptable to City, certifying that such insurance is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, or in the case where any required insurance amount is not so available, certifying as to the maximum amount that is so available, and in each case explaining in detail the basis for such conclusions. [UNDER DISCUSSION] Should this occur, E&B shall have the Formatted: Indent: Left: 0.07", Right: 0.04" Development Agreement between City of Hermosa Beach and E&B Natural Resources right to self-insure in order to obtain additional policy limits and/or coverage as long as the 33 Development Agreement between City of Hermosa Beach and E&B Natural Resources financial capability of E&B is sufficient to obtain self-insurance coverage that would be equivalent that required by this Section 6.16. Should E&B be unable to satisfy this requirement for financial capability in order to self-insure, E&B and the City shall negotiate in good faith and attempt to agree upon alternative adequate means of financial assurance to substitute for the insurance or the portion of the insurance that is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, taking into consideration the type and amount of insurance which has become unavailable, the potential magnitude of any loss not covered by insurance. E&B may self-insure and/or provide other alternative adequate means of financial assurance to the City only for so long as and to the extent that any insurance required by this Section 6.16 is not then reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. Said differently, E&B will again be required to obtain and maintain all of the insurance required by this Section 6.16 once the same is reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. 6.16.2 Required Insurance. LESSEE shall procure, pay for and keep in full force and effect during the term of this Agreement each and all of the following insurance. 6.16.2.1 Commercial General Liability Insurance. Commercial General Liability, including: Bodily Injury; Property Damage; Personal Injury; Blanket Contractual Liability, or equivalent; Broad Form Property Damage; Premises and Operations; Fire Legal Liability; Sudden and Accidental Pollution Liability; Products and Completed Operations; Explosion, Collapse and Underground Hazard; and Advertising/Personal Injury Coverage, and pollution occurring from the same in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate. 6.16.2.2 (Loss Of) Control Of Well And Pollution Liability Coverage. (Loss Of) Control of Well insurance and Operators Extra Expense Coverage with total of Forty Million Dollars ($40,000,000.00) limited liability for Sections 1A (Well Out Of Control Insurance), 1B (Redrill/Extra Expense), and 1C (Seepage, Pollution, Cleanup and Contamination) and a total of Five Million Dollars ($5,000,000.00) limited liability for Section 2 (Care, Custody and Control) and coverage for bodily injury, property damage, including cleanup costs and defense costs resulting from a Well Out Of Control incident. Notwithstanding the foregoing, E&B shall be obligated to maintain the specified Control of Well coverages only during actual drilling of a well, which includes drilling, completing and/or testing of the well. E&B shall provide the City with a copy of E&B’s Control of Well policy prior to commencing any actual drilling, along with the Certificate of Insurance, and such policy shall be maintained throughout the entire course of each actual drilling operation. 6.16.2.3 Worker’s Compensation Insurance. Worker’s 34 Formatted: Indent: Left: 0.08", Right: 0.04" Development Agreement between City of Hermosa Beach and E&B Natural Resources Compensation insurance as required by law, together with Employer’s Liability coverage with limits of not less than One Million Dollars ($1,000,000.00). Such coverage shall include a Waiver of Subrogation in favor of the City and an “alternate employer” endorsement. 6.16.2.4 Owned, Non-Owned Or Hired Auto Insurance. Owned, Non-Owned or Hired Auto insurance with limits of not less than One Million Dollars ($1,000,000.00) per occurrence or accident. 6.16.2.5 Following Form Excess Or Umbrella Liability Insurance. Following Form Excess or Umbrella Liability insurance in an amount of not less than Twenty- Five Million Dollars ($25,000,000.00) per occurrence and aggregate per policy period to apply as excess coverage over coverage required by Subsections 6.16.2.1, 6.16.2.3 and 6.16.2.4. 6.16.2.6 Additional Insurance Required To Comply With Law. If the amounts of minimum insurance coverage as specified above in this Section 6.16.2 are insufficient or become insufficient to meet in any respect the minimum insurance coverage requirements set forth in or required by any applicable legal requirements of any governmental entity or regulatory body or agency by statute, case law, rules and/or regulations, then in such event E&B shall procure and maintain sufficient amounts of insurance coverage to satisfy any such minimum insurance coverage requirements in addition to the insurance required by Subsections 6.16.2.1, 6.16.2.2, 6.16.2.3, 6.16.2.4 and 6.16.2.5. 6.16.2.7 [Review of Insurance Amounts During Term of Development Agreement] [UNDER DISCUSSION] 6.16.3 Drilling or Other Contractors. Exhibit C to the Lease states: “Each drilling or other contractor performing work for the joint account shall be required to maintain in force, with respect to the work performed by such contractor, to the extent applicable and possible, the same insurance as specified above.” E&B also agrees to require each contractor to include the City as an additional insured to any such insurance maintained by the contractor. 6.17 Mortgagee Protection. The parties hereto agree that this Agreement shall not prevent or limit the right of E&B at its sole discretion, to encumber its leasehold interest in the Property or any portion thereof or any improvement thereon by any mortgage or other security device (collectively "Mortgage") securing financing of the purchase, development or operation of the Property or any portion thereof (including, without limitation, any combination of purchase financing, construction financing, bridge loans, take-out and 35 Development Agreement between City of Hermosa Beach and E&B Natural Resources permanent financing), as provided in this Agreement; provided, however, that any such Mortgage shall be subordinate to the rights and obligations under this Agreement. The City acknowledges that prospective lenders providing such financing may request certain acknowledgements, estoppels, interpretations and/or modifications of this Agreement, and agrees upon request, from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, to meet with E&B and representatives of such lenders to discuss in good faith any such request for acknowledgements, estoppels, interpretations and/or modifications. The City shall not unreasonably withhold its consent to and/or execution of any such requested acknowledgements, estoppels, interpretations and/or modifications which the City determines is consistent with the intent and purposes of this Agreement and reasonably protects the interests of the City under this Agreement. If the City timely receives a request from a Mortgagee requesting a copy of any notice of default given to E&B under the terms of this Agreement, the City shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of default to E&B, as the case may be. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement. Any Mortgagee who comes into possession of E&B’s interests in the Property, or any part thereof, pursuant to foreclosure of the mortgage, shall take the Property, or part thereof, subject to the terms of this Agreement; in no event shall any such Mortgagee or its successors or assigns be entitled to a building permit or occupancy certificate until all fees and other obligations due by E&B under this Agreement have been performed and/or paid to the City, all defaults have been cured, and all otherwise applicable conditions to such permit or certificate have been satisfied. 6.18 Covenant of Good Faith and Fair Dealing. No party shall do anything which shall have the effect of harming or injuring the right of the other parties to receive the benefits of this Agreement. 6.19 Covenant of Cooperation. E&B and the City shall cooperate with and assist each other in the performance of the provisions of this Agreement, including assistance in obtaining 36 Development Agreement between City of Hermosa Beach and E&B Natural Resources permits for the development of the Property or the Project which may be required from public agencies other than the City, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this Agreement), and the indemnity provisions in Section 6.5 of this Agreement. E&B reserves the right to challenge any ordinance, measure, moratorium or other limitation in a court of law if it becomes necessary to protect the development rights vested in the Property pursuant to this Agreement. 6.20 Justifiable Reliance. The City acknowledges that, in investing money and planning effort in and to the Project and all public improvements and dedication offers required hereunder, and in undertaking commencement of the Project, E&B will be doing so in reliance upon the City's covenants contained in this Agreement and upon the enforceability of this Agreement, and the City agrees that it will be reasonable and justifiable for E&B to so rely. 6.21 Project Is Private Undertaking. It is specifically understood and agreed to by and between the parties hereto that: (1) the subject development is a private development; (2) except for the obligations of the City described herein, if any, the City has no responsibilities for or duty to third parties concerning any public improvement until such time and only until such time that the City accepts the same pursuant to the provisions of this Agreement; (3) E&B shall have full power over and exclusive control of the development of the Project herein described subject only to the limitations and obligations of E&B under this Agreement and the Project Approvals; and (4) the contractual relationship between the City and E&B is such that E&B is not an agent of the City nor is City an agent of E&B. Notwithstanding the foregoing, nothing contained in this Agreement shall be deemed to waive or modify any otherwise applicable obligations the City, acting in its governmental capacity and not as a party to this Agreement, may have to E&B or any other party, under and in accordance with all applicable laws. 6.22 Further Actions and Instruments. The parties to this Agreement shall cooperate with and provide reasonable assistance to the other parties to the extent contemplated in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of any party, the other parties shall promptly execute, 37 Development Agreement between City of Hermosa Beach and E&B Natural Resources with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. 6.23 Section Headings. All Article and Section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 6.24 Enforced Delay (Force Majeure). (a) In addition to specific provisions of this Agreement, performance by any party hereunder, including making payments, shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, casualties, acts of God, litigation not commenced by a Party to this Agreement claiming the enforced delay (including without limitation, third party legal challenges to the Project, the Project Approvals or the environmental clearance for the Project Approvals and the Project), unavailability of materials, unforeseeable events beyond the control of E&B, governmental restrictions including moratoria imposed or mandated by other governmental entities (as City is prohibited from imposing moratoria under Section 3.1.2) (but only as to delays or defaults on the part of E&B), enactment of conflicting state or federal laws or regulations (but only if the party claiming delay complies at all times with the provisions of this Agreement pertaining to such conflicting laws), delays caused by the delay or failure by any entity other than the party claiming such delay to provide financing for or construction of needed public facilities or infrastructure as contemplated or required by this Agreement, delays due to the enforcement of environmental regulations, litigation brought by third parties, or similar bases for excused performance. Any period of enforced delay provided for in this Section shall run concurrently with any period of enforced delay under the Lease. E&B shall only be required to provide one notice claiming such extension for enforced delay under both this Agreement and the Lease. (b) An extension of time for any such cause including an extension of the Term (a "Force Majeure Delay") shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party 38 Development Agreement between City of Hermosa Beach and E&B Natural Resources claiming such extension is sent to the other parties within thirty (30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within thirty (30) days after it obtains actual knowledge of the event. The time for performance due to a Force Majeure Delay will be extended for such period of time as the cause of such delay exists (whether or not it extends beyond the Term or the Extended Term) but in no event for longer than for such period of time. (c) Notwithstanding the first sentence of paragraph (b), above, the following shall apply: (i) E&B shall be entitled to a Force Majeure Delay for a period longer than the period of enforced delay if the City Council determines that such longer period is reasonably required; and (ii) E&B shall be entitled to a Force Majeure Delay notwithstanding the fact that E&B may not have given timely notice to the City, if the City Council determines that such Force Majeure Delay is reasonably required. (d) A Force Majeure Delay shall not include the existence of any adverse or difficult market or economic conditions. 6.25 Emergency Circumstances. (a) If, as the result of specific facts, events or circumstances, the City believes that a severe and immediate emergency threat to the health or safety of the City or its residents, meeting the requirements of subparagraph (b), below, requires the modification, suspension or termination of this Agreement, the City will, after reasonable notice to E&B (in light of all the circumstances), hold a hearing on such facts, events or circumstances, at which E&B shall have the right to address the City Council. The City shall have the right to modify, suspend or terminate this Agreement, in whole or in part, if, following such hearing, the City Council determines that such modification, suspension or termination is required in order to protect the health and safety of the City and its residents. (b) This Section 6.25 governs generally applicable emergencies in the area not 39 Development Agreement between City of Hermosa Beach and E&B Natural Resources specifically related to or caused by the Project. For purposes of this Section 6.25, an emergency must meet each of the following criteria: (i ) it must be based on genuine health, safety and general welfare concerns (other than general growth management issues); (ii) it must arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (iii) based upon its terms or its effect as applied, it does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such action by the City shall be taken in a manner so as to provide E&B with the rights and assurances provided under this Agreement. 6.26 Reporting Adverse Information. On or before the 15th and last calendar day of each month, E&B shall notify the City of any lawsuits, claims, notices of violation or administrative or governmental agency investigations concerning alleged or actual violations of any law or permit condition arising from or relating to E&B’s oil and gas drilling or production operations within the state of California. Together with the notification required by this Paragraph 6.26, E&B shall provide City two (2) copies (one to the City Manager, one to the City Attorney) of all such documents initiating such lawsuit, claim, notice of violation or administrative or governmental agency investigation, if such documents are in E&B’s possession, custody or control; otherwise, copies of such documents shall be submitted to City within three (3) days of receipt by E&B. If requested by the City Manager or City Attorney, any response by E&B to any such lawsuit, claim, notice of violation or administrative or governmental agency investigation, as well as the final decision, determination, agency or administrative action or findings, shall be submitted to City simultaneously with E&B's filing or submission, or within three (3) days of receipt of such documents by E&B. E&B's routine correspondence to said agencies need not be routinely submitted to City, but shall be made available to City promptly upon City's written request. 6.267 Severability. Invalidation of any of the provisions contained in this Agreement, or of the application thereof to any person, by judgment or court order, shall in no way affect any of the other provisions hereof or the application thereof to any other person or circumstance, and the same shall remain in full force and effect, unless enforcement of this Agreement, as so invalidated, would be unreasonable or inequitable under all the circumstances or would frustrate the purposes of this Agreement and/or the rights and obligations of the parties hereto. Formatted: Underline Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.278 Interpretation. The language in all parts of this Agreement shall in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against any party. The parties hereto acknowledge and agree that this Agreement has been prepared jointly by the parties and has been the subject of arm's length and careful negotiation over a considerable period of time, that each party has independently reviewed this Agreement with legal counsel, and that each party has the requisite experience and sophistication to understand, interpret and agree to the particular language of the provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement shall not be interpreted or construed against the party preparing it, and instead other rules of interpretation and construction shall be utilized. 6.289 Counterparts. This Agreement may be executed in duplicate counterpart originals, each of which is deemed to be an original and all of which when taken together shall constitute one and the same instrument. 40 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6. 2309 Entire Agreement. This Agreement consists of pages and exhibits (designated through __), which constitute the entire understanding and agreement of the parties, and, with the exception of (1) the Lease; (2) the Settlement Agreement; (3) the Agreement to Implement the Settlement Agreement dated July 23, 2014; and (4) the Reimbursement Agreement dated May 17, 2012 shall supersede any prior agreements, discussions, commitments, representations or agreements, written or oral, between the parties hereto with respect to this Agreement. IN WITNESS WHEREOF, the parties have each executed this Agreement on the date first written above. CITY OF HERMOSA BEACH E&B NATURAL RESOURCES MANAGEMENT CORPORATION By:_ By:_ Mayor President ATTEST: By: _ City Clerk APPROVED AS TO FORM: 41 Development Agreement between City of Hermosa Beach and E&B Natural Resources By: _ By: _ City Attorney Attorneys for E&B Natural Resources Management Corporation 42 October 7, 2014 Honorable Mayor and Members of Regular Meeting of the Hermosa Beach City Council October 14, 2014 CITY COUNCIL MEETING SCHEDULE FOR 2015 Recommendation: Review and provide direction on the proposed City Council meeting date changes and direct staff to prepare a City Council meeting schedule for 2015. Background: City Council meets on the 2nd and 4th Tuesday of each month, with the exception of the months of August and December when Council meets only once to accommodate the summer vacation and winter holiday seasons. This break in the council meeting/staff report cycle permits staff to concentrate on “work in progress” and is a very productive time. The only two apparent conflicts in the 2nd and 4th Tuesday format would be on September 22, 2015 and December 8, 2015. Yom Kippur begins at night fall on September 22, 2015 and continues until end of day on September 23, 2015. I propose moving the meeting of Tuesday, September 22, 2015 to Thursday, September 24, 2015. Hannukkah is observed December 7-14, 2015. I propose moving the meeting of Tuesday, December 8, 2015 to Tuesday, December 15, 2015. Your other options would be to keep the meetings on these holidays, select different dates than the ones proposed, or cancel the meetings. Respectfully submitted, Tom Bakaly City Manager 27 Development Agreement between City of Hermosa Beach and E&B Natural Resources DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF HERMOSA BEACH AND E&B NATURAL RESOURCES MANAGEMENT CORPORATION THIS DEVELOPMENT AGREEMENT (“Development Agreement” or “Agreement”) is entered into as of the ____ day of ______________, _____, by and between the CITY OF HERMOSA BEACH, a California municipal corporation ("City"), and E&B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation (“E&B”). RECITALS A. The City is the owner of that certain real property in the City of Hermosa Beach, County of Los Angeles, and State of California described in Section 2.4 of this Agreement (Exhibit A to this Agreement), and also known informally as the City Maintenance Yard (“Property” or “City Maintenance Yard”). B. On or about January 14, 1992, the City entered into Oil and Gas Lease No. 2 (“Lease”) with Macpherson Oil Company, a California corporation, for itself and for Windward Associates, a California limited partnership, of which it is the general partner (collectively “Macpherson”). The Lease was approved by the California State Lands Commission (“CSLC”). The Lease authorized Macpherson to perform oil and gas extraction activities in the tidelands granted to the City by the State of California, and also authorized Macpherson to utilize the Property for oil and gas drilling activities (“Macpherson Project”). C. During the 1990s, Macpherson sought and obtained approvals for the Macpherson Project from the City, the CSLC, the California Coastal Commission and the South Coast Air Quality Management District. In 1995, the voters of the City passed Proposition E, an initiative to ban oil drilling in the City. During this time, and subsequently, Macpherson, the City, the CSLC, and opponents to the Macpherson Project were parties to several lawsuits regarding the 28 Development Agreement between City of Hermosa Beach and E&B Natural Resources Macpherson Project, including an action by Macpherson against the City regarding whether Proposition E constituted a breach of the Lease (“Macpherson Lawsuit”). The trial court in the Macpherson Lawsuit determined that the adoption of Proposition E constituted a breach of the Lease, subject to certain City defenses, and scheduled a trial in April 2012 to determine Macpherson’s damages. D. E&B, who had no prior relationship with Macpherson, investigated the Macpherson Project and approached the City and Macpherson with a proposal to settle the Macpherson Lawsuit and to provide E&B with a potential opportunity to proceed with “a state- of-the-art directional well oil drilling project conducted from an urban drill site located on the City’s maintenance yard” and “an opportunity to persuade the City’s electorate that a state-of- the-art directional well oil drilling project conducted from the City’s maintenance yard can be accomplished safely and with financial beneifts to all of the parties.” (Settlement Agreement, p. 2.) On March 2, 2012, the City, Macpherson and E&B entered into a Settlement Agreement and Release (“Settlement Agreement”). E. The Settlement Agreement, among other consideration, provided for the dismissal of the Macpherson Lawsuit, certain payments to Macpherson, and the assignment to E&B of Macpherson’s rights under the Lease and all other permits for the Macpherson Project which would allow E&B to proceed with a redesigned oil development project (“Project”) under certain conditions. Under the terms of the Settlement Agreement, the City is required to place on the ballot, in a manner that comports with all applicable law, a measure that asks the voters whether to approve, among other things, “a development agreement that would afford E&B a vested right to proceed with the Project . . . .” (Settlement Agreement, p. 7.) F. The California Elections Code sets forth the procedures for a local legislative body to submit a measure to the voters of the City. As contemplated in the Settlement Agreement, the City elected to undertake environmental review of the Project referenced in paragraph E above in accordance with the requirements of the California Environmental Quality Act (“CEQA”). On July 8, 2014, the City Council of City certified an Environmental Impact Report in compliance with CEQA by its adoption of Resolution No. 14-6908. 29 Development Agreement between City of Hermosa Beach and E&B Natural Resources G. The California Legislature enacted Section 65864 et seq. of the Government Code, which provides that cities and counties may enter into development agreements with persons having legal or equitable development interests in real property. Section 65867.5 of the Government Code states that a development agreement is a “legislative act” to be approved by ordinance, and the California Constitution establishes the right of voters to approve legislative acts. Elections Code section 9222 authorizes the City Council to submit any ordinance to the voters for their approval. Section 65869 of the Government Code mandates Coastal Commission approval for any development agreement in an area where a local coastal program has not been certified. H. The City has adopted rules and regulations for consideration of development agreements, pursuant to Government Code Section 65865, in Chapter 17.64 of the City’s Municipal Code. I. In compliance with the Settlement Agreement and all other applicable law, the City submitted the [insert title of Ballot Measure] (“Ballot Measure”) to the voters of the City on [insert date] in compliance with California Elections Code Section 9222. The Ballot Measure includes the following legislative approvals: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). These legislative approvals are referred to in this Agreement as “Ballot Measure Approvals.” J. By approving the Ballot Measure and this Agreement, the voters of the City have determined that the public interest is served by entering into this Agreement because the Project, described in Exhibit B to this Agreement, will provide for the remediation of the City Maintenance Yard, and will provide substantial economic benefits to the City and to the Community in the form of royalties as described in the Lease and as further set forth in Exhibit C to this Agreement. 30 Development Agreement between City of Hermosa Beach and E&B Natural Resources K. This Agreement will bind future City Councils to the terms and obligations specified in this Agreement and limit, to the degree specified in this Agreement, the future exercise of the City's ability to regulate development on the Property. L. Upon approval by the voters of the Ballot Measure Approvals, this Agreement and the Project will be consistent with, and will serve to implement the policies, objectives, and standards of the elements of the City of Hermosa Beach General Plan and will be consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code). M. This Agreement and the Project is consistent with, and will serve to implement, the provisions of Article 3 of the California Coastal Act. N. This Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property and generally serve the public interest. AGREEMENT NOW THEREFORE, in consideration of the above recitals, the mutual covenants and conditions herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agrees as follows: 1 DEFINITIONS For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Agreement" means this Development Agreement by and between the City and E&B. "Approval Date" means the date on which the Ordinance approving this Development Agreement becomes effective under Elections Code Section 9217, specifically ten days after the date the vote is declared by the City Council [INSERT DATE]. 31 Development Agreement between City of Hermosa Beach and E&B Natural Resources “Ballot Measure” means the measure that was approved by the voters on the Election Date. “Ballot Measure Ordinance” or “Ordinance” means the ordinance that accomplishes the Ballot Measure Approvals. “Ballot Measure Approvals” means the: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). "CEQA" means the California Environmental Quality Act, Section 21000, et seq., of the California Public Resources Code. "City" means the City of Hermosa Beach, California. "City Council" means the City Council of the City of Hermosa Beach. "Code" or “HBMC” means the Municipal Code of the City of Hermosa Beach. "Commencement Date" means that date when the Commission approves the Development Agreement under Government Code Section 65869; provided, however, if litigation challenging the validity of this Agreement including any Project Approvals and/or environmental review pursuant to CEQA should be brought against the City or the Coastal Commission, the Commencement Date shall be the date such litigation is concluded in a manner that permits the commencement or continuation of the parties' rights and obligations under this Agreement. “Commission” means the California Coastal Commission. “Conditional Use Permit” means the Conditional Use Permit for Oil Development at 32 Development Agreement between City of Hermosa Beach and E&B Natural Resources the City Maintenance Yard, approved by the City in Resolution No. 93-5632, and the validity of which was confirmed by the Settlement Agreement, which is to be abandoned and superseded pursuant to the terms of this Agreement. "Current Land Use Regulations" means the ordinances, resolutions, rules, regulations, requirements and official policies of the City in force as of the date on which the City Council calls the election on the Ballot Measure, as amended by the Ballot Measure Approvals. "Development Agreement Act" means Section 65864 et seq., of the California Government Code. “E&B” means E & B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation in the business of exploring for and producing oil and gas and each of its respective successors and assigns to all or any portion of its interests in the Property during such time as such portion is subject to this Agreement. “Election Date” means March 3, 2015. "Event of Default" is defined in Section 5.1.1. "Exactions" means any requirement imposed by the City in connection with or pursuant to any land use regulation or land use approval process for the dedication of land, construction or improvement of public improvements or amenities, payment of development fees, or other mitigation measures required to mitigate the impacts of the development including, without limitation, all development impact fees or linkage fees, utility capacity fees, service or connection fees, major facilities fees, park fees, flood control fees, environmental impact mitigation fees, affordable housing fees, arts fees, transportation fees, child care fees and any similar governmental fees, charges and exactions required for the development of projects or property. "Force Majeure Delay" is defined in Section 6.23. "Future Ministerial Permits" is defined in Section 3.2.1. "General Plan" means the General Plan of the City as of the Effective Date. “Off-site Project Components” or “Off-site Components” means the Project 33 Development Agreement between City of Hermosa Beach and E&B Natural Resources components in the City of Hermosa Beach outside of the Property as described in Exhibit B to this Agreement, including (1) oil and gas pipelines along Valley Drive, Hermosa Beach, California, (2) supply staging/storage at 601 Cypress Avenue, Hermosa Beach, California, (3) a parking lot at 636 Cypress Avenue, Hermosa Beach, California, and (4) various locations outside the jurisdiction of Hermosa Beach. The location of (2) is more particularly described in Exhibit A-2 and the location of (3) is more particularly described in Exhibit A-3. “Oil Code” means the Hermosa Beach Oil Code, Chapter 21A (Oil Production), approved by the City with Ordinance No. 85-803. "Processing Fees" means all routine and generally applicable City-wide fees required by the City for processing applications and permits including, but not limited to, fees for land use applications, project permits, building applications, building permits, grading permits, maps and certificates of occupancy in effect at the time paid. Expressly exempted from Processing Fees are all Exactions. "Project" means the proposed oil and gas drilling and production project as described in the Project Description contained in Exhibit B. "Project Approvals" means the approvals for the Project as set forth in Section 2.6 of this Agreement. "Public Benefits" means those improvements to be constructed, services to be provided and/or amounts to be paid by E&B to the City as consideration for this Agreement pursuant to Section 2.1 and Exhibit C. "Term" means the term of this Agreement, as provided in Section 6.1 of this Agreement. "Zoning Ordinance" means the comprehensive Zoning Ordinance of the City, found in Chapter 17 of the Code of the City of Hermosa Beach as it exists on the Effective Date. 2 THE DEVELOPMENT AGREEMENT PROCESS 2.1 Statement of Benefits and Consideration. The voters of the City have determined that the 34 Development Agreement between City of Hermosa Beach and E&B Natural Resources Project is a development for which a development agreement is appropriate. Development of the Project in accordance with a development agreement will provide for the orderly development of the Property in accordance with the objectives set forth in the General Plan, including the Land Use Plan of the Local Coastal Program, as amended. Moreover, a development agreement for the Project will eliminate uncertainty in planning for and securing orderly development of the Property, ensure attainment of the maximum efficient utilization of resources within the City at the least economic cost to its citizens, and achieve the provision of public services, public uses, urban infrastructure and other goals and purposes for which the Development Agreement Act was enacted, all in the promotion of the health, safety and general welfare of the City of Hermosa Beach and its residents. In exchange for these and other benefits to the City, E&B will receive the assurance that E&B may develop the Project during the Term of this Agreement, subject to the terms and conditions herein contained. By approving Ballot Measure ___, the voters of the City have found and determined that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and have approved this Agreement. This Agreement does not (1) grant density or intensity in excess of that otherwise established in the Project Approvals, (2) supersede, nullify or amend any condition imposed in the Project Approvals, (3) guarantee to E&B any profits from the Project, or (4) prohibit or, if legally required, indicate E&B’s consent to, the Property's inclusion in any public financing district or assessment district. The City will receive substantial benefits as a result of the development of the Property in accordance with this Agreement, as set forth in Exhibit C, in recognition of and in exchange for this Agreement and the benefits provided to E&B pursuant to this Agreement. The voters of the City acknowledge the adequacy of the consideration provided by E&B to the City pursuant to this Agreement. In consideration of the benefits, commitments and consideration to be provided by E&B pursuant to this Agreement and in order to strengthen the public planning process and reduce the economic costs of development, the voters of the City hereby provide E&B assurance that it can proceed with the development of the Property for the Term of this Agreement pursuant to the land use, density and intensity specified in the Current Land Use 35 Development Agreement between City of Hermosa Beach and E&B Natural Resources Regulations, the Project Approvals and this Agreement. E&B would not enter into this Agreement or agree to provide the public benefits, commitments and consideration described in this Agreement if it were not for the certainty provided by this Agreement that the Property can be developed during the Term of this Agreement in accordance with the Current Land Use Regulations and the Project Approvals including the land use, density and intensity set forth in the Project Approvals. 2.2 Public Hearings. On June 23, 2014, the Planning Commission of the City, after providing notice as required by law, held public hearings on the legislative elements of the Project, including this Agreement and the amendments to the Hermosa Beach Municipal Code and Coastal Land Use Plan and the EIR. The City Council, after providing public notice as required by law, similarly held public hearings on the Project, including this Agreement [insert dates and specific code provisions]. 2.3 City Council and Voter Findings. The City Council adopted findings that review of the environmental impacts of this Agreement and the Project Approvals has been conducted in accordance with the provisions of CEQA and the State and local guidelines adopted thereunder, and the City Council has given consideration to such environmental review prior to placing the Ballot Measure on the ballot and has undertaken all actions necessary to comply with CEQA. In approving the Ballot Measure and this Agreement, the voters of the City have determined and found that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and all other applicable City plans, policies and regulations, and is consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code), all as amended by the Ballot Measure Approvals. 2.4 Property. The Property includes all real property that is subject to this Agreement. The Property as of the Election Date is commonly known as City Maintenance Yard, as more fully described in Exhibit A-1 incorporated herein by reference. 2.5 The Project. The Project consists of the development, construction and operations on the Property permitted under this Agreement and the Project Approvals. The description of the Project and its uses are more fully described in the Project Description set forth in Exhibit B which is incorporated herein by reference. The Project includes Off-site 36 Development Agreement between City of Hermosa Beach and E&B Natural Resources Components within the City of Hermosa Beach, and other elements located outside of the City. 2.6 Project Approvals. The Project includes, without limitation, all items described in the Project Description contained in Exhibit B and incorporated herein by reference and the following Project Approvals: (a) Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93- 5632 (as set forth in Section 2.7 below, to be abandoned per HBMC Section 17.70.030 and superseded pursuant to the terms of this Agreement); (b) Environmental Impact Report, dated June 2014, prepared pursuant to CEQA and certified by the City Council on July 8, 2014 (with revisions identified in City Council Resolution No. 14-6908); (c) Amendments to the Land Use Plan and Land Use Plan Map of the Local Coastal Program (a component of the City’s General Plan), approved by Ballot Measure __ on ________________, and by Commission [insert Commission action] on ______________________; (d) Amendment to the Municipal Code, approved by Ballot Measure __ on _________________; (e) Franchise for Oil and Gas Pipelines, approved by Ballot Measure __ on _______________; (f) Amendment to the Oil Code, approved by Ballot Measure __ on _______________; and (e) Development Agreement, approved by Ballot Measure __ on _________________, and by Commission [insert Commission action] on _________________. 37 Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.7. Abandonment of Conditional Use Permit. With adoption of the Ballot Measure, oil drilling and production is permitted on the Property subject to a development agreement. The relevant conditions of approval from the 1993 Conditional Use Permit (CUP) for oil development at the Property (Resolution No. 93-5632) are incorporated into this Development Agreement as Exhibit D-1 herein, and E&B shall comply with said conditions as required herein. Thus, upon the Commencement Date, this agreement will supersede the 1993 CUP, which shall no longer serve a regulatory purpose. Hermosa Beach Municipal Code Section 17.70.030 allows for voluntary abandonment of a Conditional Use Permit. This Agreement at the Commencement Date shall serve as both a written request to abandon the CUP and the City’s declaration that the 1993 CUP is abandoned. 3 VESTED DEVELOPMENT RIGHTS 3.1 Vested Rights to Develop. Subject to the terms, conditions, and covenants of this Agreement, including the Reservations of Power in Section 3.4, and the conditions of approval and mitigation measures attached hereto and incorporated herein as Exhibit D, E&B shall, as of the Approval Date, have a vested right to develop the Property and Project, including Off-site Components, in accordance with, and to the extent of, the Project Approvals, and the Current Land Use Regulations. The approved use of the Property, the density and intensity of use, the maximum height, footprint, and square footage of proposed buildings and structures, and provisions for reservation and dedication of land or public purposes shall be those set forth in the Project Approvals and the attached Exhibits. Nothing in this Agreement shall be deemed to obligate E&B to initiate development of the Project or any portion thereof within any period of time or at all. 3.1.1 Certain Changes Prohibited Without Consent of E&B. Except as otherwise provided in this Agreement, during the Term, the City shall not, as to the Property and the Project, including Off-site Components, without the prior written consent of E&B, which may be withheld in E&B’s sole and unfettered discretion: (a) change the Current Land Use Regulations, or Project Approvals as they apply to the Property or Project so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals; or (b) apply to the Property or the Project any new or 38 Development Agreement between City of Hermosa Beach and E&B Natural Resources amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals, so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals, or prevent or adversely affect the operation of the Project as contemplated hereby in accordance with the Current Land Use Regulations or Project Approvals; or (c) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that requires additional discretionary review or approval not otherwise required for the Project by the Current Land Use Regulations or Project Approvals; or (d) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that materially, adversely affects the timing or phasing of construction or development, or which limits the availability of utilities or other infrastructure for the Project. For the purposes of this Section 3.1, “prevent or adversely affect development or construction of the Project” shall include, without limitation, any changes which fundamentally affect the ability of any of the permitted uses to operate within the Project (e.g. prohibit any of the uses in the Project Approvals, change parking standards for any of the uses, etc.). 3.1.2 Rights are Vested. Unless amended or terminated in the manner specified in this Agreement (and subject to the provisions of this Agreement), E&B shall have the rights and benefits afforded by this Agreement and this Agreement shall be enforceable by E&B and the City notwithstanding any growth control measure, initiative, proposition or any development moratorium adopted after the Approval Date, or any change in the General Plan, zoning, or subdivision regulations adopted by the City which alter or amend the Current Land Use Regulations or Project Approvals or the adoption of any new or amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals and so as to prevent or adversely affect development or construction of the Project in accordance with the Current Land Use Regulations or Project Approvals. This Section shall be construed to prohibit the City from applying to the Property or the Project, including any Off-site Components, any development moratorium or growth control measure that is adopted specifically to prohibit the construction or operation of the Project, or as an interim measure pending contemplated General Plan, Specific Plan or zoning changes, or as a general growth control management measure except as provided for pursuant to Section 3.4. 39 Development Agreement between City of Hermosa Beach and E&B Natural Resources 3.1.3 Future Changes to Current Land Use Regulations. Following the Approval Date, if the City modifies the Current Land Use Regulations in a manner that E&B, in its sole discretion, determines is more beneficial than the Current Land Use Regulations, then E&B may choose in its sole discretion to be governed by the modified land use regulations rather than the Current Land Use Regulations, without E&B being deemed to have waived or limited any rights, remedies or privileges under this Agreement. 3.2 Other Rights. 3.2.1 Future Ministerial Permits. E&B will seek additional ministerial permits as required by the City, including, without limitation, excavation only permits, grading permits, demolition permits, building permits, well permits, drilling permits and public works permits, as needed to implement the Project Approvals and to construct and operate the Project. Collectively, these ministerial permit applications are called the "Future Ministerial Permits". The City agrees that it will not unreasonably withhold or unreasonably condition any of the Future Ministerial Permits which must be issued by the City in order for the Project to proceed, provided that E&B reasonably and satisfactorily complies with all preliminary procedures, actions, payment of Processing Fees and criteria generally required for processing such Future Ministerial Permits, and provided further that such Future Ministerial Permits comply with this Agreement, the Current Land Use Regulations and the Project Approvals and approvals of other governmental agencies with jurisdiction over the Project. The City further agrees that no discretionary permits, other than the Project Approvals, are required from the City to construct and operate the Project. 3.3 Reservations of Power. 3.3.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the following subsequent land use regulations shall apply to the development of the Property: (a) Processing Fees (but not Exactions) imposed by the City to cover the estimated actual costs to the City of processing applications for Project Approvals, fees for monitoring compliance with any Project Approvals, inspection fees, or fees for monitoring 40 Development Agreement between City of Hermosa Beach and E&B Natural Resources compliance with environmental mitigation measures. (b) Procedural regulations applied on a City-wide, nondiscriminatory basis relating to City entities required to review petitions or applications, forms of petitions and applications, notice requirements, information requested with petitions or applications, conduct of hearings, form of staff reports, nature and type of recommendations by City entities, appeal procedures and any other similar matters of procedure. (c) Regulations governing building codes and similar construction standards and specifications including, but not limited to, the California and International Codes, as they may be changed from time to time. (d) Regulations that are necessary to protect the public health and safety, including without limitation, development moratorium or limitation on the delivery of City-provided utility services, which meet each of the following requirements: (a) are based on genuine health, safety and general welfare concerns (other than general growth management issues); (b) which arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (c) are based upon its terms or its effect as applied, does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such regulations shall be applied and construed so as to provide E&B with the rights and assurances provided under this Agreement. This subsection governs generally applicable emergencies in the area not specifically related to or caused by the Project. (e) Regulations that are not in conflict with the Project Approvals, Current Land Use Regulations or this Agreement. Any regulation, whether adopted by initiative or otherwise, limiting the rate, timing, phasing or sequencing of development of the Property shall be deemed to conflict with the Project and shall therefore not be applicable to the development of the Property. Any regulation limiting the permitted uses of the Property, limiting the density or intensity of use of the Property, or limiting the size, height or location of improvements on the Property shall be deemed to conflict with the Project Approvals and shall therefore not be applicable to the development of the Property. (f) Regulations that are in conflict with the Project, but as to which the 41 Development Agreement between City of Hermosa Beach and E&B Natural Resources E&B has given its prior written consent for such regulations to be applied to the Property or to the development of the Property. (g) Regulations applied on a City-wide, non-discriminatory basis that do not prevent or adversely affect development or construction of the Project. 3.3.2 Modification or Suspension by State or Federal Law. In the event that state or federal laws or regulations, or those of any regional authority having jurisdiction over the Project or Property, enacted after the Approval Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement or the Project conditions, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state, federal, or regional authority laws or regulations and to effectuate to the extent possible the terms of this Agreement. 3.3.3 Police Power. The parties acknowledge and agree that City is restricted in its authority to limit its police power by development agreement and that the foregoing limitations, reservations and exceptions are intended to reserve to City all of its police power which cannot be so limited. This Agreement shall be construed to reserve to City all such power and authority which cannot be restricted by development agreement. 3.3.4 Taxes, Assessments and Fees. Anything herein to the contrary notwithstanding, City may impose on the Project any new non-discriminatory, City-wide taxes, assessments and fees, including but not limited to business license taxes or franchise fees, but not including any Exaction or other fee designated to mitigate the impact of development of the Project. 3.4 Regulation by Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of the City may possess authority to regulate aspects of the development of the Property separately from or jointly with City, and this Agreement does not limit the authority of such other public agencies. Changes to the project mandated by such regulatory agencies shall be automatically included into this Development Agreement as authorized in Section 10.F of the Ballot Measure and shall supersede any inconsistent provisions herein. 3.5 Agreement and Assurances on the Part of E&B. Without in any way limiting E&B’s 42 Development Agreement between City of Hermosa Beach and E&B Natural Resources rights under Section 5.2.2 not to proceed with development of the Project and, in such an event, to terminate this Agreement in its sole and subjective business judgment, if E&B proceeds with the Project, E&B agrees that it will use commercially reasonable efforts, in accordance with its own business judgment and taking into account market conditions and economic considerations, to develop the Project, in accordance with the terms and conditions of this Agreement, the Current Land Use Regulations, the Lease and the Project Approvals. 3.6 Public Benefits. 3.6.1 The parties acknowledge and agree that development of the Project will result in public benefits as set forth in Exhibit C. The voters of the City acknowledge the adequacy of the consideration, including the Public Benefits, provided by E&B pursuant to this Agreement. 3.6.2 Exactions and Processing Fees. 3.6.2.1 Exactions. No Exaction may be imposed on this Project except as specifically articulated in this Agreement, and except as required by the conditions of approval and the Mitigation Monitoring and Reporting Program contained in Exhibit D. 3.6.2.2 Processing Fees. E&B shall pay to the City all applicable Processing Fees regularly charged by the City and the amount of such Processing Fees may be increased from time to time on a non-discriminatory City-wide basis. 3.7 Public Improvements and Utilities 3.7.1 Installation Obligations. The parties hereby agree that the obligations to install public improvements and utilities necessary for the development of the Property shall be as provided for in the Project Approvals. 3.7.2 City-Provided Utilities: Reservation of Sufficient Capacity. To the extent that it is within the control of the City, the City shall use its best efforts to ensure that there shall be sufficient capacity, facilities and services with respect to City-provided utilities to complete construction of the Project, provided that E&B bear all costs incurred by the City in doing so. 43 Development Agreement between City of Hermosa Beach and E&B Natural Resources The City agrees that if limitations in the provision of utilities become necessary due to the existence of an emergency situation, they shall be applied only to the extent necessary to respond to such emergency, and shall not be applied against the Property or the Project in a discriminatory manner. 3.7.3 City-Provided Utilities: Nondiscriminatory Rates and Provision of Service. The City agrees that rates and charges for City-provided utilities for the Property and Project shall not be set or imposed in a discriminatory manner, but shall be those rates and charges that are or would be generally applicable to any user of a comparable quantity and quality of the utility use in the City (i.e., any other entity whose use or consumption of the utility is comparable to that of E&B), and that the City shall not discriminate against the Property or the Project in the provision of any City-provided utilities (such as potable and reclaimed water, sewer and drainage). 3.7.4 Dedications, Reservations and Conditions of Development. The portions of Property to be reserved or dedicated for public purposes pursuant to this Agreement, if any, shall be that property described in the Project Approvals. Unless otherwise indicated herein, the property described in the Project Approvals to be reserved or dedicated for public use shall be dedicated by E&B as provided in the Project Approvals. The City shall take such actions as may be necessary to vacate any prior dedications, offers to dedicate and grants of easements that are no longer necessary for the development of the Project in accordance with this Agreement. 3.8 Mitigation Measures and Conditions of Approval. E&B shall at its own expense timely perform all mitigation measures identified in the environmental documentation for the Project and conditions of approval identified in the Project Approvals as set forth in Exhibit D. E&B shall have no duty to complete the mitigation measures or conditions of approval, except as otherwise set forth in this Agreement, if the contemplated development fails to occur. 4 ASSIGNMENT, AMENDMENT AND REVIEW 44 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.1 Assignment 4.1.1 Right to Assign. E&B shall have the right to sell, transfer or assign its rights or interests in the Property in whole or in part (provided that no such partial transfer shall be permitted to cause a violation of the Subdivision Map Act, Government Code Section 66410 et seq.) to any person, partnership, joint venture, firm or corporation at any time during the Term, subject to the City’s consent, as provided in Subsection 4.1.2. The conditions and covenants set forth in this Agreement and incorporated herein shall run with the land and the benefits and burdens shall bind and inure to the benefit of the parties. Any such sale, transfer or assignment shall include the assignment and assumption of the rights, duties and obligations arising under or from this Agreement with respect to the property transferred and shall be made in strict compliance with the following requirements: (a) Except as provided in Section 6.17 of this Agreement, no sale, transfer or assignment of any right or interest under this Agreement shall be made unless made together with the sale, transfer or assignment of all or a part of the Property and then, only in accordance herewith. (b) Concurrently with the closing of such sale, transfer or assignment, E&B shall provide the City with an executed agreement by the purchaser, transferee or assignee and providing therein that the purchaser, transferee or assignee expressly and unconditionally assumes the duties and obligations of E&B under this Agreement to the extent of such transfer or assignment, in a form satisfactory to the City Attorney. (c) The purchaser, transferee or assignee shall provide the City with security equivalent to any security previously provided by E&B to secure performance of its obligations hereunder, if any, or under any of the Project Approvals. Any sale, transfer or assignment under Section 4.1 of this Agreement not made in strict compliance with the foregoing conditions shall constitute a default by E&B under this Agreement and any such assignment shall be void and of no effect. Notwithstanding the failure of any purchaser, transferee or assignee to execute the agreement required by subparagraph (b) of this Subsection 4.1.1, the burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the benefits of this Agreement shall not inure to 45 Development Agreement between City of Hermosa Beach and E&B Natural Resources such purchaser, transferee or assignee until and unless such agreement is executed. 4.1.2 City’s Reasonable Consent Required. E&B may sell, transfer or assign its rights or interests in the Property in whole or in part and this Agreement to any other person, partnership, joint venture, firm, corporation, trust or other lawful entity with the City’s consent, which consent shall not be unreasonably withheld or conditioned (“Transfer”). In the event E&B desires to make such Transfer, E&B shall submit to the City a request for approval at least forty- five (45) days prior to such Transfer, which approval shall not be unreasonably withheld, conditioned or delayed by the City. The City may withhold, condition or delay its approval upon finding of any of the following: (a) The proposed purchaser, transferee or assignee lacks the financial ability to perform the obligations of this Agreement; (b) The proposed purchaser, transferee or assignee lacks the necessary qualifications, competence, experience or capability to implement the development plan contemplated by the Project Approvals with the skill, expertise and quality equivalent to that of E&B; provided, however, if the proposed purchaser, transferee or assignee is a nationally or regionally recognized, or regionally known in Southern California, as an owner or developer of oil and gas facilities, such proposed purchaser, transferee or assignee shall be deemed to have met this requirement; or (c) An Event of Default by E&B as defined in Section 5.1.1 has occurred and is continuing under this Agreement. E&B shall provide to the City such information that the City reasonably requests in order for the City to make any determinations provided for by this Subsection 4.1.2. E&B agrees to provide such information on a timely basis sufficient to permit the City to make its determinations within the forty-five (45) day time period. 4.1.3 Applicability. The provisions of Sections 4.1.1 and 4.1.2 shall not be applicable to a Transfer as a result of which E&B retains at least a fifty (50) percent interest in the Property. or as a result of which E&B retains at least twenty-five (25) percent interest in the Property and maintains effective management control of the Project. 4.2 Changes and Amendments to Project 46 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.2.1 In the event E&B reasonably finds that a change or amendment in the Project Approvals is reasonably necessary or appropriate, E&B shall apply for any required changes to the Project Approvals. Any such application that does not require an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the Current Land Use Regulations, except as otherwise provided by this Agreement, including the Reservations of Power. Any application that requires an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the land use regulations in effect at the time the application is filed. 4.2.2 Minor Changes to Project - No Amendment of Agreement The parties acknowledge that refinements or modifications of the Project may be required during the Term. The parties agree that refinements and modifications which constitute a "Minor Change” in the Project or Project Approvals shall not require an amendment to this Agreement or public notice and a hearing. For any such Minor Change, the City shall not impose as a condition to approval any Exaction, except as authorized in this Agreement. The City Manager, subject to the City Council’s approval, shall be authorized to make the determination on behalf of the City whether a requested refinement or modification may be effectuated pursuant to this Section 4.2.2 or whether the requested refinement or modification is of such a character to require an amendment hereof pursuant to Section 4.2.3. The City Manager, subject to the City Council’s approval, shall be authorized to approve any Minor Changes hereunder on behalf of the City. If and when the parties find that Minor Changes are necessary or appropriate, they shall, unless otherwise required by law, effectuate such changes or adjustments through a letter prepared by the City Manager and approved by the City Council, which, after execution, shall be attached hereto as addenda and become a part hereof. The City Manager may consult with technical experts in making the determination that a requested refinement or modification is a “Major” or “Minor Change.” The City Manager shall not unreasonably withhold or delay its determination that a requested refinement or modification is a “Minor Change” as that term is used herein. The changes described below shall not be deemed Minor Changes; however, the examples listed below are listed for reference only, and are not intended to provide a complete list of changes that may not be deemed as Minor Changes: (a) Alters the permitted uses of the Property as a whole; 47 Development Agreement between City of Hermosa Beach and E&B Natural Resources (b) Requires an amendment to the Zoning Ordinance, or General Plan, or other legislative acts not contemplated in this Agreement; (c) Increases the density or intensity of use of the Property as a whole; (d) Constitutes a project requiring a subsequent or supplemental environmental impact report pursuant to Public Resources Code Section 21166; (e) Creates a situation adverse to public health or safety. 4.2.3 Other Changes. Any change in the Project which does not qualify as a "Minor Change" as defined herein shall require an amendment to this Agreement as provided in Section 6.9, and compliance with CEQA as applicable. 4.3 Annual/Special Review. 4.3.1 Annual Review. The City shall, at least every twelve (12) months during the Term of this Agreement, review the extent of good faith substantial compliance by E&B with the terms of this Agreement. Subject to the notice and cure procedure set forth in Section 5.1.2, such a periodic review may result in amendment or termination of this Agreement, provided a default has been established under the terms of this Agreement. Pursuant to Government Code Section 65865.1, as amended, E&B shall have the duty to file an annual review request with the City, pay any applicable Processing Fees for such annual review and demonstrate its good faith compliance with the terms of this Agreement at such periodic review. Processing fees for such review are to include, but are not limited to, all costs incurred by the City in retaining the necessary professionals and experts to provide the City with the necessary input regarding the annual review, including but not limited to City Attorney, consultant and other third parties the City deems necessary to conduct the annual review. Upon request by the City, E&B shall provide such information as may be necessary or appropriate in order to ascertain compliance with this Agreement. 4.3.1.1 Any party may address any requirement of this Agreement during the review. However, ten (10) days’ written notice of any requirement to be addressed shall be made by the requesting party. If at the time of review an issue not previously identified in 48 Development Agreement between City of Hermosa Beach and E&B Natural Resources writing is required to be addressed, the review at the request of either party shall be continued to afford sufficient time for analysis and preparation. 4.3.2 Special Review. The City Council may order a special review of compliance with this Agreement at any time. The Director of Community Development or City Council, as determined from time to time by the City Council, shall conduct such special reviews. Any special review shall comply with the procedural provisions and Processing Fees of an annual review as provided by Section 4.3.1. 4.3.3 Opportunity to be Heard. Upon written request to the City by E&B, E&B shall be permitted an opportunity to be heard orally and/or in writing at a hearing before the City Council regarding its performance under this Agreement. E&B shall also be heard before the City Council at any required public hearing concerning a review of action on the Agreement. Such hearings requested by E&B shall be subject to the Processing Fees provision of Section 4.3.1. 4.3.4 Information to be Provided E&B. The City shall, to such an extent as is practical, deposit in the mail to E&B a copy of staff reports and related exhibits concerning contract performance a minimum of seven (7) business days prior to any such review or action upon this Agreement by the Planning Commission or the City Council. 5 DEFAULT, REMEDIES AND TERMINATION 5.1 Enforceability. 5.1.1 Default. Subject to Sections 5.1.2 and 5.1.3, failure by any party to perform any term or provision of this Agreement required to be performed by such party shall constitute an event of default ("Event of Default”). In the event that E&B files for reorganization or other relief under any Federal or State bankruptcy or insolvency law, whether voluntarily or by involuntary bankruptcy or insolvency action, all provisions of this Agreement shall remain in full force and effect unless E&B engages in an Event of Default. For purposes of this Agreement, a party claiming another party is in default shall be referred to as the "Complaining Party", and the party alleged to be in default shall be referred to as the "Party in Default". 49 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5.1.2 Procedure Regarding Defaults. 5.1.2.1 Notice of Default. The Complaining Party shall give written notice of default to the Party in Default, specifying the default complained of by the Complaining Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. The Party in Default shall diligently endeavor to cure, correct or remedy the matter complained of, provided the such cure, correction or remedy shall be completed within the applicable time period set forth herein after receipt of written notice (or such additional, time as may be deemed by the Complaining Party to be reasonably necessary to correct the matter). Any failures or delays by a Complaining Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by a Complaining Party in asserting any of its rights and remedies shall not deprive the Complaining Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. If an Event of Default occurs, prior to exercising any remedies, the Complaining Party shall give the Party in Default written notice of such default. Without limitation, evidence of default may arise in the course of the regularly scheduled annual review or a special review described in Section 4.3. 5.1.2.2 Cure Periods. If the default is reasonably capable of being cured within thirty (30) days, the Party in Default shall have such period to effect a cure prior to exercise of remedies by the Complaining Party. If the nature of the alleged default is such that it cannot practicably be cured within such thirty (30) day period, the cure shall be deemed to have occurred within such thirty (30) day period if (i) the cure is commenced at the earliest practicable date following receipt of the notice; (ii) the cure is diligently prosecuted to completion at all times thereafter; (iii) at the earliest practicable date (in no event later than thirty (30) days after the curing party's receipt of the notice), the curing party provides written notice to the other party that the cure cannot practicably be completed within such thirty (30) day period; and (iv) the cure is completed at the earliest practicable date. In no event shall the Complaining Party be precluded from exercising remedies, subject to the preceding sentence if a default is not cured within sixty (60) days after the first notice of default is given. Subject to the foregoing, if a party fails to cure a default in accordance with the foregoing, the Complaining Party, at its option, may terminate this Agreement pursuant to this Agreement and California Government Code Section 65868, and/or institute legal proceedings pursuant to this Agreement. 50 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5.1.2.3 Procedures Regarding City Termination. Notice of intent to terminate shall be by certified mail, return receipt requested. Upon delivery by the City of notice of intent to terminate, the matter shall be scheduled for consideration and review by the City Council within thirty (30) days in accordance with Government Code Sections 65867 and 65868. Upon consideration of the evidence presented in said review and a determination by the City Council based thereon, the City may give written notice of termination of this Agreement to E&B. Any determination of default (or any determination of failure to demonstrate good faith compliance as a part of annual review) made by the City against E&B, or any person who succeeds to E&B with respect to any portion of the Property, shall be based upon written findings supported by substantial evidence in the record. Any purported termination of this Agreement for alleged default shall be subject to review in the Superior Court of the County of Los Angeles pursuant to Code of Civil Procedure § 1094.5(c). 5.1.3 Institution of Legal Action. Subject to notice of default and opportunity to cure under Section 5.1.2, and subject further to the limitation on remedies set forth in Section 5.1.4, in addition to any other rights or remedies, any party to this Agreement may institute legal action to cure, correct or remedy any default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation hereof, or to obtain any other remedies consistent with this Agreement. If a legal action or proceeding is brought by any party to this Agreement because of an Event of Default under this Agreement, or to enforce a provision hereof, the prevailing party shall be entitled to reimbursement of all costs and expenses, including reasonable attorneys’ fees, incurred in prosecuting such legal action or proceeding. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement. Additionally, in the event of a court finding (1) a violation of this development agreement or the conditions of approval in Exhibit D to this agreement, or (2) a violation of an order issued under Hermosa Beach Oil Code Section 21-A-10.1, a court may impose civil penalties up to $10,000/per day for each day in which E&B is determined to be non- compliant. 5.1.4 Remedies. 5.1.4.1 E&B’s Remedies. It is acknowledged by the parties that the City would not have entered into this Agreement if it were liable in damages under or with respect to this Agreement or the application thereof. In addition, the parties agree that monetary damages 51 Development Agreement between City of Hermosa Beach and E&B Natural Resources are not an adequate remedy for E&B if the City should be determined to be in default under this Agreement. The parties further agree that specific performance shall be E&B’s only remedy under this Agreement and E&B may not seek monetary damages in the event of a default by City under this Agreement. E&B covenants not to sue for or obtain monetary damages for the breach by City of any provision of this Agreement. 5.1.4.2 City's Remedies. The parties agree that the City shall have limited remedies for monetary damages and specific performance as specifically provided for in this Section 5.1.4.2. The City shall not have any right to compel specific performance with respect to the construction of the Project, or any obligation to construct the Project, including without limitation Section 3.7. Further, the City shall have no right to monetary damages as a result of E&B's failure to construct the Project or its failure to comply with Section 3.7. The City shall have the right to sue for monetary damages for failure by the E&B to pay any amounts owing under this Agreement including without limitation any amounts owing pursuant to Section 6.5.1. In no event shall the City be entitled to consequential damages or punitive damages for any breach of this Agreement. City also shall have the right to seek monetary damages for reimbursement of the actual cost to the City incurred by the City to construct, complete, demolish, remove or restore any physical infrastructure improvement in the public right of way which E&B commences construction of but fails to complete. If E&B’s failure or refusal to perform any provision of this Agreement causes an immediate and serious threat to life, health, property or natural resources, the City may pursue all remedies including but not limited to remedies available under the Hermosa Beach Oil Code Chapter 21-A (including the provisions of Article X, which allow for immediate cessation of operations) and Section 21 of the Lease. 5.1.4.3 Other Actions. Nothing in this Agreement shall be deemed to waive or limit any rights and remedies that the parties would otherwise have against the other relating to matters not covered by this Agreement. 5.2 Termination of Agreement. 5.2.1 As to the Property and all of the rights of E&B hereunder, and except as otherwise provided in this Agreement, this Agreement shall be deemed terminated and of no further effect upon the expiration of the Term of this Agreement unless earlier terminated pursuant to this Agreement. Subject to the notice and cure provisions set forth in Section 5.1.2, 52 Development Agreement between City of Hermosa Beach and E&B Natural Resources the City shall have the right to terminate this Agreement as to the Property and the rights of E&B hereunder, in the event E&B defaults and fails to cure such default within the respective cure period. Subject to the notice and cure provisions set forth in Section 5.1.2, E&B shall have the right to terminate this Agreement and the rights of the City hereunder in the event the City defaults and fails to cure such default within the respective cure period. Upon the termination of this Agreement, neither party shall have any further right or obligation with respect to the Property hereunder except with respect to any obligation to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination (other than commencement of construction of either phase) or with respect to any obligations which are specifically set forth as surviving this Agreement. Termination of this Agreement pursuant to this Section 5.2 shall cause the rights and benefits afforded by this Agreement to no longer be vested (subject to planning and zoning law) and as a result, the City shall no longer be limited from taking any action which may adversely affect the Property or the Project. 5.2.2 Termination by E&B Prior to Development. E&B is free, in its sole and subjective business judgment, not to proceed with development of the Project and, in such an event, to terminate this Agreement. The City acknowledges that such a right is consistent with the intent, purpose and understanding of the parties to this Agreement. In the event E&B decides not to proceed with development of the Project and to terminate this Agreement, E&B shall provide written notice to the City of that decision and of the final, irrevocable termination of this Agreement. Immediately upon the giving of such written notice to the City, the parties’ rights and obligations under this Agreement shall cease, except with respect to any obligations which are specifically set forth as surviving this Agreement. In the event of such written notice to the City terminating this Agreement, all Project Approvals (but not the Lease, Settlement Agreement and those included in the City’s General Plan and/or the Municipal Code), shall terminate and be extinguished. Termination by E&B shall not affect any of E&B’s obligations to pay assessments, liens or taxes incurred prior to the effective date of termination. 6 GENERAL PROVISIONS 6.1 Term. 6.1.1 Term. The Term of this Agreement shall commence upon the 53 Development Agreement between City of Hermosa Beach and E&B Natural Resources Commencement Date and shall be coterminous with the term of the Lease, unless terminated, modified or extended pursuant to the provisions of this Agreement or by the voters of the City. The Term of this Agreement shall be tolled during any period of time in which a Force Majeure Delay exists. 6.1.2 Additional Rights. Expiration or termination of this Agreement shall not affect any right vested under law independent of this Agreement. 6.2 Approval, Execution and Recordation Procedure. The following procedure shall govern approval of this Agreement: (a) The voters shall have approved Ballot Measure __ approving this Agreement; (b) Following voter approval, the Hermosa Beach City Council shall declare the vote in accordance with Elections Code Section 9217 and execute the Development Agreement; (c) As provided in Section 65868.5 of the Development Agreement Act, following execution by the City, the City shall cause a copy of this Agreement to be recorded with the County Recorder within ten (10) days. Any recording costs shall be paid by E&B; and (d) Following execution and recordation, the Coastal Commission shall have approved this Agreement (which shall include any revisions to this Agreement authorized by Section 10.F of the Ballot Measure Ordinance); 6.3 Cooperation and Implementation. City represents that it will cooperate with E&B to the extent reasonable and feasible to implement this Agreement. Upon satisfactory completion by E&B of all of its preliminary actions and payments of appropriate fees, City shall promptly commence and proceed with reasonable diligence to complete all steps necessary for the implementation of this Agreement and the development of the Property in accordance with the terms of this Agreement, including, but not limited to, the processing and checking of any and all Project Approvals, agreements, covenants and related matters required under the conditions of this Agreement, building plans and 54 Development Agreement between City of Hermosa Beach and E&B Natural Resources specifications, and any other plans necessary for the development of the Property, requests for inspections and certificates of occupancy, filed by or on behalf of E&B. E&B shall, in a timely manner, provide City with all documents, plans and other information necessary for the City to carry out its obligations hereunder, and pay for all necessary fees, costs, and expenses incurred by the City to facilitate implementation of this agreement that are not identified as the City’s responsibility. 6.4 Legal Challenges. 6.4.1 Defense. If any legal action or other proceeding is instituted by a third party or parties, other governmental entity or official challenging the validity of any provision of the Project Approvals, of the EIR or of this Development Agreement, E&B and the City shall cooperate in defending any such action. The City shall notify E&B of any such legal action against City within ten (10) days after the City receives service of process, except for any petition for a Temporary Restraining Order, in which case the City shall notify E&B immediately upon receipt of notice thereof. 6.4.2 Continued Processing. The filing of any lawsuit(s) by a third party (not a party to this Agreement) after the Approval Date against the City and/or E&B relating to this Agreement or to other development issues affecting the Project shall not delay or stop the processing or issuance of any permit or authorization necessary for development of the Project, unless required by court order. 6.5 Indemnity. 6.5.1 E&B Indemnity. To the fullest extent permitted by law, and notwithstanding the indemnification provisions set forth in the Lease and notwithstanding the limits of the insurance policies required herein, E&B hereby agrees, at its sole cost and expense, to defend, protect, indemnify, and hold harmless the City and its elected officials, officers, attorneys, agents, employees, consultants, volunteers, successors, and assigns (collectively "Indemnitees") from and against any and all third party damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens, and losses of any nature whatsoever, including reasonable fees of accountants, attorneys, engineers, consultants or other professionals and all costs associated therewith, arising or claimed to arise, 55 Development Agreement between City of Hermosa Beach and E&B Natural Resources directly or indirectly, out of, in connection with, resulting from, or related to any act, failure to act, error, or omission of E&B or any of its officers, agents, servants, lessees, employees, contractors, subcontractors, materialmen, suppliers or their officers, agents, servants, lessees, or employees, or arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to this Agreement or Project Approvals, or any approval subsequently granted by the City for the development of the Property, any construction permitted pursuant to this Agreement or Project Approvals, or any subsequent use of the Property, or any portion thereof, permitted by this Agreement or Project Approvals except for any actions resulting from the gross negligence or intentional acts of an Indemnitee. The City may elect to participate in the litigation, in which case E&B agrees to reimburse the City for its litigation costs and fees, including the retention of outside counsel to be selected by the City at the City’s sole discretion. Neither party shall settle any such lawsuit without the consent of the other party. 6.5.2 Survival of Indemnity. The indemnity provisions contained in Sections 6.4 and 6.5 shall survive the termination of the Agreement and are in addition to any other rights or remedies which Indemnitees may have under the law. Payment is not required as a condition precedent to an Indemnitee's right to recover under these indemnity provisions, and an entry of judgment against an Indemnitee shall be conclusive in favor of the Indemnitee's right to recover under these indemnity provisions. E&B shall pay Indemnitees for any reasonable attorneys’ fees and costs incurred in enforcing these indemnification provisions. 6.6 Notices. All notices or other communications required hereunder shall be in writing and shall be personally delivered (including by means of professional messenger service), or sent by registered or certified mail, postage prepaid, return receipt required, or by electronic mail (provided the email transmission is followed by delivery of a "hard" copy), and shall be deemed received on the date of receipt personally, by registered or certified mail or by facsimile. Unless otherwise indicated in writing, such notice shall be sent addressed as follows: If to the City: City Manager 56 Development Agreement between City of Hermosa Beach and E&B Natural Resources City of Hermosa Beach 1315 Valley Drive Hermosa Beach, CA 90254 With a copy to: Michael Jenkins, Esq. Jenkins & Hogin 1230 Rosecrans Avenue, Suite 110 Manhattan Beach, CA 90266 Telephone: (310) 643-8448 Fax: (310) 643-8441 If to E&B: E & B Natural Resources Management Corporation 1600 Norris Road Bakersfield, CA 93308 Telephone: (661) 679-1797 Fax: With a copy to: [name] Telephone: Fax: 6.7 No Third Party Beneficiaries. This Agreement is made and entered into for the sole 57 Development Agreement between City of Hermosa Beach and E&B Natural Resources protection and benefit of the parties to this Agreement and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 6.8 Time of Essence. Time is of the essence for each provision of this Agreement of which time is an element. 6.9 Modification, Amendment or Extension. Subject to any notice and hearing requirements imposed by law, this Agreement may be modified, amended and/or extended from time to time by mutual written consent of the City Council and E&B as set forth in Government Code Sections 65867, 65867.5 and 65868 and as authorized by Section 10.G of the Ballot Measure Ordinance and Chapter 19.66 of the Municipal Code. 6.10 Conflicts of Law. In the event that state, regional or federal laws or regulations enacted after the Approval Date or the action or inaction of any other affected governmental jurisdiction prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, the parties shall (a) provide the other party with written notice of such state, regional or federal restriction, provide a copy of such regulation or policy and a statement of conflict with the provisions of this Agreement, and (b) E&B and the City staff shall, within thirty (30) days, meet and confer in good faith in a reasonable attempt to modify this Agreement, but only to the minimum extent necessary to comply with such federal, regional or state law or regulation. Thereafter, regardless of whether the parties reach an agreement on the effect of such federal, regional or state law or regulation upon this Agreement, the matter shall be scheduled for hearings before the Council. Ten (10) days’ written notice of such hearing shall be given, pursuant to Government Code Sections 65090 and 65867. The Council, at such hearing, shall determine the exact modification or suspension which shall be necessitated by such federal, regional or state law or regulation. E&B, at the hearing, shall have the right to offer oral and written testimony. Any modification or suspension shall be taken by the affirmative vote of not less than a majority of the authorized voting members of the Council. Any suspension or modification may be subject to judicial review. The City shall cooperate with E&B in the securing of any permits which may be required as a result of such modifications or suspensions, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this agreement), and the indemnity provisions in Section 6.5 of this agreement. If E&B and the 58 Development Agreement between City of Hermosa Beach and E&B Natural Resources City do not agree on the modification or suspension, either party may elect to terminate this Agreement pursuant to the provisions of Section 5.2 of this Agreement. 6.11 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought and referring expressly to this Section. No waiver of any right or remedy in respect of any occurrence or event shall be deemed a waiver of any right or remedy in respect of any other occurrence or event 6.12 Successors and Assigns. Except as expressly provided to the contrary in this Agreement, the burdens and obligations of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement and all successors in interest to the Property or any portion thereof or any interest therein, and shall be covenants running with the land. 6.13 Governing State Law. This Agreement shall be construed in accordance with the laws of the State of California. 6.14 Constructive Notice and Acceptance. Every person who now or hereafter owns or acquires any right, title or interest in or to any portion of the Property is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Property. 6.15 Statement of Compliance. Within thirty (30) days following any written request, in accordance with the notice provisions of this Agreement, which either party may make from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, the other party shall execute and deliver to the requesting party a statement certifying that: (a) this Agreement is unmodified and in full force and effect or, if there have been modifications hereto, that this Agreement is in full force and effect, as modified, and stating the date and nature of such modifications; (b) that this Agreement is in full force and there are no current uncured defaults under this Agreement or specifying the dates and nature of any such defaults, and manner of cure; (c) any other information reasonably requested. The failure to deliver such statement within 59 Development Agreement between City of Hermosa Beach and E&B Natural Resources such time shall be conclusive upon the party which fails to deliver such statement that this Agreement is in full force and effect without modification except as may be represented by the requesting party and that there are no uncured defaults in the performance of the requesting party. Said statement(s) shall be in the form reasonably satisfactory to the City, E&B and to any purchaser, lender, title company, governmental agency, or other person reasonably requesting such statement(s) in connection with sale, use, development, construction, financing or marketing of the Property. The City and E&B, for their own respective uses, shall also be entitled to obtain a statement of compliance at any reasonable time. 6.16 Insurance. 6.16.1 E&B shall obtain and maintain insurance required by this Section 6.16, which shall also serve to satisfy the insurance requirements of section 18(b) and Exhibit C to the Lease. All insurance required to be carried by E&B shall be with companies rated A:X or better, in the then most recent edition of Best’s Insurance Guide, and licensed to provide the relevant insurance in the State of California. Certificates of Insurance required to be delivered by this Section 6.16 shall contain liability limits not less than those set forth in this Section 6.16, and shall list the City and the California State Lands Commission as an additional insured. E&B shall give the City an unqualified thirty (30) day notice of cancellation, non-renewal or material amendment thereof. E&B shall deliver the required Certificates of Insurance evidencing the insurance required by this Section 6.16 promptly upon obtaining the same. In the event any insurance (including the limits that are required to be obtained and maintained by E&B pursuant to this Section 6.16 and/or naming the City as an additional insured), other than insurance required to be obtained and maintained by applicable law, shall not be available and commercially feasible to obtain and maintain in the commercial insurance market, E&B shall provide written notice of that occurrence to the City. Said written notice shall be accompanied by a written report prepared by an independent insurance advisor of recognized national standing and reasonably acceptable to City, certifying that such insurance is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, or in the case where any required insurance amount is not so available, certifying as to the maximum amount that is so available, and in each case explaining in detail the basis for such conclusions. [UNDER DISCUSSION] Should this occur, E&B shall have the right to self-insure in order to obtain additional policy limits and/or coverage as long as the 60 Development Agreement between City of Hermosa Beach and E&B Natural Resources financial capability of E&B is sufficient to obtain self-insurance coverage that would be equivalent that required by this Section 6.16. Should E&B be unable to satisfy this requirement for financial capability in order to self-insure, E&B and the City shall negotiate in good faith and attempt to agree upon alternative adequate means of financial assurance to substitute for the insurance or the portion of the insurance that is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, taking into consideration the type and amount of insurance which has become unavailable, the potential magnitude of any loss not covered by insurance. E&B may self-insure and/or provide other alternative adequate means of financial assurance to the City only for so long as and to the extent that any insurance required by this Section 6.16 is not then reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. Said differently, E&B will again be required to obtain and maintain all of the insurance required by this Section 6.16 once the same is reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. 6.16.2 Required Insurance. LESSEE shall procure, pay for and keep in full force and effect during the term of this Agreement each and all of the following insurance. 6.16.2.1 Commercial General Liability Insurance. Commercial General Liability, including: Bodily Injury; Property Damage; Personal Injury; Blanket Contractual Liability, or equivalent; Broad Form Property Damage; Premises and Operations; Fire Legal Liability; Sudden and Accidental Pollution Liability; Products and Completed Operations; Explosion, Collapse and Underground Hazard; and Advertising/Personal Injury Coverage, and pollution occurring from the same in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate. 6.16.2.2 (Loss Of) Control Of Well And Pollution Liability Coverage. (Loss Of) Control of Well insurance and Operators Extra Expense Coverage with total of Forty Million Dollars ($40,000,000.00) limited liability for Sections 1A (Well Out Of Control Insurance), 1B (Redrill/Extra Expense), and 1C (Seepage, Pollution, Cleanup and Contamination) and a total of Five Million Dollars ($5,000,000.00) limited liability for Section 2 (Care, Custody and Control) and coverage for bodily injury, property damage, including cleanup costs and defense costs resulting from a Well Out Of Control incident. Notwithstanding the foregoing, E&B shall be obligated to maintain the specified Control of Well coverages only during actual drilling of a well, which includes drilling, completing and/or testing of the well. E&B shall provide the City with a copy of E&B’s Control of Well policy prior to commencing any actual drilling, along with the Certificate of Insurance, and such policy shall be maintained throughout the entire course of each actual drilling operation. 6.16.2.3 Worker’s Compensation Insurance. Worker’s 61 Development Agreement between City of Hermosa Beach and E&B Natural Resources Compensation insurance as required by law, together with Employer’s Liability coverage with limits of not less than One Million Dollars ($1,000,000.00). Such coverage shall include a Waiver of Subrogation in favor of the City and an “alternate employer” endorsement. 6.16.2.4 Owned, Non-Owned Or Hired Auto Insurance. Owned, Non-Owned or Hired Auto insurance with limits of not less than One Million Dollars ($1,000,000.00) per occurrence or accident. 6.16.2.5 Following Form Excess Or Umbrella Liability Insurance. Following Form Excess or Umbrella Liability insurance in an amount of not less than Twenty- Five Million Dollars ($25,000,000.00) per occurrence and aggregate per policy period to apply as excess coverage over coverage required by Subsections 6.16.2.1, 6.16.2.3 and 6.16.2.4. 6.16.2.6 Additional Insurance Required To Comply With Law. If the amounts of minimum insurance coverage as specified above in this Section 6.16.2 are insufficient or become insufficient to meet in any respect the minimum insurance coverage requirements set forth in or required by any applicable legal requirements of any governmental entity or regulatory body or agency by statute, case law, rules and/or regulations, then in such event E&B shall procure and maintain sufficient amounts of insurance coverage to satisfy any such minimum insurance coverage requirements in addition to the insurance required by Subsections 6.16.2.1, 6.16.2.2, 6.16.2.3, 6.16.2.4 and 6.16.2.5. 6.16.2.7 [Review of Insurance Amounts During Term of Development Agreement] [UNDER DISCUSSION] 6.16.3 Drilling or Other Contractors. Exhibit C to the Lease states: “Each drilling or other contractor performing work for the joint account shall be required to maintain in force, with respect to the work performed by such contractor, to the extent applicable and possible, the same insurance as specified above.” E&B also agrees to require each contractor to include the City as an additional insured to any such insurance maintained by the contractor. 6.17 Mortgagee Protection. The parties hereto agree that this Agreement shall not prevent or limit the right of E&B at its sole discretion, to encumber its leasehold interest in the Property or any portion thereof or any improvement thereon by any mortgage or other security device (collectively "Mortgage") securing financing of the purchase, development or operation of the Property or any portion thereof (including, without limitation, any combination of purchase financing, construction financing, bridge loans, take-out and 62 Development Agreement between City of Hermosa Beach and E&B Natural Resources permanent financing), as provided in this Agreement; provided, however, that any such Mortgage shall be subordinate to the rights and obligations under this Agreement. The City acknowledges that prospective lenders providing such financing may request certain acknowledgements, estoppels, interpretations and/or modifications of this Agreement, and agrees upon request, from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, to meet with E&B and representatives of such lenders to discuss in good faith any such request for acknowledgements, estoppels, interpretations and/or modifications. The City shall not unreasonably withhold its consent to and/or execution of any such requested acknowledgements, estoppels, interpretations and/or modifications which the City determines is consistent with the intent and purposes of this Agreement and reasonably protects the interests of the City under this Agreement. If the City timely receives a request from a Mortgagee requesting a copy of any notice of default given to E&B under the terms of this Agreement, the City shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of default to E&B, as the case may be. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement. Any Mortgagee who comes into possession of E&B’s interests in the Property, or any part thereof, pursuant to foreclosure of the mortgage, shall take the Property, or part thereof, subject to the terms of this Agreement; in no event shall any such Mortgagee or its successors or assigns be entitled to a building permit or occupancy certificate until all fees and other obligations due by E&B under this Agreement have been performed and/or paid to the City, all defaults have been cured, and all otherwise applicable conditions to such permit or certificate have been satisfied. 6.18 Covenant of Good Faith and Fair Dealing. No party shall do anything which shall have the effect of harming or injuring the right of the other parties to receive the benefits of this Agreement. 6.19 Covenant of Cooperation. E&B and the City shall cooperate with and assist each other in the performance of the provisions of this Agreement, including assistance in obtaining 63 Development Agreement between City of Hermosa Beach and E&B Natural Resources permits for the development of the Property or the Project which may be required from public agencies other than the City, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this Agreement), and the indemnity provisions in Section 6.5 of this Agreement. E&B reserves the right to challenge any ordinance, measure, moratorium or other limitation in a court of law if it becomes necessary to protect the development rights vested in the Property pursuant to this Agreement. 6.20 Justifiable Reliance. The City acknowledges that, in investing money and planning effort in and to the Project and all public improvements and dedication offers required hereunder, and in undertaking commencement of the Project, E&B will be doing so in reliance upon the City's covenants contained in this Agreement and upon the enforceability of this Agreement, and the City agrees that it will be reasonable and justifiable for E&B to so rely. 6.21 Project Is Private Undertaking. It is specifically understood and agreed to by and between the parties hereto that: (1) the subject development is a private development; (2) except for the obligations of the City described herein, if any, the City has no responsibilities for or duty to third parties concerning any public improvement until such time and only until such time that the City accepts the same pursuant to the provisions of this Agreement; (3) E&B shall have full power over and exclusive control of the development of the Project herein described subject only to the limitations and obligations of E&B under this Agreement and the Project Approvals; and (4) the contractual relationship between the City and E&B is such that E&B is not an agent of the City nor is City an agent of E&B. Notwithstanding the foregoing, nothing contained in this Agreement shall be deemed to waive or modify any otherwise applicable obligations the City, acting in its governmental capacity and not as a party to this Agreement, may have to E&B or any other party, under and in accordance with all applicable laws. 6.22 Further Actions and Instruments. The parties to this Agreement shall cooperate with and provide reasonable assistance to the other parties to the extent contemplated in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of any party, the other parties shall promptly execute, 64 Development Agreement between City of Hermosa Beach and E&B Natural Resources with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. 6.23 Section Headings. All Article and Section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 6.24 Enforced Delay (Force Majeure). (a) In addition to specific provisions of this Agreement, performance by any party hereunder, including making payments, shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, casualties, acts of God, litigation not commenced by a Party to this Agreement claiming the enforced delay (including without limitation, third party legal challenges to the Project, the Project Approvals or the environmental clearance for the Project Approvals and the Project), unavailability of materials, unforeseeable events beyond the control of E&B, governmental restrictions including moratoria imposed or mandated by other governmental entities (as City is prohibited from imposing moratoria under Section 3.1.2) (but only as to delays or defaults on the part of E&B), enactment of conflicting state or federal laws or regulations (but only if the party claiming delay complies at all times with the provisions of this Agreement pertaining to such conflicting laws), delays caused by the delay or failure by any entity other than the party claiming such delay to provide financing for or construction of needed public facilities or infrastructure as contemplated or required by this Agreement, delays due to the enforcement of environmental regulations, litigation brought by third parties, or similar bases for excused performance. Any period of enforced delay provided for in this Section shall run concurrently with any period of enforced delay under the Lease. E&B shall only be required to provide one notice claiming such extension for enforced delay under both this Agreement and the Lease. (b) An extension of time for any such cause including an extension of the Term (a "Force Majeure Delay") shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party 65 Development Agreement between City of Hermosa Beach and E&B Natural Resources claiming such extension is sent to the other parties within thirty (30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within thirty (30) days after it obtains actual knowledge of the event. The time for performance due to a Force Majeure Delay will be extended for such period of time as the cause of such delay exists (whether or not it extends beyond the Term or the Extended Term) but in no event for longer than for such period of time. (c) Notwithstanding the first sentence of paragraph (b), above, the following shall apply: (i) E&B shall be entitled to a Force Majeure Delay for a period longer than the period of enforced delay if the City Council determines that such longer period is reasonably required; and (ii) E&B shall be entitled to a Force Majeure Delay notwithstanding the fact that E&B may not have given timely notice to the City, if the City Council determines that such Force Majeure Delay is reasonably required. (d) A Force Majeure Delay shall not include the existence of any adverse or difficult market or economic conditions. 6.25 Emergency Circumstances. (a) If, as the result of specific facts, events or circumstances, the City believes that a severe and immediate emergency threat to the health or safety of the City or its residents, meeting the requirements of subparagraph (b), below, requires the modification, suspension or termination of this Agreement, the City will, after reasonable notice to E&B (in light of all the circumstances), hold a hearing on such facts, events or circumstances, at which E&B shall have the right to address the City Council. The City shall have the right to modify, suspend or terminate this Agreement, in whole or in part, if, following such hearing, the City Council determines that such modification, suspension or termination is required in order to protect the health and safety of the City and its residents. (b) This Section 6.25 governs generally applicable emergencies in the area not 66 Development Agreement between City of Hermosa Beach and E&B Natural Resources specifically related to or caused by the Project. For purposes of this Section 6.25, an emergency must meet each of the following criteria: (i) it must be based on genuine health, safety and general welfare concerns (other than general growth management issues); (ii) it must arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (iii) based upon its terms or its effect as applied, it does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such action by the City shall be taken in a manner so as to provide E&B with the rights and assurances provided under this Agreement. 6.26 Severability. Invalidation of any of the provisions contained in this Agreement, or of the application thereof to any person, by judgment or court order, shall in no way affect any of the other provisions hereof or the application thereof to any other person or circumstance, and the same shall remain in full force and effect, unless enforcement of this Agreement, as so invalidated, would be unreasonable or inequitable under all the circumstances or would frustrate the purposes of this Agreement and/or the rights and obligations of the parties hereto. 6.27 Interpretation. The language in all parts of this Agreement shall in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against any party. The parties hereto acknowledge and agree that this Agreement has been prepared jointly by the parties and has been the subject of arm's length and careful negotiation over a considerable period of time, that each party has independently reviewed this Agreement with legal counsel, and that each party has the requisite experience and sophistication to understand, interpret and agree to the particular language of the provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement shall not be interpreted or construed against the party preparing it, and instead other rules of interpretation and construction shall be utilized. 6.28 Counterparts. This Agreement may be executed in duplicate counterpart originals, each of which is deemed to be an original and all of which when taken together shall constitute one and the same instrument. 67 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.29 Entire Agreement. This Agreement consists of __ pages and ______________ exhibits (designated __ through __), which constitute the entire understanding and agreement of the parties, and, with the exception of (1) the Lease; (2) the Settlement Agreement; (3) the Agreement to Implement the Settlement Agreement dated July 23, 2014; and (4) the Reimbursement Agreement dated May 17, 2012 shall supersede any prior agreements, discussions, commitments, representations or agreements, written or oral, between the parties hereto with respect to this Agreement. IN WITNESS WHEREOF, the parties have each executed this Agreement on the date first written above. CITY OF HERMOSA BEACH E&B NATURAL RESOURCES MANAGEMENT CORPORATION By:____________________________ By:___________________________________ Mayor President ATTEST: By: _____________________________ City Clerk APPROVED AS TO FORM: 68 Development Agreement between City of Hermosa Beach and E&B Natural Resources By: ____________________________ By: _________________________________ City Attorney Attorneys for E&B Natural Resources Management Corporation Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-1” LEGAL DESCRIPTION 555 6TH STREET, HERMOSA BEACH, CALIFORNIA 90254 That portion of APN 4187-031-900 described as: That portion of Lot A lying south of a line commencing at the northeasterly corner of Lot 11, Block U, Tract 2002, as per Map recorded in Map Book 22, Pages 154 and 155, in the Office of the Recorder of the County of Los Angeles, and continuing along the easterly prolongation of the northerly line of said Lot 11, to the easterly line of Lot A; Lots 11 through 18, Block R, Tract 2002; Lots 11 through 18, Block U, Tract 2002; and the vacated portion of Bard Street adjoining said lots. Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-2” LEGAL DESCRIPTION 601 CYPRESS AVENUE , HERMOSA BEACH, CALIFORNIA 90254 APN 4187-030-037 Lots 11 Through 14, Block H, Tract 1686, M.B. 20- 188, City Of Hermosa Beach Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-3” LEGAL DESCRIPTION 636 CYPRESS AVENUE, HERMOSA BEACH, CALIFORNIA 90254 APN 4187-031-022 Lots 5 And Lot 6, Block I, Tract # 1686, M.B. 20- 188, City Of Hermosa Beach . Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “B” PROJECT DESCRIPTION (From Section 2.0 of FEIR) Revised with removal of City maintenance yard discussion The Proposed City Maintenance Yard Project described herein is a separate project that the City will undertake if the voters approve the Proposed Oil Project. This Development Agreement only applies to the Proposed Oil Project described below, and except for any obligations explicitly assigned to E&B herein and payments from E&B for the City Maintenance Yard Project, the Proposed City Maintenance Yard Project is not governed by this Agreement. To the extent feasible, references to the Proposed City Maintenance Yard have been removed from the Project Description. Project Description E&B Natural Resources Management Corporation (E&B), the Applicant, is proposing the E&B Oil Drilling & Development Project (Proposed Oil Project) on a 1.3-acre site located in the City of Hermosa Beach (City). The site for the Proposed Oil Project (Project Site), as shown in Figure 2.1, would be located at 555 6th Street, bounded on the east by Valley Drive and on the south by 6th Street, approximately seven blocks east of the beach and the Pacific Ocean. Oil and gas pipelines constructed and used by the Project would extend from the Project Site to one of four potential valve box locations for the oil line and to a Southern California Gas (SGE) metering station for the gas line. The Project Site is owned by the City and is currently used as the City (Public Works) Maintenance Yard. The Applicant has leased the Project Site from the City for the implementation of the Proposed Oil Project. The Proposed Project is composed of two parts: 1) the relocation of the City Maintenance Yard (called the Proposed City Maintenance Yard Project); and 2) the development of an oil and gas facility on the current City Maintenance Yard site (called the Proposed Oil Project). In order to clear the current City Maintenance Yard site (called the Project Site) for the construction of the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Directional Drilling Drilling wells at multiple angles to better reach and produce oil and gas reserves. Directional drilling allows for multiple wells from the same drilling location. proposed oil and gas facility, the City Maintenance Yard would be temporarily relocated during Phase 1 of the Proposed Project. If it is determined that the production of oil and gas on the Project Site would be economically viable (Phase 2 of the Proposed Project), construction of the permanent City Maintenance Yard would be completed once Phase 3 of the Proposed Project begins. The permanent Proposed City Maintenance Yard Project has two options: a Parking Option, which would add a net 97 parking spaces with a below grade parking garage, and a No Added Parking Option, which would have the same amount of parking as is currently available. This Project Description reflects information contained in the Project Application submitted to the City of Hermosa Beach by the Applicant, along with supporting information provided in conjunction with the Project Application (E&B Natural Resources, Planning Application and Appendices, Volumes 1 – 3, November 14, 2012; Response to Planning Application Completeness Review, April 11, 2013; Response to Requested Clarifications, June 24, 2013; Quantitative Risk Analysis, July 3, 2013; Errata, July 22, 2013).1Information related to the relocation of the City Maintenance Yard and construction and operation of the Proposed City Maintenance Yard is derived from information provided by the City of Hermosa Beach Public Works Department. The description of the Proposed Project incorporates the essential elements of the Project as it is proposed, including all phases and major components as well as the locations of all proposed offsite activities (in addition to those occurring on the Project Site). More detailed information related to some aspects of the Proposed Project (including proposed operational parameters and design features) may be found within individual sections of the Final Environmental Impact Report (EIR), where considered relevant to the discussion of specific environmental issues and/or effects. In addition, a description of the environmental setting and current conditions related to the environmental issues is presented in the Environmental Setting subsection of the individual sections of the Final EIR. 1 Information submitted by the Project Applicant is available for public review at the City of Hermosa Beach Community Development Department. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This section discusses the Project objectives, historical operations on the Proposed Project Sites, the four phases of the Proposed Oil Project, scheduling, vehicle trip and employee requirements, and necessary permitting associated with the Proposed Project. A number of technical drawings related to the Proposed Project design and layout are included in Appendix A to the Final EIR. 2.1 Project Overview The Applicant proposes the development of an onshore drilling and production facility site that would utilize directional drilling of 34 wells (30 oil wells, four wells for water disposal/injection) to access the oil and gas reserves in the tidelands (pursuant to a grant by the State of California to the City) and in an onshore area known as the uplands. Both of these areas are located within the Torrance Oil Field within the jurisdiction of the City. In addition, the Proposed Project would result in the installation of offsite underground pipelines for the transportation of the processed crude oil and gas from the Project Site to purchasers, extending through the Cities of Redondo Beach and Torrance. The Applicant proposes a laydown site for supply staging/storage within the basement level of the industrial building at 601 Cypress Avenue during the construction phases. The Applicant also proposes to construct a parking lot at 636 Cypress Avenue for use by some of its construction employees/contractors on weekdays and by the public at other times. The City Maintenance Yard is proposed to be relocated to a temporary facility to be established on the rear (westerly) portion of the City Hall site (1315 Valley Drive) prior to and during the initial phase of the Proposed Oil Project so that the maintenance operations could be moved when the existing City Maintenance Yard is demolished as part of Proposed Oil Project activities. The construction of the permanent City Maintenance Yard would be undertaken on the site now occupied by the Hermosa Self-Storage (552 11th Place) after the Applicant completes the testing phase of the Proposed Oil Project in Phase 2. As indicated below, the permanent City Maintenance Yard and the oil and gas facility on the Project Site would be constructed at the same time during Phase 3 of the Proposed Project. The timeframe from commencement of the Proposed Project until the permanent oil and gas facility would be operational is estimated to be approximately 3.25 years. The existing lease (Oil and Gas Lease No. 2) allowing drilling into the tidelands provides for a 35-year period. Table 2.1 summarizes events in the Proposed Project timeline. Specifics of each of the Proposed Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Project components are described in the following sections. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.1 Proposed Project Location Source: Project Application, Amendments and Appendices Hermosa Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.1 Proposed Project Schedule Summary Phase Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Temporary City Yard Oil Project Phase 1 Oil Project Phase 2 Drill Test Permanent City Yard Oil Project Phase 3* Oil Project Phase 4* Drill Operate Continuously for 30+ years Re-drills Average 30 days/year, max 150 days/yr** Note: * If the test phase is determined to be successful, Phase 3 and 4 would occur. For construction only. Does not include permitting timeframe. ** These are the maximum proposed by the Applicant. The 150 days per year would occur once every 5 years. Most likely re-drill activity would be lower. 2.2 Proposed Project Objectives Pursuant to Section 15124(b) of the California Environmental Quality Act (CEQA) Guidelines, the description of the Proposed Project is to contain “a clearly written statement of objectives” that would aid the lead agency in developing a reasonable range of alternatives to evaluate in the EIR and would aid decision makers in preparing findings and, if necessary, a statement of overriding considerations. The City is the lead CEQA agency which prepared the EIR, considered the EIR for certification and is placing the Proposed Project on the ballot. Project approvals will be made by the electorate of the City of Hermosa Beach. As part of the Project Application, the Applicant provided its stated objectives for the Proposed Oil Project, which consist of the following: 1. Develop the Proposed Oil Project consistent with the 1993 Conditional Use Permit and the March 2, 2012 Settlement Agreement, with the utilization of directional drilling Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources techniques from the Project Site, which is the current City Maintenance Yard; 2. Maximize oil and gas production from the Torrance Oil Field within the City’s jurisdiction, thereby maximizing the economic benefits to the City; 3. Provide an oil and gas development project on the Project Site that utilizes the latest technology and operational advancements related to safety and production efficiency in order to provide a project that would be safe and would meet the applicable environmental requirements; 4. Conduct construction and drilling activities on the Project Site incorporating technological advancements, operational practices, and design features related to air quality, odors, noise, hazards, and water quality to minimize the potential impacts on the adjacent community and the environment; 5. Provide landscaping, hardscape, signage, lighting, and other design features to minimize the visual effects of the Proposed Oil Project on the adjacent community; and 6. Implement operational practices and incorporate design features to provide safe vehicular ingress and egress during temporary construction activities and the ongoing operation of the Proposed Oil Project. Pursuant to the March 2, 2012 Settlement Agreement between the City of Hermosa Beach, E&B, and Macpherson Oil Co., the City’s primary objective is to comply with the California Environmental Quality Act and place on the ballot a measure allowing the City of Hermosa Beach electorate to decide whether or not to approve the Applicant’s Proposed Oil Project and a Development Agreement to vest the Project so that, if approved, the Project cannot later be invalidated by a vote of the people. In the event that voters approve the Proposed Oil Project, the City would need to relocate the City Maintenance Yard. Under those conditions, the City's objectives for relocation of the City Maintenance Yard would be to: 1. Provide City Yard Maintenance facilities that support provision of high-quality City services in an integrated and cost-efficient manner; 2. Consolidate City facilities and functions for maximum efficiency and flexibility; 3. Minimize disruption of City functions during relocation of the City Maintenance Yard; 4. Ensure the relocated City Maintenance Yard is compatible with surrounding uses; and 5. Ensure there is no net loss of public and employee parking spaces as a result of both the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Proposed Oil Project and the relocation of the City Maintenance Yard consistent with the Preferential Parking Program approved by the Coastal Commission. 2.3 Historical and Current Operations Oil drilling and production in the Los Angeles Basin has a long history. According to the California Division of Oil, Gas, and Geothermal Resources (DOGGR) database, almost 30,000 oil wells have been drilled in the Los Angeles Basin in the last 100 to 150 years. Figure 2.2 shows the location of these wells. The Proposed Oil Project would drill into the western edge of the Torrance Oil Field (see Figure 2.2). Most of the production from the Torrance Oil Field has been generated from wells drilled in the City of Torrance, with some drilling in the Cities of Redondo Beach and Hermosa Beach. There have been approximately 1,500 wells drilled in the Torrance Oil Field historically. Although the Project Site is relatively flat, it is underlain by windblown sand dunes that previously covered the region, resulting in uneven ground due to natural conditions. In the 1920s and 1930s, the northeastern portion of the Project Site had a large depression that was mined for sand. Around 1927, the City’s dump and refuse burner were located on the Project Site, and, by 1947, the depression was filled. The resulting former landfill is approximately 45 feet deep and is filled with glass, porcelain, and ceramic towards the bottom and soils containing miscellaneous metals, wires, glass, and other materials toward the top (i.e., closer to the ground surface). Between the depths of 3 feet and 25 feet below ground surface (bgs), the former landfill contains some soil with lead at concentrations above the Environmental Protection Agency (EPA) Region 9 Industrial Regional Screening levels. In addition, soils impacted with total petroleum hydrocarbons (TPH) were found at depths of 25 to 44 feet bgs within the central portion of the landfill. For a detailed discussion of the soil conditions on the Project Site, refer to Section 4.7, Geological Resources/Soils, of the Final EIR. Figure 2.2 Historical Wells Drilled in the Los Angeles Basin Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: DOGGR In 1930, an oil well (Stinnett Oil Well No. 1) was drilled in the western portion of the Project Site. The oil well was abandoned in 2005, consistent with the then-current standards of the DOGGR. During the mid-1940s, the first building was constructed on the Project Site for City maintenance uses, with the last building constructed in the 1980s. Since the 1990s, with the exception of the addition of trailers, storage containers, and sheds, the Project Site has generally Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources remained unchanged. The Project Site is currently developed as the City Maintenance Yard, and the Proposed Oil Project would require the relocation of the City Maintenance Yard. As indicated in Figure 2.3, existing development on the Project Site consists of three buildings, two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing, and masonry walls. In addition, within the boundaries of the Project Site, there is an asphalt parking area in the southern portion of the City Maintenance Yard that provides 15 parking spaces for employees (Monday through Thursday between the hours of 6:00 a.m. and 6:00 p.m.) and for the public after hours (6:00 p.m. to 6:00 a.m.) and on weekends and holidays. Existing site contamination from historical site uses is also shown in Figure 2.3. According to an Environmental Site Assessment prepared in 2012 (Brycon 2012), 10 of the 73 soil samples taken exceeded Regional Water Quality Control Board guidelines for total petroleum hydrocarbons, all within the mid range hydrocarbons (C13-C22). Volatile organic carbons were not present in any of the samples at concentrations above the EPA Region 9 Industrial Regional Screening Levels. Six of the samples exceeded the EPA Region 9 Industrial Regional Screening Levels for lead. In addition, a series of groundwater borings conducted in 2013 (Brycon 2013) found the presence of total petroleum hydrocarbons, lead, barium, and arsenic in the groundwater below the City Maintenance Yard that exceeded the Maximum Contaminant Levels (MCLs) established for drinking water by the Regional Water Quality Control Board. The immediately adjoining properties were sparsely developed into the 1940s, with a few residential units located to the northwest of the Project Site. Post 1940s, significant development occurred with industrial buildings being constructed to the south and west of the Project Site by 1953 and to the north of the Project Site by the 1960s. By 1960, the buildings to the west of the Project Site were identified as containing a building material warehouse, a boat repair shop, and a contractor’s storage yard. By 1960, the building to the south was being utilized as a planter mix manufacturing site. Since the 1960s, the various adjoining buildings have been utilized for multiple small businesses as industrial/commercial uses. To the east, from the late 1800s, there was a railroad right-of-way (ROW) that was utilized by the Santa Fe Railway. During the 1960s, the railroad ROW was converted to a greenbelt/park (Veterans Parkway - Hermosa Valley Greenbelt (Greenbelt)), Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources followed by a Council initiative in 1987 directing the City of Hermosa Beach to acquire the Railroad ROW for public use as parkland and open space in perpetuity; the property is zoned O-S-1 Restricted Open Space. Currently, other land uses adjacent to the Project Site (on the same block between 8th and 6thStreet and Cypress Avenue and Valley Drive) are commercial/industrial (Cypress Auto Body, A&B Heating, JB Plumbing, McGivern Surfboard Manufacturing, Buddhist Meditation Center, NUWORK, a recording studio and other various small commercial/industrial businesses), with some residential uses along 8th Street to the north. Adjacent blocks include residential uses located 150 feet to the north of the Project Site, 250 feet to the west and 180 feet to the east (east of the Greenbelt), with small commercial/industrial uses and the Beach Cities Self Storage facility located to the immediate south across 6th Street with its required parking lot abutting the southwest corner of the Project Site. Figure 2.4 shows the southern area of the City of Hermosa Beach along with land uses. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.3 Existing Site Conditions Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant Project Application, DOGGR well database, Phase 2 Environmental Site Assessments Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.4 Project Site and Area Land Uses (Zoning Map) Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: City of Hermosa Beach Zoning Map, November 2013 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 1 Site Preparation 6-7 Months 2.4 Proposed Oil Project Phases The Proposed Oil Project would occur in the following four phases: • Phase 1: Site Preparation; • Phase 2: Drilling and Testing; • Phase 3: Final Design and Construction; and • Phase 4: Development and Operations. Each phase is discussed in the following sections. The Applicant proposes a facility designed for a maximum capacity of 8,000 barrels per day (bpd) of crude oil and 2.5 million standard cubic feet per day (scfd) of produced gas at completion of the drilling stage of the Proposed Oil Project in Phase 4. The operational parameters of the Proposed Oil Project are summarized in Table 2.2. Prior to the initiation of the Proposed Oil Project, it would be required that plans be submitted by the Applicant to the City and other permitting authorities for review and approval. These would include coastal development permits, oil and gas well permits, demolition plans, grading plans, utility and electrical plans, cement/foundation plans, landscaping plans, street and ROW improvement/modification plans, and construction plans, amongst others. Figure 2.5 shows the Project Site along with the electrical and pipeline connections and the Cypress Avenue parking lot. 2.4.1 Phase 1 Site Preparation The purpose of Phase 1 would be to prepare the Project Site for drilling and testing as well as for the subsequent phases of the Proposed Oil Project. It is anticipated that Phase 1 would occur for approximately six months. Prior to Phase 1 activities, the temporary City Maintenance Yard would be installed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.1.1 Phase 1 Construction Activities Phase 1 would consist of the following construction activities: • Underground existing overhead utilities; • Construction of modifications to intersection of 6th Street and Valley Drive; • Relocation of City Maintenance Yard to the temporary site; • Clearance of Project Site; • Construction of retaining walls and rough grading; • Installation of perimeter fencing; • Construction of well cellar; • Installation of offsite electrical conduit and onsite electrical equipment; • Completion of onsite surface and entrance/exit; • Installation of temporary landscaping; and • Installation of 35-foot sound attenuation wall.(per Mitigation Measure NV-3a) Table 2.2 Proposed Oil Project Design Parameters Parameter Value Crude oil production Phase 2: Up to 800 bpd Phase 4: Up to 8,000 bpd Crude oil properties 18 API Natural gas production Phase 2: Up to 250,000 scfd Phase 4: Up to 2.5 million scfd Produced water disposal/injection Phase 2: Up to 1,600 bpd Phase 4: Up to 16,000 bpd Maximum number of wells Phase 2: 4 wells (3 production, 1 water disposal/injection) Phase 4: 34 total (30 production, 4 water disposal/injection) NGL production Up to 1 bpd mixed with crude oil Pipeline length and tie-in, gas Approx. 0.43 miles + 1.4 miles Pipeline length and tie-in, crude Approx. 3.55 miles Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water use, during construction Approx. 2,000 gallons per day during grading and earthwork (potable) Approx. 10,000 gallons per day during pipeline installation (potable) Approx. 20,000 gallons per month during facility construction (potable) Water use, during drilling 130,000 gallons per well (reclaimed water) (Approx. 4,500 gallons per day) Water use, during operations and maintenance (Landscaping- Reclaimed Water) (Domestic-Potable Water) 1,300 gallons per day (1,000 gallons per day for landscaping) (300 gallons per day for domestic use) Electrical use, Phase 2 4.5 megawatts (including drill rig) Electrical use, Phase 3 0.3 megawatts Electrical use, Phase 4 7.0 megawatts (including drill rig) 3.0 megawatts during normal ongoing operations Onsite electrical generation of 1 MW Well workovers, annually 90 days/year Well re-drills (full sized drilling rig, peak annually Up to 5 per year, up to 30 re-drills for the life of the Project Notes:bpd = barrels per day; kW = kilowatts; scfd = standard cubic feet per day; NGL = natural gas liquids; API = American Petroleum Institute; estimated peak values and maximums shown Source: Project Application, Amendments and Appendices. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.5 Project Site and Pipeline/Electrical Connections Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: E&B Supplemental Application materials, January 2014 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is discussed in the following subsections. Figure 2.6 shows the proposed arrangement of the Project Site under Phase 1. Appendix A of the Final EIR provides the conceptual grading plan, site plan, elevations, and landscape concept plan for the Proposed Oil Project at the completion of Phase 1. The laydown area (equipment and supply storage/staging) for the Proposed Oil Project would be in the basement of the building located at 601 Cypress Street on the northwest corner of Cypress Street/6th Street (See Figure 2.3). Underground Existing Overhead Utilities There are currently overhead power lines and communication lines on poles that run overhead through the existing trees along Valley Drive. These existing lines would be removed along the Project frontage and relocated underground adjacent to the Project Site in a location determined by the utility companies and the City. Appendix A of the Final EIR provides drawings showing the general location where the utility lines would be placed underground. Construction of Modifications to Intersection of 6th Street and Valley Drive The Proposed Oil Project would include the construction of modifications to the intersection of 6th Street/Valley Drive to provide the necessary turning radius for Project-related trucks. Appendix A of the Final EIR provides drawings showing the conceptual design of the proposed intersection modifications. These modifications would result in: • Removal of a portion of the landscaped area and entry driveway to the Beach Cities Self Storage facility; • Redesign of the sidewalk on the southwest corner of the intersection; • Relocation of the stop sign and striping for the northbound lanes on Valley Drive to address the redesign of the southwest corner; • Removal of a utility pole and underground utilities on the southwest corner of the intersection; • Removal of a utility pole and underground the utilities on 6th Street; and • The removal of two on-street parking spaces on 6th Street. As a part of the intersection modifications, the stop sign and striping for the southbound lanes on Valley Drive would be relocated to improve the line of sight to and from the intersection with 6th Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Street. This modification would be made concurrently with the addition of the perimeter fencing on the Project Site (See Figure 2.6). In addition, the curb on the northwest corner along 6th Street adjacent to the Project Site would be temporarily provided as a rolled asphalt curb for Phases 1 and 2. The two on-street parking spaces removed from 6th Street would be provided as part of the Project’s overall parking replacement program discussed further below. Relocation of the City Maintenance Yard Prior to Phase 1, a temporary City Maintenance Yard would be built at the New City Maintenance Yard location to the rear of City Hall at 1315 Valley Drive. At this point, the maintenance operations would be moved into the temporary City Maintenance Yard. Clearance of the Project Site Prior to the initiation of the site clearance activities, temporary 24-foot sound attenuation walls (per Mitigation Measure NV-1a) would be erected at the Project Site to reduce noise impacts related to construction. These sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise associated with Phase 1 demolition and construction activities. The temporary sound walls would be removed from the Project Site after the onsite construction activities in Phase 1 are completed. Following the relocation of the City Maintenance Yard , the Project Site would be cleared. The site clearance activities would include the removal of three existing buildings (one of which would be moved to the temporary site), two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing and masonry walls. In addition, the asphalt parking area to the west of the City Maintenance Yard would be removed, resulting in the removal of 15 parking spaces. The building located at 636 Cypress Avenue would also be demolished at this time to clear the parcel for the off-site temporary parking area. Prior to the demolition of both buildings, building materials would be assessed for asbestos content and presence of lead based paint, consistent with the requirements of the South Coast Air Quality Management District (SCAQMD). If asbestos containing materials or lead based paint are detected, the appropriate abatement process would be implemented. The building materials removed from the Project Site would be transported by truck to the recycling facility at Southern Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water Injection Pumping produced water back down the well hole into the oil reservoir from which it was originally extracted. California Disposal in Santa Monica, the recycling facilities at Hanson Aggregates in Long Beach, or another certified facility for recycling or disposal. The Proposed Oil Project would include an overall parking replacement program that meets the intent of the City’s Preferential Parking Program and Coastal Development Permit requirements. Section 2.4.5 discusses the parking plan for the Proposed Oil Project. Three of the four existing mature trees along the frontage of the Project Site on Valley Drive would be retained to help screen construction activities. The Applicant has concluded that the fourth tree should be removed because it is in poor health, and it would limit access to the Project Site (See Figure 2.6). The three remaining trees would be trimmed to keep branches from hanging over onsite equipment and to help prevent trespassing. Construction of Retaining Walls and Rough Grading Once the Project Site is cleared, retaining walls would be constructed along the western boundary of the Project Site and set back 10 feet along the western portion of the southern property boundary (See Figure 2.6). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.6 Proposed Oil Project Phase 1 Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources [need to fix this image] Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Rough grading would occur to allow for: • The construction of a well cellar for three test oil wells and a water disposal/injection well; • Surface drainage towards a temporary retention basin, which would contain a 100-year flood event; • A level area for the set up and movement of the drill rig; and • The installation of temporary production equipment. It is anticipated that the rough grading would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the retaining wall locations and rough grading at the completion of Phase 1. Installation of Perimeter Fencing Following the rough grading, the Project Site would be enclosed by a six-foot temporary perimeter chain link fence covered with green fabric. The fence would include secured gates for the entrance off Valley Drive and the exit to 6th Street. The Applicant proposes to include the appropriate signage consistent with the requirements of the City. Figure 2.6 shows the location of the fencing and gates at the completion of Phase 1, and Appendix A of the Final EIR shows an elevation of the fencing. Construction of Well Cellar A cement well cellar approximately 8 feet wide by 40 feet long by 12 feet deep would be constructed for three test wells and one water disposal/injection well to allow for the drilling of the wells in Phase 2. The well cellar would provide containment of any potential oil spillage during Phase 2. Figure 2.6 shows the location of the well cellar. Installation of Offsite Electrical Conduit and Onsite Electrical Equipment Electrical service for the Proposed Oil Project would be provided by Southern California Edison (SCE). The electrical conduit and onsite electrical equipment for all phases of the Proposed Oil Project would be installed in Phase 1. The electrical load during Phase 2 and Phase 3 would be 4.5 Megawatts (MW) and 0.3 MW, respectively. During Phase 4, the electrical load during Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources drilling would be 7.0 MW and during ongoing operations would be 3.0 MW. According to the Applicant, SCE has determined that the existing 16 kilovolt (kV) circuit running along 8th Street to the north of the Project Site has the necessary capacity to serve the Proposed Oil Project. To receive electrical service from SCE, the Proposed Oil Project would provide for the installation of an underground conduit for a linear distance of 280 feet under Valley Drive from 8th Street to the northeast corner of the Project Site (see Figure 2.6) Electrical equipment consisting of step down transformer(s), switchgear, and variable frequency drive units would be installed in the northeast corner of the Project Site designated as the New SCE Yard in Figure 2.6. The electricity would be used to provide power for well pumps, the temporary production equipment, the temporary construction trailer, safety system controls, onsite lighting, and the drill rig used in Phase 2 and Phase 4 (both drilling and re-drills). An uninterruptable power supply would be installed for critical systems such as the temporary production equipment safety systems and security lights. An emergency generator would be installed to provide power for the safe shutdown of the drilling operation in the event of a loss of power from SCE. Appendix A of the Final EIR provides the general location of the offsite underground conduit. Completion of Onsite Surface and Entrance/Exit The surface of the Project Site would be covered with crushed aggregate base material to serve as a dust inhibitor and driving surface. Temporary berms would be constructed around the areas where the drill rig and associated equipment would be set up and the temporary production equipment installed to provide secondary containment. In addition, a temporary berm would be provided around the well cellar to avoid surface flows from entering the well cellar. The existing driveway access from Valley Drive and 6th Street would be used. On both sides of the driveway on 6th Street, a rolled asphalt curb would be provided. Installation of Temporary Landscaping Landscaping would be provided along the eastern and southern perimeter of the Project Site to provide a visual buffer. The plant materials and irrigation would be consistent with the requirements of the City. The trees and other plant materials would be planted in a manner that Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources allows for their replanting as a part of the permanent landscaping provided in Phase 3. Reclaimed water supplied by West Basin Municipal Water District would be used for irrigation. The reclaimed water line serving the Greenbelt east of Valley Drive would be tapped and extended to the Project Site. Appendix A of the Final EIR includes a conceptual landscape plan and plant materials for the temporary landscaping provided at the completion of Phase 1. Installation of 32-Foot Sound Attenuation Wall Upon completion of the Phase I improvements, a 35-foot sound attenuation wall (per Mitigation Measure NV-3a) would be erected inside the chain link construction fence in order to attenuate noise generated during Phase 2 drilling and testing. The 35-foot sound wall would stay installed through the duration of Phase 2. 2.4.1.2 Phase 1 Site Preparation Detailed Schedule It is anticipated that Phase 1 would occur for a period of approximately six months as indicated in the schedule provided in Table 2.3. As required by the previous Conditional Use Permit and as proposed by the Applicant, the construction activities on the Project Site, including the operation of earthmoving equipment, would be conducted between the hours of 8:00 a.m. and 6:00 p.m. Monday through Friday (except holidays) and 9:00 a.m. and 5:00 p.m. on Saturdays. Offsite construction activities within the public ROW would occur between the hours of 8:00 a.m. and 3:00 p.m. Monday through Friday in the City of Hermosa Beach. Truck deliveries to the Project Site would be limited to the hours between 9:00 a.m. and 3:00 p.m. Monday through Friday, except in the case of an emergency and with the prior approval of the Director of Public Works. The Project-related truck trips would be limited to 18 round trips per day and limited to the designated truck routes. 2.4.1.3 Phase 1 Site Preparation Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 1 are provided in the detailed Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources listing in Appendix A of the Final EIR. Vehicle trips are summarized in Table 2.4. The Project- related personnel would utilize parking spaces in an offsite parking area provided consistent with the proposed parking plan described in detail in Appendix A. Table 2.3 Phase 1 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Construction of Temporary City Yard Underground overhead utilities 6thStreet & Valley intersection Relocation of Yard Remove buildings Remove other site structures Construct retaining walls Grade, well cellar, aggregate Construct chain link fence Construct well cellar Install electrical service Install landscaping Install 32-foot sound wall Note: relocation of Yard would only include moving of shop materials and equipment. The Temporary City Maintenance Yard would be construction prior to the start of Phase 1 and would take approximately 9 months. See section 2.5. 2.4.1.4 Phase 1 Truck Routes Truck trips would be required in order to deliver and remove construction-related materials and equipment to and from, respectively, the Project Site. Trucks would utilize roads designated as truck routes by the cities of Hermosa Beach, Redondo Beach, Manhattan Beach and Torrance. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Truck routes are shown in Figures 2.13 and 2.14. The routes identified by the Applicant as those utilized for all phases of the Project are as follows: Inbound Trucks 1. Inbound trucks from westbound Artesia Boulevard 2. Left on to southbound Pacific Coast Highway 3. Right on to westbound Pier Avenue 4. Left on southbound Valley Drive 5. Right into the Project driveway on Valley Drive Or 6. Inbound trucks from westbound 190th Street (which becomes Anita Street) 7. Right on northbound Pacific Coast Highway 8. Left on to westbound Pier Avenue 9. Left on to southbound Valley Drive 10. Right into the Project driveway on Valley Drive Outbound Trucks 11. Outbound trucks on to eastbound 6th Street 12. Right on to southbound Valley Drive 13. Left on to eastbound Herondo Street 14. Continue onto Anita Street, then 190th Street to the Interstate 405 (I-405)/ Crenshaw interchange Or 15. Outbound trucks on to eastbound 6th Street 16. Right on to southbound Valley Drive 17. Left on to eastbound Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 2 Drilling and Testing: Drilling for 3-4 Months Testing for 7-9 Months More 18. Left on to northbound Pacific Coast Highway 19. Right on to Artesia Boulevard. 2.4.2 Phase 2 Drilling and Testing The purpose of Phase 2 would be to conduct the drilling and testing of wells in order to determine the potential productivity and economic viability of the Proposed Oil Project. During this phase, up to three test wells and one water disposal/injection well (a total of four wells) would be drilled. These wells would be drilled utilizing directional drilling technology, which enables the wells to be drilled laterally for long distances, so that the bottom-hole locations may be located several thousand feet from the surface location of each wellhead on the Project Site (see Figure 2.7 and 2.8). 2.4.2.1 Phase 2 Site Geology and Drilling Objectives The Proposed Oil Project would utilize directional drilling techniques to access the crude oil and gas reserves in the tidelands (offshore) and uplands (onshore) in the portions of the Torrance Oil Field within the City’s jurisdiction. The Project Application states that "no hydraulic fracturing (or “fracking”) of wells will occur because the geologic zones for the Proposed Project are permeable and capable of yielding oil and gas without hydraulic fracture stimulation." Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.4 Phase 1 Vehicle Trip Summary Activity Trucks, Maximum RT/day* Autos/PU, Maximum RT/day Total, Maximum RT/day Underground overhead utilities 4 10 14 Construct 6th& Valley intersection 3 8 11 Remove buildings 10 8 18 Remove other existing site structures 15 6 21 Construct retaining walls 5 14 19 Grade, well cellar and aggregate 15 10 25 Construct chain link fence 1 4 5 Construct well cellar 4 8 12 Install electrical service 6 15 22 Install landscaping 1 2 3 Install 32-foot sound attenuation wall 3 12 14 Greatest number of trips in one day 18 (during week 9) 31 (during week 12) 43 (during week 10) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during week 9 with the installation of electrical service and the removal of existing structures. Maximum auto activity occurs during week 12 with the installation of electrical service and construction of the retaining wall. Maximum activity trucks and autos combined occur during week 10. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices The approximate extent of the City’s jurisdiction within the Torrance Oil Field is provided in Figure 2.7. Figure 2.8 provides a typical well cross section illustrating how wells can reach the oil reserves, within the tidelands, from the Project Site. The Project Application states the primary target zones are the Upper Main, Lower Main, and Del Amo Zones with some production potential within the Schist Conglomerate. As shown in Figure 2.8, the Upper Main Zone is the uppermost part of the Puente Formation. The Project Application states that it is expected to be the shallowest oil productive zone in the City. Of the three known producing horizons in the Torrance Oil Field, the Upper Main Zone is the most prolific. The Upper Main Zone beneath the Hermosa Beach tidelands and uplands is expected to be 300 feet thick and composed of inter-bedded thin sands and shales. The shales are currently fractured and provide both fractured porosity and permeability. The fractures are Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources critical to the performance of the reservoir in the area due to the fine-grained and thin-bedded nature of the sands. The Lower Main Zone lies below the Upper Main Zone in the Puente Formation. The Project Application states that similar to the Upper Main Zone, the shales of the Lower Main Zone are currently fractured and important for oil production. However, the Lower Main Zone has fewer interbedded fine-grained sands and is over 500 feet thick. Figure 2.7 Proposed Oil Project Lease Areas (below) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Final Environmental Impact Report 2-113 E&B Oil Drilling & Production Project Figure 2.8 Applicant Proposed Oil Project Lease Areas Cross Section Source: Project Application. Representative figure not to scale or reflective of the exact geology of the region. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The Del Amo Zone lies beneath the Lower Main Zone. It contains the least amount of thin- bedded sandstone in the Puente Formation. The Project Application states that similar to the other two zones, the shales of the Del Amo Zone are currently fractured and important for oil production. The Del Amo Zone varies the most in thickness and could be from 200 feet up to 700 feet thick. The Schist Conglomerate underlies the Del Amo Zone and is resting on metamorphic basement rock (Catalina Schist). The Schist Conglomerate could be as much as 400 feet thick and is composed of reworked fragments derived from erosion of the underlying Catalina Schist. The Project Application states that although it is unknown if the Schist Conglomerate is productive beneath the City, it is still a viable exploration target. The production test wells would target areas to the south-west, the north-west and the north areas of the lease (see Figure 2.7). The wells for the Proposed Oil Project would be at a true vertical depth of approximately 3,000 feet and a measured depth of approximately 9,000 feet. The actual well depth would vary depending on the area targeted. The Applicant indicates that the wellhead pressures anticipated during and immediately after drilling would be 0.0 pounds per square inch (psi) and that the wells are not anticipated to be free-flowing. DOGGR must review and approve an engineering study conforming to CCR Section 1724.6 and 1724.7 for operations. No Class II injection wells will be permitted prior to review and approval of the study. A Notice of Intent will need to be submitted for each proposed well. The Notice of Intent will be reviewed for accuracy and completeness and, if appropriate, a drilling permit issued. 2.4.2.2 Phase 2 Construction and Drilling Activities Phase 2 construction and drilling would consist of the following activities and improvements: • Installation of Temporary Construction Trailer • Delivery and Set Up of Drill Rig • Installation of Temporary Production Equipment Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources • Drilling of Wells • Testing and Operational Systems These activities are discussed in the following subsections. Phase 2 Installation of Temporary Construction Trailer A temporary construction trailer would be installed in the northeast portion of the Project Site (see Figure 2.9). In addition, the associated utilities, including potable water and sewer, would be extended from the existing lines currently located along 6th Street that serve the City Maintenance Yard. Water and sewer service would be provided by the California Water Service Company and the City, respectively. Electricity would be provided by Southern California Edison (SCE) as discussed above under Phase 1 construction activities. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.9 Proposed Conceptual Site Plan - Project Phase 2 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Automated Drilling Rig Ground Flare Phase 2 Delivery and Set Up of Drill Rig An electric drilling rig and its associated equipment would be brought to the Project Site on large trucks with trailers to be permitted by the City and the California Highway Patrol (CHP). The drilling rig would be an "automated drill rig" (ADR), which means that many of the drill rig procedures (loading pipe, etc,) would be done by mechanical means automatically. The approximately 87-foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, a generator, which would be a non-road portable diesel-fuel generator certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. Phase 2 Installation of Temporary Production Equipment Temporary oil, water, and gas production equipment would be installed on the Project Site. This temporary equipment would include a well test station, an induced gas flotation/filter skid, a gas combustor (enclosed ground flare), fluid handling tanks, piping, vapor recovery unit, pumps, and vessels. The production equipment would be delivered by trucks to the Project Site. The temporary production equipment would be installed in the eastern portion of the Project Site within an area enclosed by a containment berm as shown in Figure 2.9. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Phase 2 of the Proposed Oil Project would be designed as a closed-loop system, with pressure relief valves venting to a flare and tanks venting to a vapor recovery system. The control system would be computerized and would monitor the closed-loop system, providing warnings, corrective actions, and shutdowns, if necessary. Corrective actions could be closing valves, sounding alarms, shutting down wells or other process related functions. In addition, according to the Applicant, redundancy would be built into the system to provide an extra level of protection, ensuring there would be a backup for each safety device. All safety devices would be tested on a regular basis as per applicable codes and standards. Operators would be onsite 24 hours per day, seven days per week, to monitor all aspects of the Proposed Oil Project’s production process. Phase 2 Drilling of Wells Once the drill rig and associated equipment set up is complete, up to three test wells would be drilled utilizing directional drilling technology. This would enable the wells to be drilled laterally for long distances so that the bottom-hole locations may be located horizontally several thousand feet from the surface location of the well head on the Project Site. All wells would be permitted, drilled and cemented in accordance with the State Division of Oil, Gas, and Geothermal Resources (DOGGR) regulations. Drilling would proceed in the following manner: • Installation of conductor casing; • Drilling of wells; • Placement of casing and cementing of wells (in stages at various depths); and • Completion of the well, including installation of down-hole pumps and tubing. Installation of Conductor Casing The conductor casing is the initial hole drilled into the ground with a large diameter pipe installed to maintain integrity. The subsequent drilling of the well would take place through the conductor casing. Conductor casing would be installed with a small drilling rig, referred to as a dry-hole digger, which would be used to set the conductor casing for all of the intended wells in the Project Site. A large diameter hole, about 18 inches in diameter, would be drilled to an approximately 80-foot depth. This type of drilling is similar to boring a hole with an auger. Usually, no drilling fluid is needed to drill the hole, hence the name dry-hole digger. A large Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources diameter casing, commonly referred to as “conductor pipe”, typically 13-3/8 inches in diameter, is lowered to the bottom of the hole and is cemented in place with construction concrete. This forms the first seal of the near-surface formations and also serves as a steel conduit to allow the drilling fluid used in the next stage of the well drilling to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project test phase would be set at this time and the dry-hole digger moved off before the drilling rig would be mobilized and brought to the Project Site. Drilling, Casing and Completion of Wells The components of the drill rig and all necessary equipment would then be moved onto the Project Site with large specially equipped trucks. The drill rig height would be 87 feet. The drilling setup would include three main parts; the drilling structure (i.e., mast, substructure, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources catwalk, silicon-controlled rectifier (SCR) house, top drive, back-up generator, crown block, traveling block, iron rough neck, drill pipe, control cabin), the blow out preventer (BOP) system (i.e., BOP Stack, Shear Ram, BOP Controller, and Accumulator), and the mud system (i.e., mud tanks, mud shakers, mud pumps, mud return line). The drilling rig would also require other equipment such as a spare parts house, other tanks, and storage areas as needed to support the drilling operation. The substructure of the drill rig would be located over the first well conductor casing, the mast would be raised, and the other equipment would be aligned and connected. The drill pipe would be laid out on racks convenient to the rig floor so they may be used when needed. Water tanks would be filled, and drilling fluid additives would be stored on site. The drill rig for the Proposed Oil Project would be run on electric utility power, so an electrical hookup would be made at this time. Drilling operations would then begin. The initial mobilization and rigging up operation is expected to last about seven to ten working days. “Spudding in” is the term used to begin drilling operations. A large (12 ¼-inch diameter) drill bit is attached to the first joint of drill pipe (usually 30 feet long) and lowered into the conductor casing. As the first length of pipe is completely lowered in, another length of pipe is attached to the end, thereby increasing the length of the drill “string”. When the drill string reaches the bottom of the conductor casing at a depth of 80 feet, the drilling begins. In order to drill downwards through soil and rock, the drill bit requires rotation and downward force, which is provided by the weight of thick-walled pipe on top of the drill bit. A single, 30-foot long drill pipe for a larger diameter drill bit weighs approximately three tons. As the drill bit drills deeper, more drill pipe is placed on top, thereby increasing the downward force; this is collectively known as the drill string. The drill bit turns clockwise as the weight of the drill pipe column forces it downward. Drilling fluid, called mud, is pumped down the inside of the hollow drill pipe, through a hole in the drill bit, and flushes the drilled rock cuttings away from the bit and up the space between the wall of the borehole and the outside of the drill pipe, which is referred to as the “annulus.” When the mud reaches the surface, it circulates to a mud tank where the rock cuttings are separated out of the fluid by using a shaker, and the clean mud is pumped back down the hole in a continuous circuit, constantly circulating the drilled rock cuttings up and away from the drill bit as it penetrates deeper into the earth. The cuttings are analyzed, stored in 20 cubic yard bins, and then hauled offsite. Initially, a large diameter bit is used to drill to a predetermined depth. When the specified depth Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources is reached, drilling is stopped, the drilling string is removed and a large diameter pipe (a casing string) is assembled in 40-foot lengths and lowered to the bottom of the well bore. Cement is then pumped down the inside of the casing, around the bottom of the hole, and up the annulus between the casing and the well bore. When the cement hardens, it ensures that the entire casing and well bore are encased in cement, protecting the fresh water aquifers and surrounding subsurface areas from the production fluids inside of the casing. See Figure 2.10 for a schematic of the well bore and casing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.10 Typical Well Bore and Casing Source:Project Application Next, a piece of equipment known as a blowout preventer (BOP) is attached to the well head. The BOP is a safety system used during drilling operations in oil and gas fields to prevent the uncontrolled release of reservoir fluids and to immediately shut off the flow in the event that abnormal pressure is encountered in the well bore that cannot be controlled by the hydrostatic head of the drilling fluid when drilling resumes beneath the surface casing. Blow out prevention equipment shall conform to DOGGR’s publication M07 “Blowout Prevention in California, Equipment Selection and Testing 2006 edition. If the subsurface pressure begins to cause the well to flow, the BOP is activated, closing in the well and trapping the pressure until it can be bled off safely and drilling can continue. A BOP would be placed on each wellhead during the drilling and removed after the well is completed. A BOP utilizing Blind Shear Rams would be utilized. Blind Shear Rams are a type of BOP common in the offshore environment that allow for the shutting off of flow through the well even if drill pipe is in the wellbore. Pursuant to the requirements of the Code of Federal Regulation on Oil and Gas and Sulphur Operations in the Outer Continental Shelf(30 CFR part 250), the Applicant indicates that the BOP would be certified that the shear rams can actually shear the drill pipe prior to drilling. The surface casing serves three primary functions: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources • It isolates fresh water formations from contact with any fluids coming from deeper in the earth; • It serves as a mounting place for the blowout preventer; and • It serves as the support for the production casing that would be placed in the well if oil is found. Once the surface casing is cemented in, drilling operations resume with a smaller drill bit. This smaller hole is drilled to the total depth decided upon by the Applicant’s geologic and engineering staff. Usually, the only interruptions to drilling operations would be to remove the drill pipe (also known as tripping pipe) from the well to replace a dull drill bit, and then lowering the pipe back to the bottom of the well. In order to achieve the directional aspect of the drill hole, the well bore is bent. The act of “bending” a well out of the vertical axis typically begins after vertical drilling has progressed several hundred feet beneath the surface. Although the specifics of each well proposed for this Project have not been established, it is not uncommon to begin to deviate from vertical at a depth of about 600 feet and still reach a target formation located at a depth of 4,000 feet, but also almost 4,000 to 6,000 feet sideways from the surface spot location. This system would be used on virtually all of the wells drilled for the Proposed Oil Project. When the well reaches total depth (TD), drilling operations are halted and the drill pipe is removed from the well leaving mud in the hole to contain any potential production fluids located at the reservoir depth. A logging tool is then lowered into the hole to record petrophysical data of the formations through which the rig has drilled. If the well looks like it would produce oil, production casing is installed in a similar fashion to the installation of the surface casing. Production casing for the Proposed Oil Project is planned to be 7inches in diameter. Production casing would be cemented similarly to how the surface casing is cemented, as previously described. Once the cement has been allowed to fully harden, another electric logging tool, called a cement bond log, is lowered to the bottom of the well to evaluate the completeness and effectiveness of the cement on the outside of the production casing. If the cement is found to have defects, the casing can be perforated and cement forced into the well at a specific location or the casing can be removed and the well re-drilled. Devices are inserted to ensure any perforations are sealed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The well is then “completed”, which is a series of activities that allow for the production fluids to flow into the well bore inside the casing and to the surface. Table 2.5 shows a list of chemicals that would be used during drilling operations. The amounts listed are the estimated quantities consumed per well drilled. These materials are packaged by the manufacturer for shipping and would be delivered to the job site by conventional delivery or flatbed trucks. Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District from an existing reclaimed water line serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in Baker tanks (enclosed tanks that are approximately 12 feet tall by 40 feet long and hold up to 500 barrels each). Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed of each day by truck at an approved disposal site at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. In addition, all other waste generated by the test drilling would be transported by truck to the appropriate disposal site at Clean Harbors Buttonwillow Landfill, or a similar facility if closer to the Project Site. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.5 Phase 2 Drilling Chemicals Common/Trade Name Use Container Amount per Well Gel Wyoming Bentonite Used to enhance mud viscosity 100-pound sack 525 sacks DMA Sodium Polyacrylate Water absorbent mud additive 50-pound sack 82 sacks Benex Anionic Acrylamide Mud additive 2-pound sack 75 sacks GEOZan Xanthan Gum Mud viscosifier 25-pound sack 40 sacks Omniopol Sodium Polyacrylate Liquid Water absorbent mud additive - 380 gallons CFR Fatty Acid Liquid Mud additive to enhance lubricity - 600 gallons Bicarb Sodium Bicarbonate Mud additive for pH control 50-pound sack 40 sacks Citric Acid Mud additive for pH control 50-pound sack 11 sacks Walnut Hulls Filter medium, used to reduce torque and drag of drill pipe and for plugging of fractures and high porosity formations 50-pound sack 48 sacks Cement Bulk-Truck Used for well sealing - 3 bulk trucks Biotreat 8415 Treatment of water before injection into the oil reservoir Hydrochloric Acid 15%, used for acid washing during completion Bin varies Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Hydrofluoric Acid 3%, used for acidizing muds Bin varies Source: Project Application, Amendments and Appendices The Proposed Oil Project would comply with the 1993 CUP conditions of approval, proposed operational practices, and proposed design features. The noise reduction methods would include the following: • An electric drill rig would be utilized, reducing the need for diesel engines; • The drill rig would have no draw works or cables resulting in less noise; • A 35-foot-high acoustical barrier wall (per Mitigation Measure NV-3a) would be erected around the perimeter of the Project Site during all drilling activities. The wall would have a sound transmission class (STC) rating of at least 32; • The air inlets and vents of the hydraulic power unit would be fitted with silencers; • An acoustical shroud would enclose three sides of the rig mast to reduce the top drive noise (if applicable); • The mud pumps would be enclosed with acoustical barriers having a sound transmission class (STC) rating of at least 25; • An 8-foot high acoustical barrier with an STC rating of at least 25 would be installed around the shaker tables; • Drilling Quiet Mode Plan would be implemented at the drill site between 7:00 p.m. and 8:00 a.m., a plan which would provide for the following: disablement of all audible mobile equipment and truck backup alarms; minimization of pipe handling; cessation of cementing operations, maintenance, and tripping pipe; and limits within the delivery schedule; and • An automated and remotely managed system to connect/disconnect pipe (Iron Roughneck) would be used, which would reduce pipe handling; No processing of gas would occur during Phase 2. The gas separated from the oil and water would be directed to a gas combustor (enclosed ground flare), where disposal of it would occur through burning. The Applicant indicates that low levels of potential “native” hydrogen sulfide (H2S), in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources underlying oil reservoir. Because the produced fluids may contain some H2S, fixed H2S detection systems would be installed around the drilling site and continuous monitoring would be present during all drilling, workover, and well servicing operations. Sensors would be located in areas that are frequently used by personnel, selected drilling area locations, areas where H2S may accumulate, and any other areas determined by hazard analysis to pose a potential risk. Personnel would also carry personal H2S monitors attached to their clothing for immediate H2S detection during drilling. Figures 2.12 and 2.13 provide an outline of the City’s designated truck route for construction trucks through the cities of Hermosa Beach, Redondo Beach and Torrance. Phase 2 Testing and Operational Systems After the completion of the first test well and the water disposal/injection well, the extracted oil would go through production and testing. The temporary production equipment on the Project Site would be used to process the production fluid. The oil would be processed to a standard that would be suitable for sale. The produced water would be processed and re-injected back into the oil-producing reservoir below the oil water contact. Disposal of the gas produced during Phase 2 would occur through burning in the enclosed ground gas flare. Figure 2.11 shows the steps involved in processing the oil, water, and gas produced from the test wells in Phase 2. Processing of Production Fluids During Phase 2, the Proposed Oil Project is designed to handle up to 800 barrels of oil per day and up to 250,000 standard cubic feet of gas per day. After the oil is processed, it would be trucked from the Project Site to an offsite oil receiving facility at 2650 Lomita Boulevard in Torrance. The route used for crude haul trucks is detailed in Appendix A of the Final EIR. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.11 Phase 2 Process Flow Diagram Source: Applicant application The produced fluids would be sent from the wells to a three-phase separator, which would separate the fluid into gas, oil and water streams. The gas exits the top of the separator, the oil exits the middle, and the water exits the bottom of the separator. Each one of these fluids enters a specific system of treatment as follows. Oil Treatment System The produced oil would enter a series of stock tanks after leaving the three-phase separator. The stock tanks would be used if the oil needs to be further processed to remove excess water. The water removed from the oil and water mixture would be sent back to the three-phase separator through a drain system. Once the oil is processed to a standard suitable for sale, the oil from the stock tank would be loaded into a tanker truck and transported to the purchaser. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Gas Treatment System The produced gas would be sent directly to a compressor and then to the gas flare for combustion after leaving the three-phase separator. A vapor recovery system attached to the temporary Baker tanks would be utilized to capture vapors and to direct them to a vapor recovery compressor and to the gas system and flare. The vapor recovery, tank and flare system would be subject to Southern California Air Quality Management District (SCAQMD) permit requirements. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.12 Truck Routes from Highway 405 to Project Site Source:Project Application, Amendments and Appendices Figure 2.13 Truck Routes to Highway 405from theProject Site Source:Project Application, Amendments and Appendices The Proposed Project provides for the disposal of treated stormwater runoff and produced water from the drilling and production process back into the oil reservoir using water disposal/injection Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources wells. The injection of untreated water can result in the creation of H2S concentrations in the oil reservoir above preexisting levels (referred to as the “native” condition). Prior to the injection of produced water from the oil extraction process, or the injection of surface runoff from precipitation that collects on the Project Site, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff water and any other injected water, would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Facility Storm Drain System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for disposal/injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Safety Systems Operators would be onsite 24 hours per day, seven days per week, to monitor the Proposed Oil Project’s production process during Phase 2. A fire protection system as required by Federal, State, and local codes, ordinances and regulations would be installed by the Applicant prior to the drilling and testing activities on the Project Site. The Fire Protection Plan for Phase 2 of the Proposed Oil Project would be provided to the City of Hermosa Beach Fire Department for review and approval prior to the initiation of Phase 2. The design and operation of the Proposed Oil Project would be required to meet provisions Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources within the California Fire Code (CFC) and standards of the National Fire Protection Association (NFPA), including the requirements for the storage of hazardous materials, the installation and use of fire protection systems and devices, and the implementation of safety measures for employees and emergency responders. Onsite personnel and a site security program, including a closed circuit television system, a gate access system, and an intrusion and motion detection system, would control all access to and from the Project Site during Phase 2. In addition, temporary lighting would be provided. The lighting would be shielded/hooded and directed downward, as is consistent with City requirements. All tanks would have containment equal or greater in capacity than at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Water Treatment System The produced water would be pumped into a treatment system, including a gas flotation unit and a filter unit, to remove excess oil after leaving the three-phase separator. The primary objective of both units would be to clean the water of oil and solids such as sand. The water would then enter a water surge tank after leaving the filter unit and would be sent to the water disposal/injection pumps for disposal/injection into the oil-producing reservoir through the disposal/injection well. If determined to be needed, before it enters the water surge tank, the water would be injected with a biocide to eliminate any bacteria that may be in the produced water. Electrical Requirements Approximately 75 kilo-watt hours of electricity would be required to drill each well. Chemicals Project operations would require the use of chemicals. These chemicals would be documented in a required Hazardous Materials Business Plan. Typical chemicals utilized in the temporary production facility are shown in Table 2.6. Table 2.6 Phase 2 Testing Chemicals Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Common/Trade Name Use Maximum Quantity (Gallons) Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter/Cor 7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Source: Project Application, Amendments and Appendices Noise Abatement The Proposed Project would be implemented in compliance with the 1993 Conditional Use Permit conditions of approval. In addition, the applicant proposes to incorporate several operational practices and design features intended to abate noise. The conditions of approval, operational practices and design features that would be incorporated into the production operations include the following: • Heavy/large reciprocating equipment would be mounted on vibration isolators; • Pipe tripping would be restricted to daylight hours only; • Loudspeaker paging systems would be prohibited; • Well workover rigs or any other workover-type rig (not the main drilling rig) that is used would be operated only between 8:00 am and 6:00 pm during daytime weekday hours only, excluding holidays, except in an emergency as defined in the Conditional Use Permit (CUP) and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) would be muffled to reduce noise to an acceptable limit. The operator would use whatever means necessary, including, but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing; Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources • All oil maintenance equipment, vehicles and non-electrical motors would be equipped with manufacturer approved mufflers or housed in a sound-proofing device; • Noise monitoring would be conducted under the supervision of an independent certified acoustical engineer; • Each well pump would produce a sound power level no greater than 83 dBA. This may be achieved by fitting sound attenuating enclosures that provide an insertion loss of at least 15 dB; • The produced oil pumps, produced water pumps, water booster pumps and variable frequency drive electrical (VFD) cabinets would produce a sound power level no greater than 77 dBA; • The water injection pumps would produce a sound power level no greater than 83 dBA. • The vapor recovery compressors would produce a sound power level no greater than 83 dBA; and • The cooler for the compressors would produce a sound power level no greater than 85 dBA. Decision not to Proceed -Abandonment If it is determined that the production of oil and gas on the Project Site would not be economically viable, the Applicant would remove the sound attenuation walls, the temporary production equipment, and the temporary construction trailer and abandon the three test wells and the water disposal/injection well in accordance with the requirements of DOGGR. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. As the temporary City Maintenance Yard would already be constructed under the Proposed Project, the current City Maintenance Yard Site would be empty and would be available for development within the M-1 Light Manufacturing zoned area of Hermosa Beach. The Project Site would then be available for City or other development proposals, or for the temporary City Maintenance Yard to be relocated back to this site. However, any future use would need to be consistent with the lease agreement with the Applicant. Current site contamination would remain as part of the abandonment process and would be removed in accordance with the requirements of any future site use. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.2.3 Phase 2 Drilling and Testing Schedule It is anticipated that Phase 2 would occur for approximately 12 months as indicated in the schedule provided in Table 2.7. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take 120 days for drilling activities, 24 hours a day, which is approximately 30 days per well for four wells. After the drilling of the three oil wells and one water disposal/injection well is complete, the drill rig would be removed from the Project Site. As each well is drilled, the produced fluids from that well would go thorough production and testing, as described above. 2.4.2.4 Phase 2 Drilling and Testing Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 2 are provided in detail in Appendix A of the Final EIR. A summary of the vehicle trips is shown in Table 2.8. Parking for the employees would be provided in an adjacent parking area as previously discussed for Phase 1. Since Phase 1 prepares the Project Site for Phase 2, the conceptual landscape plan and elevations provided above for Phase 1 would also be applicable to Phase 2. Table 2.7 Phase 2 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 thru 54 Install trailer and associated utilities Deliver and set up drill rig/equipment Install oil, water, and gas equipment Drill 3 test wells and water well Testing of wells Remove drill rig and equipment Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.8 Phase 2 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day* 2-axle trucks, Autos, Maximum RT/day Total, Maximum RT/day Install trailer and associated utilities 2 5 7 Deliver and set up drill rig/equipment 7 20 27 Install oil, water, and gas equipment 6 15 21 Drill 3 test wells and water well 9 10 19 Testing of wells 13 5 18 Remove drill rig and equipment 5 20 25 Greatest number of trips in one day 18 (during weeks 15, 17, 19, 21-24) 25 (during weeks 7- 12 ) 37 (during week 7) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during drilling and testing of wells. Maximum auto activity occurs during weeks 7-12 with the installation of oil, water and gas equipment and the drilling of wells. Maximum activity trucks and autos combined occurs during week 7. Testing of wells would involve crude transportation by truck, by way of an average of 7 trucks per day/5 days per week or up to 12 trucks in one day (round trip). Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix A. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources each week. Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 3 Final Design and Construction: 16 Months 2.4.3 Phase 3 Final Design and Construction If it is determined that the production of oil and gas on the Project Site would be economically viable, the Applicant would begin Phase 3 of the Proposed Oil Project. The purpose of Phase 3 would be to utilize the production information from Phase 2 to prepare the final design of the facility, prepare the onsite area for facility installation, install the permanent oil and gas production facilities, and construct offsite Pipelines. 2.4.3.1 Phase 3 Onsite Construction Phase 3 onsite activities would involve the following construction activities: • Preparation of final engineering design; • Removal of temporary production equipment; • Removal of three remaining trees; • Removal of 35-foot sound attenuation wall and perimeter fencing (per Mitigation Measure NV-3a); • Installation of 24-foot sound attenuation wall (per Mitigation Measure NV-4a); • Implementation of remedial action plan; • Construction of remaining retaining walls and final grading; • Completion of construction of well cellars; • Construction of 35-foot block wall (per Mitigation Measure NV-6a); • Removal of 24-foot sound attenuation wall (per Mitigation Measure NV-4a); • Construction of small office building; • Installation of permanent production equipment; • Construction of final site improvements; • Construction of final street improvements along Project frontage; • Installation of final landscaping; • Installation of 32-foot sound attenuation wall; • Setting of conductor pipe; and • Installation of lighting systems. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is detailed in the discussion that follows. A site plan for Phase 3 is shown in Figure 2.14. The conceptual grading plan, site plan, elevations (with the 32-foot sound attenuation wall), and conceptual landscape plan for the Proposed Oil Project at the completion of Phase 3 are shown in Appendix A of the Final EIR. Prepare Final Engineering Design The final design of the permanent oil and gas production facilities, to be implemented during the first few months of Phase 3, would be based on the oil and gas analysis and production results from Phase 2 activities. Final design would include the sizing and development of the exact specifications for the oil, gas, and water separation production equipment and the detailed engineering to prepare the required final construction drawings. Remove Temporary Production Equipment The temporary oil, water, and gas production equipment installed on the Project Site during Phase 2 would be removed. The wells drilled during Phase 2 would be shut in, and steel plating would be placed on top of the well cellar. Remove Remaining Trees The three remaining mature trees along the frontage of the Project Site along Valley Drive would be removed to allow for the construction of final site improvements including a perimeter wall and the installation of permanent landscaping. Remove 32-Foot Sound Attenuation Wall and Perimeter Fencing The 35-foot sound attenuation wall (per Mitigation Measure NV-6a) and the 6-foot perimeter chain link fencing would be removed from the Project Site. Install 16-Foot Sound Attenuation Wall Prior to the initiation of earthmoving activities, a temporary 24-foot sound attenuation wall (per Mitigation Measure NV-4a) would be brought to the Project Site. The sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise and dust associated with the earthmoving activities needed for the implementation of the Remedial Action Plan and the final grading of the Project Site. The temporary sound walls Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources would be removed from the Project Site after the onsite earthmoving and grading activities are completed. Implementation of Remedial Action Plan The Remedial Action Plan would be implemented to address lead, barium, arsenic and total petroleum hydrocarbon (TPH) contaminated soil and groundwater within and beneath the former landfill area in the northeastern portion of the Project Site. It is anticipated that approximately 9,000 cubic yards of lead contaminated soil would be removed from the Project Site in accordance with the Remedial Action Plan and hauled to a Class 1 landfill at the Kettleman Hills Facility, approximately 190 miles from the Project Site. The TPH contaminated soil (approximately 4,500 cubic yards located deeper than 25 feet) would be treated onsite via vapor extraction. For a detailed discussion of the soil remediation that would occur prior to final grading of the Project Site, refer to the Remedial Action Plan provided in Appendix A of the Final EIR. Groundwater contamination attributed to historic use of the site has been documented (Brycon 2013). The RWQCB have indicated that the Regional Water Quality Control Board Site Cleanup Program reviewed the Report on Groundwater Assessment and indicated the matter would go on its large backlog of low priority cases. Construction of Remaining Retaining Walls and Final Grading Retaining walls (up to 6 feet high) would be constructed 10 feet back from the Valley Drive and 6th Street property lines, along the eastern boundary of the Project Site and along the eastern portion of the southern boundary of the Project Site (see Figure 2.14). In addition, retaining walls would be constructed within the Project Site for the containment area associated with the production equipment. After the completion of the retaining walls, the Project Site would be graded to allow for the installation of Project equipment and to allow for proper site drainage. The final grading of the Project Site would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the location of the retaining wall locations and the final grading of the Project Site. Complete Construction of Well Cellars The cement well cellar constructed in Phase 2 would be extended, and a second well cellar would be constructed to allow for the drilling of the remaining wells in Phase 4. At completion, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources the well cellars would be approximately 8 feet wide by 120 feet long by 12 feet deep, with stairs at each end and covered with expanded metal grating. The well cellars would be equipped with storm water collection sumps and pumps to direct the storm water to the drain sump. From the drain sump, water would be directed into the processing system and injected, by the water disposal/injection wells drilled in Phase 4, into the oil-producing reservoir below the oil water contact. Figure 2.14 shows the location of the well cellars. Construction of 16-Foot Split-Face Block Wall A 16-foot split-face block wall would be constructed around the perimeter of the Project Site. The wall would be set back 10 feet from the Valley Drive and 6th Street property lines to allow for a landscape area. The wall would have a gated entrance off Valley Drive (set back 70 feet from the sidewalk) and a gated exit to 6th Street. The gates would be metal and motor operated. The appropriate signage would be provided, as is consistent with City requirements. Remove 16-Foot Sound Attenuation Wall After the completion of the Remedial Action Plan, final site grading, and construction of the well cellars and perimeter wall, the 16-foot temporary sound attenuation wall would be removed from the Project Site. Construction of Small Office Building A small office building approximately 650 square feet in size would be constructed in the northeast portion of the Project Site to house employee offices and control and monitoring equipment. The building would have a restroom and break room. The improvements extended to the Project Site in Phase 1 would provide for associated utilities, including water, sewer, natural gas, and telephone. The California Water Service Company and the City would provide water and sewer service, respectively. Southern California Gas Company (SCGC) would provide natural gas, and electricity would be provided by Southern California Edison (SCE). Verizon would provide telephone service. Office related solid waste services would be provided by Athens Services or a future city franchisee. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.14 Phase 3 Proposed Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Installation of Permanent Production Equipment Permanent oil, water, and gas production equipment would be installed on the Project Site. The permanent oil production facilities would include tanks, vessels, piping, pumps, filters, and supporting metering equipment. These are listed in Table 2.9. A retaining wall around all of the vessels, tanks and other equipment containing oil would provide secondary containment. The design capacity of the secondary containment would exceed the fluid capacity of the largest tank by 110 percent plus the precipitation from a 100-year storm event. In Phase 4, the oil production facility would be used to separate gas, water, and solids from the oil, after which the oil would be stored in tanks prior to transport via pipeline from the Project Site. The separated water would be accumulated in tanks, filtered, and then injected into the oil- bearing reservoir by the four water disposal/injection wells. Gas from each well would be treated on the Project Site and then sold to the SCGC. The permanent gas production facilities would have compressors, vessels, a H2S and carbon dioxide (CO2) removal system, a moisture removal system, and an odorizing system. The use of this equipment is discussed in Section 2.4.4, Phase 4 Development and Operations. Table 2.9 Phase 3 and 4 Processing Equipment Listing Equipment Size and Number Oil Shipping Tanks 40 foot diameter by 16 feet high, 2900 BBLS, 2 tanks Water Clarifier 40 foot diameter by 16 feet high, 2900 BBLS, 1 tank Water Surge 30 foot diameter by 16 feet high, 1120 BBLS, 2 tanks Gas compressors 30 foot by 40 foot - 3 compressors DEA Skid (acid gas removal) 12 foot by 40 foot, 1 skid Low Temperature Separation (LTS) skid (propane refrigerant) 12 foot by 40 foot, 1 skid Flare/Gas Combustor 10 foot diameter by 22 feet high Vapor Recovery Compressor 17 foot by 28 foot IGF Skid 18 foot by 8 foot, 1 skid Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Filter Skid 25 foot by 18 foot, 1 skid Micro Turbines (five turbines) 200 kw each, 30 foot by 40 foot 3-Phase Separator 7 foot diameter by 35 feet long Lease Automatic Custody Transfer (LACT) Skid 5 foot by 12 foot Source: Project Application, Amendments and Appendices. BBLS=barrels (42 gallons), skid=a pre- fabricated unit. Construction of Final Site Improvements In addition to the areas where the concrete well cellar, the containment area, and the oil and gas production equipment have been constructed, the ground surface of the Project Site would be paved with concrete or asphaltic concrete and designed so that no fluids, including rain water up to a 100-year storm event, would leave the Project Site. Liquids, including rainwater, would be captured in the containment areas or in the well cellars, processed through the production facility, and injected into the oil-bearing reservoir via four water disposal/injection wells. Construction of Final Street Improvements Along Project Frontage The Proposed Oil Project would include the construction of street improvements along the frontage of the Project Site on 6th Street and Valley Drive. The improvements would include the installation of new curbs, gutters, and sidewalks. Installation of Final Landscaping Permanent landscaping would be provided along the perimeter of the Project. To the extent feasible, plant materials used in the temporary landscape plan installed in Phase 1 would be reused in the permanent landscaping. Reclaimed water supplied by the West Basin Municipal Water District would be used for irrigation. Appendix A provides the conceptual landscape plan and plant materials for the permanent landscaping that would be provided at the completion of Phase 3. Installation of 32-Foot Sound Attenuation Wall At the completion of the improvements in Phase 3, a 32-foot sound attenuation wall would be Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources erected inside the 16-foot block wall to provide for noise attenuation during Phase 4 drilling. Appendix A of the Final EIR provides the elevations of the Project Site, including the sound attenuation walls with the block walls, from Valley Drive and 6th Street at the completion of Phase 3. Set Conductor Pipe Prior to drilling in Phase 4, a dry-hole digger/auger would be used to set the conductor casing in the well cellars for all of the intended wells on the Project Site in a manner similar to the setting of the conductor pipe in Phase 2. A hole approximately 18 inches in diameter would be drilled to a depth of approximately 80 feet. A conductor pipe would be lowered to the bottom of the hole and cemented in place. This would form the seal of the near-surface formation and serve as a steel conduit to allow the drilling fluid used in the next stage of the well to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project would be set, and the dry hole digger/auger would be moved off the Project Site. Lighting Systems The permanent lighting for the Proposed Oil Project would be installed as a part of Phase 3. The lighting,as proposed in the Applicant’s Lighting Plan, would be designed to be directed downward and shielded in order to avoid obtrusive light spillage beyond the Project Site, reflective glare, and illumination of the nighttime sky. 2.4.3.2 Phase 3 Offsite Pipeline Construction During Phase 3, offsite pipelines for oil and gas would be constructed to transport the oil and gas to markets. Each route is discussed in the following subsections. Gas Pipeline Route As it leaves the Project Site, the offsite underground pipeline for the transport of gas would be constructed for a distance of 0.43 miles in the ROW of southbound Valley Drive (which is a one way street south of 2nd Street) in the City of Hermosa Beach to a tie-in to a SCG gas line in the Southern California Edison(SCE) Utility Corridor east of N. Francisca Avenue in the City of Redondo Beach. See Figure 2.15 for the proposed pipeline routes. Appendix A contains Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources detailed drawings of the route and valve box options. This portion of the gas pipeline would consist of two parallel pipelines, 4 inches in diameter, and located at a depth of approximately 3.5 to 4 feet below ground surface (bgs) within the road ROW until it ties into the SCG line at a proposed metering station immediately to the east of N. Francisca Avenue. The pipeline would be a loop system that allows for the gas to be returned to the Project Site for further treatment in the event that the produced gas does not meet SCG standards. The metering station site, which would be provided as a part of the Proposed Oil Project and is owned by SCG, would be approximately 40 by 60 feet in size and surrounded by an 8-foot high block wall. As shown in Figure 2.15, this first portion of the gas pipeline is bounded to the east by the Greenbelt and Ardmore Park and, further to the east, by Ardmore Avenue and residential development in the City of Hermosa Beach; to the west by the Beach Cities Self Storage facility, light manufacturing land uses, South Park, and residential development in the City of Hermosa Beach; and to the west in the City of Redondo Beach by facilities associated with the AES Power Plant. The gas line is designed for a maximum operating pressure of 465 pounds per square inch gauge (psig), but would typically operate at approximately 225 psig of pressure. Once the proposed gas pipeline from the Project Site ties into the SCG point of receipt at the proposed metering station, SCG would construct a six-inch gas pipeline that extends northeast for approximately 1.4 miles to connect to an existing SCG pipeline transmission facility (Line 1170) located on the south side of 190th Street near its intersection with Green Lane, between Flagler Lane and Beryl Street, in the City of Redondo Beach. After the first portion of the new six-inch gas pipeline leaves the proposed metering station and continues northeast, it would be located in an existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway. The new pipeline would exit the SCE Utility Corridor on the south side of the intersection of Herondo Street/Anita Street with Pacific Coast Highway, extend across Pacific Coast Highway, and continue northeast within the ROW of Anita Street/190th Street to its point of connection with the existing SCG pipeline transmission facility (Line 1170). If for some reason the first portion of the new pipeline could not be located within the existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway, it would leave the proposed metering station and continue for a short distance north within the ROW of N. Francisca Avenue and turn northeast at Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Pigging Passing a device through a pipeline that cleans or inspects the pipeline. A pig is usually a small rubber device slightly smaller in diameter than the pipeline. The pig is forced through it by product flow. Usually cylindrical or spherical, pigs sweep the line by scraping the sides of the pipeline within the ROW until it reaches the intersection of Herondo Street/Anita Street with Pacific Coast Highway. At that point it would continue to the northeast as described previously. Although SCG would obtain the necessary permits and construct the new gas pipeline, the Applicant would pay for the associated costs of construction. The proposed gas line from the proposed metering station to the existing SCG pipeline transmission facility is bounded to the north by commercial land uses and residential development in the City of Redondo Beach and to the south by commercial land uses, residential development, and public facilities including Dominguez Park and Redondo Beach Dog Park in the City of Redondo Beach. Oil Pipeline Route The offsite underground pipeline for the transport of oil to an area refinery via a connection to a valve location in the City of Torrance would be constructed for a distance of approximately 3.55 miles in one of three potential pipeline scenarios that would follow a route through the Cities of Hermosa Beach and Redondo Beach and terminate in Torrance. The selection of the pipeline route would occur after Project approval. Appendix A of the Final EIR shows the pipeline route scenarios in detail. The pipeline would be 8 inches or less in diameter, located at a depth of approximately 3.5 to 4 feet bgs depending on the grade. At one of four potential valve box locations, the pipeline would tie-in to an existing pipeline that transports oil to a refinery. Appendix A of the Final EIR provides the proposed alignments of the three oil pipeline scenarios, the respective jurisdictional boundaries, and the adjacent land uses. Appendix A of the Final EIR provides the four valve box location options that the pipeline could tie into. More details are included in Appendix A. The oil line would be designed for a maximum operating pressure of approximately 500 psig, but would typically operate at approximately 100 to 200 psig of pressure. The pipeline would Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources include pigging stations to send and receive maintenance pigs into and from the pipelines to clean or inspect the pipelines during ongoing operations. This would occur for the lifetime of the Proposed Oil Project. Pigging refers to the practice of using pipeline inspection gauges or 'pigs' to perform various maintenance operations on a pipeline without stopping the flow of the product in the pipeline (refer to sidebar for more information). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.15 Proposed Pipeline Routes Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source:Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources As shown in Figure 2.15, the oil pipeline would be constructed for a distance of 0.39 miles in the ROW of southbound Valley Drive (which is one-way starting at 2nd Street) in the City of Hermosa Beach to the corner of Valley Drive/N. Francisca Avenue and Herondo Street in the City of Redondo Beach. At this point, the oil pipeline would turn to the east along one of the following three pipeline scenarios (see Appendix A of the Final EIR): • Scenario 1 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street, Anita Street, and 190th Street in the City of Redondo Beach to the intersection of 190th Street/Hawthorne Boulevard in the City of Torrance. At this point, Scenario 1 would continue to one of the four valve box options presented later in this discussion; • Scenario 2 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street and Anita Street in the City of Redondo Beach and the ROW of 190th Street in the City of Torrance to the intersection of 190th Street/Hawthorne Boulevard. At this point, Scenario 2 would continue to one of the four valve box options presented later in this discussion; and • Scenario 3 consists of the construction of the oil pipeline towards the east within the SCE Utility Corridor in the Cities of Redondo Beach and Torrance. When the oil pipeline meets Hawthorne Boulevard in the City of Torrance, Scenario 3 would continue to one of the four valve box options presented later in this discussion. The function of the valve box is to house the valve on the new oil pipeline to isolate it from the main oil transmission line and allow for inspection, operation, and maintenance of the valve and line to be performed as required by Federal and State regulations. The site requirement for a valve box for the Proposed Oil Project would be approximately six feet wide by eight feet long by six feet high. The valve box would be a precast concrete box with walls that are typically eight to ten inches thick. The valve box would be located below grade and designed to State of California Highway “traffic-rated” standards to allow for vehicle travel over it. A standard 36-inch or 42-inch manhole cover would provide access down into the valve box from grade. The manhole cover, the weight of which takes two people to remove and replace, would be bolted into place with special tools, providing security for the valve box. The oil pipeline would end at one of the following valve box locations: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources • Valve Option 1 – For Pipeline Scenarios 1 and 2, the pipeline would continue from the Hawthorne Boulevard/190th Street intersection down 190th Street to the Exxon Mobil Refinery, where it would connect with a valve box location within the refinery site. For Pipeline Scenario 3, the pipeline would turn north in Hawthorne Boulevard and east in 190th Street to the refinery site; • Valve Option 2 - For Pipeline Scenarios 1 and 2, the pipeline would turn south in Hawthorne Boulevard to the SCE Utility Corridor where it would turn east to the valve box location. For Pipeline Scenario 3, the pipeline would continue east in the SCE Utility Corridor across Hawthorne Boulevard to the valve box location; • Valve Option 3 – For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location adjacent to the Santa Fe Rail Road line; and • Valve Option 4 - For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location northeast of the intersection of 190th Street/Hawthorne Boulevard. The oil pipeline would be equipped with a supervisory control and data acquisition system (SCADA), which would monitor pipeline pressure and flow and, if a leak is suspected, would notify the operators. The percentage that is set in the SCADA system would notify the operator of potential oil leak. The detection timeframes set by the Applicant would vary depending on the crude oil flow rate in the pipeline. When the flow rate is at the maximum anticipated production rate of 8,000 barrels per day, flowing on a continuous basis, the flow rate would be 5.5 barrels per minute, and the following would apply: • 15 minute time interval 5 % or 4.1 barrels • 1 hour time interval 2 % or 6.7 barrels • 24 hour time interval 1 % or 80 barrels If oil production is considerably less than the 8,000 barrels per day, the percentages would be adjusted upward to maintain essentially the same volume of oil previously noted based on the reduced flow rate in the pipe. Pipeline Construction Methods The gas and oil pipelines would be installed utilizing conventional trenching methods within Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources either one trench or two separate trenches within the roadway ROW. The construction and installation process would occur in stages consisting of approximately 237 feet in length each. Two stages would be constructed per day (a segment of 237 feet would be new construction, and another 237 feet would be the completion of the construction from the previous day). With the addition of approximately 126 feet for lane transitions and safety cones, a total of approximately 600 linear feet of roadway would be affected per day. A construction spread would be used to accomplish most aspects of the gas and oil pipeline construction along the alignments previously discussed. A construction spread is a clustering of construction equipment that moves along the pipeline route, sequentially removing asphalt roadway, trenching, laying pipe, filling, re-paving, and cleaning up. A pipeline construction spread consisting of several units would be organized to proceed in the following order: • Pre-construction activities • Asphalt removal and ditching or ROW grubbing and ditching • Pipe handling/welding • Pipe coating • Pipe lowering, backfilling, and street repair • Pipe testing and inspection • Metering, pigging, odorant station installation If the oil pipeline can be laid within the SCE Utility Corridor (Scenario 3 pipeline route), a construction spread similar in arrangement, but smaller, would be used since the alignment would not have asphalt. In addition, if it is determined that existing sleeves under streets crossing the SCE Utility Easement exist, trenching across some streets may not need to occur. The following describes the activities that would occur for the construction of the pipelines and Figure 2.16 depicts a typical pipeline construction spread. Pre-Construction Activity The pipeline alignment ROW would include roadways and/or land in existing paved streets and other property, potentially including private property. Approval to construct and operate a pipeline would be obtained from or authorized by franchise agreements or permits from the agency with jurisdiction over the roadways and, if needed, from affected property owners. The construction requirements in the municipal codes and ordinances of the Cities of Hermosa Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Beach, Redondo Beach, and Torrance allow for the construction on major roadways during the following weekday hours: • Hermosa Beach: 8:00 a.m. to 6:00 p.m. on weekdays and 9:00 a.m. to 5:00 p.m. on Saturday. No construction on Sundays and holidays; • Redondo Beach: 9:00 a.m. to 3:00 p.m. on weekdays. No construction on weekends and holidays; and • Torrance: 8:30 a.m. to 3:30 p.m. on weekdays. No construction on weekends and holidays. Figure 2.16 Typical Pipeline Construction Spread Note: All activities may not occur simultaneously. The pipeline construction activities would occur on weekdays between the hours of 9:00 a.m. and 3:00 p.m. (as per the CUP requirements), a time frame which is after morning peak commute hours (i.e., 7:00 a.m. to 9:00 a.m.) and before evening peak commute hours (i.e.: 4:00 p.m. to 6:00 p.m.) on the affected roadways. The Applicant proposes no construction activities during weekends and holidays. The Applicant would prepare a Construction Traffic Management Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources (CTMP) that would include the following: • Require the pipeline contractor(s) to obtain and follow Street Construction Permits in the affected Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities (Pacific Coast Highway and Hawthorne Boulevard); • Develop detour and traffic management plans consistent with the affected City’s Standard Roadway Plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH); • Revise pipeline construction segments to minimize access conflicts to adjacent residents and businesses; • Develop truck route plans to reduce traffic on the street network during peak traffic commute hours; • Avoid construction-related traffic to occur during peak travel periods; and • Implementation of staggered construction worker shifts to minimize Project traffic during the peak hours. Underground Service Alert would notify service providers of construction to avoid conflicts with existing utilities and disruptions of service to utility customers. Because construction would occur in either paved streets or an existing utility corridor, extensive grading is not proposed. Asphalt Removal and Ditching Once traffic control measures are in place, trenching operations would begin. Typically, a five- foot deep and 18- to 24-inch wide ditch (single pipe) or 36-inch wide ditch (double pipes) would be excavated (varying depths, depending on the conditions encountered). Backhoes and track hoes would excavate the ditch. However, hand digging would be necessary to locate buried utilities, such as other pipelines, cables, water mains, and sewers. Fugitive dust emissions at the construction site during earthmoving operations would be controlled by water trucks equipped with fine-spray nozzles. Spoils from cuts, including cuts in the streets, would be saved for backfill or would be removed, and the ditch would be backfilled with slurry material as approved by the local jurisdictional agency. Effort would be made to minimize the amount of excess material. Material unsuitable for backfill and not economically useful for other purposes at the pipeline location would be disposed of at a landfill according to local jurisdictional guidelines. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources When used for backfill, the spoils from the trenches would be hauled to previously disturbed sites, as determined by the construction contractor. Pipe Handling Special trucks would transport the pipe in 40- to 80-foot lengths from the shipment point or storage yard to the pipeline installation point. Where sufficient room exists, trucks would carry the pipe along the roadway, and sideboom tractors would unload the joints of pipe from the stringing trucks and lay them end to end beside the ditch-line for future line-up and welding. A portable bending machine would bend the pipe to fit the ditch contour both vertically and horizontally. Construction ROW conditions could occasionally require pipe bends that are not able to be accomplished in the field. In these cases, manufactured or shop-made bends would be used, and pipe would be bent prior to the application of coating. While the line-up crew lays the pipe, line-up clamps would hold the pipe sections in position until approximately 50 percent of the first welding pass is completed. The welding crew would then apply the remaining weld passes to comply with API 1104, ASME B31.4, or ASME 31.8.2 All pipeline welds would be radiographically inspected. Pipe Coating Protecting the pipe from moisture and air helps prevent corrosion, thereby preventing cracks, breaks, and leaks in the pipe. The steel pipeline would be coated externally with fusion-bond epoxy or a corrosion resistant tape wrap system. Pipeline coating would be applied at the mill before delivery to the construction site. However, field coating would be necessary on all field weld joints to provide a continuous coating along the pipeline. After the pipe has been welded and radiographically inspected, one of the following would be applied: two-part epoxy, heat- shrink polyethylene sleeves or polyethylene tape and tape primer. Pipe Lowering, Backfilling, and Street Repair The pipe would be lifted and lowered into the ditch by one or two sideboom tractors spaced so that the weight of unsupported pipe would not cause mechanical damage. Cradles with rubber rollers or padded slings would allow the tractors to lower the pipe without damage as they travel 2 ASME - American Society of Mechanical Engineers; API – American Petroleum Institute Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources along the ditch line. Additional welds could be required in instances where the ditch line is obstructed by other utilities crossing the pipe ditch. These welds would typically be made in the ditch at the final elevation. In addition to normal welding and weld inspection, each weld would require pipe handling for line-up, cutting to exact length, coating, and backfilling. Backfill material in roadways would most likely be slurry material or could be ditch spoils, according to local agency requirements. Slurry material would be delivered by concrete trucks and consist of sand and cement. Concrete trucks would be trucks from local commercial sources. The area would be repaved if it was previously an existing paved street. In areas where the pipeline would be in previously unpaved areas, the backfill would include topsoil preserved from the excavation for re-vegetation where needed. At the time of backfilling, a colored warning tape would be buried approximately 12 to 18 inches above the pipeline to indicate the presence of a buried pipeline to third-party excavators. The backfilled earth would be compacted using a roller or hydraulic tamper. The trench would be filled with slurry where approved or required by local regulations. Steel plates would cover any open trench at the end of each workday. Pipe Testing and Inspection All field welding would be performed by qualified welders that meet the Applicant’s specifications and in accordance with all applicable laws, ordinances, regulations, and standards, including API 1104, the Standard for Welding Pipe Lines and Related Facilities, and the rules and regulations of the U.S. Department of Transportation found in the Code of Federal Regulations. All welds would be visually and radiographically inspected. All rejected welds would be repaired or replaced as necessary and radiographically inspected again. The radiographic reports and a record of the location of welds would be maintained for the life of the pipeline. In addition to standard testing of all pipe and fittings at the mill, hydrostatic testing would be performed after construction and prior to startup. Federal regulations mandate hydrostatic testing of new, cathodically protected pipelines prior to placing the line into operation. This test involves filling a test section of the pipeline with fresh water and increasing pressure to a predetermined level. Such tests are designed to prove that the pipe, fittings, and weld sections would maintain mechanical integrity under pressure without failure or leakage. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Cathodic protection controls the corrosion of a metal surface by making it work as a cathode of an electrochemical cell. This is achieved by placing the cell in contact with the metal surface and another more easily corroded metal to act as the anode of the electrochemical cell. The cathodic protection system consists of power sources called rectifiers, buried anodes (either sacrificial or impressed current), and test stations along the pipelines. Metering and Pigging Station Installation A gas-metering station would be required at the custody transfer location where the Applicant’s proposed gas pipeline interconnects with the existing SCG pipeline. The metering station would measure and record gas volumes, gas quality, and gas characteristics and provide custody transfer of the gas to SCG. The metering station would be located adjacent to N. Francisca Avenue, southeast of the intersection of Herondo Street and N. Francisca Avenue. SCG would then construct a new six-inch pipeline to a tie-in location with the existing SCG pipeline transmission facility (Line 1170) as previously discussed in Section 2.4.3.2, Phase 3 Offsite Pipeline Construction. In addition to the metering station, a pigging station would be installed at the metering station and Project Site for the gas pipeline, as required by SCG, and at the tie-in point for the oil pipeline. An odorant station would be installed at the Project Site consisting of a 500 gallon odorant tank that would be filled approximately annually. The gas would be odorized before it leaves the site. 2.4.3.3 Phase 3 Hazardous Materials Hazardous materials used as part of Phase 3 would be associated with construction activities, including diesel fuels, lubricating oils, pipe coatings, solvents, etc. No storage of hazardous materials beyond standard consumer quantities (a few gallons) is anticipated in this phase. 2.4.3.4 Phase 3 Schedule It is anticipated that Phase 3 would occur for a period of approximately 14 months as indicated in the schedule provided in Table 2.10. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.10 Phase 3 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28- 38 39- 53 54 55 56 57 58 59 60 61 62 63 64 Remove temporary equipment Remove trees along Valley Remove32-foot sound wall Implement RAP Construct retaining walls Final grading Construct well cellars Construct 16-foot block wall Remove 16-foot sound wall Construct/install facilities Construct street improvements Install landscaping Construct offsitepipelines Start-up of equipment Install 32-foot sound wall Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Set conductor Note: Days are weekdaysSource: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.11 Phase 3 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Remove production equipment 6 15 21 Remove trees along Valley Drive 2 4 6 Install 16-foot noise wall 6 8 14 Implement Remedial Action Plan 18 8 28 Construct retaining walls 3 20 24 Final grading (balanced) 4 6 10 Construct well cellars 9 15 25 Construct 16-foot perimeter wall 5 20 25 Remove 16-foot noise wall 5 5 10 Construct/install onsite facilities 18 40 47 Construct street improvements 11 9 20 Install landscaping 1 7 7 Construct pipeline 18 22 54 Start-up production equipment 0 7 7 Install 32-foot sound wall 6 9 16 Set conductor 2 5 7 Greatest number of trips in one day 18 (during weeks 6-13, 23, 54) 62 (during weeks 39-53) 78 (during week 39-53) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips (RT). Maximum truck activity occurs during week 6-13 with RAP activities, week23 with construct well cellars, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 4 Development and Operations: 2.5 years drilling program. Operations - ongoing perimeter wall and onsite facilities and week 54 with construction of onsite facilities, pipeline construction and conductor setting. However, the majority of the pipeline construction traffic would occur away from the Project Site except during the installation of the sections of the pipeline located very close to the Project facility. Maximum auto activity occurs during weeks 39-53 with the facilities construction. Maximum activity trucks and autos combined occurs during weeks 39-53, however, the majority of the vehicles for the pipeline construction would be parked at the contractor’s facilities or near the pipeline alignment. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices 2.4.3.5 Phase 3 Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 3 are provided in Table 2.11. The vehicle trips required to transport employees and equipment for Phase 2 are also provided in Table 2.11. 2.4.4 Phase 4 Development and Operations The purpose of Phase 4 would be to maximize oil and gas recovery from the reservoirs by drilling additional wells and operating the permanent facility. To accomplish this, Phase 4 would involve the drilling of wells; the operation of the permanent oil production equipment; the transport of the oil and gas by pipeline to their respective destinations; and the ongoing Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources maintenance of the Proposed Oil Project. The Proposed Oil Project would be designed for a maximum capacity of 8,000 barrels of oil per day and 2.5 million cubic feet of gas per day. Figure 2.17 provides the conceptual site plan for Phase 4. Elevations and the conceptual landscape plan for the Proposed Oil Project during Phase 4 are included in Appendix A of the Final EIR. 2.4.4.1 Phase 4 Drilling Phase 4 drilling would involve delivery and setup of the drilling rig and the drilling of the remaining wells. Delivery and Set Up of Drill Rig The drilling rig and its associated equipment would be brought to the Project Site by trucks with trailers permitted by the City and the California Highway Patrol. The approximately 87-foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. The crane would be removed from the Project Site after the drill rig and supporting equipment have been set in place. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, the generator, which would be a non-road portable diesel-fuel generators certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. The drill rig and its associated equipment would require the same setup as described under Section 2.4.2, Phase 2 Drilling and Testing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.5 Drill Remaining Wells The drilling of the remaining oil wells and water disposal/injection wells, up to a total of 30 oil wells and four water disposal/injection wells, would involve the same activities as described for Phase 2. As previously discussed regarding Phase 2, once the drilling of a well is complete, the cemented casing would be run from the surface to the bottom of the wellbore where the well penetrates the oil-producing reservoir. The well would be plumbed into the temporary production equipment and pump system that had been installed. The pump system, installed below ground, would bring the oil, gas, and water to the surface for processing. In addition, up to three additional water disposal/injection wells (in addition to the single water disposal/injection well drilled during Phase 2) would be drilled to allow for the injection of processed produced water back into the oil-producing reservoir and at below formation fracture pressure. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take approximately 30 days to drill each well, including the time for placing the drilling rig in position and installing rigging. After the drilling of the wells is complete, the drill rig would be removed from the Project Site. Including set up for each well and removal from the Project Site, the total drilling time for Phase 4 would be about 30 months (2 ½ years). Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District conveyed via extension of an existing waterline serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in tanks. Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. All other waste generated by the test drilling would be transported by truck to Clean Harbors Buttonwillow Landfill or a similar facility closer to the Project Site. Noise abatement would be incorporated into the drilling process in the same manner as described for Phase 2, including a 32-foot high sound attenuation wall. After the drilling of the wells is Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources completed, the 32-foot sound attenuation wall would be removed from the Project Site. Re-Drilling of Wells Re-drilling of a well occurs if production from a well declines substantially or if problems exist with the well, affecting the well’s efficiency or viability. The same activities would be required for re-drills as for initial drilling, except that conductor piping would not have to be installed again, as the same conductor piping would be used for the re-drill. Although the Applicant does not expect the need for the re-drilling of wells, the activity may be required under extraordinary circumstances. Depending on the circumstances, a workover rig might be able to be used to complete a re-drill. However, for the purpose of providing a worst- case analysis, the Applicant estimates that up to 30 re-drills could occur over the life of the Proposed Oil Project, with up to five re-drills occurring during any given year. In the event that a re-drill would occur, noise attenuation design features, including the use of a 32-foot sound attenuation wall and acoustical covers, would be implemented on the Project Site. Re-drills would involve the same activities and equipment as the drilling proposed for Phase 2 and 4. 2.4.5.1 Phase 4 Processing and Operations During the drilling of the remaining oil wells and water disposal/injection wells, the production of the extracted oil would occur. Figure 2.18 shows the steps involved in processing the oil, water, and gas produced from the wells during Phase 4. The permanent production equipment on the Project Site would be used to process the oil and gas to a standard that would be suitable for sale. The produced water would be processed and injected into the oil-producing reservoir. The gas produced would be processed and sold to the gas company. The oil and gas produced would be transported offsite via pipelines constructed during Phase 3. Figure 2.18 Phase 4 Process Flow Diagram Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Noise abatement would be incorporated into operational practices and permanent production equipment. The anticipated personnel on the Project Site would be four personnel for a 12-hour daytime shift, two personnel for an 8-hourgraveyard shift, and two personnel for an 8-hour swing shift. Therefore, personnel would be present 24 hours per day on the Project Site. During the ongoing operation of the Proposed Oil Project, active wells would require periodic routine service. These activities could include the replacement of down-hole pumps, piping, and cleaning. These maintenance activities would typically be accomplished by utilizing a service rig, or “workover” rig, approximately 110 feet high. The workover rig would be operated on the Project Site a maximum of 90 days per year. The workover rig would be operated between the hours of 8:00 a.m. and 6:00 p.m. on weekdays only (excluding holidays). Only a single workover rig would be onsite at one time. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources In addition, there would be an occasional need for other services such as facilities repair and solid and liquid waste pick-up. Preventative maintenance would be performed on a routine basis to ensure the integrity of the operating equipment. The pipelines would be periodically inspected to ensure their continued integrity. The permanent production facility would be utilized to separate and treat produced oil, gas and water. The separation and treatment of these fluids allows for the oil and gas to be sold and subsequently transported via pipeline and for the water to be injected into the oil-producing reservoir below the oil water contact line. Figure 2.18 provides a simplified flow diagram of the flow of fluids through the permanent production facility. The following describes the steps of production and operational characteristics in Phase 4. Fluids Piped from the Wellhead to the Production Facility After a well has been drilled and completed (final down-hole equipment installed), the extracted fluids would be piped to the permanent production facility on site. The combination of fluids (i.e., oil, gas, and water mixture) is referred to as an emulsion. This emulsion would be sent via pipes to a production header, where it is commingled with the emulsion from all the wells in a gross line before entering a three-phase separator. There is also a test header that allows the diversion of emulsions from a single well through a well test station before the three-phase separator. The well test station allows for the testing of each well quality and flow characteristics. After the emulsion passes through the well test station, it would be directed back to the gross line where it would be commingled back with the emulsion from the production header and then enter the three-phase separator. The three-phase separator separates the oil, gas, and water. The gas exits the top, the oil exits the middle, and the water exits the bottom of the separator. Each of these fluids enters a specific system of treatment, as is discussed in the following subsections. Oil Treatment System After the produced oil leaves the three-phase separator, it would enter a stock tank, where it may need to be heated depending on the quality of the crude oil. This heating would allow excess water to drop from the oil. Heating, if necessary, would be provided by the microturbine exhaust waste heat recovery system. From the stock tank, the oil would be measured using a Lease Automated Custody Transfer Unit (LACT) and transported via pipeline to the purchaser. Any Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources water that drops out of the oil would be routed to the water treatment system. Vapors would be directed to the gas processing systems through the vapor recovery unit. Gas Treatment System During this phase, gas would be treated, sold, and subsequently transported via pipeline to the SCGC. Treatment of the gas would be required to meet gas pipeline specifications. After the gas leaves the three-phase separator, it would be sent to the first stage compressor. The first stage compressor would increase the pressure of the gas for treatment. The first stage of gas treatment is removal of H2S from the gas utilizing triazine using the SulfaScrub system. SulfaScrub is a non-regenerative batch process that requires replacement of the SulfaScrub materials periodically. The SulfaScrub process is a “scavenging” process, meaning it is used to remove H2S in process gas at low concentrations (up to concentrations of approximately 200 ppm). After leaving the SulfaScrub system, the gas would be sent through the amine system. This amine system removes CO2 from the gas. After leaving the amine system, the gas would pass through the second stage compressor, where pressure is increased prior to the gas’ entry into the low temperature separation system. The low temperature separation system removes any remaining moisture (mostly water) and gas liquids from the gas prior to sale. Propane would be utilized as a refrigerant in the low temperature separation system. Before the gas leaves the Project Site, it would be odorized using an odorizing substance (mercaptan or equivalent) as required by law. The gas would then be sent via pipeline through a metering station to a SCG pipeline constructed in Phase 3 located near the corner of Herondo Avenue and N. Francisca Drive to the south of the Project Site. Water Treatment System After the water leaves the three-phase separator, it would be sent to the clarifier tank. This tank would allow solids in the water to drop out. From the clarifier tank, the water would then enter the induced gas flotation unit for the removal of suspended matter, such as oil or solids. The induced gas flotation unit removes oil by injecting gas bubbles into the water. The bubbles adhere to the suspended matter, causing the suspended matter to float to the surface and form a froth layer, which is then removed by a skimmer. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources From the induced gas flotation unit, the water would then pass through a filter unit. The filter unit would be used to clean the water of any remaining oil and solids, such as sand. After the water has left the filter unit, it would enter the water surge tanks for storage before disposal/injection. From the water surge tank, the water would then flow through pumps and be sent to the disposal/injection wells for injection into the oil producing reservoir. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.17 Phase 4 Site Plan with Drilling Rig Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Vapor Recovery System Gas from all tanks and vessels not part of the gas processing system (the oil and water processing tanks and vessels), as well as pressure relief valves, would be gathered through pipes into a closed-system and directed to a vapor recovery compressor unit. The vapor recovery compressor would compress the gas and then add it to the gas in the gas processing system (from the three- phase separator, etc), where it would be processed and sent via pipeline to the metering station and the SCG system. Process Drain System All equipment would be connected to a drain system that would be directed to a drain tank. Liquids from the drain tank would be sent back to the three-phase separator for reprocessing. Solids from the drain system may periodically be removed to an offsite approved disposal facility. Electrical Generation System The facility would utilize a Microturbine system, which would consist of five 200 kw Capstone turbines configured as a single 1,000 kw package. Anticipated NOx emissions would be 4 ppm. Gas produced on the Project Site would be utilized as fuel for the turbines. Facility Storm Drainage System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the Project Site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation from a 100- year storm event. Waste Waste would be generated as part of the facility operations and the production process. Regular waste would include typical municipal trash such as paper, trash bags, food, and cups. Process waste would include generic oil field waste such as sandy oil (from the tank bottoms), spent H2S scavenger, spent filters, oily cloths (i.e., rags), gloves and Tyvek® suits. Intermittently the facility could generate hazardous waste. These wastes could include empty drums, rinse water, painting supplies, spilled chemicals, spent media, and hydraulic fluids. The Applicant indicates Section 2: Project Description Exhibit B that the Project Site would have an Environmental Protection Agency (EPA) and Department of Toxic Substances Control(DTSC) Identification Number. Phase 4 Safety and Security Systems The Fire Protection Plan for Phase 4 would be provided by the Applicant for review and approval by the City of Hermosa Beach Fire Department (Fire Department) and incorporated into the Phase 4 Site Safety Plan. Emergency access would be incorporated into the design of the Proposed Oil Project. An additional fire hydrant would be provided adjacent to the Project Site as a component of the Proposed Oil Project. The location of the hydrant would be determined by the Fire Department, and installation would occur as a part of the construction completed in Phase 3. A fire suppression system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed during Phase 3. The fire suppression systems would include a foam injection system and automated detection and annunciation systems. Automated alarm systems would be installed for the detection of chemicals and fire hazards to notify onsite personnel that an emergency situation is potentially occurring. If it is determined that a chemical fire or fire emergency exists, the onsite operator would activate the emergency shutdown system and notify the Fire Department. The Fire Department and their allied agencies would respond as indicated in their mutual and automatic aid agreement contracts. The onsite personnel for the Proposed Oil Projectwould be trained for initial spill response and activation of emergency systems at the site as per HAZWOPER requirements, but would not be trained for fire fighting and would rely on the Fire Department for response activities. The fire detection system would consist of thermal fire detection and optical surveillance systems that would monitor potential fire zones and activate warning indicators. The Applicant proposes Subsidence and Induced Seismicity Monitoring Programs to detect subsidence as a result of drilling activities. This would ensure that subsidence would not be tolerated to the degree that it could endanger the facility, offsite structures, and the shoreline. Also, an Induced Seismicity Monitoring Program would be designed to detect seismic activity that might result from drilling activities. The security system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed and initiated during Phase 3. Security on the Project Site would be provided by onsite personnel and a site security program that would include a Closed Circuit Television System, a gate access system, and an intrusion and motion detection system. The security system would Section 2: Project Description Exhibit B control all access to and from the Project Site. During the final design of the Proposed Project and submission of plans to the appropriate agencies for permits, the following plans and programs would be developed by the Applicant as part of the facility drilling and operations phases (Phase 2 and Phase 4 activities): • Odor Minimization Plan; • Air Monitoring Plan; • Fire Protection Plan; • Safety and Environmental Management Program; • Mechanical Integrity Program; • Hazardous Materials Business Plan; • Subsidence and Induced Seismicity Monitoring Programs; • Noise Monitoring Plan; • Quiet Mode Drilling Plan; and • Various plans related to grading, equipment design, electrical design, landscaping, etc. Safety devices would be installed within the piping, vessels, and tanks in the processing system. Safety devices would provide early warning, corrective action, or shut down of a specific segment of the system or the entire facility, if necessary. A number of safety devices are required or recommended by codes, standards and regulations, including: • High level warning systems; • High pressure warning systems; • Automatic shutdown valves; • Vessel and pipe design requirements; • Vapor recovery and component leakage limits; and • Fuel contaminant limits. Detailed piping and instrument diagrams would be provided by the Applicant during the detailed permitting stages, and reviews of the final design would be undertaken at that time. Specific measures to reduce the risk of hazardous material releases are addressed in Section 4.8, Safety, Risk of Upset, and Hazards. Phase 4 Hazardous Materials The operation would require the use of hazardous chemicals. The chemicals would be stored Section 2: Project Description Exhibit B onsite with secondary containment. The chemicals would be documented in a required Hazardous Materials Business Plan and submitted to the Los Angeles County Fire Department as the Certified Unified Program Agency (CUPA) and the Hermosa beach Fire Department. Typical chemicals utilized in the permanent production facility and the maximum quantities that would be onsite at any time are listed in Table 2.12. Hydrogen Sulfide The Applicant indicates that low levels of potential “native” H2S, in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the underlying oil reservoir. In order to have the capability to treat higher levels, the Proposed Oil Project has been planned to treat H2S levels of 15 ppm and has a maximum design capacity to treat H2S levels of up to 100 ppm. After treatment with the SulfaScrub system, the H2S levels of the gas would be reduced to less than 4.0 ppm. SCG’s specifications limit the H2S concentrations in gas delivered to the meter from a producer to less than 4.0 ppm. The Proposed Project provides for the disposal/injection of treated produced water from the drilling and production process back into the oil reservoir using water disposal/injection wells. Untreated produced water can result in the creation of H2S concentrations in the reservoir above the existing levels in the oil reservoir (referred to as the “native” condition). Prior to the disposal/injection of produced water from the oil extraction process, surface runoff from precipitation that collects on the Project Site, or any additional injected water, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff and additional water would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) Odorant/Mercaptan Odorize the sales gas 500 H2S Scavenger/Pertrosweet Gas treatment for H2S 9,000 Section 2: Project Description Exhibit B Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) HSE700 Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter Cor7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Glycol/TEG Gas treatment for water removal 55 Amine/DEA Gas Treatment for H2S removal 110 Methanol For oil treatment 55 Biotreat 8415 Water treatment prior tore- injection 55 Hydrochloric Acid 15%, used for acid washing during completion Varies Hydrofluoric Acid 3%, used for acidizing muds Varies Note: Project Application, Amendments and Appendices 2.4.5.2 Phase 4 Schedule It is anticipated that Phase 4 would occur for a period of approximately 30 to 35 years, as indicated in the schedule provided in Table 2.13. The drilling of the remaining wells would occur during the first 30 months of Phase 4, with periodic re-drills thereafter for the life of the project (averaging 30 days per year with a maximum of 150 days in one single year). The permanent production equipment would operate 24 hours a day, seven days per week. The Section 2: Project Description Exhibit B Project Site would be staffed 24 hours a day, seven days per week. Section 2: Project Description Exhibit B Table 2.13 Phase 4 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 through 131 132 133 134 135 Life of Project Deliver and Set up drill rig Drill remaining 30 wells Remove drill rig Remove 32-foot noise wall Facility operations and maintenance Continuous Re-drills Avg. 30 days/yr Max 150 days/yr* Well workovers Max 90 days per year Source: Project Application, Amendments and Appendices. To re-drill a well, a drilling rig similar to the one initiallyused to drill the wells would be used with the same setup, drilling and removal procedures. Workovers would use an 110-foot tall truck mounted drilling rig and would be conducted a maximum of 90 days per year. * This is the maximum number of days per year proposed by the Applicant. The 150 days per year is predicted to occur once every 5 years. Most likely re-drill activity would be lower. 2.4.5.3 Phase 4 Vehicle Requirements The number of vehicles estimated by the Applicant to be necessary for Phase 4 operations are provided in Table 2.14. During drilling, parking for Project employees would be provided as previously described under Section 2.4.1.1, Phase 1 Construction Activities, under the subsection Clearance of the Project Site. Parking for Project employees would be provided on the Project Site after the drilling of all the wells is completed and the drill rig has been removed from the Project Site. 2.4.6 Parking Requirements The Proposed Project construction and operation activities would result in increased parking demand. The elimination of existing parking would also make necessary the replacement of spaces lost. Parking requirements addressed in this FEIR include the following: • Temporary parking for a maximum of 40 Project employee vehicles, varying between Section 2: Project Description Exhibit B approximately 20 and 40 employee vehicles during construction and/or drilling activities in Phases 1-4, excluding ongoing production in Phase 4; • Long-term parking for four Project employees during the ongoing operation of the Proposed Project and four additional spaces for maintenance workers in Phase 4; Exhibit B Replacement of 15 parking spaces currently located at the City Maintenance Yard that supply free remote public parking on weekends under the City’s Preferential Parking Program approved by the Coastal Commission. These spaces are used by: • Maintenance Yard employees during working hours (i.e., Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays) and by the public at other times; and • Replacement of two on-street public parking spaces that would be eliminated by improvements to the southwest corner of 6th Street and Valley Drive. These spaces are not part of the City’s Preferential Parking Program. Table 2.14 Phase 4 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Deliver and Set up drill rig 6 20 26 Drill remaining 30 wells 12 11 23 Remove drill rig 5 20 25 Remove 32-foot sound wall 4 8 12 Facility operations and maintenance 5 13 18 Well workovers/Major Maintenance 4 14 18 Greatest number of trips in one day 17 (during drilling ) 34 (during drilling) 44 (during drilling) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum activity occurs during drilling of wells with facility operations and maintenance. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simple addition of the two. See Appendix A. Re-drilling would produce the same level of traffic as traffic produced during drilling activities. Exhibit B See Appendix A for details regarding vehicles, employees, trucks and construction equipment necessary for Project operations each week. Source: Project Application, Amendments and Appendices In order to comply with the City’s Preferential Parking Program and Coastal Development Permit requirements and be consistent with the City’s Coastal Land Use Plan (titled Local Coastal Plan) policies,, 17 public parking spaces would have to be generated under the Proposed Oil Project to replace the 15 parking spaces removed at the current City Maintenance Yard and the 2 on-street public parking spaces removed from 6th Street, Table 2.15 provides the Applicant’s assessment of parking demand for each phase of the Proposed Oil Project and the Applicant’s proposal for the development of the required parking as a component of the Proposed Oil Project. As indicated in Table 2.15, Phases 1, 2, and 3 and the drilling portion of Phase 4 would require temporary offsite parking. Exhibit B Table 2.15 Proposed Oil Project Parking Requirements Phase and Peak Activities Peak Number of Employees Number of Offsite Parking Spaces Needed Comments Phase 1: construct fence, wells cellar and install electrical service 27 20 Some employees would park onsite and others would use temporary parking lot. Phase 2: Install equipment and drill test wells. 22 12 Two 5 person shifts for drilling, some carpooling assumed. Phase 3: Construct wall, remove soundwall, construct onsite facilities 30-60 40 Peak employees occurs for constructing onsite facilities. Assumes some carpooling. Phase 4: Drilling and Operations 10 4 5 persons per shift with 2 shifts per day. Carpooling is assumed. Phase 4: Operations Only 2-4 0 No offsite parking needed. Source: Applicant submittals January 2014 The following information summarizes E&B’s proposal in the Project Application to meet parking demands. Cypress Parking Lot: Parking for 20 employees during temporary construction and drilling activities during Phases 1, 2, 3, and the drilling portion of Phase 4 would be provided in an offsite temporary parking lot to be developed at 636 Cypress Avenue adjacent to the western Project boundary (referred to as the temporary parking lot). The Applicant states it has entered into an agreement with the current owner of the subject property at 636 Cypress Avenue (Assessor Parcel No. 4187-031-22) for this use. Access to the parcel is provided from Cypress Avenue. While adjoining the Project Site at 555 6th Street, the temporary parking lot will not be accessible from the Project Site due to an elevation difference between the properties and the need for secured points of entry onto the Project Site. Exhibit B The 6,000-square foot parcel at 636 Cypress Avenue is a relatively level property. Itis currently developed with a single-story building that occupies approximately 75 percent of the parcel and a parking lot with approximately 6 parking spaces. The development of the parcel would comply with all City requirements. Development would require demolition of the existing building, removal of the current asphalt parking area, and minimal grading. The Cypress Parking Lot would be completed before the commencement of construction activities to occur under Phase 1 Site Preparation of the Proposed Project. Improvements that would be made to the new 60-foot by 100-foot parking lot with 20 parking spaces would include drainage, landscaping with irrigation, lighting, a trash container, and other elements to comply with the City of Hermosa Beach Municipal Code. Details of the redeveloped parcel are shown in Figure 2-18. The Applicant has requested that the City supply the required 17 replacement spaces as part of the City Maintenance Yard relocation. If the No Added Parking option is constructed, then the 17 spaces would be provided on a temporary basis at the proposed temporary parking lot at 636 Cypress Avenue and on a permanent basis as indicated below.. The City has not agreed to supply any replacement spaces regardless whether the Parking option or No Added Parking option were to be constructed Additional 20 Temporary Parking Spaces (Phase 3):During peak construction activities in Phase 3, parking for a maximum of 20 temporary parking spaces, in addition to the 20 temporary parking spaces provided at the off-site temporary parking area at 636 Cypress Avenue , would be provided at one or more sites, not yet identified, that would be leased or rented by the Applicant. Employees would walk to or be shuttled to the Project Site. The Applicant proposes to ensure to the City, through the submittal of any required documentation, that the parking spaces would be available during the temporary construction and drilling activities for the Proposed Project. If spaces are “remote,” located farther than 5 to 8 blocks from the Project Site as defined by the Applicant, a van pool shuttle service from the remote parking spaces would be provided to the Project Site by the Applicant. The Applicant proposes to obtain all required approvals and entitlements from the City and to make any required modifications to conform with City codes, identified as mitigation measures in the certified EIR, and any other requirements that may be imposed as a result of the Development Agreement or ballot measure. Construction Vehicle Parking (Phases 1-4 excluding permanent operations): The Applicant Exhibit B indicates that it has an agreement to utilize the below-ground parking area at 601Cypress Street for non-hazardous equipment storage and construction vehicle parking. Parking for construction vehicles and staging would be provided both at the Project Site at 555 6th Street and within the building at 601 Cypress Street during Phases 1-4. Parking for Ongoing Operations in (Phase 4): The long-term parking for a maximum of four Project employee vehicles during ongoing operations and maintenance will be supplied by four marked parking spaces on the Project Site at 555 6th Street. Additional parking required for maintenance activities for ongoing operations would also be accommodated onsite along the perimeter wall as indicated in Figure 2-18. No additional offsite parking would be required for long-term Project operations. Replacement of Spaces Eliminated by the Project: Fifteen parking spaces at the Project Site at 555 6th Street are used by City Maintenance Yard employees during working hours of Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays. These spaces also supply free remote public parking on weekends under the City’s Preferential Parking Program, approved by the Coastal Commission, and are otherwise used by the public when available. The Application proposes to replace 15 spaces for free remote public parking in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The City would be responsible to supply parking for its Maintenance Yard employees as part of its City Maintenance Yard relocation plan. Two on-street public parking spaces would also be eliminated by Project improvements to the southwest corner of 6th and Valley Drive; these spaces are not part of the City’s Preferential Parking Program. The Application proposes to replace these two spaces in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The Application indicates potential overlap with onsite employee scheduling during the drilling portion of Phase 4, requiring four parking spaces at 636 Cypress Avenue to be vacant as one shift arrives and another shift is leaving. This results in the availability of 16, rather than 17, parking spaces for a period of approximately one hour. The Application indicates that relocation of the 17 public parking spaces requires a coordinated approach between the Applicant and the City and proposes that this relocation be governed by the Lease Agreement (Section 13). The Applicant proposes the relocated City Maintenance Yard be developed in a manner which could supply the permanent public parking spaces on weekends Exhibit B and at night, similar to the way in which the existing parking spaces at the current City Maintenance Yard are utilized. If the relocation of the City Maintenance Yard does not become the location for the permanent public parking spaces, then the Applicant proposes to provide 15 replacement public parking spaces as well as the additional 2 public parking spaces, prior to the commencement of Project operations, at the offsite temporary parking lot at 636 Cypress Avenue or to provide other suitable public parking spaces consistent with requirements of the City’s Preferential Parking Program, the California Coastal Act, and a framework proposed by the Applicant. 2.4.7 Project Life and Decommissioning Under the Proposed Oil Project, the oil and gas resources would be developed until they are depleted and developing them is no longer economically viable, for up to 35 years. Currently, the amount of crude oil that could be produced from the field is unknown, and future crude prices are difficult to assess. According to the Lease Agreement, the Proposed Oil Project could operate for up to 35 years. Figure 2.19 shows the estimated crude oil, gas and water production for the life of the Proposed Oil Project. If during Phase 2 the Applicant does not consider the level of production from the Project Site to be economically feasible, then decommissioning of the installed equipment would commence. Decommissioning would involve the removal of the drilling and temporary testing equipment and would include abandonment of wells according to the Division of Oil, Gas and Geothermal Resources (DOGGR) requirements. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. At the end of the Proposed Oil Project, when the owner applies to DOGGR and to the City to abandon the facility, a separate permit process and CEQA environmental review would be required to evaluate decommissioning of the entire Project Site. Since the timing of the decommissioning is unknown, the Applicant has not submitted a detailed decommissioning plan, and therefore any assessment of decommissioning activities would be speculative at this time. Exhibit B Figure 2-18 Cypress Parking Area Source: E&B Updated Parking Plan 1/8/2014 Exhibit B Figure 2.19 Estimated Production Levels Source: Based on Applicant submitted estimates 2.4.8 Project Scheduling Summary Under the Proposed Oil Project, there are a number of different activities with various allowances for time of day, day of week and annual limits. These are summarized in Table 2.16. Table 2.16 Proposed Oil Project Scheduling Summary Activity Allowed Period Annually Days and Hours per Day Workover Rig Maximum 90 days per year 8 am - 6 pm weekdays only Exhibit B Drilling Rig Phase 2 - 120 days Phase 4 - 30 months 24 hours per day Re-drills 30 days per year average, up to 150 per year max 24 hours per day Phase 1 and Phase 3 Construction Any 8 am - 6 pm weekdays and 9 am - 5 pm Saturdays Offsite ROW Construction Any 8 am - 3 pm weekdays only in the City of HB Truck deliveries Any 9am - 3 pm weekdays or emergencies Quiet mode drilling Phase 2 and Phase 4 Drilling, Re-drills 7 pm - 8 am Pipeline construction activities Phase 3 9 am - 3 pm weekdays. Exhibit B Exhibit C EXHIBIT “C” PUBLIC BENEFITS OF PROJECT With the approval of the Project by the voters of the City, the public benefits of the Project provided by the Lease include: a) the royalties as further described in the Lease, that have been recently estimated to range from [insert amount] pursuant to the City’s Cost Benefit Analysis to [insert amount] pursuant to E&B’s Economic Analysis;[UNDER DISCUSSION] and b) the minimum annual royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled as further described in the Lease (“Minimum Royalty”). In addition, and as consideration for the benefits provided to E&B through the approval of this Agreement by the voters of the City, E&B has agreed to provide the additional public benefits as follows: 1) Advances Commencing with Issuance of City Drilling Permit for First Well: E&B shall pay to the City, as an advance, One Million Dollars ($1,000,000) per year, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Drilling Permit Advance” or collectively, “Drilling Permit Advances”). (For clarity, this period is estimated to continue for approximately five years, for a total of Five Million Dollars ($5,000,000).) The Drilling Permit Advances are not restricted and may be used in accordance with applicable City laws. Each $1,000,000 Drilling Permit Advance would be adjusted by any royalties received by the City in that year to ensure that the City receives a minimum of $1,000,000 each year. The Drilling Permit Advances shall be repaid by the City from royalties, including royalties from tidelands, without interest, and will be added to the advance amount and subject to the repayment process set forth in Section 13.d(4) of the Lease. If royalties are not sufficient to repay the Drilling Permit Advances, then the City is not required to repay the Drilling Permit Advances. 2) Additional Payment During Years 4-13 To Ensure $1,000,000 Minimum Amount: The Lease provides for a Minimum Royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled and continuing to the 13th anniversary (“Years 4-13”). If royalties provided to the City during Years 4-13 do not exceed One Million Dollars ($1,000,000), E&B shall pay to the City an additional amount equal to the difference between the Minimum Royalty and One Million Dollars ($1,000,000). For clarity, given that the Minimum Royalty is Five Hundred Thousand Dollars ($500,000), this payment would be an additional amount of up to Five Hundred Thousand Dollars ($500,000), for a total of One Million Dollars ($1,000,000). Exhibit C 3) Remediation of City Maintenance Yard: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, E&B shall implement the proposed Remedial Action Plan as described in Exhibit B to this Agreement in Phase 3 of the Project; however, if E&B determines as a part of Phase 2 not to proceed with Phase 3 of the Project, then E&B shall conduct any necessary remediation activities at the Project site to allow the site to be used for industrial or commercial purposes (e.g., City maintenance or commercial activities), in a manner consistent with its obligations under the Lease, the Settlement Agreement and this Agreement. E&B shall not be obligated to remediate the property for any other future uses, such as commercial or residential uses. [If voters do not approve ballot measure, this document would not be vehicle for determining clean-up, but in any case, E&B is will not remediate site if project is not approved.] 4) Educational Funding: E&B’s Proposal: E&B shall pay 1% of gross revenues (currently estimated to be Thirty Seven Million Dollars ($37,000,000)) to the Hermosa Beach Education Foundation (“Foundation”), and if the Foundation does not accept the donation, the amount shall be provided to the City to be used for any municipal purposes. Councilmember DiVirgilio’s proposal: Education Funding: E&B shall pay 1% of its gross annual revenues directly to the Hermosa Beach School District. In the event that the School District does not accept the funds, E&B shall pay 1% of its gross annual revenues directly to the Hermosa Beach Education Foundation. Payment shall be made monthly each year the Development Agreement is in effect, commencing the month that production commences. The School District and the Education Foundation, as the case may be, are third party beneficiaries of this obligation and may enforce it as though parties to this Development Agreement. The City is not an indispensable party in any such action. In the event neither the School District nor the Education Foundation accepts the funds, this requirement will be deemed satisfied. Councilmember Fangary would delete this paragraph 4. [UNDER DISCUSSION] 5) Relocation of City Maintenance Yard: If the voters approve the Project, the City may determine to relocate the City Maintenance Yard to a temporary location and then to a permanent location or alternatively, to relocate the City Maintenance Yard directly to a permanent location, without a temporary location. With respect to either of these options, E&B agrees as follows: a. $3.5 Million Forgiven Upon Issuance by City of Drilling Permit for First Well: Upon the issuance by the City of the drilling permit for the first well, the City shall not be required to repay the Three Million Five Hundred Exhibit C Thousand Dollars ($3,500,000), plus interest, to E&B as further described in Section 4.6.b of the Lease. b. $6.5 Million Advance for Permanent Relocation: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, then E&B shall advance Six Million Five Hundred Thousand Dollars ($6,500,000) to the City for the permanent relocation of the City Maintenance Yard. 6) Matching Funds to Property Owners for Undergrounding Utility Lines in the City: If E&B determines as a part of Phase II of the Project to proceed with Phase III of the Project, E&B agrees to provide up to Thirty Million Dollars $30,000,000 in matching funds (50% of the costs) to property owners for the purpose of undergrounding utility lines in the City. Property owners in the City may utilize the City process to create a district for this purpose or, alternatively, coordinate directly with the utility to achieve the undergrounding of utilities. The costs would be confirmed through the City process or by the utility, and any costs incurred by the City (that would otherwise be reimbursed by the property owner) would be included in the cost amount. These matching funds would be funded through gross revenues from the Project, with an initial amount of One Million Dollars ($1,000,000) to be contributed by E&B at the commencement of the program. [UNDER DISCUSSION] 7) Hermosa Beach Residential Property Fund: Purpose: To provide owners of residential properties within 600 feet of the Hermosa Beach Oil Recovery Project (Project) with assurance that they will incur no loss, as a result of the Project, to their property’s fair market value (Market Value), in the event of a sale of their property. Such assurance is offered through voluntary participation in a Hermosa Beach Residential Property Fund (Fund). Offer: The Fund will pay the difference between an eligible property's actual negotiated sale price and the appraised Market Value of the property, which will be determined as if the Project had not been built. A predetermined independent appraisal process will demonstrate if there is a loss in the Market Value of an owner's residential property. Participation: Participation in the Fund is entirely voluntary. Eligibility: Owners of residential properties that are located within the “eligibility area” (within 600 feet of the Project, measured property edge to property edge) are eligible to participate. The claim must be made by the then current owner of the property and only one claim per property will be allowed; however, the owner need not own the property when the Fund commences in order to be eligible for a claim. By way of example only, if the original owner of the property does not make a claim in connection with its sale to a buyer, then so long as the sale occurs during the Fund term, the buyer would automatically succeed to the rights of the selling property owner with respect to the Fund, Exhibit C including the right to make any claim, subject to the other requirements for participation in this Fund. Costs: There is no monetary cost to participating residential property owners to receive the benefits of the Fund, now or in the future. All costs, including the costs of obtaining required appraisals, are paid by the Fund. Cap: There will be a $20,000,000 cap (Funding Cap) on the total amount of benefits that the Fund can pay out. Term: The Fund will commence upon issuance of the City Drilling Permit for First Well by the City of Hermosa Beach and will continue in effect until the first to occur of (a) six years from commencement of the Fund, or one year after the completion of the final Project well, whichever is later, or (b) the entire Funding Cap has been disbursed to eligible residential property owners. The six-year aspect of the Fund term described in subpart (a), above, will be extended consistent with any extension of the term of the Development Agreement in accordance with Section 6.24 of the Development Agreement. Administration: E&B Natural Resources (E&B) will establish the Fund and designate a qualified, independent Fund Administrator. The Fund Administrator will not be an officer, employee, or affiliate of E&B. Application: To receive benefits, a selling owner of a residential property within the eligible area will submit to the Fund Administrator: (1) a signed Program Participation Agreement setting forth the terms of the Fund program (Program) and a signed claim form; (2) a copy of an accepted written offer to purchase the residence on arms-length terms from a buyer who is not related to or affiliated with the selling residential property owner and that complies with the Program requirements; and (3) a current (dated not earlier than six months prior to the property owner’s application) appraisal reflecting the Market Value of the property, which will be determined as if the Project had not been built. The appraisal must be prepared by an MAI or RM designated appraiser who is licensed in California and has at least five years of experience appraising similarly-situated residential properties in the South Bay region of Los Angeles County, California. Benefits: Within 14 calendar days after receiving a selling residential property owner’s application materials, the Fund will either agree to pay the amount of the claim, or obtain another appraisal of the residential property using the same criteria as the owner's appraisal. If the Fund obtains an alternate appraisal and the difference between the two appraisals is within 10% of the higher appraised Market Value, the Market Value for purposes of the residential property owner’s claim on the Fund will be equal to the average of the two appraised Market Values. If not, a third appraiser will be selected by the first two appraisers, and the Market Value determination in the Exhibit C third appraisal will be deemed the Market Value of the property. The owner and the Fund will be conclusively bound by the third appraisal. The difference between the Market Value of the residence, as so determined, and the property’s actual negotiated sale price will be paid by the Fund to the selling homeowner either at closing or within 10 calendar days after the Market Value of the residence has been determined, whichever takes place later. Market Value: Each appraisal obtained will determine the Market Value of the homeowner’s residential property as of the date of the appraisal and as if the Project had never been built. Claims: By submitting a claim to the Fund, the homeowner agrees to be bound by the terms of Program, and to accept reimbursement from the Fund for a loss in the Market Value of the owner’s residential property in exchange for foregoing any legal action to receive compensation for a decrease in the Market Value of the owner’s residential property that is caused by or results from the Project. Any offer that a participating owner enters into for sale of its residence must disclose that E&B has a right of first refusal to purchase the property for a price equal to the Market Value determined by the appraisal process without incurring any broker's commission. Any claim against the Fund must be submitted before the sale of the eligible residential property is completed; no claim will be considered or paid by the Fund after the closing of the sale of the residential property. Funding: E&B will ensure that, at all times during the Fund term, there is a minimum balance of $1,000,000 in the Fund, and E&B will ensure that at least $1,000,000 is in the Fund upon expiration of the six-year Fund term. E&B will regularly replenish the Fund up to the Funding Cap, as and if disbursements are made, to ensure that the Fund has readily-available funds to satisfy potential claims asserted by owners of eligible residential properties under the Program. E&B will also provide additional funding totaling a maximum of $4,000,000 from contributions based on 1.5% of gross project revenues on an annual basis until either a total of $4,000,000 has been contributed to the Fund from gross project revenues or the Funding Cap has been reached. Distribution: E&B will ensure that upon expiration of the Fund term, the Fund will have a remaining balance of at least $1,000,000 and up to a maximum sum of $5,000,000, depending on the total amount of claims that have been made against and paid by the Fund. The remaining amount in the Fund at the end of the Term shall be distributed to the then current owners of all otherwise-eligible residential properties located within 300 feet of the Project for which there has not previously been made any claim. The owner of each such residential property will be entitled to an equal, pro rata share of the amount remaining in the Fund at the end of the Fund term (after all appraisal costs and other Fund administrative expenses have been deducted). The pro rata share of the Fund balance to which each owner will be entitled will be based on the total number of properties entitled to share in the distribution. By way of example only, if at the end of the Fund Exhibit C term, there are 60 residential properties within 300 feet of the Project for which no claim has been made against, and no distribution received from, the Fund, then the owner of each such residential property will be entitled to 1/60 of the amount then remaining in the Fund after all appraisal costs and other Fund administrative expenses have been deducted. : Exhibit D EXHIBIT “D” CONDITIONS OF PROJECT APPROVAL Exhibit D includes: 1. Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this agreement) 2. Exhibit D-2 Additional Project Conditions 3. Exhibit D-3 Mitigation Measures/Mitigation Monitoring Plan- from Section 8.0 of Final Environmental Impact Report (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). Exhibit D Exhibit D-1 Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this Agreement) (Amendments to conditions necessary for consistency with Project Description, Mitigation Measures and other conditions and terms are reflected herein) SECTION 1. GENERAL 1. The testing phase for all production shall be a maximum of one year from the date drilling is initiated. 2. A minimum of one annual site audit shall take place to inspect for soil contamination as a result of accidental spills in any area not paved and expose. Auditor shall be hired by City. 3. The maximum number of days the work over rigs or any other rig (other than a drill rig) that is to be used on-site shall be 90 days per year, and shall be operated weekdays 8:00 A.M. to 6:00 P.M. excluding holidays. 4. In the event that a residence with solar panels is affected by shading, a site specific study paid for by the oil contractor shall be conducted to determine economic impact. 5. Pursuant to Assembly Bill 3180 the operation shall be monitored for all condition of the approval of which the City has responsibility which includes (but not limited to) noise monitoring and inspection of the site for proper maintenance. 6. The proposed plans shall be submitted to the State Division of Oil, Gas & Geothermal Resources for their review and recommendation; a. Any recommendation by the State Division of Oil, Gas & Geothermal Resources shall be taken into consideration prior to approval, and may be included as condition of approval. 7. Drill cuttings and other wastes, shall be collected in above ground containers and disposed of at an approved disposal site. Receipts for all disposal of waste product shall be provided within ten (10) days of disposal to the Public Works Director. Exhibit D-1 8. All requirements, standards, conditions stated within the oil Production Code, Chapter 21-A, of the City’s Municipal Code shall be met, unless more restrictive requirements are imposed through mitigation measures; where it cannot be clearly determined whether the City’s Oil Ordinance, Chapter 21-A or mitigation measure are more stringent, the appropriate City staff shall make a determination; appealable to the City Council. 9. Three (3) copies of final building plans including site, elevation, and floor plans shall be submitted for review and approval by the Planning Director prior to the issuance of any Building Permit. 10. The proposed development shall be in substantial conformance with submitted plans. Any minor modification shall be reviewed and may be approved by the Planning Director. 11. All wells must be drilled and completed within 55 months from the start of drilling of the first exploratory well in accordance with the following schedule: PHASE 1 SITE PREPARATION 6 MONTHS PHASE 2 DRILLING AND TESTING PHASE 12 MONTHS (Exploratory drilling, production testing) PHASE 3 FINAL DESIGN AND CONSTRUCTION PHASE 14 MONTHS (Permanent facility construction) PHASE 4 DEVELOPMENT AND OPERATIONS (DRILLING) 34 MONTHS (Development Drilling, 1 month per well) If the Drilling Contractor is delayed at any time in the progress of work by any act or neglect of the City of Hermosa Beach or any other governmental body having authority over this project, or by labor disputes, adverse weather conditions, by law, war, riots, strikes, Exhibit D-1 unavoidable casualties, unusual delays in receiving material or equipment or by an act of God, or causes beyond the control of the Drilling Contractor, when justified, the time period may be extended to a reasonable time to correspond with the delay incurred by the Drilling Contractor. SECTION 2. LAND USE 1. The maximum size for any storage tank of any type shall be forty feet in diameter and sixteen feet in height, appurtenances not included. 2. Prior to construction and prior to obtaining building permits for oil production, a complete soil analysis shall be performed and approved by all applicable governing agencies having jurisdiction over the project. 3. Not more than five tanks shall be installed, and shall be submerged in a concrete basin which contains 10% above the volume required by the State Division of Oil, Gas & Geothermal Resources and the Uniform Fire Code which is as follows: the volumetric capacity of the diked area shall not be less than the greatest amount of liquid that can be released from the largest tank within the diked area. The capacity of the diked areas enclosing more than one tank shall be calculated by deducting the volume of the tanks other than the largest tank below the height of the dike. 4. All wells shall be drilled and cemented in accordance with State Division of Oil, Gas and Geothermal Resources regulations to protect underground aquifers. 5. The electrical service systems shall be designed with sufficient capacity to minimize surging impacts. 6. The well cellars shall be concrete lined and shall be designed to hold contaminated run-off from on-site sources; or a sump shall be provided. 7. Solid state control console linked to a control system to perform energy conservation functions such as start/stop time programming of motor equipment, data logging of energy consumption and maintenance and service scheduling shall be provided. a. All Electrical machinery where possible shall have a minimum coefficient of Exhibit D-1 efficiency of 0.75. SECTION 3. PUBLIC SAFETY 1. The site shall be enclosed by a solid masonry or concrete wall with solid gates during all operations, protecting both against public entry, observation and attraction. A chain link fence to provide security is acceptable only through Phases 1 and 2. 2. Security personnel shall be employed at all times during the drilling stage (24 hours) and emergency phone numbers shall be posted during production Phases 2 and 4. 3. Signs warning of unauthorized entry and safety hazards shall be posted on all sides. 4. Access to facilities shall be limited to authorized personnel only. 5. Trees shall be maintained at a distance from all walls to prohibit children and others from unauthorized entry. 6. All site personnel shall be instructed on required safety procedures if hydrogen sulfide concentrations are encountered. Documentation of training and instruction shall be made available to the City Manager. 7. Both solid and liquid wastes shall be sampled and tested to determine if it needs to be treated as a hazardous waste. 8. An Oil Spill Prevention Control Countermeasures (SPCC) Plan and an Oil Drilling Contingency Plan will be Prepared for the Project and approved by the State Division of Oil, Gas and Geothermal Resources, and the City of Hermosa Beach Fire and Building and Safety Departments. 9. Drillsite and production facilities shall be constructed in accordance with the State seismic standards, and designed in accordance with U. B.C. seismic requirements for hazardous facilities. 10. A soils engineering report and engineering geology report prepared by a licensed Exhibit D-1 geologist and engineer shall be prepared and reviewed in conjunction with the plans for all physical improvements. Said report shall address potential seismic hazards, such as liquefaction, due to soils or geologic conditions. All recommendations contained in said reports shall be incorporated in the construction documents. 11. An emergency response plan, including a blowout prevention and control plan, shall be prepared for review and approval by the State Division of Oil, Gas & Geothermal Resources and the Hermosa Beach Fire Department. 12. When a leak or spill occurs, it shall be contained, the fluid shall be recovered and the area restored to its original condition. SECTION 4. FIRE SAFETY 1. Adequate fire detection and fighting equipment and supplies, approved by the Fire Department, shall be maintained on the drillsite and tank production facility at all times. 2. A supplementary analysis by a professional consultant shall be provided detailing any necessary improvements the Fire Department may need to prevent, and to halt oil related fires and shall also include the following: public notification, warning and evacuation plan. 3. Oil sumps, drip pans, etc. shall be cleaned at regular intervals to reduce fire hazards and prevent minor spills. 4. Oily rags, paper and miscellaneous waste shall be disposed of in an appropriate manner to reduce fire hazards 5. Signs warning of flammable fluids and prohibiting smoking shall be installed where appropriate. 6. The drillsite and production facility shall be protected by automatic fire detection sensors and suppression systems. The fire suppression systems shall include a tank- cooling sprinkler system. Exhibit D-1 7. Drilling operations shall be conducted in accordance with appropriate State Division of Oil, Gas & Geothermal Resources regulations and shall utilize all required blowout prevention equipment and safety devices. 8. Fire flows to service the operation shall meet Fire Department regulations. 9. All equipment necessary to contain an oil fire or blowout shall be provided and/or maintained on site and all fire personnel shall be trained on its use. SECTION 6. VEHICLE TRAFFIC AND CIRCULATION ON AND OFF SITE 1. All truck deliveries shall be limited to daylight hours (9:00 AM – 3:00 PM), Monday through Friday, except for an emergency situation, as defined by this agreement and reported to the City in accordance with the notification requirement, which have been reported to the Director of Public Works in advance of the delivery. 2. Operation of earthmoving equipment shall be limited to daytime hours between 8 AM and 6 PM. 3. Equipment deliveries shall be made only during daytime hours between 9 AM and 3 PM. 4. Project related truck travel shall be restricted to specific truck routes and access points as approved by the Public Works Department. 5. Signs shall be installed to direct detour traffic as approved by the Public Works Director. 6. The number of truck trips shall be limited to a maximum of 18 round trips per day, except in an emergency, as defined by this agreement and reported to the City in accordance with the notification requirement. 7. Maintenance Yard site access shall be designed to enable trucks to turn into the site without inhibiting traffic movement on Valley Drive or Sixth Street. 8. Minor curb radii reconstruction shall be done by the operator as determined by the Exhibit D-1 City Public Works depending on the length and necessary turning radii for project related trucks. 9. Area residents shall be notified of pipeline construction prior to commencement. Signs shall be installed to direct detour traffic. 10. All trucks arriving or departing the drill site shall be washed to prevent spillage of earth and all routes shall be swept and washed by the driller as required by the City. 11. An evaluation of the structural condition of the existing pavement shall be performed by a soils engineer on all access streets and the proposed truck routes prior to commencing any site preparation or construction and prior to the issuance of any necessary permits. The evaluation shall include as a minimum: a) the number, type, size and weight of trucks for export of materials or product, b) the number, type, size and weight of truck deliveries of building supplies, drilling supplies etc., c) the number, type, size and weight of equipment transported to the site, d) other associated transportation items, e) other anticipated loading. The evaluation shall contain recommendations as to the actions required to maintain said streets and routes in their current condition throughout the planned development phase, planned production phase, and in the close out phase. 12. The operator shall perform the actions on the existing pavement as recommended by the soils or highway engineer, the operator will hire a licensed contractor and provide street profiles, drawings, and engineering to the satisfaction of the Public Works Department prior to work commencing. 13. The City Council may restrict the use of certain street, alleys, or roadways in connection with the permittee’s operation. In the event any street, alley or roadway is Exhibit D-1 damaged by the permittee’s operations, such damages shall be paid for by the permittee upon demand by the City, and the failure to pay such damages, being the reasonable cost of the repair of any such damaged portions, shall be grounds for the revocation of the permit and the collection of such damages. SECTION 7. SANITARY SEWER 1. Use of sanitary sewer is prohibited, except for the minimal use associated with the office and restroom facilities. Any water from oil production shall be disposed in the four disposal wells. SECTION 8. NOISE /VIBRATION 1. Tripping will be restricted to daylight hours only. 2. Loudspeaker paging systems shall be prohibited. 3. Well workover rigs or any other rig that is used shall be operated only between the hours of 8:00 A.M. and 6:00 P.M. during daytime weekday hours only, excluding holidays, except in an emergency, as defined herein and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) shall be muffled to reduce noise to an acceptable limit. The operator shall use whatever means necessary, including but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing. 4. All oil maintenance equipment, vehicles and non-electrical motors shall be equipped with manufacturer approved mufflers or housed in a sound-proofing device. 5. Noise monitoring shall be conducted under the supervision of an independent certified acoustical engineer paid for by the permittee. Reports shall be submitted to the Planning Director within three working days after the completion of each phase of the monitoring. The monitoring shall include the following: a. Pre-drilling phase monitoring. Prior to the start of the drilling phase, noise measurements shall be obtained during the operation of the specific drilling rig which has been selected and the measurements shall be related to those Exhibit D-1 experienced at the nearest residential boundaries to the drilling site. In addition, the noise control measures which have been (or will be) applied to the rig as needed for compliance with the City of Hermosa Beach noise ordinances shall be identified. b. Start of Drilling. Noise measurements shall be obtained during the nighttime hours (10:00 P.M. to 7:00 A.M.) for at least six hours on each of the three nights within the five day period from the start of the drilling phase. Monitoring is to occur at the nearest residential boundary to the actual drilling operation. c. During the drilling phase. Noise monitoring shall occur during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each month during the drilling phase of the project. The noise level data obtained shall be compared to the City of Hermosa Beach Noise Ordinance standards by the Planning Department. Where an exceedence of the standards is identified, noise control measures shall be required. Production phase. Noise measurements shall be obtained during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each year during the production and completion phase.SECTION 9. LANDSCAPING 1. A Detailed Landscape Plan for Phases 2 (exploratory drilling and testing) and Phase 4, indicating the type, size and quantity of plant materials shall be submitted to the Planning Commission, and shall comply with Section 21A-2.9 of the Oil Code. 2. During Phase 2, test facility, landscaping consisting of 24” box, or larger size trees may be installed without permanent planting. 3. Minimum 24” boxed trees for Phases 2 and 4 shall be adequate in size to create a buffer effect to obscure visibility of oil production activity. Permanent trees planted around the perimeter of the site for Phase 4 shall be a minimum sixteen (16) feet high at planting. 4. Trees along the lot perimeter shall be provided to create a dense landscape buffer to the satisfaction and field review of the Planning Director. Exhibit D-1 5. The aesthetic impact of the exposed masonry walls on the west and northern sides shall be softened with the planting of climbing vines to the satisfaction and review of the Planning Director. 6. Landscaping shall be maintained in a neat and clean condition. 7. A complete automatic sprinkler system shall be provided prior to commencement of Phases 2 and 4. SECTION 10. AESTHETICS 1. The tanks, acoustical wrap and wall, and production facility shall be painted a neutral color to blend in with in with the surroundings; color shall be reviewed and approved the Planning Commission. 2. The use of architectural lighting beyond safety and security requirements shall be prohibited. 3. The site for drilling equipment and the storage facilities shall be depressed in combination with walls so that the visual impact is minimized. 4. All outdoor lighting shall be shielded and directed inward of the site. 5. Lighting shall be limited solely to the amount and intensities necessary for safety and security purposes. 6. Certain activities which might involve unshielded lighting (i.e., site preparation and restoration) activities shall be limited to daylight hours and thus not require nighttime lighting. 7. A wall maintained graffiti free of a minimum of 12 feet in height shall be provided; wall materials shall be reviewed and approved by Planning Director. During test drilling minimum 6’high fencing shall be provided. See Mitigation Measures for Noise and Vibration in D-3 below for additional requirements for this wall. Exhibit D-1 8. Tanks shall be submerged 6 to 8 feet or more below grade and will be adjacent to the 35-foot high privacy wall. 9. If the drill derrick remains idle for more than one year, review and approval by the City Planning Commission or the City Council shall be required, or the derrick shall be dismantled at the expense of the operator. 10. All production equipment and structures shall be painted to blend with the surrounding environment with review and approval by the Planning Director. 11. On-site signs shall be limited to those needed for public health and safety. 12. All derricks masts hereafter erected for drilling, re-drilling or remedial operations or for use in production operations shall be removed within 45 days after completion of the work unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources of the state. 13. The operator shall diligently and continuously pursue drilling operations until the all 30 oil wells and all four (4) water disposal wells are completed or abandoned to the satisfaction of the Division of Oil, Gas & Geothermal Resources of the state and upon completion or abandonment shall remove all drilling equipment from the drill site within 45 days following completion or abandonment of the well unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources. SECTION 11. ODORS/VAPOR/AIR POLLUTION 1. A vapor recovery system shall be installed to recover 99% of hydrocarbon emission during storage and transfer of crude oil. 2. Raw gas shall not be allowed into the atmosphere. 3. Gas and vapor detection systems shall be installed at appropriate locations. 4. All project site activities shall be conducted such as to eliminate escape of gas in accordance with best available control technology and practices which shall be reviewed and approved by the City. Exhibit D-1 5. All requirements of AQMD shall be met at all times. 6. A state-of-the-art scrubber shall be employed for the exploratory phase to eliminate odors from waste gases, and any flame shall be enclosed. 7. Tanks shall be designed and located so that no odors or fumes can be detected from the adjacent areas outside the exterior walls of the project. 8. Operators shall not blow lines to the atmosphere, except in an emergency, as defined below in Section 14. and reported to the City in accordance with the notification requirement. 9. Construction equipment and vehicles shall be maintained in proper tune. 10. Odorless drilling muds shall be used. 11. Well tubing and rods shall not remain out of the well during workover operation less than 8-hours. The tubing will be surface washed with a detergent solution to remove odor bearing residual hydrocarbons if exposed longer than 8-hours. 12. Odor control will be further enforced by the SCAQMD under Rules 402, 466.1 of their regulations, and the commercial recovery system shall be employed for the permanent facility. 13. There shall be no open flames allowed. 14. The permittee shall monitor drilling mud during drilling on the site for odorous substances and take such measures to eliminate any odor which would be perceptible outside the drill site. 15. The permittee shall undertake no refining process or any process for the extraction of products from natural gas, except for such minor processeds as necessary to make natural gas acceptable to the City gas mains for domestic use. [correction of typo] 16. Well cellars shall be maintained in a clean and efficient manner to prevent waste accumulation and shall be frequently steam cleaned. Exhibit D-1 SECTION 12. GRADING/STORM WATER/SITE RUNOFF 1. Grading shall not be performed when wind speeds exceed 20 mph. The contractor shall maintain a wind speed monitoring device on site during grading operations. The contractor shall continually keep the soil moist during grading operations. At no time shall any dust be allowed to leave the work site. 2. Normal wetting procedures shall be employed during grading. Review and approval of procedure shall be by Public Works Director. 3. Graded surfaces shall be paved or landscaped per approved plan. 4. Project site shall be graded so that all contaminated runoff is collected and treated on-site and disposed of according to all laws. 5. Site shall be graded in a manner so that all hazards or contaminated fluids and runoff are directed toward a cellar and approved pit and disposed of properly. 6. No water from the site shall be allowed to enter the storm drainage system or any public area. 7. No water from the site shall be allowed to surface flow across the public beach. SECTION 13. PIPELINE CONSTRUCTION 1. The pipeline operators shall adhere to all applicable federal, state, regional, and local statutes governing design, construction, operation, and maintenance of the pipelines and related equipment. 2. A detailed pipeline survey shall be conducted in order to locate existing pipelines prior to excavation for pipeline construction. 3. A responsible agent paid for by the applicant shall be present during excavations. 4. Areas of construction and maintenance activities shall be delineated by signs, Exhibit D-1 flagmen, pavement markings, barricades, and lights, as determined by permit requirements of all local agencies. 5. Where pedestrian activities are affected during construction, appropriate warning signs shall be installed and pedestrians will be diverted. Pedestrian access to businesses and residences will be maintained during construction. Special facilities, such as handrails, fences, and walkways shall be provided, if necessary, for the safety of pedestrians. 6. Obstruction of emergency vehicle operations will be partially mitigated by ensuring that providers of emergency services are kept informed of the location, nature, and duration of construction activities so alternate routes can be chosen. It is essential that fire department access is maintained to all buildings adjacent to construction activities. For this reason, a minimum of at least one lane for streets undergoing construction will be kept open at all times, and fire hydrants in construction areas will remain accessible. 7. If public transit stops along pipeline routes need to be temporarily relocated during construction, the applicant shall provide signs directing riders to the temporary stop location. 8. When hauling excavated and waste materials from construction sites, substandard roadways will be avoided and local jurisdiction regulation governing hauling vehicles will be adhered to. 9. Pipeline construction and operation of earth moving equipment shall be limited to daylight hours between 8:00 AM and 3:00 PM and shall not be permitted during weekend periods. Additionally, construction-related trucks should not be operated during peak traffic hours of 7 to 9 AM and 3 to 7 PM. Pipeline construction at major intersections shall be limited to daylight hours between 9:00 AM and 3:00 PM to avoid peak traffic periods. 10. Equipment deliveries shall be made only during daytime hours between 8 AM and 3 PM. 11. In order to reduce visual impacts and possible safety hazards, storage of pipes and Exhibit D-1 other materials, as well as construction equipment, shall not be permitted on any street during non-construction hours. 12. Area residents within 300’ shall be notified about the pipeline construction operation prior to commencement of construction. 13. Detour signs on pipeline construction routes shall be placed at appropriate locations. 14. Steel plates covering pipeline excavation trenches shall be placed to permit traffic movement during non-construction hours. 15. Pipelines shall be designed with ample safety factors, pressure-tested prior to being placed in operation, and monitored for corrosion once in operation. 16. Safety shut-down devices that respond to drops in pipeline pressure shall be incorporated into the project in order to stop the flow of the pipeline contents in case of a pipeline rupture. 17. Groundwater level and land subsidence shall be monitored to insure that pipeline damage does not occur as a result of geologic and hydrologic phenomena. The annual subsidence survey shall include a report to the City on monitoring efforts to insure pipelining damage has not occurred. 18. Pipeline construction along Valley Drive shall be approved by the Director of Public Works prior to issuance of a permit. 19. Pipeline construction shall not occur in the area known as the Hermosa Valley Greenbelt except that the permittee may connect to West Basin Municipal Water District’s existing reclaimed water line for the purposes and as described in Exhibit B to this Agreement. 20. Storage of materials shall not be allowed on the Hermosa Valley Greenbelt. The storage or dumping upon the greenbelt of any materials, construction equipment, debris, oil drilling equipment, drilling rigs, piping, etc., and any and all equipment and vehicles necessary for the construction and maintenance of the pipeline and oil development site shall be prohibited. The use of the greenbelt as a staging area for Exhibit D-1 construction of the oil facility or pipeline shall be prohibited. There shall be no parking or standing of any vehicles on the greenbelt for any time period. 21. Trenches shall be covered during non-working hours to minimize traffic circulation problems. SECTION 14 Definition and notification requirements for emergency situations: I. For purposes of these conditions, “Emergency” is defined as follows: A threat to the health and safety of persons in the surrounding area to the drill site and the following conditions which require immediate action: A. Conditions which could lead to potential spill or well blowout: 1. Entry of oil and gas into the wellbore while drilling, tripping or out of the hole which may be indicated by one or more of the following: a. Pit volume gain b. Well flowing with pumps off c. Flow rate increases with circulation d. Improper hole fill-up on trips e. Sudden increase in drilling rate f. Pump pressure decreases and pump rate increases g. Decrease in returning mud rate h. Sloughing shale i. Changes in mud salinity and/or mud flow properties 2. Lost circulation or loss of ability to circulate 3. Casing or wellhead failure while drilling 4. Stuck pipe and/or equipment during any of the following operations: Exhibit D-1 a. Drilling b. Tripping drill pipe and tools c. Wireline logging d. Drill stem testing e. Running casing f. Perforating and stimulating completion interval 5. Loss of rig power or equipment failure while drilling or tripping. B. Injuries to personnel at the Drill Site C. Conditions which could reduce the stability and safety of the rig and production equipment: 1. Natural events: a. Excessive winds, rain and lightning b. Floods c. Subsidence d. Earthquakes 2. Other events a. Riots/Demonstrations b. Fire II. Notification Required: In the case of an emergency, as defined above, the permittee shall give immediate notice to the City of the occurrence of the emergency event. The City will provide the permittee with a list of phone numbers of City personnel to call for notification purposes. A written notice, including a detailed description of the emergency condition, and the actions take and/or proposed to be taken to correct the situation, shall be provided within 24 hours of the occurrence of the emergency event. SECTION 15 Exhibit D-1 1. Each of the above conditions is separately enforced, and if any of the conditions of approval is found to be invalid by a court of law, all the other conditions shall remain valid and enforceable. 2. The subject property shall be developed, maintained and operated in full compliance with the conditions of this grant and any law, statute, ordinance or other regulation applicable to any development or activity on the subject property. Failure of the permittee to cease any development or activity not in full compliance shall be a violation of these conditions. Exhibit D-2 Exhibit D-2 ADDITIONAL PROJECT CONDITIONS A. GENERAL E&B (herein “Operator”) is the owner and Operator of this project, responsible for implementing and complying with all applicable conditions. A-1 Project Description This Development Agreement, and associated conditions, is based upon and limited to the project described in Exhibit B to the Development Agreement. A-2 Acceptance of Conditions Execution of this agreement shall be deemed as acceptance of all conditions herein and waiver of any objections thereto. A-3 Costs of Implementing and Enforcing Conditions The Operator shall be fully responsible for all reasonable costs and expenses incurred by the City or any City contractors, consultants, or employees, in implementing, monitoring, or enforcing this approval, including but not limited to, costs for permitting, permit conditions implementation, mitigation monitoring, compliance monitoring, reviewing and verifying information contained in reports, undertaking studies, research and inspections, administrative support, and including the fully burdened cost of time spent by City employees on such matters. Draw-Down Account. The Operator shall maintain a draw-down account with the City, from which actual costs will be billed and deducted for the purpose of defraying the expenses involved in the City’s review and verification of the information contained in any required reports or plans and any other activities of the City, including but not limited to: enforcement, permitting, inspection, coordination of compliance monitoring, administrative support, technical studies, and the hiring of independent consultants. The initial amount to be deposited by the Operator shall be $500,000. In the first year, if withdrawals from the Exhibit D-2 account have reduced its balance to less than 50 percent of the amount of the initial deposit ($250,000), the Operator shall deposit $50,000 in supplemental funds within 30 business days of notification. After the first year, if the balance in the draw-down account is reduced at any time to $50,000 or less, the Operator shall deposit $50,000 in supplemental funds on each occasion that the account is reduced to $50,000 or less within 30 business days of notification. There is no limit to the number of supplemental deposits that may be required. At the discretion of the Operator, the amount of an initial or supplemental deposit may exceed the minimum amounts specified in this subsection. The City Manager or Designee may, from time to time, increase the minimum $50,000 figure to account for inflation or the City’s experience in obtaining funds from the account. Operator shall be entitled to reasonably review during normal business hours the expenditures from the deposit to ensure the expenditures are related to the Project. Should Operator object to an expenditure, Operator shall submit a request in writing to the City Manager for a detailed written explanation of the expenditure. Following receipt of the written explanation from the City and should Operator continue to object to payment of the expenditure, it shall file such objection in writing with the City Council explaining why such expenditure is not appropriate from the draw down account or why the amount of the expenditure is not appropriate for the work. Following City Council consideration of the matter and decision, the Council’s determination on the expenditure shall be final and binding on the parties. A-4 Substantial Conformity The Project shall be designed, constructed, and operated in substantial conformity with the Project Description in Exhibit B and all conditions of approval set forth in this Exhibit D. A-5 Conflicts Between Conditions In the event that any condition or mitigation measure contained in this development agreement is determined to be in conflict with any other condition contained herein, then where principles of law do not provide to the contrary, the condition most protective of natural environmental resources and public health and safety shall prevail to the extent feasible. A-6 Facility Throughput and Source Limits All facilities constructed under this approval shall be limited to the following maximum Exhibit D-2 production volumes: Phase 2 shall be limited to 800 barrels of oil and up to 250,000 standard cubic feet per day of gas. Phase 4 shall be limited to 8,000 barrels of oil per day and 2.5 million standard cubic feet of gas per day. A-7 Alternative Mitigation if Condition Invalidated If any condition of this project is invalidated by a court of law in a final adjudication, this approval shall be suspended pending imposition of a substitute condition or mitigation measure that will achieve equivalent results or reduction of impacts. A substitute condition or mitigation measure shall be incorporated into the Development Agreement in accordance with Section 4.2 of the Agreement- Changes and Amendments to Project before the suspension shall be lifted and the project is allowed to proceed. A-8 Applicability of Conditions to Construction and Operations These conditions are intended to apply to the E&B Project during both the construction and the operation of the permitted facilities. The term "operations" shall be understood to encompass both construction and operation phases unless such an interpretation would be inappropriate. A-9 Compliance Plans to have Same Force and Effect as Conditions All elements of the plans and programs required under this Exhibit D shall have the force and effect of a project condition. The remedies available to the City upon Operators failure to comply with such plans and programs includes but is not limited to those remedies which are available to the City upon Operator’s failure to comply with a project condition. A-10 Performance Security The Operator shall be subject to the following provisions: a. Performance Bond. Prior to issuance of the first drilling permit, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in a commercially reasonable amount to be determined by the City Manager taking into account existing bonds to the extent they overlap, payable to the City and executed by a corporate surety acceptable Exhibit D-2 to the City and licensed to transact business as a surety in the State of California to cover the exploratory phase of the Project. The exploratory phase performance bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, financing spill response connected with exploration. Should the Project proceed to the oil production phases of the Project, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in the sum to be determined by the City Manager, payable to the City and executed by a corporate surety acceptable to the City and licensed to transact business as a surety in the State of California Such bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, financing spill response and shall be in a format and include terms approved by the City Manager connected with the production phases of the project. These bonds shall be in addition to any other bond required by law (including without limitation Public Resources Code Sections 3202, 3204, 3205, 3205.2 and 3206 and 14 C.C.R. § 1722.8. These bonds shall satisfy the bond requirement in Section 23 of the Lease, and in the City Manager’s discretion, may satisfy the bond requirement in Condition E-1 below. b. Change of Operator. The performance bond(s) required above shall continue in force for one (1) year following any sale, transfer, assignment, or other change of Operator of the Project Site, or of the current Operator’s termination of activities at the Project Site. The City may release said bond prior to the end of the one (1) year period upon satisfaction by said Operator of all its obligations. Notwithstanding the foregoing, the performance bond shall not be terminated or released upon the sale, transfer, assignment, or other change of Operator until the new Operator has delivered a replacement bond complying with the provisions of this section. c. Funding Options. At its sole option, the City may accept Certificates of Deposit, Cash Deposits, or U.S. Government Securities in lieu of commercial bonds to meet the above bonding requirements on terms approved by the City Manager. B. PROJECT REVIEW B-1 Review by Community Development Director Prior to commencement of construction or operation for Phase 1, 2, 3 and 4, and for subsequent modifications, Operator shall submit to Community Development Department Exhibit D-2 relevant construction plans, engineering drawings and supporting text demonstrating compliance with the relevant conditions of this approval. Construction or operation may not commence until City has reviewed and approved the appropriate submittal, consistent with applicable conditions. The City agrees to make a good faith attempt to review the submittal for completeness as expeditiously as possible, which may involve retaining consultants with the appropriate technical expertise to review the submittal, and to provide a list of deficiencies. When the submittal is deemed complete, the City agrees to provide written notice of approval of construction plans as expeditiously as possible, or indicate in writing the conditions which have not been met, or notify the permittee that the Community Development Director review shall be completed within a period of time specified by the City, based on sound engineering practices. When such conditions have been met and city confirms in writing, construction or operation may be commenced. The City may require post-construction inspections or review of as-built drawings, as necessary to confirm consistency with the approved submittal. B-2 Condition Scheduling Conflicts In the event that scheduling requirements among or between conditions in this approval (or with this approval and conditions imposed by other agencies) conflict with respect to timing, Community Development Department (in consultation with other departments, agencies, and Operator as appropriate) shall resolve such conflict. B-3 Authority to Begin Construction Operator shall not commence construction without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to construction of Phase 1, Phase 2, and Phase 3, as specified by this approval, have been satisfied. B-4 Authority to Begin Operations After construction and prior to start-up, Operator shall not commence operations without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to start-up, as specified by this approval, have been satisfied. Start-up, for purposes of this condition, is defined as the introduction of hydrocarbons into Exhibit D-2 the facility production equipment for both Phase 2/4. C. MANAGEMENT AND MONITORING C-1 Environmental Quality Assurance Program (EQAP) Under EM-1 below in Exhibit D-3, Operator is required to provide funding for implementation and administration of an environmental monitoring program, including an environmental monitor (“Monitor”), to ensure compliance with the environmental conditions of approval. The Monitor shall assist in condition compliance and mitigation monitoring for all applicable construction and operational stages of the project. The monitor shall be under contract with the City and funded by the Operator. 1. In accordance with EM-1, the Monitor will create a monitoring program for the project that includes a post-construction component to monitor measures that extend beyond the construction period and the operational phase of the project. 2. The Monitor will prepare a working monitoring plan that reflects the approved environmental mitigation measures and conditions of approval. The monitor’s plan will include: a. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; b. Lines of communication and reporting methods; c. Daily and weekly reporting of compliance; d. Construction crew training regarding environmental sensitivities; e. Authority to stop work; and f. Action to be taken in the event of non‐compliance. 3. Under EM-1 and other conditions, Operator is also responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, noise engineer, etc.). The Monitor will coordinate the monitoring efforts of the specialists, including communication with the City and responsible Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). To assist the Monitor in creating and implementing its working monitoring plan, Operator shall prepare and obtain Community Development Department approval of an Environmental Quality Assurance Program (EQAP) prior to commencement of Phase 1 construction activities, and obtain Community Development Department approval of a revised EQAP Exhibit D-2 prior to commencement of Phase 2, Phase 3, construction activities and Phase 4, Operations. The approved EQAP and all approved revisions to the EQAP shall be submitted to the Monitor prior to commencement of each Project phase. This EQAP shall encompass both construction and operations phases of the E&B Project, and shall describe the steps Operator will take to assure compliance with the conditions contained in the approval for this project. The EQAP is intended to provide a monitoring and reporting framework for compliance with all conditions, programs and plans specified by these conditions and the mitigation measures. As such, it will become a comprehensive reference document for the City, the Monitor, other agencies, and the public regarding the E&B Project. The EQAP shall include, without limitation: a. All plans, as required by these conditions and mitigation measures, relevant to construction and operation of the permitted facilities (including the Risk Management Program, SIMQAP, Emergency Response Plan, Hazardous Material and Waste Management Plan, Site Security Plan, and Fire Protection Plan). To the extent there is any overlap or redundancy between plans required under Exhibits D-2 and D-3, upon E&B request the Monitor may in its discretion authorize E&B to combine required plans into one submittal; b. Provisions for regularly communicating with and reporting to the Monitor; c. Provisions for ensuring knowledge of and compliance with these conditions; d. Provisions for the submittal to Community Development Department and the Monitor of monthly compliance reports throughout construction and annual summary reports during operations unless more frequent reporting is deemed necessary by Community Development or the Monitor. Upon receipt of compliance reports, Community Development Department or the Monitor shall advise Operator of what additional compliance items require reporting prior to the next report. These compliance reports shall describe: 1. Project status, including but not necessarily limited to: i. the extent to which construction has been completed on various project phases ii. the background and experience of the construction labor force Exhibit D-2 iii. the rate of production/throughput during operation, iv. environmental planning and implementation efforts, and v. any revised time schedules or timetables of construction and/or operation that will occur in the next one-year period. 2. Condition compliance, including but not necessarily limited to the results of the specific mitigation requirements identified in these conditions and any compliance plans. 3. Results and analyses of all data collection efforts being conducted by Operator pursuant to these permit conditions. d. Copies of all local, state, and federal permits relative to the E&B Project, and any amendments thereto. The EQAP shall be updated regularly to include all up-to-date compliance plans required under these conditions of approval. C-2 24-Hour Emergency Contact Prior to issuance of the Permit for Phase 1, Operator shall provide to the Community Development Department and the City Fire Department the current name and position, title, address, and 24-hour telephone numbers of the person in charge of the facility, person in charge of construction, and other representatives who shall receive all orders and notices, as well as all communications regarding matters of condition and permit compliance at the site and who shall have authority to implement a facility shutdown pursuant to this agreement or other City ordinances. There shall always be such a contact person(s) designated by the Operator. One contact person shall be available 24 hours a day in order to respond to inquiries received from the City, or from anyone in case of an emergency. If the address or telephone number of Operator’s agent should change, or the responsibility be assigned to another person or position, Operator shall provide to Community Development Department the new information within 24 hours of the effective date of such change. Exhibit D-2 C-3 Operator to Provide Copies of Permits to Community Development Department Operator shall furnish to Community Development Department and Monitor copies of all local, state, and federal permits relative to the E&B Project within 30 days of receipt by Operator. C-4 Pipeline Construction Confined to Right-of-Way All pipeline construction activities, including work areas and staging and storage areas of pipe, shall be confined to the area defined in the encroachment permit. C-5 Capacity and Throughput Reports Operator shall report to Community Development Department and Monitor the volumes and rates of: (1) inlet volumes; (2) transferred for sales into the Southern California Gas Company transmission line; and (3) Oil volumes transported to Pipeline. Reports shall be made on at least a monthly and annual basis and supporting documentation will be provided upon request from Community Development Department or Monitor. Upon approval from the Community Development Director and the Monitor, these reports may be combined with and submitted at the same time as Royalty Statements under Section 4 of the Lease. C-6 Risk Mitigation Program A Risk Management Program to substantially reduce the risks of project-related accidents which may result in loss of life and/or injury, and damage to property and/or the natural environment shall be submitted for approval to the Hermosa Beach City Community Development, Fire and Public Works Departments. Other City departments, as deemed necessary, may be consulted. All reasonable costs associated with this City review shall be borne by Operator. Operator shall be entitled to participate fully in the review process. The Program shall include all appropriate construction plans, Process Hazards Analyses (PHA), and Hazard and Operability Studies (HAZOPs) for the proposed facility and ancillary equipment to the City who may employ a third-party technical review in order to evaluate project design and help identify possible design hazards prior to issuance of ministerial permits. The HAZOPs shall be reviewed and approved by the City prior to construction for each Phase of the project. This review shall also evaluate all mitigation identified in the EIR. Exhibit D-2 The City may require as-built inspections and the submittal of as-built drawings for approval prior to the operation of any plant modifications. C-7 Safety Inspection, Maintenance And Quality Assurance Program Operator shall submit a detailed Safety Inspection, Maintenance and Quality Assurance Program (SIMQAP) for all facilities and pipelines which shall be implemented during construction and operations. Separate SIMQAP plans may be submitted for Phase 1 and Phase 2/3/4 activities. The SIMQAP shall be reviewed and approved by the City, including the Hermosa Beach City Community Development Department, Hermosa Beach Fire Department and the Monitor. Other City departments, as deemed necessary, may be consulted. The SIMQAP for construction shall be approved prior to construction, and the SIMQAP for operation shall be approved prior to operation for each Phase of the project. The plan is a dynamic document and, as such, updates including new procedures, safety and maintenance technologies and processes, shall be reviewed jointly by Operator and the City. The SIMQAP shall be revised as appropriate. The SIMQAP shall include, but not be limited to, evaluation of staffing levels for safe operation of the plant in emergency situations, establishing procedures for review of safety inspection records, regular maintenance and safety inspections, periodic safety audits, development of safety system testing protocols, training and experience standards for personnel and use of simulation techniques in training programs, inspections of all trucks carrying hazardous and/or flammable material prior to loading, monitoring of critical safety devices and systems, and review of the routing of all trucks carrying hazardous material. Operator shall implement the approved plan and shall provide for involvement of the Monitor, City staff, or its consultants in all inspections as appropriate. Prior to construction and operations, Operator shall demonstrate that employees (and subcontractors) are trained in the safety, inspection, maintenance and operations requirements of the project. All costs associated with this review process shall be borne by Operator. C-8 Emergency Response Plan Operator shall submit to the applicable City Departments and the City Fire Department an Emergency Response Plan (ERP) that addresses response procedures to be implemented by Operator for accidental events that pose significant threats to public health and safety, property, or the environment. Exhibit D-2 The ERP shall be reviewed and approved by the City Fire, Community Development and Public Works Departments prior to commencement of drilling operations. Separate ERPs may be required for Phase 1 and Phase 2/3/4 activities. The ERP shall include specific measures to avoid impacts on cultural resources, sensitive habitats, and sensitive biological resources identified in the project EIR whenever possible without affecting emergency response. Operator shall demonstrate the effectiveness of its ERP by responding effectively as determined by Fire to one emergency response drill prior to Phase 1 and prior to approval of the Plan by Fire. The ERP shall be submitted sufficiently prior to Operator’s projected start-up date so as to allow reasonable time for review and the planning of a drill required prior to ERP approval. The ERP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when warranted to incorporate new planning strategies or procedural changes, new technologies, and the acquisition of more effective, feasible response equipment as it becomes available. Any changes shall be submitted to the City Fire, Community Development and Public Works Departments for their review and approval, prior to implementation. Operator shall demonstrate the ongoing effectiveness of the ERP by responding to no more than two surprise drills each year which may be called by the City. If critical operations are underway, Operator need not respond to the drill at that time but shall explain the nature of the critical operations and why response is not possible. The City may then call for an additional surprise drill in the same year. Operator shall implement all reasonable changes based on review of drill performance, which will further enhance overall emergency response planning and capabilities. Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-9 Hazardous Material and Waste Management Plan Prior to start-up, Operator shall submit a Hazardous Material and Waste Management Plan (HMWMP) to the City Fire Department and Community Development Department for all facilities. The HMWMP shall be reviewed and approved by Fire and Community Development prior to start-up. The Plan shall demonstrate compliance with the provisions of the Uniform Fire Code as adopted in Chapter 15 of the Hermosa Beach Municipal Code and the provisions of the Health and Safety Code §25500 et seq, Chapter 6.95 Business Plan Requirements, with the Exhibit D-2 exception of emergency response procedures which are complied with above. The Hazardous Material and Waste Management Plan shall include but not be limited to the following: a. Locations and methods for storing hazardous materials and wastes, both within the facility and along the OIL pipeline right-of-way. b. Treatment procedures, or justification where none are used, to reduce the hazardous nature of the materials before they are permitted to leave the site. c. Specific routes for transportation of hazardous waste materials to Class I disposal sites consistent with City policy. d. Letter of commitment that the materials are transferred by a carrier licensed in hazardous material transport. e. Letter of commitment ensuring complete accounting of intake, processing, and exit of hazardous material and wastes. f. Detailed description of a monitoring system to be installed, capable of detecting hazardous material and wastes that may escape from primary storage devices. g. A revised Hazardous Materials Business Plan which accurately reflects the revised chemical inventory of the project site to Environmental Health Services for review and approval, in accordance with the California Health & Safety Code, Chapter 6.95, Section 25,500 et seq. The HMWMP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when parties mutually agree it is warranted to incorporate new planning strategies, changes in procedures, new technologies, or changes in materials, or when required by law. Any changes requested by Operator or City shall be submitted to Fire and Community Development for their review and approval, prior to implementation. C-10 Site Security Plan Exhibit D-2 Prior to issuance of a Permit for Phase 1, Operator shall submit to the Community Development and the Hermosa Beach City Police Department for review and approval a site security plan. The plan shall describe the procedures to be implemented by Operator which will prevent intentional damage to the drilling and production facilities which may result in environmental damage or public safety hazards. The plan shall include placement of security cameras to the satisfaction of the Community Development and Police Departments, and employment of security personnel at all times during drilling stages (24 hours) (see condition 3.2 in D-1) and employment of security personnel from dusk until dawn at all other times. The plan shall be reviewed and revised as warranted to require incorporation of new planning strategies, new technologies or changes in plant operation, and changes in notification procedures. C-11 Fire Protection Plan All E&B Project facilities shall have fire protection features installed in accordance with the provisions of an E&B Project Fire Protection Plan (FPP), and as such features may be required under this Exhibit D. All facilities, construction activities, process equipment, and fire protection equipment shall comply with the standards of the National Fire Protection Association (NFPA), American Petroleum Institute, Uniform Fire Code as adopted in Chapter 15, Building and Construction of the Hermosa Beach Municipal Code, and the Hermosa Beach City Fire Department. In the event of a conflict between these standards, the Fire Marshal, in consultation with the Operator, shall make a cost/benefit decision regarding which standards apply. Prior to construction, Operator shall receive Fire Department approval of an FPP which addresses both construction and operation of the E&B Project. Operator shall distribute copies of the approved contingency plans to applicable City Departments and the City Fire Department. All plan recipients are to be notified of contingency plan changes via formal contingency plan updates. Separate FPPs may be submitted for Phase 1 and Phase 2/3/4 activities. The FPP shall include, but may not be limited to, discussions of the following:  Onsite firefighting equipment and systems  Fire and detection  Access  Vegetation management  Employee training and safe practices Exhibit D-2  Process control and monitoring analysis  Drainage and containment  Safety, inspection (including City inspectors) and maintenance practices Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-12 Prevention of Internal Pipeline Corrosion Operator shall implement techniques to prevent internal corrosion in accordance with the requirements of the California State Fire Marshal (Title 5 §51010-5-019 of the California Government Code), 49 CFR 192 Parts 150, 475 and 477, and 49 CFR 195.418 as part of the Oil and pipeline maintenance procedures. The internal inspection records shall be submitted to and reviewed by the appropriate governmental agencies. Such activities shall include routinely scheduled pigging of the pipeline to remove pockets of accumulated fluids that contribute to internal corrosion (such as hydrogen sulfide, carbon dioxide, and water), the use of corrosion inhibitors and corrosion coupons, and periodic testing by a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents, cracks and other defects have occurred. Specific measures are discussed below: a) Whenever any section of the pipelines are removed for any reason, they shall be inspected for possible internal corrosion and records retained for inspection by the State Fire Marshal. b) The pipeline shall be tested with a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents cracks and other defects have occurred. State-of- the-art pigging will be capable of defining wall-thickness contours around any area of reduced wall thickness. The smart pigging will be done prior to operation of the Oil and natural gas pipelines and at a subsequent interval to be determined by the California State Fire Marshal. A program of maintenance shall be developed to ensure that permits to perform the work are obtained as soon as possible and that pipeline defects are rectified within one month of securing the necessary permits for severe defects, and within six months for moderate defects. This procedure shall be noted in the SIMQAP and receive approval by the SSRRC prior to operations of either the OIL or natural gas pipelines. Exhibit D-2 C-13 Prevention of External Pipeline Corrosion Operator shall undertake the following provisions to avoid external pipeline corrosion: a) The Oil and natural gas pipelines shall be coated to reduce the potential for external corrosion. Final selection of pipeline coating will be demonstrated, to the satisfaction of the California State Fire Marshal, that the selected coating would provide the maximum level of protection of available coatings for all expected operating conditions; and b) A baseline pipe-to-soil cathodic profile and reading shall be obtained after the pipeline has been installed, but before any cathodic protection facilities are connected. Other utilities shall disconnect their bonds as well. This measure shall be included on the construction plans which shall be reviewed by the City. C-14 Pipeline Hydrotesting The oil and natural gas pipelines shall be hydrotested prior to operation, and every five years thereafter or sooner if warranted by major ground movement that has the potential to undermine the structural integrity of the pipeline. This procedure shall be noted in the SIMQAP which shall be reviewed and approved prior to operations. C-15 Structural Support for Underground Utilities Operator shall provide structural support for underground utilities in and near the construction area during work in the trench and backfilling operations to prevent damage to such facilities during construction activities. C-16 Underground Utility Damage Operator shall halt work in the immediate vicinity in the event of inadvertent damage to an underground utility, until the owner of the utility has been contacted and repairs have been effected. C-17 Underground Pipeline Warning Marker A plastic ribbon or other suitable material shall be buried 12 to 18 inches above the oil and Exhibit D-2 natural gas pipelines and shall cover the length of the pipeline. The material shall be brightly colored and be labeled with a warning that this area contains a hazardous liquid pipeline trench. This measure shall be noted on the design and construction plans to be reviewed and approved by the City. C-18 Pipeline Route Warning Signs The entire pipeline route shall be marked with pipeline warning signs a minimum of every 500 feet. Spacing of markers may be greater in agricultural areas provided markers are clearly within sight of each other. Bright colored markers shall be installed above new pipelines that extend offsite of the proposed facility. This type of measure helps reduce the likelihood of external mechanical interference, of which third party damage associated with excavation near the pipelines is the most common cause of pipeline failures. C-19 Underground Service Alert Notification Operator shall notify owners through the office of Underground Service Alert of any underground facilities (including electrical, water, petroleum pipelines, fiber-optics and agricultural water delivery and drainage pipelines) 48 hours in advance of excavation in the vicinity of these facilities. Operator shall have an electrical contractor on-call at all times during construction near the potentially affected facility to repair any circuits if required by the owner in the event they are damaged during construction. The appropriate response to hazards associated with damage to natural gas pipelines will be determined in consultation with Southern California Gas Company. The City Fire Department shall be notified of the schedule for construction activities in the vicinity of natural gas and other oil pipelines. C-20 Finished Pipeline Route Maps Upon completion of pipeline construction, Operator shall provide all jurisdictional agencies with at least two copies of maps showing the finished pipeline route and shall include locations accessible by fire department emergency response vehicles. Said maps shall be 7 1/2 minute quadrate scale, (one inch equals 24,000 inches), and shall represent topographical features. C-21 Supervisory Control and Data Acquisition and Emergency Shutdown Systems Exhibit D-2 The pipeline supervisory control and data acquisition (SCADA) and Emergency Shutdown (ESD) systems, including inspection, maintenance and quality assurance procedures for the SCADA and ESD systems, shall be reviewed and approved by the Fire Department and the Building Department and Public Works Department prior to operations of either the oil or natural gas pipelines, and as appropriate thereafter. The SCADA and ESD systems shall comply with the provisions of Fire Department Development Standard No. 7 and the National Electrical Code Article 760. Operator shall conduct a comprehensive safety and reliability analysis of the SCADA system as well as the processing facility and oil and natural gas pipelines control room prior to commencement of pipeline operations, and as appropriate thereafter. The analysis shall meet or exceed the guidelines developed by the Institute of Electronic and Electrical Engineers. Any improvements identified in the study shall be included in the suggested hardware and software. Results of the study shall be provided to the Community Development Department. Company shall design the project such that the entire project will integrate the supervisory control and data acquisition (SCADA) or other monitoring system for all the components of this project in a manner so as to provide timely and efficient detection, shutdown, notification and response to an emergency involving any of the project components. Any break, rupture, and/or damage to the facilities shall result in the orderly shutdown of the pumping operations, and will activate the shut off valves in a manner which will minimize environmental damage. C-22 Update of Operational Risk Assessment Upon City request, Operator shall fund the updating of the operational risk assessment subject to ministerial permitting, as needed, so that any surrounding land use proposals are aware of existing risk, if any. D. FACILITY DESIGN D-1 Submittal of As Built Drawings Within one year after initial start-up of the E&B Project (Phase 1), and again within one year of commencement of Phase 2 operations, Operator shall submit as-built drawings of the Exhibit D-2 entire facility(s) to City. Any facility modifications required for Phase 3 operations shall also be documented on facility as-built drawings within one year of their construction. Operator shall submit as many sets of drawings (up to ten sets) as requested by the Community Development Department. D-2 Solid Waste Disposal Solid waste generated on the site shall be collected by the City’s franchised commercial trash hauler. Construction waste shall be transported by E&B’s own efforts to a facility authorized to accept construction waste in accordance with the provisions of the Hermosa Beach Municipal Code. Hazardous waste shall be transported by E&B’s own efforts to a facility authorized to accept hazardous waste in accordance with all local, state and federal laws. D-3 Water Conservation Measures The design of all new and/or modified onsite facilities shall incorporate the use of cost- effective water-conserving fixtures, including by way of example indoor and outdoor plumbing fixtures and irrigation. D-4 Energy Conservation Measures Throughout the project life, as equipment is added or replaced, cost-effective energy conservation techniques shall be incorporated into project design, including by way of example indoor and outdoor lighting, HVAC, drill equipment, vehicles, and microturbines. E. ABANDONMENT E-1 Abandonment Procedures In implementing Section 26 of the Lease and Article VII of the Hermosa Beach Municipal Code - Oil Code Chapter 21A, Operator shall secure all necessary permits and proceed in accordance with a City Council approved abandonment and restoration plan within one year of permanent shut down. The abandonment plan shall be processed with environmental review of the plan. Operator shall post a performance bond, or other security device Exhibit D-2 acceptable to City Council, prior to commencement of Phase 1 construction for estimated costs of abandoning Phase 1 facilities. Operator shall also post a performance bond, or other security device acceptable to City Council, prior to commencement of Phase 2 for estimated costs of abandoning Phase 2 facilities. E-2. Abandonment Costs All costs associated with abandonment or removal shall be borne by Operator. E-3. Wellsites Prior to permanent shutdown or termination of this agreement or the lease, any well drilled by Operator shall be plugged and abandoned within three months from the date it is determined that such well is no longer capable of production, subject to weather and rig availability, and capped, in accordance with the rules and regulations of the State Division of Oil, Gas & Geothermal Resources. Thereafter, the wellsite shall be restored as near as practicable to its original condition. F. Miscellaneous Conditions F-1. Hydraulic Fracturing Prohibited The use of hydraulic fracturing as a well stimulation technique for enhanced hydrocarbon production shall be prohibited on the project site. F-2. Pipelines All pipelines installed for the Project shall not go below the depth authorized by the State Division of Oil, Gas & Geothermal Resources. After completion of the construction of any such pipelines, Operator shall restore the surface of the area impacted by the construction of such pipeline as nearly as practicable to its condition immediately prior to such construction. F-4. Fire Marshal Position Operator shall fund a full-time dedicated Fire Marshal position for the Hermosa Beach Fire Department for the full Term of the Development Agreement. Exhibit D-2 F-5. Training Operator shall pay for annual training for Hermosa Beach Fire Department personnel and fire personnel from the City’s automatic aide partners on fighting oil fires. F-6. Odor (from HIA) In the event of frequent reports of odor emanating from the site, Operator shall pay for additional studies and/or periodic air monitoring. If the studies or monitoring indicate that additional control measures should be implemented to reduce the frequency of noticeable odors, Operator shall include those measures as project conditions. F-7. Notice (from HIA) During Phase 3 pipeline construction, Operator shall provide written notification of impending construction activities, including the dates and times of activities that may produce excessive noise, to all residents within 100 feet of the construction activities. Notice shall be provided no less than 72 hours before construction begins. F-8. Light impact reduction (from HIA) Operator shall pay for or provide black-out blinds or curtains for bedrooms with direct line- of-sight to the exposed side of the electric drill rig that will be lit at night. The amount of payment or the brand of blinds/curtains shall be pre-approved by the City Manager, and may be provided through a direct mail program. F-9. Community Relations (from HIA) As recommended in Intrinsik’s Health Impact Assessment for the project, and at the City Council’s discretion, the Operator may be required to pay for the costs associated with (1) organizing a Community Liaison Committee; (2) a follow-up Community Health Assessment; and/or (3) a quality of life health survey. Exhibit D-2 [Continue to following page for Mitigation Measures] Exhibit D-3 EXHIBIT “D-3” Mitigation Measures/Mitigation Monitoring Plan from Section 8.0 of FEIR (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). 8.0 Summary of Mitigation Measures and Mitigation Monitoring Plan 8.1 Mitigation Monitoring Program As the Lead Agency under the California Environmental Quality Act (CEQA), the City of Hermosa Beach (City) is required to adopt a program for reporting or monitoring regarding the implementation of mitigation measures for this Project, if it is approved, to ensure that the adopted mitigation measures are implemented as defined in this Environmental Impact Report (EIR). This Lead Agency responsibility originates in Public Resources Code Section 21081.6(a) (Findings) and the CEQA Guidelines Sections 15091(d) (Findings) and 15097 (Mitigation Monitoring or Reporting). 8.2 Monitoring Authority and Enforcement Responsibility The purpose of a Mitigation Monitoring, Compliance, and Reporting Program (MMCRP) is to ensure that measures adopted to mitigate or avoid significant impacts are implemented. A MMCRP can be a working guide to facilitate not only the implementation of mitigation measures by the Project proponent, but also the monitoring, compliance, and reporting activities of the City and any monitors it may designate. The City may delegate duties and responsibilities for monitoring to other environmental monitors or consultants as deemed necessary, and some monitoring responsibilities may be assumed by responsible agencies, such as affected jurisdictions and cities. The number of monitors assigned to the Project will depend on the number of concurrent activities and their locations. The City or its designee(s), however, will ensure that each person delegated any duties or responsibilities is qualified to monitor compliance. Any mitigation measure study or plan that requires the approval of the City must allow at least 60 days for adequate review time. When a mitigation measure requires that a mitigation program Exhibit D-3 be developed during the design phase of the Project, the Applicant must submit the final program to City for review and approval for at least 60 days before any activity begins. Other agencies and jurisdictions may require additional review time. It is the responsibility of the environmental monitor assigned to the Project to ensure that appropriate agency reviews and approvals are obtained. The City or its designee will also ensure that any deviation from the procedures identified under the monitoring program is approved by the City. Any deviation and its correction shall be reported immediately to the City or its designee by the environmental monitor assigned to the Project. The City is responsible for enforcing the procedures adopted for monitoring through the environ- mental monitor assigned to the Project. Any assigned environmental monitor shall note problems with monitoring, notify appropriate agencies or individuals about any problems, and report the problems to the City or its designee. 8.3 Mitigation Compliance Responsibility The Applicant is responsible for successfully implementing all the mitigation measures in the MMCRP, and is responsible for assuring that these requirements are met by all of its contractors and field personnel. Standards for successful mitigation also are implicit in many mitigation measures that include such requirements as obtaining permits or avoiding a specific impact entirely. Other mitigation measures include detailed success criteria. Additional mitigation success thresholds will be established by applicable agencies with jurisdiction through the permit process and through the review and approval of specific plans for the implementation of mitigation measures. 8.4 General Monitoring Procedures Environmental Monitors. The City and the environmental monitor(s) are responsible for integrating the mitigation monitoring procedures into the construction or operation process in coordination with the Applicant. To oversee the monitoring procedures and to ensure success, the environmental monitor assigned to the Project must be on site during that portion of the construction or operation that has the potential to create a significant environmental impact or other impact for which mitigation is required. The environmental monitor is responsible for ensuring that all procedures specified in the monitoring program are followed. Exhibit D-3 Construction and Operations Personnel. A key feature contributing to the success of mitigation monitoring will be obtaining the full cooperation of construction and operations personnel and supervisors. Many of the mitigation measures require action on the part of the supervisors or crews for successful implementation. To ensure success, the following actions, detailed in specific mitigation measures, will be taken: • Procedures to be followed by construction or operations companies hired to do the work will be written into contracts between the Applicant and any contractors. Procedures to be followed by construction and operations crews will be written into a separate document that all personnel will be asked to sign, denoting agreement. • One or more meetings will be held to inform all and train personnel about the requirements of the monitoring program. • A written summary of mitigation monitoring procedures will be provided to supervisors for all mitigation measures requiring their attention. General Reporting Procedures. Site visits and specified monitoring procedures performed by other individuals will be reported to the environmental monitor. A monitoring record form will be submitted to the environmental monitor by the individual conducting the visit or procedure so that details of the visit can be recorded and progress tracked by the environmental monitor. A checklist will be developed and maintained by the environmental monitor to track all procedures required for each mitigation measure and to ensure that the timing specified for the procedures is adhered to. The environmental monitor will note any problems that may occur and take appropriate action to rectify the problems. Public Access to Records. The public is allowed access to records and reports used to track the monitoring program. Monitoring records and reports will be made available for public inspection by the City or its designee on request. 8.5 Mitigation Monitoring Table The Tables below present a summary of monitoring and reporting plan requirements for the mitigation measures identified in Chapter 4 of the EIR as applicable to the Proposed Project. The Table provides the following information, by column: • Mitigation Measure (description of the mitigation measure identified in Chapter 4); • Monitoring/Plan Requirements (monitoring or plan requirements necessary to verify compliance with the mitigation measure); Exhibit D-3 • Method of Verification (this is how the responsible agency can determine if the mitigation measure has been implemented); • Timing (this identifies when action needs to be taken on mitigation measure); and • Responsible Agency (this is the agency that is responsible for assuring compliance with the mitigation measure). Table 8-1 Aesthetics and Visual Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party EM-1 Prior to issuance of the first grading and/or construction permits, the Applicant shall enter into agreements with the City to provide funding for the implementation and administration of an environmental monitoring program, including an environmental monitor, to ensure compliance with each Agency’s environmental Conditions of Approval. The monitor shall assist the Agencies in condition compliance and mitigation monitoring for all applicable construction and operational stages of the Oil Project, as specified in a scope of work, as approved by the Agencies. The monitoring program shall include a post‐construction program to monitor measures that extend beyond the construction period (e.g., success of landscaping, etc.), as well as monitor certain mitigation measures required during the operational phase. The monitor will prepare a working monitoring plan that reflects the Agencies ‐ approved environmental mitigation measures/conditions of approval. This plan will include: 1. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; Conditions included within the Development Agreement, including administrative measures to ensure bonding, payment methods and insurance Before the start of Phase 1 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party 2. Lines of communication and reporting methods; 3. Daily and weekly reporting of compliance; 4. Construction crew training regarding environmental sensitivities; 5. Authority to stop work; and 6. Action to be taken in the event of non‐compliance. The environmental monitor shall be under contract to the Agencies. Costs of the monitor, monitoring program, and any Agency administrative fees, shall be paid by the Applicant. The Applicant shall also be responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, noise engineer, etc.). The Agencies’ environmental monitor will coordinate the monitoring efforts of the specialist, including communication with the Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). AE-1a Material choice of electrical drill rig acoustical shroud shall be of neutral sky color which is selected for its ability to reduce visual impact, in coordination with and approval by the City Community Development Director. Approval of Construction Documents and Specifications and field- Prior to issuance of permits City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party demonstration AE-1b The sound attenuation wall shall be replaced by a permanent wall with design features installed at the end of Phase 3. The intent is to provide stability of views and opportunities for positive visual elements that partially mitigate the visual presence of the walls from the Hermosa Greenbelt and other sensitive views in the immediate Project vicinity. The permanent wall shall be allowed to be provided in lieu of the 16-foot block wall. Landscape design shall be allowed to be adjusted to respond to façade articulations, though quantities and densities shall be maintained. The permanent wall shall be designed with architectural features in coordination with and approval of the City Community Development Director. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2a Design of the sound attenuation wall exterior façade shall be required to include design articulations that are complementary to the character, scale, and quality of the surrounding environment. The intent is to mitigate the visual impact of the wall from the Hermosa Greenbelt and other sensitive views in the immediate project vicinity. The following measures of success shall be met: 1) Articulations of façade decrease scale and proportion of mass into smaller increments that more closely resemble those of adjacent buildings; and 2) Colors, detailing and material use are varied to a level consistent with existing Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party visual environment. AE-2b Planting area growth medium shall be capable of supporting the long term health and growth of the landscape design. Requirements shall be: 1) Demonstrated free of debris and construction waste (asphalt, concrete, etc) to a minimum depth of 3 feet within all planted areas. Wall footings shall be designed to limit encroachment into planted areas; 2) Soils analysis report shall be conducted by a certified soil scientist. Report shall include recommendations to meet the intent of this mitigation measure; and 3) If soils are determined to be unsuitable to support plant growth, they shall be amended or removed/replaced to meet requirements of soils analysis for plant pallette selected. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2c Vine plantings where used shall meet the following conditions: 1) be self- attaching or structure supported; 2) have demonstrated success in the City; 3) be planted at a density to achieve full coverage at maturity; 4) be planted at a minimum 5 gallon size; and 5) be required on the visible portion of the west wall at the temporary parking facility. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2d All trees shall be required to be a minimum of 20’ in height at installation and meet the American Standard for Nursery Stock (ANSI Z60.1-2004). If a tree species alternate is proposed, it shall be required to be an equal to the species Approval of Construction Documents and Prior to issuance of permits and City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party proposed in the Project Application in the following characteristics: 1) Dense evergreen with similar form and habit; 2) Probability of achieving a minimum of 35-40 feet at maturity; and 3) Comply with Municipal Code Chapter 8.60 and 8.56. Specifications and Inspection during construction AE-3a Pipeline alignments and valve box locations shall be designed to avoid the removal or modification of trees, hedgerows, and/or large shrubs to the extent feasible. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach, and Torrance AE-3b If landscaped areas, streetscapes, plazas and/or parklands are required to be temporarily disturbed, they shall be restored to their previous condition following completion of construction. Avoidance of disturbance shall be the preferred option, especially where landscape elements act to screen views (hedges, large shrubs, etc) or where they act as community gateways (Redondo Beach at Hwy-1). Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach and Torrance AE-3c Block color/s selection and pattern (if applicable) shall be complementary to adjacent buildings. A buffer of shrubs and vines shall be planted to match the existing character and quality of the adjacent properties. Approval of Construction Documents and Prior to issuance of permits and Cities of Hermosa Beach, Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Specifications and Inspection during construction Redondo Beach and Torrance AE-4a Final acoustical cover material selection shall be required to be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4b Colors and finishes of equipment and surfaces within the soundwall (including the interior face of the soundwall, the interior face of the drill rig acoustical cover, and the physical structure of the drill rig within the acoustical shield) shall have a reflectivity rating of 0.3 or lower. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4c All proposed site lighting fixtures associated with the drilling activities shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AE-5a Colors and finishes of surfaces within the facility, including the interior face of the soundwall, ground materials (darker or asphalt), wall paints and equipment paints to the extent feasible shall have a low reflectivity rating of 0.3 or lower to reduce the potential for glow. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5b Final sound wall material/s selection/s (including gates) shall be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5c All proposed site lighting, including fixtures outside the wall, shall be fully shielded. Fully shielded shall be defined as: A luminaire constructed and installed in such a manner that all light emitted by the luminaire, either directly from the lamp or a diffusing element, or indirectly by reflection or refraction from any part of the luminaire, is projected below the horizontal plane through the luminaire’s lowest light-emitting part (IES/IDA, 2011) Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5d The LZ-2 parameters of the Model Lighting Ordinance (IES/IDA, 2011) shall be used to demonstrate that maximum vertical illuminance for the site are not exceeded. For site lighting inside the wall, Table B allowances shall be used. Approval of Construction Documents and Prior to issuance of permits and City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Lighting outside the wall at site entrances shall not exceed that of existing street lighting, which produces a maximum of 1 footcandle. For the purposes of measuring vertical illumination, the plane of the property line shall be extended to an elevation equal to the height of the electric drilling rig. Specifications and Inspection during construction AE-5e All proposed site lighting fixtures shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-6a Any proposed metering station site lighting shall be fully shielded and shall incorporate permanent features (shields, hoods, etc.) shall incorporate permanent features which prevent light spillage beyond the property line. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Redondo Beach AE-6b Light levels and quantities of fixtures shall not exceed that which is needed for security and safety. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Redondo Beach and Torrance Table 8-2 Air Quality and GHG’s Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AQ-1a The Applicant shall submit and implement a Fugitive Dust Control Plan that includes SCAQMD mitigations for fugitive dust mitigation, according to Rule 403, and SCAQMD CEQA Guidelines. Fugitive dust mitigation measures in the plan shall include the following (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - Apply water every 3 hours to disturbed areas and unpaved roads within a construction site (61 percent reduction). - Require minimum soil moisture of 12 percent for earthmoving, by using a moveable sprinkler system or water truck. Moisture content can be verified by lab sample or moisture probe (69 percent reduction). - Limit onsite vehicle speeds on unpaved roads to 15 mph and posting of speed limits. - All trucks hauling dirt, sand, soil, or other loose materials are to be tarped with a fabric cover and maintain a freeboard height of 12 inches (91 percent reduction). - Install gravel bed trackout apron (3 inches deep, 25 feet long, 12 feet Plan review, site inspections Before and during construction Both Oil Project and City Yard SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party wide per lane, and edged by rock berm or row of stakes) to reduce mud and dirt trackout from unpaved truck exit routes (46 to 80 percent reduction). - Water storage piles by hand or apply cover when wind events are declared, according to SCAQMD Rule 403 when instantaneous wind speeds exceed 25 miles per hour (90 percent reduction). - Appoint a construction relations officer to act as a community liaison concerning onsite construction issues, such as dust generation. AQ-1b The Applicant shall implement a NOx reduction program including the following, or equivalent, measures to the satisfaction of the SCAQMD (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - All off-road construction equipment shall be tuned and maintained according to manufacturers’ specifications. - Any temporary electric power shall be obtained from the electrical grid, rather than portable diesel or gasoline generators. - All off-road diesel construction equipment with greater than 100- horsepower engines shall meet Tier 3 NOx requirements. - Limit onsite truck idling to less than 5 minutes. - A copy of the certified tier specification, best available control Plan review, site inspections Before and during construction SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party technology documentation, or the CARB or SCAQMD operating permit for each piece of equipment shall be kept onsite during all operations. AQ-3a The Applicant shall limit flaring during Phase 4 to a total of 5 hours per day at the full flaring capacity (or to an equivalent volume of flared gas) during all emergency or routine flaring events in order to ensure that NOx emissions are reduced below the thresholds. Lower NOx emission combustors or other equivalent measures can also be used to satisfy the requirement. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-3b The Applicant shall implement methods to reduce the off-gassing of muds by at least 90 percent through the installation of fully enclosed mud pit areas with vapor control (either through carbon canisters or vapor recovery) and/or the use of mud degassing units routed to vapor control systems. The Applicant shall monitor the muds vapor immediately above the muds exit point from the wellbore and at other areas above the mud pits where muds may be exposed to the atmosphere in order to ensure that hydrocarbon vapors are captured at the minimum rate of 90 percent. Plan review, site inspections Before Phase 2 and Phase 4 drilling SCAQMD City of Hermosa Beach AQ-4 The Applicant shall limit the microturbine PM emissions to 0.0035 lbs/mmbtu, or an equivalent reduction in the number and/or size of the microturbines, in order to reduce emissions to below the localized thresholds. The City shall be responsible for ensuring that the applicant will be subject to permit conditions Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party that limit emissions from the set of microturbines, not just individual permit units. AQ-5a The Applicant shall at all times have a gas buster and SCAQMD-approved portable flare at the site and connected for immediate use to circulate out and combust any gas encountered during drilling. The flare shall be capable of recording the volume of gas that is flared. The operator shall report any flared gas from drilling to the Hermosa Beach Fire Chief and the SCAQMD. Plan review, site inspections Before Phase 2 drilling SCAQMD City of Hermosa Beach AQ-5b The Applicant shall install a compressor seal vent collection system. In the event of a seal leak, vapors shall be collected and sent to the vapor recovery system or flare for destruction. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-5c The Applicant shall develop and implement an Odor Minimization Plan, submitted to and approved by the City and the SCAQMD. The Odor Minimization Plan shall address reducing the frequency from potential sources of odors from all site equipment, including wells and drilling operations, temporary operations such as truck loading, and measures to reduce or eliminate these odors (e.g., containment, design modifications, carbon canisters). The Plan shall address issues such as facility information, buffer zones, signs with contact information, logs of odor complaints, the protocol for handling odor complaints and odor release investigations and methods Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party instituted to prevent a re-occurrence. The Plan shall require that all odor complaints and issues be immediately communicated to the City and that the City shall have the authority to implement and enforce contingency measures to ensure that any nuisance odors from the facility are eliminated. AQ-5d The Applicant shall develop and implement an Air Monitoring Plan. The Plan shall provide for the monitoring of total hydrocarbon vapors and hydrogen sulfide and total hydrocarbon vapors at all perimeter locations of the facility as well as at strategic locations near processing equipment. At all times during operations, drilling, redrilling and workover operations, the Operator shall maintain monitoring equipment that shall monitor and digitally record the levels of hydrogen sulfide and total hydrocarbon vapors. Such monitors shall provide automatic alarms that are audible and visible to the Operator of the drilling equipment, and gas plant, and shall be triggered by the detection of hydrogen sulfide or total hydrocarbon vapors. Alarm points shall be set at a maximum of 1 5 and 5 10 ppm H2S and 500 and 1,000 ppm hydrocarbons, with the higher level requiring shut-down of drilling or plant operations and the lower level requiring notification to appropriate agencies, including the Hermosa Beach Fire Department and SCAQMD. A meteorological station to monitor wind speed and direction under the guidance and specification of the SCAQMD shall be Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party installed at the site. The Air Monitoring Plan shall be reviewed and approved by the City and the SCAQMD. AQ-5e The Applicant shall use an odor suppressant spray system on the mud shaker tables, and shall install carbon capture canisters on all tanks (permanent and portable) that are not equipped with vapor recovery, containing potentially odiferous materials (for example; the mud baker-type tanks) for all drilling operations so that no odor can be detected at the closest receptor. Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach AQ-5f The fugitive component leak detection program under Rule 1173 shall utilize a Leak Detection and Reporting (LDAR) level of monthly detections with an action level of 100ppm, the installation of bellows valves where applicable (valves 2 inches or smaller) and the use of IR cameras or equivalent during monthly detections to ensure that leaking components are minimized at the facility. Plan review, site inspections Before Phase 2 operations SCAQMD City of Hermosa Beach AQ-6 The Applicant shall provide credits for all GHG emissions generated above the threshold of 10,000 MTCO2e per year. A GHG Reporting and Reduction Plan shall be submitted to the SCAQMD and the City detailing the measures to be implemented to achieve the required reductions, updated annually, and shall include specifications on the protocol, vintage, and registry for any offsite mitigation. The following mitigation credits shall not require prior City or SCAQMD approval: Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party 1. Credits generated within Los Angeles County per an approved SCAQMD protocol; 2. Credits generated within the State of California per an approved SCAQMD protocol; 3. Credits that are generated and verified under the CAPCOA GHG Rx program; 4. Credits that are generated and verified under the voluntary SCAQMD Regulation XXVII; 5. Verified credits registered with the Climate Action Reserve or the American Carbon Registry. In addition, independently verified GHG credits available through other carbon registries that follow specific protocols may be eligible for offsite mitigation, subject to review and prior approval by the City and the SCAQMD. The general criteria for acceptable credits include: • Real: emission reduction must have actually occurred, as the result of a project yielding quantifiable and verifiable reductions or removals. • Additional/Surplus: an emission reduction cannot be required by a law, rule, or other requirement. • Quantifiable: reductions must be quantifiable through tools or tests that Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party are reliable, based on applicable methodologies, and recorded with adequate documentation. • Verifiable: The action taken to produce credits can be audited and there is sufficient evidence to show that the reduction occurred and was quantified correctly. • Enforceable: An enforcement mechanism must exist to ensure that the reduction project is implemented correctly. • Permanent: Emission reductions or removals must continue to occur for the expected life of the reduction project. Operational/drilling GHG emissions from stationary and mobile sources shall be quantified and reported to the City and to the SCAQMD annually. Emissions reporting will follow the same reporting format and procedures as required by the Mandatory Reporting Rule. AQ-7a All diesel equipment used at the site shall meet EPA Tier 3 emission requirements and be equipped with a CARB Level 3 diesel particulate filter to reduce Diesel PM emissions. Workover rigs operated at the project site shall have cumulative total DPM emissions below 1.5 lbs/year or shall utilize electric drive/sources . Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-7b Vapor recovery on crude oil tanks shall achieve a minimum of 99 percent Plan review, Before Phase SCAQMD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party recovery of fugitive emissions. site inspections 4 operations City of Hermosa Beach Table 8-3 Biological Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party BIO-1 To minimize potential impacts to nesting native bird species, and in compliance with the federal Migratory Bird Treaty Act and Sections 3503, 3503.5, or 3513 of the California Fish and Wildlife Code, initial vegetation removal/trimming shall be done outside the breeding season (breeding season is defined herein as January 15 through August 31 for raptors and February 15 through August 31 for all non- raptor species). If vegetation removal/trimming must be completed during this period, then surveys for nesting birds must be conducted by a qualified, City-approved Biologist, within 3 days prior to vegetation removal or other construction-related disturbances. If nesting birds are observed within the Plan review, site inspections Before and during construction City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party project area, then a minimum 100-foot buffer from any non-raptor species and 500 foot buffer from any raptor nest would be established and maintained for the duration of vegetation removal/trimming activities or until nestlings fledge from the nest. BIO-2 The Applicant shall submit for City approval and shall implement an Emergency Response Plan that would, in compliance with the California State Oil Spill Contingency Plan (CDFW, OSPR 2014),address protection of biological resources and possible revegetation of any areas disturbed during an oil spill or cleanup activities. The Emergency Response Plan shall, at a minimum, include specific measures to avoid impacts to native vegetation and wildlife habitats, plant and animal species, and environmentally sensitive habitat areas during response and cleanup operations. The Emergency Response Plan shall include provisions for containment and cleanup measures and responsibilities. The plan shall contain: • Definition of the authorities, responsibilities, and duties of all entities involved in oil removal operations, and methods of emergency action agency coordination during and after an oil spill; • Agreements and statements from all resource agencies involved in an oil response and removal operation; Plan review Before construction City of Hermosa Beach OSPR Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party • Procedures and frequencies for regular monitoring and inspections of pipelines and facilities; • Procedures for early detection and timely notification of an oil discharge; • A description of the necessary onsite equipment and details on the placement of the material required to quickly control, contain, and remove any discharged oil; • Assurance that full resource capability is known and can be committed following a discharge; • A description of sensitive biological resources in the SMB that should be prioritized for clean-up activities in the case of an oil spill into the marine environment; • Actions for after discovery and notification of a discharge; • Procedures to facilitate recovery of damages and enforcement measures. The Emergency Response Plan shall be approved by the California Department of Fish and Wildlife (CDFW) Office of Spill Prevention and Response (OSPR). When habitat disturbance cannot be avoided, the Emergency Response Action Plan shall provide stipulations for development and Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party implementation of site-specific habitat restoration plans and other site-specific and species-specific measures appropriate for mitigating impacts to local populations of special-status wildlife species and to restore native plant and animal communities to pre-spill conditions. Access and egress points, staging areas, and material stockpile areas that avoid specific habitat areas shall be identified. The Emergency Response Action Plan shall include species- and site-specific procedures for collection, transportation and treatment of oiled wildlife. The Emergency Response Plan shall be approved by the City prior to commencing any construction activities. ____________________________________________________________________________________________________________ _________ Table 8-4 Cultural Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party CR-1 Prior to beginning demolition of the existing City Maintenance Yard Building, Development During Project Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party guidelines shall be developed for the careful exposure of extant elements of the historic brick and mortar furnace. Once exposed, detailed documentation of the furnace shall be undertaken. Documentation shall be guided by the Historic American Engineering Record (HAER) standards. This documentation shall include production of high quality 35-mm photographs and plan drawings of building elements exposed, including but not limited to, a floor plan, any character-defining building features, and elevation drawings. All work carried out pursuant to the recordation of the furnace building shall be conducted by, or under the direct supervision of a person or persons meeting, at a minimum, the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994) as an architectural historian. A written report detailing the HAER-like documentation shall be provided to the City upon completion the work. This report shall be produced on archivally stable materials and filed with the Hermosa Beach Historical Society. and implementation of a monitoring and documentation plan by a qualified archaeologist. building demolition within areas of recorded historical resources. Proponent and Construction Contractor CR-2a The design of the New City Maintenance Yard Building shall be compatible in design, styling, material, and massing of the adjacent City Hall complex. The building design should not attempt to replicate the New Formalist style, but it shall not conflict or contrast with the existing building style. The buildings constructed in the New City Maintenance Yard shall be no more than two Design of the New City Maintenance Building and landscape Design Phase Project Proponent and City Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party stories high. They shall not overpower or overshadow the existing building complex. CR-2b The landscaping associated with the proposed New City Maintenance Yard shall replicate the planting types surrounding the City Civic buildings, to the extent possible, in order to blend the new construction into the existing Complex. The final design of both the new building and landscape should be developed in consultation with an historic architect or architectural historian who meets Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). Design of the New City Maintenance Building and landscape Design Phase Project Proponent and City CR-3a Prior to any ground-disturbing activities or building removal within the Proposed Project sites, an Archaeological Monitoring Plan shall be developed by a qualified archaeologist with provision for review and input by concerned Native Americans and approval by the City. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. The Plan is to include provisions for archaeological and Native American monitoring, detailed documentation of all early twentieth-century artifact-bearing deposits exposed during ground- disturbing site work, and development of a clear collection policy for both prehistoric and historic artifacts, subsequent artifact analysis, reporting of Development and implementation of a monitoring plan by a qualified archaeologist in consultation with concerned Native The monitoring plan shall be submitted for review by the City of Hermosa Beach and approval prior to beginning Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party findings, and disposition and/or curation of any significant artifacts recovered. All reports of findings shall be filed with to SCCIC. American tribes. development. Plan shall be implemented prior to and during construction. CR-3b Any significant archaeological deposits remaining in the area of the previous City of Hermosa Beach Dump following over-excavation at the Proposed Oil Development Project site must be protected in place. Stabilization and covering of these archaeological deposits shall be monitored by a qualified historical archaeologist meeting the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). Following construction any remaining archaeological deposits must be stabilized and covered for protection. Following over- excavation Project Proponent and Construction Contractor CR-4 Should Project-related excavations be designed to exceed 45 feet in depth at the City Dump, or depths greater than 15 feet along the pipelines, or otherwise be shown to have the potential to impact intact San Pedro Sand deposits as described above, a Paleontological Resources Monitoring and Mitigation Plan (PRMMP) shall be developed by a qualified paleontologist in consultation with A paleontological resource monitoring and mitigation The monitoring plan shall be submitted for review by the Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party the City and implemented prior to or during Project-related ground disturbing activities. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. program (PRMMP) for treatment of the paleontological resources will be developed and implemented. City of Hermosa Beach and approval prior to beginning development. Plan shall be implemented prior to and/or during construction. CR-5 Ground-disturbing activities in the area of the discovery shall immediately be halted or redirected. A temporary construction exclusion zone shall be established surrounding the site to allow for further examination and treatment of the find. A City representative shall immediately notify the Los Angeles County Coroner’s office by telephone. By law, the Coroner will determine within two working days of being notified if the remains are subject to his or her authority. If the Coroner recognizes the remains to be Native American, he or she shall contact the Native American Heritage Commission who will appoint The Native American Heritage Commission (NAHC) must be contacted by the Los Angeles Upon discovery of human remains. Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party the Most Likely Descendent (MLD). Additionally, if the remains are determined to be Native American, a plan will be developed regarding the treatment of human remains and associated burial objects and the plan will be implemented under the direction of the MLD. County Coroner, and a Most Likely Descendant must be designated. Any further treatment of the remains will occur in consultation with the MLD, the NAHC, and a qualified archaeologist. __________________________________________________________________________________________________________ Table 8-5 Fire Protection and Emergency Response Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party FP-1a The Applicant shall ensure adequate (3,000-5,000 gpm) water supplies are available from the existing water lines and hydrant system, by extending the 8 inch water main or some other source for water supplies that provides sufficient water supply rates, pressure and duration to comply with codes, standards and requirements of the LACFD and the HBFD. Installation of a fire pump, or installation of a piping connection to area water mains that can supply the flows, may be required to ensure the appropriate water flow and pressure requirements. The Applicant shall ensure that all area hydrants and water supplies are tested annually as to the NFPA standards for water flows and pressures, and shall ensure that the results are reported to the City of Hermosa Beach and the Hermosa Beach Fire Department. Review of water flow calcs and tests, annual reviews Before Phase 2 City of Hermosa Beach HBFD FP-1b The Applicant shall coordinate with the HBFD to integrate a community alert notification system for the proposed project into the City's existing alert system to automatically notify area residences and businesses in the event of an emergency at the project site that would require residents to take shelter or take other protective actions. The Applicant shall implement programs to ensure that all immediate neighbors are provide ample opportunity to participate in the notification system. Review and testing of system Before Phase 2 City of Hermosa Beach HBFD FP-1c The Applicant shall fund an additional FTE position at the HBFD, or equivalent, Training and Before Phase City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party for personnel with specific capabilities in inspection and code compliance associated with oil and gas production facilities. This arrangement shall be to the satisfaction of the HBFD. hiring completed at HBFD 2 Hermosa Beach HBFD FP-1d The Applicant shall develop emergency response plans addressing the facility's fire-fighting capabilities pursuant to the most recent NFPA requirements, Los Angeles County Fire Code, LACFD, California Code of Regulation, and API requirements, in coordination with and to the satisfaction of the LACFD and the City of Hermosa Beach Fire Department. These plans shall include, but not be limited to, fire monitor placement, water capabilities, fire detection capabilities, fire foam requirements, facility condition relating to fire-fighting ease and prevention, and measures to reduce impacts to sensitive resources. The plan should also address coordination with local emergency responders and area schools and daycare facilities. Review and approval of plans Before Phase 2 City of Hermosa Beach HBFD FP-1e The Applicant shall ensure that the emergency response planning includes development of evacuation plans of neighbors for an emergency scenario at the facility,. The plan shall be reviewed by the LACFD, HBFD and the City annually and updated as needed. The relevant portions of the plan shall be distributed to the public utilizing a method determined by the reviewing Agencies. Review of plan revision Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-1f The Applicant shall ensure and make funding available to 1) upgrade the Review of Before Phase City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party dispatch system and procedures within Hermosa/Torrance/Redondo to implement a CAD-to-CAD system to improve dispatch times; and 2) extend the mutual aid agreements to become automatic aid agreements between the Hermosa Beach Fire Department, Redondo Beach Fire Department and the Torrance Fire Department and to include the Torrance HAZMAT unit, or provide for funding to provide additional equipment and to train a sufficient number of Hermosa Beach, Redondo Beach and/or Manhattan Beach Emergency Response personnel to provide first response HAZMAT capabilities. Mutual Aid agreement revision 2 and Phase 4 Hermosa Beach HBFD FP-1g The Applicant shall ensure, during Phase 2 and Phase 4, that the site shall have sufficient water containment capabilities, as per guidance and approval of the Fire Department. Area storm drains along 6th Street and Cypress Avenue shall be equipped with flapper-type valves to enable the closure of the storm drain system in the event of potential overflow. Review of plan and onsite inspections Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-2a The Applicant shall ensure that design and construction comply with applicable codes and standards for equipment spacing, particularly those related to flare location and distances to public areas and distances from well drilling equipment to buildings. If this cannot be achieved, additional requirements shall include the construction of thermal radiation barriers or insulation on the crude oil tanks, installation of thermal barriers/walls around the flare stack, Third party audit report review Before Phase 2 and Phase 4 City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party increasing the height of the flare stack during drilling, relocation of the flare stack, providing thermal radiation modeling to estimate the impacts of equipment on the crude tanks and process piping and public areas and the design and construction of blast walls as per API 752. Fire rated barriers shall be established, as per LACFD requirements, to ensure that all buildings within 100 feet of well drilling would be protected from thermal radiation. Thermal assessments shall be completed to ensure that the thermal radiation from the flare is within acceptable levels (as per API RP 521) and does notproduce damage to other equipment or nearby walls/soundwalls. The design and construction compliance status shall be verified by third-party audits under the direction of the City. FP-2b Fire protection measures specific to the crude oil containment system shall be provided, including the installation of manual fire foam systems with automatic detection and notification (to both the operators and the HBFD) capable of foaming in the perimeter of the crude oil containment system, wellhead area and the area immediately adjacent to combustion or spark producing equipment within or immediately adjacent to the crude oil containment area. The system shall be capable of being remotely activated from a safe location in the event of a crude oil fire. The highest level electrical classification achievable shall be Review of design documents Before Phase 2 and Phase 4 City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party designated for all equipment located within the crude oil containment and wellhead area. ____________________________________________________________________________________________________________ _________ Table 8-6 Geological Resources/Soils Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party GEO-1a In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds a ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil Inspection by a California Registered Civil Engineer Following any seismic event that results in substantial ground accelerations at the Project Site, as pre- determined by City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party field infrastructure is structurally sound. a California- licensed geotechnical engineer. GEO-1b All seismic related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. These measures shall include, but not be limited to the following: - Drilled-in-place piles or cast-in-drilled-hole piles shall be constructed for foundations in the landfill area, i.e., northeast Project Site, to reduce seismically induced settlement. - Ground improvement techniques, including high pressure grout injection, i.e., compaction grouting, shall be used in the landfill area to reduce seismically induced settlement and allow construction of conventional shallow foundations. - Seismic design criteria for horizontal and vertical accelerations, identified in Tables 10 and 11 of the geotechnical report, shall be used during Proposed Project design (including incorporation of updated seismic design criteria from the 2013 California Building Code). - During Phase 1, the upper 2 to 4 feet of soil in the vicinity of the proposed well cellars shall be excavated and replaced with compacted fill. In addition, the Review and approval of geotechnical report. Approve geotechnical report prior to issuance of grading permit. City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party basement under the maintenance building shall be removed and filled in with compacted fill. In addition, the basement under the maintenance building shall be removed and filled in with compacted fill. - During Phase 3, the eastern portion of the site shall be excavated approximately 7 feet deeper than the majority of the proposed building pad, with a minimum of 3 feet of overexcavation below design grades, and recompacted to provide a uniform fill blanket below proposed tanks, compressors, and other equipment. - Asphalt pavement and underlying subgrade soils shall be designed to accommodate the proposed drill rig. Positive surface drainage shall be provided to direct runoff away from slopes and structures and toward suitable drainage devices. Ponding of water on structural pads shall not be allowed. GEO-2a Injection pressures associated wastewater injection shall not exceed reservoir fracture pressures as specified in California Code of Regulations Title 14, Division 2, Section 1724.10, and as approved by the California Division of Oil, Gas, and Geothermal Resources.. Comparing pressure measurements on each injection well to formation During waste water injection operations California Division of Oil and Gas and Geothermal Resources (DOGGR) Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party fracture pressure and Hermosa Beach Public Works Department GEO-2b In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). Readings from the accelerometer shall be recorded at the Oil Field and transmitted in real-time to the Caltech Seismological Laboratory. The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil field infrastructure is structurally sound. Monthly City of Hermosa Beach GEO-2c In the event that monitoring indicates that Proposed Oil Project-induced seismicity is occurring, wastewater injection operations shall be adjusted to alleviate such seismicity. The drilling operator shall first receive approval from Seismicity monitoring Following monthly monitoring, as City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party the California Division of Oil, Gas, and Geothermal Resources prior to any change (increase) in the injection operations. necessary GEO-3 All slope stability related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. Temporary excavations shall be stabilized per the latest edition of Cal/OSHA requirements for loose sands, including shoring or laying back of trench walls. Shoring along the northern perimeter of the Project Site shall be designed by an experienced structural engineer due to the proximity to existing buildings that must be protected from potential settlement and lateral movements. Submit temporary shoring plans and calculations. Prior to permit issuance City of Hermosa Beach GEO-4a Prior to approval of the first Phase 4 drilling permit, the Applicant shall have submitted and the City of Hermosa Beach and the California Coastal Commission shall have approved a Subsidence Monitoring and Avoidance Program, for both onshore and offshore areas. The onshore monitoring plan shall be completed throughout the life of this project, in accordance with Appendix A, Subsidence Monitoring Program, of the Subsidence and Induced Seismicity Technical Report, E&B Oil Development Project (Geosyntec Consultants 2012), included as Appendix _F of this EIR. The offshore monitoring plan shall be completed throughout the life of this project in accordance with the Offshore Subsidence Monitoring Program and Possible Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Mitigation Measures, Hermosa Beach, California (Coastal Environments 1998), included as Appendix _F of this EIR. The latter shall be updated, as applicable, to reflect advances in science since 1998. In addition, Section 7.6, Mitigation of Onshore Subsidence, of the latter report, shall not be applied to this mitigation measure, as the onshore monitoring program would be completed in accordance with the Geosyntec Consultants (2012) report. GEO-4b The Subsidence Monitoring Program shall include: Ground elevation survey methodologies with high vertical resolution; including onshore surface elevations and offshore bathymetric elevations; Prior to Phase 4 II drilling, establishment of a network of onshore and offshore survey or subsidence monitoring locations, including continuous GPS stations, GPS benchmarks, and tautly anchored offshore monitoring points, positioned within the City, outside the City, and in offshore areas, that are sufficiently spaced to draw conclusions about subsidence within the zone of influence of the Project; Because subsidence can occur for a variety of reasons, establishment of control points outside the zone of influence to allow differentiation of possible subsidence effects related to other activities; Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Use of InSAR imagery technology to evaluate regional subsidence patterns both within and beyond the proposed oil field; Sufficient monitoring frequency to establish trends in subsidence in order to distinguish background ground movement from any subsidence caused by proposed oil field operations; Reservoir monitoring, including documentation of produced fluid volume (oil, gas and water) and reservoir pressures at similar frequency to ground elevation measurements; Reporting requirements; and Action levels, as specified in the onshore and offshore subsidence monitoring reports. Surveying for both vertical and horizontal ground movement shall be completed along the perimeter and throughout the interior of the oil field, including both onshore and offshore areas, utilizing Global Positioning System technology in combination with a network of ground stations. The onshore continuous monitoring GPS stations shall include: Hermosa Beach Pier. The pier will serve as the furthest offshore point in the onshore monitoring program. Longfellow Outfall. This Outfall is larger and more structurally stable than some Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party of the other outfalls along the City’s coast. King Harbor Jetty. This location was selected to achieve a distribution of continuous monitoring points along the coast of Hermosa Beach. This will help provide a limited regional picture of the subsidence between survey events. GEO-4c An onshore and offshore baseline subsidence report shall be completed and made available to the City of Hermosa Beach and the California Coastal Commission at least two months and no more than six months prior to planned commencement of Phase 4 II drilling operations. Subsidence monitoring reports shall be completed annually and the results shall be forwarded to the California Coastal Commission and the City of Hermosa Beach for review, no more than one month following the end of each annual monitoring cycle. In addition, results shall be forwarded to the adjoining City of Redondo Beach and City of Manhattan Beach. Coordinate with Hermosa Beach Public Works Department At least two months prior to Phase 4 2 drilling operations Hermosa Beach Public Works Department GEO-4d In the event that the Global Position System monitoring indicates that significant subsidence, as defined by the onshore and offshore subsidence monitoring reports described in GEO-4a, is occurring in and/or around the Proposed Project area, wastewater or water reinjection operations shall be increased to alleviate such subsidence. The Applicant shall coordinate with the California Division of Oil, Gas and Geothermal Resources, which will approve increased Coordinate with California Division of Oil and Gas and Geothermal Resources Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party levels of wastewater or water reinjection operations in accordance with the approved Subsidence Monitoring Program. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. (DOGGR) and Hermosa Beach Public Works Department GEO-4e In the unlikely event that subsidence related mitigation induces seismicity, corrective actions related to subsidence shall proceed until baseline surface elevations have been achieved, as subsidence related damage would likely be more pronounced in comparison to damage associated with Project related micro-seismicity. Upon reestablishment of baseline elevations, drilling operations shall cease until a balance between subsidence avoidance and induced seismicity avoidance can be established, as agreed upon by the California Division of Oil, Gas and Geothermal Resources, the California Coastal Commission, and the City of Hermosa Beach. Coordinate with California Division of Oil and Gas and Geothermal Resources (DOGGR) Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Department GEO-6 A Registered Civil Engineer shall analyze surficial and near-surface soils at the Project Site subsequent to grading and prior to on-site construction, to determine whether expansive soils are present. Similarly, soils at the Proposed Soil auger and analytical laboratory Prior to final design City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party City Maintenance Yard Project Site and along the proposed pipeline route shall be analyzed for soil expansion potential. In the event that clay-rich, expansive soils are present, foundations shall be designed to accommodate expansive soils and pipelines shall be placed within a blanket of non-expansive soils to prevent structural damage and/or failure. Foundation and pipeline design shall be reviewed and approved by a Registered Civil Engineer. GEO-7a Proposed Oil Project design must conform to the recommendations of HDR Schiff (2012), included within Appendix C in NMG Geotechnical (2012), or as per the City Engineer, and should occur prior to completion of the final Project design. Design for protection against corrosion Prior to final design City of Hermosa Beach GEO-7b All buried metal pipelines shall be coated and placed under impressed cathodic protection. To monitor for internal corrosion, corrosion coupons or equivalent measures can be utilized. Under impressed cathodic protection Prior to final design City of Hermosa Beach GEO-7c External pipe inspections shall be conducted for the exposed pipeline sections to ensure atmospheric coatings are in good conditions. All external inspections shall be documented and reviewed by the operations management and repairs documented, when necessary. Visual inspections Monthly City of Hermosa Beach GEO-7d In accordance with California Division of Oil, Gas, and Geothermal Resources Prepare under Prior to final California Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party pipeline regulations (Public Resources Code Sections 3013 and 3782), a pipeline management plan shall be implemented for the Project Site. Similarly, in accordance with United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration regulations, a pipeline management plan shall be implemented for proposed pipelines located beyond the perimeter of the Project Site. These plans shall include, but not be limited to mechanical testing, including ultrasonic and hydrostatic testing. guidance of California Department of Conservation Division of Oil, Gas, and Geothermal Resources and United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration design Division of Oil and Gas and Geothermal Resources (DOGGR), United States Department of Transporta- tion, Pipeline and Hazardous Materials Safety Administra- tion, and Cities of Hermosa Beach, Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Redondo Beach, and Torrance GEO-7e All concrete in contact with the high sulfate or corrosive soils shall be Type V concrete in accordance with the 2010 California Building Code. Pour proper concrete adjacent to corrosive soils During construction City of Hermosa Beach ___________________________________________________________________________________________________________ Table 8-7 Safety, Risk of Upset and Hazards Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1a The Applicant shall cause to be prepared an independent third-party audit, under the direction and supervision of the City, of the gas and crude oil plants and pipelines, once constructed, including the well pads, to ensure compliance with Fire Code, applicable API and NFPA codes, EPA RMP, OSHA PSM, DOGGR and SPCC and emergency response plans requirements. All audit items shall be implemented in a timely fashion, and the audit shall be updated annually, as directed by the City and the Los Angeles County Fire Departments. The final installation of the facilities shall include a seismic assessment, including walkthroughs, of equipment to withstand earthquakes prepared by a registered Structural Engineer in compliance with Local Emergency Planning Committee Region 1 CalARP guidance and the seismic assessment shall be updated, with walkthrough inspections, annually to ensure compliance with the codes and standards at the time of installation. Review of audit reports Before Phase 4 operations and annually thereafter LACFD HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1b The Applicant shall ensure that the crude oil spill containment areas shall be designed as Class I Division I areas according to NFPA and NEC, or that spark producing equipment (such as the flare) would be isolated from the containment area, in order to reduce the potential for crude oil fires. The refrigeration system shall utilize non-flammable refrigerant. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1c The Applicant shall ensure that all crude-oil truck haulers and a sufficient number of onsite personnel (at least two per shift) are trained in HAZMAT (to the HAZWOPER technician level at least) spill response and that each truck carries a spill response kit. Site inspections, review of contracts Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1d The Applicant shall install automatic valves on the gas pipeline that will automatically shut down under a low pressure scenario at the Processing Facility Area for all pipelines leaving the processing plant, and shall install a backflow prevention device at the main gas pipeline tie-in location, to prevent the release of gas from the main transmission pipeline in the event of a rupture in the gas pipeline. The second, return pipeline shall remain isolated from the main gas pipeline during normal operations. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1e The Applicant shall ensure that warning tape is installed above the pipelines within the pipeline trench to warn third parties that pipelines are located below the warning tape and that the pipelines are capable of utilizing a smartpig. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1f The odorant system shall have its own, smaller containment area around it limiting the spilled pool size to the minimum size attainable, in order to prevent any offsite impacts. Transfer of odorant shall utilize carbon canisters and a canister change-out/maintenance program to ensure that filling of odorant tanks do not cause offsite impacts. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD SR-1g The comingled produced gas shall be continuously monitored for hydrogen sulfide. If H2S levels in the produced gas from any individual well exceeds 100 ppm, then that well shall be shut in and abandoned as per DOGGR requirements. Wells shall be tested when fluids first flow, when the well is placed into production and periodically thereafter in order to ensure that all wells operate below 100 ppm H2S. Review of design documents and in-field inspections Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-2 The Applicant shall sample soil during Phase 1 grading to ensure that soil lead contamination levels are below 9,500 mg/kg and that soil contaminated with TPH are below the regulatory guidelines. If soils are encountered above these levels, then those soils shall be removed from the site and transported to a disposal site. This may necessitate implementing the RAP during Phase 1 if substantial amounts of contamination are encountered. Review of design documents and in-field inspections Phase 1 City of Hermosa Beach ____________________________________________________________________________________________________________ _________ Table 8-8 Hydrology and Water Quality Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2a The Applicant shall properly maintain the associated crude oil pipelines, storage tanks, and processing facilities within and outside the Project Site, including smart-pigging according to State of California Office of the State Fire Marshal requirements and the standards outlined by the Department of Oil, Gas and Geothermal Resources, and the Los Angeles Regional Water Quality Control Board. The Applicant shall visually inspect onsite storage tank and processing equipment at least daily and provide a visual inspection of the crude oil pipeline right-of-way inspections on a weekly basis. Review of maintenance reports Before Phase 4 operations Annually Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2b The Applicant shall install a leak detection system for crude pipelines to the Exxon Mobil Refinery transfer of custody location. The system shall include pressure and flow meters, flow balancing, supervisor control and data acquisition system, and a computer alarm system in the event of a suspected leak. Temperature, pressure, and flow shall be monitored at each pipeline entry and exit. If any variable deviates by more than 10 percent of the normal operating range, the system shall trigger both audible and visual alarms. Flow balancing shall be conducted every 5 minutes, 1 hour, 24 hours, and 48 hours with the accuracy defined once the system is established and tested. Review of system design and testing results Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2c Personnel at the site shall be trained in equipment use and containment and cleanup of an oil spill. Dry cleanup methods, such as absorbents, shall be used on paved and impermeable surfaces and shall be included in a spill trailer maintained onsite. Spills in dirt areas shall be immediately contained with an earthen dike and the contaminated soil shall be dug up and discarded in accordance with local and state regulations. Review of training and equipment Before Phase 2 and Phase 4 operations and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2d Oil spills shall be contained and cleaned according to measures outlined in the then-current California Stormwater Quality Association Best Management Practice Handbook. Review of training and incident reports Before Phase 2 and Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2e A United States Environmental Protection Agency, Spill Prevention, Control, and Countermeasure Plan, approved by the City of Hermosa Beach Fire Department, shall be implemented in the event of a spill. The Plan, which shall include a spill response trailer, equipment, and personnel training shall be completed prior to Phase 2 and Phase 4, and in compliance with the California State Oil Spill Contingency Plan (California Department of Fish and Game, Office of Spill Prevention and Response 2010) and the Los Angeles/Long Beach Oil Spill Contingency Plan (California Department of Fish and Wildlife 2011). Spill cleanup shall be completed under the oversight of the lead regulatory agency, with respect to oil spills, as identified in the Spill Prevention, Control, and Countermeasure Plan. Review of reports Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2f The well cellar shall be lined with an impermeable membrane to prevent oil- based substances from seeping into groundwater supplies. All drilling muds storage shall be contained within Baker-type enclosed tanks, which shall be sized to accommodate high intensity rainfall events without overtopping. Review of design documents, field inspection Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2g The Applicant shall install a check valve in the crude oil pipeline at the Herondo and Valley drive where the crude oil pipeline turns eastward and starts uphill. Review of design documents, field inspection Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2h The Applicant shall fund and install, under the direction of the Hermosa Beach Public Works Department, an oil/grit separators or oil/water separator located along Herondo Street downstream of Valley Drive, in order to capture small to medium sized spills before they reach the ocean. Installation and maintenance costs shall be provided by the Applicant and the devices shall be inspected by the Applicant to ensure that the "trap" is operational before any storm events. Review of design documents, field inspection Before Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2i The Applicant shall utilize a smaller 6" ERW pipe and a heat and impact resistant coating at a minimum comparable to a 3-layer fusion bonded epoxy (such as BrederoShaw 3LPP) and weld coverings equivalent to sleeves with epoxy primer. Specification of the pipe and coating shall approved by the City. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach, CSFM Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2j The Applicant shall install a 3 sack slurry starting 6 inches above the pipe to the base of the pavement or ground surface and lay strips of warning tape over the top to prevent third-party damage. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach Table 8-9 Noise and Vibration Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-1a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 1). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1b The gates on the east and south sides of the site shall be 24-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2g The acoustical shroud around the drilling mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2h Provide acoustical treatment within the combustor fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2i Eliminate use of the combustor during drilling in Phase 2 or prior to the initiation of production occurring concurrent with drilling in Phase 2, acoustical treatment shall be provided: within the combustor fan housing and/or ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA; and to the combustor stack to limit the power level radiated by the stack to 80 dBA.. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2j During the drilling portion of Phase 2, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 2; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV2a through NV2i in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-3a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-3d Provide acoustical treatment within the combuster fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-4a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 3). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-4b The gates on the east and south sides of the site shall be 25-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-4c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-6a Increase the height of the noise barriers on all sides of the site from 32-feet to35-feet (35-feet is the maximum height allowed by zoning code). Minimum sound insulation performance of the barrier material shall be STC-32. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. In the event that a permanent 35-foot wall is built, the interior surfaces of the wall (i.e. those facing inwards towards the drilling and production operations) shall be treated with exterior grade acoustical panels offering equivalent sound absorption performance to that specified in this Measure above a height of 10-feet from the ground. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6g The acoustical shroud around the drilling rig mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6h During the drilling portion of Phase 4, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 4; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV6a through NV6g in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours of Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-7a Increase the height of the masonry walls on the north and west sides of the site to a minimum of 27-feet. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7b Apply outdoor acoustical panels to all available surfaces of the north and west walls that face the production operations above a height of 10-feet above the ground. The purpose of the acoustical panels is to control reflection of production noise in the direction of the sensitive uses to the east and south. The acoustical panels shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.28, 0.68, 0.95, 0.86, 0.89, 0.72. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7c Well workover rigs shall be powered by electric drive/sources or “ultra-quiet” generators or engines - either diesel or natural gas-powered - that are capable of operating below the noise significance thresholds for daytime operation. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Table 8-10 Transportation and Circulation Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1a For Phases 1-3, the Applicant shall fund, through and in consultation with the School District and Safe Routes to School, an afternoon crossing guard to be stationed at the Project Site area to ensure pedestrians passing nearby the Project Site have assistance in crossing the streets and the entrances/exit of the Project Site. Alternately, the Applicant shall ensure that trucks do not travel to and from the Project Site unless school is in session (i.e. truck travel prohibited on Valley Drive after 2:48 p.m., on Wednesdays after 1:45 p.m. or on school minimum days after 12:45 p.m.). The Applicant shall consult with the School District to ensure timing is current. Review of contracts and site inspections Prior to construction activities City of Hermosa Beach TR-1b For Phases 1-3, the Applicant shall install, subject to the approval of the City Public Works Department, warning signs and blinking yellow lights one block north and south (if applicable with possible one-way on Valley Drive) of the Project Site warning vehicle traffic that trucks may be entering and exiting the roadway. Blinking lights shall only operate when trucks are utilizing the roadway (not 24 hours per day). Review of design documents and site inspections Prior to construction activities City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1c The Applicant shall ensure that all trucks accessing the Project Site and utilizing the Pier Avenue/Valley Drive intersection are less than 65 feet long to prevent safety hazards at the double intersection on Pier Avenue between Valley Drive and Ardmore Avenue. If trucks longer than 65 feet are required, then flagger shall be used at the Pier Avenue and Valley/Ardmore intersection. Review of contracts and site inspections Phase 1-4 Prior to construction activities City of Hermosa Beach TR-1d For Phases 1-3, the Applicant shall, with the approval and coordination of the City Public Works Department, either 1) restripe Valley Drive south of Pier Avenue to be a southerly directed one-way street. No on-street parking shall be allowed on Valley Drive between 6th Street and 8th Street to allow for sufficient line of sight for trucks entering and exiting the Project Site; or 2) restripe the section of Valley Drive between 2nd Street and Herondo Street to make it two- way and direct all truck traffic along Herondo Street to approach the project site from the south. Review of design documents and site inspections Prior to pipeline construction activities City of Hermosa Beach TR-2a Pipeline construction activities within the Pipeline right-of-way shall be limited to weekday between the hours of 9:00 a.m. and 3:00 p.m., unless the applicable municipality approves a specific exception to the time limit for periods of limited duration, subject to measures required by the municipality to protect the public health and safety. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Review of design documents and site inspections Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-2b The applicant shall implement a Construction Traffic Management Plan (CTMP) during Pipeline construction that includes the following pursuant to the procedures and subject to approval of the applicable municipality: 1) Require the Pipeline contractor(s) to obtain and follow street construction permits in the affected areas (Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities - PCH and Hawthorne Boulevard); 2) Develop detour and traffic management plans consistent with the affected City’s standard roadway plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH); 3) Revise Pipeline construction schedules to minimize access impacts to adjacent residents and businesses; and 4) Ensure that all affected residences and business have adequate emergency access during all times and phases of construction. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Approval of CTMP Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-3a The applicant shall be prohibited from routing Proposed Oil Project-related heavy truck exceeding 20,000 pounds on 190th Street between Anza Avenue and PCH, except during Pipeline construction. The Applicant shall comply with all requirements of the applicable city. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3b The applicant shall route inbound and outbound heavy (>20,000 pounds) truck traffic along PCH and Artesia Boulevard, which are designated truck routes. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3c Applicant shall supply private parking sufficient to meet all parking demands and shall direct all employees and contractors to park within Applicant’s private parking areas, or to utilize an alternative parking program approved by the City. Review of Plans and onsite inspections Phase 1-4 City of Hermosa Beach TR-4a The City shall design the permanent Proposed City Maintenance Yard so that it does not enter/exit directly onto Valley Drive. Review of Plans Phase 3 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-4b If the permanent Proposed City Maintenance Yard Project affects the sidewalk, then the design shall incorporate a sidewalk design along Valley Drive which utilizes a landscape buffer to separate the pedestrians from the street. Review of Plans Phase 3 City of Hermosa Beach Table 8-11 Water Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-1 Prior to approval of demolition and new construction, a Registered Civil Engineer in the State of California shall evaluate the capacity of the existing sewer line system, beginning at the proposed tie-ins on Valley Drive for the Proposed City Maintenance Yard Project and 6th Street for the Proposed Oil Project, and continuing downstream to the Sanitation Districts of Los Angeles County sewer system, prior to any connections. A 7-day capacity performance test shall be performed, based on Sanitation Districts of Los Angeles County average wastewater generation factors, to determine baseline and peak flows, and to ensure the sewer has adequate capacity in the downstream areas. The Area study of the proposed sewer line and a 7-day performance capacity test should be performed at select Prior to issuance of permit City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party capacity analysis shall be submitted to the City Public Works Department and the Districts for review and approval. In the event that existing sanitary sewer facilities are insufficient to accommodate increased flows from the Project Site, the Applicant shall provide mobile sanitary facilities (i.e., toilet, sink, and urinal) for onsite personnel, as necessary. downstream locations to verify the adequacy of the existing sewer. WR-2 Implement MM HWQ-2a through HWQ-2d. See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ-2d WR-3a The Applicant shall complete a site-specific Area of Review/Zone of Endangering Influence analysis, per Division of Oil, Gas, and Geothermal Resources requirements, to determine if oil and gas wells are present that might serve as conduits for injected liquids to migrate upward to underground sources of drinking water. In the event that such wells are present, those wells shall be plugged and abandoned such that underground sources of drinking water (i.e., less than 10,000 mg/L total dissolved solids) are protected. Plugging and abandonment of those wells shall include zonal isolation plugs outside all casings and shall be completed per current Division of Oil, Gas, and Geothermal Resources standards. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to initiation of injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-3b The Applicant shall confine injected fluids into the intended zone of injection in order to adequately protect underground sources of drinking water. Injection well cement shall be placed at the base of all underground sources of drinking water, and not just at the base of fresh water, to protect water with total dissolved solids content ranging from 3,000 mg/L to 10,000 mg/L. Coordination with Division of Oil, Gas, and Geothermal Resources During injection well drilling and injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3c The Applicant shall complete step-rate tests, using bottom-hole and surface pressure gauges, such that maximum allowable surface injection pressures are set at a maximum of 95 percent of the fracture pressure of the formation being injected. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-3d The Applicant shall ensure that the hydrostatic pressure in overlying West Coast Basin aquifers is not exceeded during injection over the active life of the disposal wells. To ensure that this does not occur, the static reservoir pressure shall be monitored on a periodic basis, per Division of Oil, Gas, and Geothermal Resources requirements, and injection into the receiving zone shall cease if and when the hydrostatic pressure is exceeded. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3e The Applicant shall meet with Division of Oil, Gas, and Geothermal Resources staff annually to review the status of the waste water injection wells. Any deficiencies identified by Division of Oil, Gas, and Geothermal Resources staff shall be immediately rectified by the Applicant. Coordination with Division of Oil, Gas, and Geothermal Resources Annually following initiation of Phase 2 City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources 1 Development Agreement between City of Hermosa Beach and E&B Natural Resources DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF HERMOSA BEACH AND E&B NATURAL RESOURCES MANAGEMENT CORPORATION THIS DEVELOPMENT AGREEMENT (“Development Agreement” or “Agreement”) is entered into as of the ____ day of ______________, _____, by and between the CITY OF HERMOSA BEACH, a California municipal corporation ("City"), and E&B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation (“E&B”). RECITALS A. The City is the owner of that certain real property in the City of Hermosa Beach, County of Los Angeles, and State of California described in Section 2.4 of this Agreement (Exhibit A to this Agreement), and also known informally as the City Maintenance Yard (“Property” or “City Maintenance Yard”). B. On or about January 14, 1992, the City entered into Oil and Gas Lease No. 2 (“Lease”) with Macpherson Oil Company, a California corporation, for itself and for Windward Associates, a California limited partnership, of which it is the general partner (collectively “Macpherson”). The Lease was approved by the California State Lands Commission (“CSLC”). The Lease authorized Macpherson to perform oil and gas extraction activities in the tidelands granted to the City by the State of California, and also authorized Macpherson to utilize the Property for oil and gas drilling activities (“Macpherson Project”). C. During the 1990s, Macpherson sought and obtained approvals for the Macpherson Project from the City, the CSLC, the California Coastal Commission and the South Coast Air Quality Management District. In 1995, the voters of the City passed Proposition E, an initiative to ban oil drilling in the City. During this time, and subsequently, Macpherson, the City, the CSLC, and opponents to the Macpherson Project were parties to several lawsuits regarding the 2 Development Agreement between City of Hermosa Beach and E&B Natural Resources Macpherson Project, including an action by Macpherson against the City regarding whether Proposition E constituted a breach of the Lease (“Macpherson Lawsuit”). The trial court in the Macpherson Lawsuit determined that the adoption of Proposition E constituted a breach of the Lease, subject to certain City defenses, and scheduled a trial in April 2012 to determine Macpherson’s damages. D. E&B, who had no prior relationship with Macpherson, investigated the Macpherson Project and approached the City and Macpherson with a proposal to settle the Macpherson Lawsuit and to provide E&B with a potential opportunity to proceed with “a state- of-the-art directional well oil drilling project conducted from an urban drill site located on the City’s maintenance yard” and “an opportunity to persuade the City’s electorate that a state-of- the-art directional well oil drilling project conducted from the City’s maintenance yard can be accomplished safely and with financial beneifts to all of the parties.” (Settlement Agreement, p. 2.) On March 2, 2012, the City, Macpherson and E&B entered into a Settlement Agreement and Release (“Settlement Agreement”). E. The Settlement Agreement, among other consideration, provided for the dismissal of the Macpherson Lawsuit, certain payments to Macpherson, and the assignment to E&B of Macpherson’s rights under the Lease and all other permits for the Macpherson Project which would allow E&B to proceed with a redesigned oil development project (“Project”) under certain conditions. Under the terms of the Settlement Agreement, the City is required to place on the ballot, in a manner that comports with all applicable law, a measure that asks the voters whether to approve, among other things, “a development agreement that would afford E&B a vested right to proceed with the Project . . . .” (Settlement Agreement, p. 7.) F. The California Elections Code sets forth the procedures for a local legislative body to submit a measure to the voters of the City. As contemplated in the Settlement Agreement, the City elected to undertake environmental review of the Project referenced in paragraph E above in accordance with the requirements of the California Environmental Quality Act (“CEQA”). On July 8, 2014, the City Council of City certified an Environmental Impact Report in compliance with CEQA by its adoption of Resolution No. 14-6908. Formatted: Highlight 3 Development Agreement between City of Hermosa Beach and E&B Natural Resources G. The California Legislature enacted Section 65864 et seq. of the Government Code, which provides that cities and counties may enter into development agreements with persons having legal or equitable development interests in real property. Section 65867.5 of the Government Code states that a development agreement is a “legislative act” to be approved by ordinance, and the California Constitution establishes the right of voters to approve legislative acts. Elections Code section 9222 authorizes the City Council to submit any ordinance to the voters for their approval. Section 65869 of the Government Code mandates Coastal Commission approval for any development agreement in an area where a local coastal program has not been certified. H. The City has adopted rules and regulations for consideration of development agreements, pursuant to Government Code Section 65865, in Chapter 17.64 of the City’s Municipal Code. I. In compliance with the Settlement Agreement and all other applicable law, the City submitted the [insert title of Ballot Measure] (“Ballot Measure”) to the voters of the City on [insert date] in compliance with California Elections Code Section 9222. The Ballot Measure includes the following legislative approvals: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). These legislative approvals are referred to in this Agreement as “Ballot Measure Approvals.” J. By approving the Ballot Measure and this Agreement, the voters of the City have determined that the public interest is served by entering into this Agreement because the Project, described in Exhibit B to this Agreement, will provide for the remediation of the City Maintenance Yard, and will provide substantial economic benefits to the City and to the Community in the form of royalties as described in the Lease and as further set forth in Exhibit C to this Agreement. 4 Development Agreement between City of Hermosa Beach and E&B Natural Resources K. This Agreement will bind future City Councils to the terms and obligations specified in this Agreement and limit, to the degree specified in this Agreement, the future exercise of the City's ability to regulate development on the Property. L. Upon approval by the voters of the Ballot Measure Approvals, Tthis Agreement and the Project will beis consistent with, and will serve to implement the policies, objectives, and standards of the elements of the City of Hermosa Beach General Plan and will beis consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code)., all as amended by the Ballot Measure Approvals. M. This Agreement and the Project is consistent with, and will serve to implement, the provisions of Article 3 of the California Coastal Act. N. This Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property and generally serve the public interest. AGREEMENT NOW THEREFORE, in consideration of the above recitals, the mutual covenants and conditions herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agrees as follows: 1 DEFINITIONS For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Agreement" means this Development Agreement by and between the City and E&B. "Approval Date" means the date on which the Ordinance approving this Development Agreement becomes effective under Elections Code Section 9217, specifically ten days after the date the vote is declared by the City Council [INSERT DATE]. 5 Development Agreement between City of Hermosa Beach and E&B Natural Resources “Ballot Measure” means the measure that was approved by the voters on the Election Date. “Ballot Measure Ordinance” or “Ordinance” means the ordinance that accomplishes the Ballot Measure Approvals. “Ballot Measure Approvals” means the: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). "CEQA" means the California Environmental Quality Act, Section 21000, et seq., of the California Public Resources Code. "City" means the City of Hermosa Beach, California. "City Council" means the City Council of the City of Hermosa Beach. "Code" or “HBMC” means the Municipal Code of the City of Hermosa Beach. "Commencement Date" means that date when the Commission approves the Development Agreement under Government Code Section 65869; provided, however, if litigation challenging the validity of this Agreement including any Project Approvals and/or environmental review pursuant to CEQA should be brought against the City or the Coastal Commission, the Commencement Date shall be the date such litigation is concluded in a manner that permits the commencement or continuation of the parties' rights and obligations under this Agreement. “Commission” means the California Coastal Commission. “Conditional Use Permit” means the Conditional Use Permit for Oil Development at 6 Development Agreement between City of Hermosa Beach and E&B Natural Resources the City Maintenance Yard, approved by the City in Resolution No. 93-5632, and the validity of which was confirmed by the Settlement Agreement, which is to be abandoned and superseded pursuant to the terms of this Agreement. "Current Land Use Regulations" means the ordinances, resolutions, rules, regulations, requirements and official policies of the City in force as of the date on which the City Council calls the election on the Ballot Measure, as amended by the Ballot Measure Approvals. "Development Agreement Act" means Section 65864 et seq., of the California Government Code. “E&B” means E & B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation in the business of exploring for and producing oil and gas and each of its respective successors and assigns to all or any portion of its interests in the Property during such time as such portion is subject to this Agreement. “Election Date” means March 3, 2015the date that the Ballot Measure was submitted for a vote to the voters. "Event of Default" is defined in Section 5.1.1. "Exactions" means any requirement imposed by the City in connection with or pursuant to any land use regulation or land use approval process for the dedication of land, construction or improvement of public improvements or amenities, payment of development fees, or other mitigation measures required to mitigate the impacts of the development including, without limitation, all development impact fees or linkage fees, utility capacity fees, service or connection fees, major facilities fees, park fees, flood control fees, environmental impact mitigation fees, affordable housing fees, arts fees, transportation fees, child care fees and any similar governmental fees, charges and exactions required for the development of projects or property. "Force Majeure Delay" is defined in Section 6.23. "Future Ministerial Permits" is defined in Section 3.2.1. "General Plan" means the General Plan of the City as of the Effective Date. 7 Development Agreement between City of Hermosa Beach and E&B Natural Resources “Off-site Project Components” or “Off-site Components” means the Project components in the City of Hermosa Beach outside of the Property as described in Exhibit B to this Agreement, including (1) oil and gas pipelines along Valley Drive, Hermosa Beach, California, (2) supply staging/storage at 601 Cypress Avenue, Hermosa Beach, California, (3) a parking lot at 636 Cypress Avenue, Hermosa Beach, California, and (4) various locations outside the jurisdiction of Hermosa Beach. The location of (2) is more particularly described in Exhibit A-2 and the location of (3) is more particularly described in Exhibit A-3. “Oil Code” means the Hermosa Beach Oil Code, Chapter 21A (Oil Production), approved by the City with Ordinance No. 85-803. "Processing Fees" means all routine and generally applicable City-wide fees required by the City for processing applications and permits including, but not limited to, fees for land use applications, project permits, building applications, building permits, grading permits, maps and certificates of occupancy in effect at the time paid. Expressly exempted from Processing Fees are all Exactions. "Project" means the proposed oil and gas drilling and production project development of the Propertyas described in the Project Description contained in Exhibit B. "Project Approvals" means the approvals for the Project as set forth in Section 2.65 of this Agreement. "Public Benefits" means those improvements to be constructed, services to be provided and/or amounts to be paid by E&B to the City as consideration for this Agreement pursuant to Section 2.1 and Exhibit C. "Term" means the term of this Agreement, as provided in Section 6.1 of this Agreement. "Zoning Ordinance" means the comprehensive Zoning Ordinance of the City, found in Chapter 17 of the Code of the City of Hermosa Beach as it exists on the Effective Date. 2 THE DEVELOPMENT AGREEMENT PROCESS 8 Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.1 Statement of Benefits and Consideration. The voters of the City have determined that the Project is a development for which a development agreement is appropriate. Development of the Project in accordance with a development agreement will provide for the orderly development of the Property in accordance with the objectives set forth in the General Plan, including the Land Use Plan of the Local Coastal Program, as amended. Moreover, a development agreement for the Project will eliminate uncertainty in planning for and securing orderly development of the Property, ensure attainment of the maximum efficient utilization of resources within the City at the least economic cost to its citizens, and achieve the provision of public services, public uses, urban infrastructure and other goals and purposes for which the Development Agreement Act was enacted, all in the promotion of the health, safety and general welfare of the City of Hermosa Beach and its residents. In exchange for these and other benefits to the City, E&B will receive the assurance that E&B may develop the Project during the Term of this Agreement, subject to the terms and conditions herein contained. By approving Ballot Measure ___, the voters of the City have found and determined that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and have approved this Agreement. This Agreement does not (1) grant density or intensity in excess of that otherwise established in the Project Approvals, (2) supersede, nullify or amend any condition imposed in the Project Approvals, (3) guarantee to E&B any profits from the Project, or (4) prohibit or, if legally required, indicate E&B’s consent to, the Property's inclusion in any public financing district or assessment district. The City will receive substantial benefits as a result of the development of the Property in accordance with this Agreement, as set forth in Exhibit C, in recognition of and in exchange for this Agreement and the benefits provided to E&B pursuant to this Agreement. The voters of the City acknowledge the adequacy of the consideration provided by E&B to the City pursuant to this Agreement. In consideration of the benefits, commitments and consideration to be provided by E&B pursuant to this Agreement and in order to strengthen the public planning process and reduce the economic costs of development, the voters of the City hereby provide E&B assurance that it can proceed with the development of the Property for the Term of this Formatted: Highlight Formatted: Highlight 9 Development Agreement between City of Hermosa Beach and E&B Natural Resources Agreement pursuant to the land use, density and intensity specified in the Current Land Use Regulations, the Project Approvals and this Agreement. E&B would not enter into this Agreement or agree to provide the public benefits, commitments and consideration described in this Agreement if it were not for the certainty provided by this Agreement that the Property can be developed during the Term of this Agreement in accordance with the Current Land Use Regulations and the Project Approvals including the land use, density and intensity set forth in the Project Approvals. 2.2 Public Hearings. On June 23, 2014, the Planning Commission of the City, after providing notice as required by law, held public hearings on the legislative elements of the Project, including this Agreement and the amendments to the Hermosa Beach Municipal Code and Coastal Land Use Plan and the EIR. The City Council, after providing public notice as required by law, similarly held public hearings on the Project, including this Agreement [insert dates and specific code provisions]. 2.3 City Council and Voter Findings. The City Council adopted findings that review of the environmental impacts of this Agreement and the Project Approvals has been conducted in accordance with the provisions of CEQA and the State and local guidelines adopted thereunder, and the City Council has given consideration to such environmental review prior to placing the Ballot Measure on the ballot and has undertaken all actions necessary to comply with CEQA. In approving the Ballot Measure and this Agreement, the voters of the City have determined and found that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and all other applicable City plans, policies and regulations, and is consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code), all as amended by the Ballot Measure Approvals. 2.4 Property. The Property includes all real property that is subject to this Agreement. The Property as of the Election Date is commonly known as City Maintenance Yard, as more fully described in Exhibit A-1 incorporated herein by reference. 2.42.5 The Project. The Project consists of the development, construction and operations on the Property permitted under this Agreement and the Project Approvals. The description of the Project and its uses are more fully described in the Project Description set forth in Formatted: Outline numbered + Level: 2 + NumberingStyle: 1, 2, 3, … + Start at: 1 + Alignment: Left + Aligned at: 0" + Indent at: 0.4" Formatted: Underline 10 Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B which is incorporated herein by reference. The Project includes Off-site Components within the City of Hermosa Beach, and other elements located outside of the City. 2.52.6 Project Approvals. The Project includes, without limitation, all items described in the Project Description contained in Exhibit B and incorporated herein by reference and the following Project Approvals: (a) Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93- 5632 (as set forth in Section 2.76 below, to be abandoned per HBMC Section 17.70.030 and superseded pursuant to the terms of this Agreement); (b) Environmental Impact Report, dated June 2014, prepared pursuant to CEQA and certified by the City Council on July 8, 2014 (with revisions identified in City Council Resolution No. 14-6908); (c) Amendments to the Land Use Plan and Land Use Plan Map of the Local Coastal Program (a component of the City’s General Plan), approved by Ballot Measure __ on ________________, and by Commission [insert Commission action] on ______________________; (d) Amendment to the Municipal Code, approved by Ballot Measure __ on _________________; (e) Franchise for Oil and Gas Pipelines, approved by Ballot Measure __ on _______________; (f) Amendment to the Oil Code, approved by Ballot Measure __ on _______________; and (e) Development Agreement, approved by Ballot Measure __ on _________________, and by Commission [insert Commission action] on _________________. 11 Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.76. Abandonment of Conditional Use Permit. With adoption of the Ballot Measure, oil drilling and production is permitted on the Property subject to a development agreement. The relevant conditions of approval from the 1993 Conditional Use Permit (CUP) for oil development at the Property (Resolution No. 93-5632) are incorporated into this Development Agreement as Exhibit D-1 herein, and E&B shall comply with said conditions as required herein. Thus, upon the Commencement Date, this agreement will supersede the 1993 CUP, which shall no longer serve a regulatory purpose. Hermosa Beach Municipal Code Section 17.70.030 allows for voluntary abandonment of a Conditional Use Permit. This Agreement at the Commencement Date shall serve as both a written request to abandon the CUP and the City’s declaration that the 1993 CUP is abandoned. 3 VESTED DEVELOPMENT RIGHTS 3.1 Vested Rights to Develop. Subject to the terms, conditions, and covenants of this Agreement, including the Reservations of Power in Section 3.4, and the conditions of approval and mitigation measures attached hereto and incorporated herein as Exhibit D, E&B shall, as of the Approval Date, have a vested right to develop the Property and Project, including Off-site Components, in accordance with, and to the extent of, the Project Approvals, and the Current Land Use Regulations. The approved use of the Property, the density and intensity of use, the maximum height, footprint, and square footage of proposed buildings and structures, and provisions for reservation and dedication of land or public purposes shall be those set forth in the Project Approvals and the attached Exhibits. Nothing in this Agreement shall be deemed to obligate E&B to initiate development of the Project or any portion thereof within any period of time or at all. 3.1.1 Certain Changes Prohibited Without Consent of E&B. Except as otherwise provided in this Agreement, during the Term, the City shall not, as to the Property and the Project, including Off-site Components, without the prior written consent of E&B, which may be withheld in E&B’s sole and unfettered discretion: (a) change the Current Land Use Regulations, or Project Approvals as they apply to the Property or Project so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals; or (b) apply to the Property or the Project any new or 12 Development Agreement between City of Hermosa Beach and E&B Natural Resources amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals, so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals, or prevent or adversely affect the operation of the Project as contemplated hereby in accordance with the Current Land Use Regulations or Project Approvals; or (c) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that requires additional discretionary review or approval not otherwise required for the Project by the Current Land Use Regulations or Project Approvals; or (d) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that materially, adversely affects the timing or phasing of construction or development, or which limits the availability of utilities or other infrastructure for the Project. For the purposes of this Section 3.1, “prevent or adversely affect development or construction of the Project” shall include, without limitation, any changes which fundamentally affect the ability of any of the permitted uses to operate within the Project (e.g. prohibit any of the uses in the Project Approvals, change parking standards for any of the uses, etc.). 3.1.2 Rights are Vested. Unless amended or terminated in the manner specified in this Agreement (and subject to the provisions of this Agreement), E&B shall have the rights and benefits afforded by this Agreement and this Agreement shall be enforceable by E&B and the City notwithstanding any growth control measure, initiative, proposition or any development moratorium adopted after the Approval Date, or any change in the General Plan, zoning, or subdivision regulations adopted by the City which alter or amend the Current Land Use Regulations or Project Approvals or the adoption of any new or amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals and so as to prevent or adversely affect development or construction of the Project in accordance with the Current Land Use Regulations or Project Approvals. This Section shall be construed to prohibit the City from applying to the Property or the Project, including any Off-site Components, any development moratorium or growth control measure that is adopted specifically to prohibit the construction or operation of the Project, or as an interim measure pending contemplated General Plan, Specific Plan or zoning changes, or as a general growth control management measure except as provided for pursuant to Section 3.4. 13 Development Agreement between City of Hermosa Beach and E&B Natural Resources 3.1.3 Future Changes to Current Land Use Regulations. Following the Approval Date, if the City modifies the Current Land Use Regulations in a manner that E&B, in its sole discretion, determines is more beneficial than the Current Land Use Regulations, then E&B may choose in its sole discretion to be governed by the modified land use regulations rather than the Current Land Use Regulations, without E&B being deemed to have waived or limited any rights, remedies or privileges under this Agreement. 3.2 Other Rights. 3.2.1 Future Ministerial Permits. E&B will seek additional ministerial permits as required by the City, including, without limitation, excavation only permits, grading permits, demolition permits, building permits, well permits, drilling permits and public works permits, as needed to implement the Project Approvals and to construct and operate the Project. Collectively, these ministerial permit applications are called the "Future Ministerial Permits". The City agrees that it will not unreasonably withhold or unreasonably condition any of the Future Ministerial Permits which must be issued by the City in order for the Project to proceed, provided that E&B reasonably and satisfactorily complies with all preliminary procedures, actions, payment of Processing Fees and criteria generally required for processing such Future Ministerial Permits, and provided further that such Future Ministerial Permits comply with this Agreement, the Current Land Use Regulations and the Project Approvals and approvals of other governmental agencies with jurisdiction over the Project. The City further agrees that no discretionary permits, other than the Project Approvals, are required from the City to construct and operate the Project. 3.3 Reservations of Power. 3.3.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the following subsequent land use regulations shall apply to the development of the Property: (a) Processing Fees (but not Exactions) imposed by the City to cover the estimated actual costs to the City of processing applications for Project Approvals, fees for monitoring compliance with any Project Approvals, inspection fees, or fees for monitoring 14 Development Agreement between City of Hermosa Beach and E&B Natural Resources compliance with environmental mitigation measures. (b) Procedural regulations applied on a City-wide, nondiscriminatory basis relating to City entities required to review petitions or applications, forms of petitions and applications, notice requirements, information requested with petitions or applications, conduct of hearings, form of staff reports, nature and type of recommendations by City entities, appeal procedures and any other similar matters of procedure. (c) Regulations governing building codes and similar construction standards and specifications including, but not limited to, the California and International Codes, as they may be changed from time to time. (d) Regulations that are necessary to protect the public health and safety, including without limitation, development moratorium or limitation on the delivery of City-provided utility services, which meet each of the following requirements: (a) are based on genuine health, safety and general welfare concerns (other than general growth management issues); (b) which arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (c) are based upon its terms or its effect as applied, does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such regulations shall be applied and construed so as to provide E&B with the rights and assurances provided under this Agreement. This subsection governs generally applicable emergencies in the area not specifically related to or caused by the Project. (e) Regulations that are not in conflict with the Project Approvals, Current Land Use Regulations or this Agreement. Any regulation, whether adopted by initiative or otherwise, limiting the rate, timing, phasing or sequencing of development of the Property shall be deemed to conflict with the Project and shall therefore not be applicable to the development of the Property. Any regulation limiting the permitted uses of the Property, limiting the density or intensity of use of the Property, or limiting the size, height or location of improvements on the Property shall be deemed to conflict with the Project Approvals and shall therefore not be applicable to the development of the Property. (f) Regulations that are in conflict with the Project, but as to which the 15 Development Agreement between City of Hermosa Beach and E&B Natural Resources E&B has given its prior written consent for such regulations to be applied to the Property or to the development of the Property. (g) Regulations applied on a City-wide, non-discriminatory basis that do not prevent or adversely affect development or construction of the Project. 3.3.2 Modification or Suspension by State or Federal Law. In the event that state or federal laws or regulations, or those of any regional authority having jurisdiction over the Project or Property, enacted after the Approval Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement or the Project conditions, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state, federal, or regional authority laws or regulations and to effectuate to the extent possible the terms of this Agreement. 3.3.3 Police Power. The parties acknowledge and agree that City is restricted in its authority to limit its police power by development agreement and that the foregoing limitations, reservations and exceptions are intended to reserve to City all of its police power which cannot be so limited. This Agreement shall be construed to reserve to City all such power and authority which cannot be restricted by development agreement. 3.3.4 Taxes, Assessments and Fees. Anything herein to the contrary notwithstanding, City may impose on the Project any new non-discriminatory, City-wide taxes, assessments and fees, including but not limited to business license taxes or franchise fees, but not including any Exaction or other fee designated to mitigate the impact of development of the Project. 3.4 Regulation by Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of the City may possess authority to regulate aspects of the development of the Property separately from or jointly with City, and this Agreement does not limit the authority of such other public agencies. Changes to the project mandated by such regulatory agencies shall be automatically included into this Development Agreement as set forthauthorized in Section 10.F of the Ballot Measure and shall supersede any inconsistent provisions herein. 3.5 Agreement and Assurances on the Part of E&B. Without in any way limiting E&B’s 16 Development Agreement between City of Hermosa Beach and E&B Natural Resources rights under Section 5.2.2 not to proceed with development of the Project and, in such an event, to terminate this Agreement in its sole and subjective business judgment, if E&B proceeds with the Project, E&B agrees that it will use commercially reasonable efforts, in accordance with its own business judgment and taking into account market conditions and economic considerations, to develop the Project, in accordance with the terms and conditions of this Agreement, the Current Land Use Regulations, the Lease and the Project Approvals. 3.6 Public Benefits. 3.6.1 The parties acknowledge and agree that development of the Project will result in public benefits as set forth in Exhibit C. The voters of the City acknowledges the adequacy of the consideration, including the Public Benefits, provided by E&B to the City pursuant to this Agreement. 3.6.2 Exactions and Processing Fees. 3.6.2.1 Exactions. No Exaction may be imposed on this Project except as specifically articulated in this Agreement, and except as required by the conditions of approval and the Mitigation Monitoring and Reporting Program contained in Exhibit D. 3.6.2.2 Processing Fees. E&B shall pay to the City all applicable Processing Fees regularly charged by the City and the amount of such Processing Fees may be increased from time to time on a non-discriminatory City-wide basis. 3.7 Public Improvements and Utilities 3.7.1 Installation Obligations. The parties hereby agree that the obligations to install public improvements and utilities necessary for the development of the Property shall be as provided for in the Project Approvals. 3.7.2 City-Provided Utilities: Reservation of Sufficient Capacity. To the extent that it is within the control of the City, the City shall use its best efforts to ensure that there shall be sufficient capacity, facilities and services with respect to City-provided utilities to complete construction of the Project, provided that E&B bear all costs incurred by the City in doing so. 17 Development Agreement between City of Hermosa Beach and E&B Natural Resources and open the uses thereon to the public. The City agrees that if limitations in the provision of utilities become necessary due to the existence of an emergency situation, they shall be applied only to the extent necessary to respond to such emergency, and shall not be applied against the Property or the Project in a discriminatory manner. 3.7.3 City-Provided Utilities: Nondiscriminatory Rates and Provision of Service. The City agrees that rates and charges for City-provided utilities for the Property and Project shall not be set or imposed in a discriminatory manner, but shall be those rates and charges that are or would be generally applicable to any user of a comparable quantity and quality of the utility use in the City (i.e., any other entity whose use or consumption of the utility is comparable to that of E&B), and that the City shall not discriminate against the Property or the Project in the provision of any City-provided utilities (such as potable and reclaimed water, sewer and drainage). 3.7.4 Dedications, Reservations and Conditions of Development. The portions of Property to be reserved or dedicated for public purposes pursuant to this Agreement, if any, shall be that property described in the Project Approvals. Unless otherwise indicated herein, the property described in the Project Approvals to be reserved or dedicated for public use shall be dedicated by E&B as provided in the Project Approvals. The City shall take such actions as may be necessary to vacate any prior dedications, offers to dedicate and grants of easements that are no longer necessary for the development of the Project in accordance with this Agreement. 3.8 Mitigation Measures and Conditions of Approval. E&B shall at its own expense timely perform all mitigation measures identified in the environmental documentation for the Project and conditions of approval identified in the Project Approvals as set forth in Exhibit D. E&B shall have no duty to complete the mitigation measures or conditions of approval, except as otherwise set forth in this Agreement, if the contemplated development fails to occur. 4 ASSIGNMENT, AMENDMENT AND REVIEW 18 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.1 Assignment 4.1.1 Right to Assign. E&B shall have the right to sell, transfer or assign its rights or interests in the Property in whole or in part (provided that no such partial transfer shall be permitted to cause a violation of the Subdivision Map Act, Government Code Section 66410 et seq.) to any person, partnership, joint venture, firm or corporation at any time during the Term, subject to the City’s consent, as provided in Subsection 4.1.2. The conditions and covenants set forth in this Agreement and incorporated herein shall run with the land and the benefits and burdens shall bind and inure to the benefit of the parties. Any such sale, transfer or assignment shall include the assignment and assumption of the rights, duties and obligations arising under or from this Agreement with respect to the property transferred and shall be made in strict compliance with the following requirements: (a) Except as provided in Section 6.17 of this Agreement, no sale, transfer or assignment of any right or interest under this Agreement shall be made unless made together with the sale, transfer or assignment of all or a part of the Property and then, only in accordance herewith. (b) Concurrently with the closing of such sale, transfer or assignment, E&B shall provide the City with an executed agreement by the purchaser, transferee or assignee and providing therein that the purchaser, transferee or assignee expressly and unconditionally assumes the duties and obligations of E&B under this Agreement to the extent of such transfer or assignment, in a form satisfactory to the City Attorney. (c) The purchaser, transferee or assignee shall provide the City with security equivalent to any security previously provided by E&B to secure performance of its obligations hereunder, if any, or under any of the Project Approvals. Any sale, transfer or assignment under Section 4.1 of this Agreement not made in strict compliance with the foregoing conditions shall constitute a default by E&B under this Agreement and any such assignment shall be void and of no effect. Notwithstanding the failure of any purchaser, transferee or assignee to execute the agreement required by subparagraph (b) of this Subsection 4.1.1, the burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the benefits of this Agreement shall not inure to Formatted: Highlight 19 Development Agreement between City of Hermosa Beach and E&B Natural Resources such purchaser, transferee or assignee until and unless such agreement is executed. 4.1.2 City’s Reasonable Consent Required. E&B may sell, transfer or assign its rights or interests in the Property in whole or in part and this Agreement to any other person, partnership, joint venture, firm, corporation, trust or other lawful entity with the City’s consent, which consent shall not be unreasonably withheld or conditioned (“Transfer”). In the event E&B desires to make such Transfer, E&B shall submit to the City a request for approval at least forty- five (45) days prior to such Transfer, which approval shall not be unreasonably withheld, conditioned or delayed by the City. The City may withhold, condition or delay its approval upon finding of any of the following: (a) The proposed purchaser, transferee or assignee lacks the financial ability to perform the obligations of this Agreement; (b) The proposed purchaser, transferee or assignee lacks the necessary qualifications, competence, experience or capability to implement the development plan contemplated by the Project Approvals with the skill, expertise and quality equivalent to that of E&B; provided, however, if the proposed purchaser, transferee or assignee is a nationally or regionally recognized, or regionally known in Southern California, as an owner or developer of oil and gas facilities, such proposed purchaser, transferee or assignee shall be deemed to have met this requirement; or (c) An Event of Default by E&B as defined in Section 5.1.1 has occurred and is continuing under this Agreement. E&B shall provide to the City such information that the City reasonably requests in order for the City to make any determinations provided for by this Subsection 4.1.2. E&B agrees to provide such information on a timely basis sufficient to permit the City to make its determinations within the forty-five (45) day time period. 4.1.3 Applicability. The provisions of Sections 4.1.1 and 4.1.2 shall not be applicable to a Transfer as a result of which E&B retains at least a fifty (50) percent interest in the Property. or as a result of which E&B retains at least twenty-five (25) percent interest in the Property and maintains effective management control of the Project. 4.2 Changes and Amendments to Project Formatted: Highlight 20 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.2.1 In the event E&B reasonably finds that a change or amendment in the Project Approvals is reasonably necessary or appropriate, E&B shall apply for any required changes to the Project Approvals. Any such application that does not require an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the Current Land Use Regulations, except as otherwise provided by this Agreement, including the Reservations of Power. Any application that requires an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the land use regulations in effect at the time the application is filed. 4.2.2 Minor Changes to Project - No Amendment of Agreement The parties acknowledge that refinements or modifications of the Project may be required during the Term. The parties agree that refinements and modifications which constitute a "Minor Change” in the Project or Project Approvals shall not require an amendment to this Agreement or public notice and a hearing. For any such Minor Change, the City shall not impose as a condition to approval any Exaction, except as authorized in this Agreement. The City Manager, subject to the City Council’s approval, shall be authorized to make the determination on behalf of the City whether a requested refinement or modification may be effectuated pursuant to this Section 4.2.2 or whether the requested refinement or modification is of such a character to require an amendment hereof pursuant to Section 4.2.3. The City Manager, subject to the City Council’s approval, shall be authorized to approve any Minor Changes hereunder on behalf of the City. If and when the parties find that Minor Changes are necessary or appropriate, they shall, unless otherwise required by law, effectuate such changes or adjustments through a letter prepared by the City Manager and approved by the City Council, which, after execution, shall be attached hereto as addenda and become a part hereof. The City Manager may consult with technical experts in making the determination that a requested refinement or modification is a “Major” or “Minor Change.” The City Manager shall not unreasonably withhold or delay its determination that a requested refinement or modification is a “Minor Change” as that term is used herein. The changes described below shall not be deemed Minor Changes; however, the examples listed below are listed for reference only, and are not intended to provide a complete list of changes that may not be deemed as Minor Changes: A change to the Project Approvals shall not be deemed “Minor Change” if such change: 21 Development Agreement between City of Hermosa Beach and E&B Natural Resources (a) Alters the permitted uses of the Property as a whole; (b) Requires an amendment to the Zoning Ordinance, or General Plan, or other legislative acts not contemplated in this Agreement; (c) Increases the density or intensity of use of the Property as a whole; (d) Constitutes a project requiring a subsequent or supplemental environmental impact report pursuant to Public Resources Code Section 21166; (e) Creates a situation adverse to public health or safety. 4.2.3 Other Changes. Any change in the Project which does not qualify as a "Minor Change" as defined herein shall require an amendment to this Agreement as provided in Section 6.9, and compliance with CEQA as applicable. 4.3 Annual/Special Review. 4.3.1 Annual Review. The City shall, at least every twelve (12) months during the Term of this Agreement, review the extent of good faith substantial compliance by E&B with the terms of this Agreement. Subject to the notice and cure procedure set forth in Section 5.1.2, such a periodic review may result in amendment or termination of this Agreement, provided a default has been established under the terms of this Agreement. Pursuant to Government Code Section 65865.1, as amended, E&B shall have the duty to file an annual review request with the City, pay any applicable Processing Fees for such annual review and demonstrate its good faith compliance with the terms of this Agreement at such periodic review. Processing fees for such review are to include, but are not limited to, all costs incurred by the City in retaining the necessary professionals and experts to provide the City with the necessary input regarding the annual review, including but not limited to City Attorney, consultant and other third parties the City deems necessary to conduct the annual review. Upon request by the City, E&B shall provide such information as may be necessary or appropriate in order to ascertain compliance with this Agreement. , provided however, that the parties recognize that this Agreement and the 22 Development Agreement between City of Hermosa Beach and E&B Natural Resources documents incorporated herein could be deemed to contain many requirements (i.e., construction standards, landscape standards, etc.) and that evidence of each and every requirement would be a wasteful exercise of the parties' resources. Accordingly, E&B shall be deemed to have satisfied its duty of demonstration if it presents evidence satisfactory to the City of its good faith and substantial compliance with the major provisions of this Agreement. 4.3.1.1 Any party may address any requirement of this Agreement during the review. However, ten (10) days’ written notice of any requirement to be addressed shall be made by the requesting party. If at the time of review an issue not previously identified in writing is required to be addressed, the review at the request of either party shall be continued to afford sufficient time for analysis and preparation. 4.3.2 Special Review. The City Council may order a special review of compliance with this Agreement at any time. The Director of Community Development or City Council, as determined from time to time by the City Council, shall conduct such special reviews. Any special review shall comply with the procedural provisions and Processing Fees of an annual review as provided by Section 4.3.1. 4.3.3 Opportunity to be Heard. Upon written request to the City by E&B, E&B shall be permitted an opportunity to be heard orally and/or in writing at a hearing before the City Council regarding its performance under this Agreement. E&B shall also be heard before the City Council at any required public hearing concerning a review of action on the Agreement. Such hearings requested by E&B shall be subject to the Processing Fees provision of Section 4.3.1. 4.3.4 Information to be Provided E&B. The City shall, to such an extent as is practical, deposit in the mail to E&B a copy of staff reports and related exhibits concerning contract performance a minimum of seven (7) business days prior to any such review or action upon this Agreement by the Planning Commission or the City Council. 5 DEFAULT, REMEDIES AND TERMINATION 5.1 Enforceability. 23 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5.1.1 Default. Subject to Sections 5.1.2 and 5.1.3, failure by any party to perform any term or provision of this Agreement required to be performed by such party shall constitute an event of default ("Event of Default”). In the event that E&B files for reorganization or other relief under any Federal or State bankruptcy or insolvency law, whether voluntarily or by involuntary bankruptcy or insolvency action, all provisions of this Agreement shall remain in full force and effect unless E&B engages in an Event of Default. For purposes of this Agreement, a party claiming another party is in default shall be referred to as the "Complaining Party", and the party alleged to be in default shall be referred to as the "Party in Default". 5.1.2 Procedure Regarding Defaults. 5.1.2.1 Notice of Default. The Complaining Party shall give written notice of default to the Party in Default, specifying the default complained of by the Complaining Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. The Party in Default shall diligently endeavor to cure, correct or remedy the matter complained of, provided the such cure, correction or remedy shall be completed within the applicable time period set forth herein after receipt of written notice (or such additional, time as may be deemed by the Complaining Party to be reasonably necessary to correct the matter). Any failures or delays by a Complaining Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by a Complaining Party in asserting any of its rights and remedies shall not deprive the Complaining Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. If an Event of Default occurs, prior to exercising any remedies, the Complaining Party shall give the Party in Default written notice of such default. Without limitation, evidence of default may arise in the course of the regularly scheduled annual review or a special review described in Section 4.3. 5.1.2.2 Cure Periods. If the default is reasonably capable of being cured within thirty (30) days, the Party in Default shall have such period to effect a cure prior to exercise of remedies by the Complaining Party. If the nature of the alleged default is such that it cannot practicably be cured within such thirty (30) day period, the cure shall be deemed to have occurred within such thirty (30) day period if (i) the cure is commenced at the earliest practicable date following receipt of the notice; (ii) the cure is diligently prosecuted to completion at all times thereafter; (iii) at the earliest practicable date (in no event later than thirty (30) days after 24 Development Agreement between City of Hermosa Beach and E&B Natural Resources the curing party's receipt of the notice), the curing party provides written notice to the other party that the cure cannot practicably be completed within such thirty (30) day period; and (iv) the cure is completed at the earliest practicable date. In no event shall the Complaining Party be precluded from exercising remedies, subject to the preceding sentence if a default is not cured within sixty (60) days after the first notice of default is given. Subject to the foregoing, if a party fails to cure a default in accordance with the foregoing, the Complaining Party, at its option, may terminate this Agreement pursuant to this Agreement and California Government Code Section 65868, and/or institute legal proceedings pursuant to this Agreement. 5.1.2.3 Procedures Regarding City Termination. Notice of intent to terminate shall be by certified mail, return receipt requested. Upon delivery by the City of notice of intent to terminate, the matter shall be scheduled for consideration and review by the City Council within thirty (30) days in accordance with Government Code Sections 65867 and 65868. Upon consideration of the evidence presented in said review and a determination by the City Council based thereon, the City may give written notice of termination of this Agreement to E&B. Any determination of default (or any determination of failure to demonstrate good faith compliance as a part of annual review) made by the City against E&B, or any person who succeeds to E&B with respect to any portion of the Property, shall be based upon written findings supported by substantial evidence in the record. Any purported termination of this Agreement for alleged default shall be subject to review in the Superior Court of the County of Los Angeles pursuant to Code of Civil Procedure § 1094.5(c). 5.1.3 Institution of Legal Action. Subject to notice of default and opportunity to cure under Section 5.1.2, and subject further to the limitation on remedies set forth in Section 5.1.4, in addition to any other rights or remedies, any party to this Agreement may institute legal action to cure, correct or remedy any default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation hereof, or to obtain any other remedies consistent with this Agreement. If a legal action or proceeding is brought by any party to this Agreement because of an Event of Default under this Agreement, or to enforce a provision hereof, the prevailing party shall be entitled to reimbursement of all costs and expenses, including reasonable attorneys’ fees, incurred in prosecuting such legal action or proceeding. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement. Additionally, in the event of a court finding (1) a violation of this Formatted: Highlight 25 Development Agreement between City of Hermosa Beach and E&B Natural Resources development agreement or the conditions of approval in Exhibit D to this agreement, or (2) a violation of an order issued under Hermosa Beach Oil Code Section 21-A-10.1, a court may impose civil penalties up to $10,000/per day for each day in which E&B is determined to be non- compliant. 5.1.4 Remedies. 5.1.4.1 E&B’s Remedies. It is acknowledged by the parties that the City would not have entered into this Agreement if it were liable in damages under or with respect to this Agreement or the application thereof. In addition, the parties agree that monetary damages are not an adequate remedy for E&B if the City should be determined to be in default under this Agreement. The parties further agree that specific performance shall be E&B’s only remedy under this Agreement and E&B may not seek monetary damages in the event of a default by City under this Agreement. E&B covenants not to sue for or obtain monetary damages for the breach by City of any provision of this Agreement. 5.1.4.2 City's Remedies. The parties agree that the City shall have limited remedies for monetary damages and specific performance as specifically provided for in this Section 5.1.4.2. The City shall not have any right to compel specific performance with respect to the construction of the Project, or any obligation to construct the Project, including without limitation Section 3.7. Further, the City shall have no right to monetary damages as a result of E&B's failure to construct the Project or its failure to comply with Section 3.7. The City shall have the right to sue for monetary damages for failure by the E&B to pay any amounts owing under this Agreement including without limitation any amounts owing pursuant to Section 6.5.1. In no event shall the City be entitled to consequential damages or punitive damages for any breach of this Agreement. City also shall have the right to seek monetary damages for reimbursement of the actual cost to the City incurred by the City to construct, complete, demolish, remove or restore any physical infrastructure improvement in the public right of way which E&B commences construction of but fails to complete. If E&B’s failure or refusal to perform any provision of this Agreement causes an immediate and serious threat to life, health, property or natural resources, the City may pursue all remedies including but not limited to remedies available under the Hermosa Beach Oil Code Chapter 21-A (including the provisions of Article X, which allow for immediate cessation of operations) and Section 21 of the Lease. Formatted: Highlight 26 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5.1.4.3 Other Actions. Nothing in this Agreement shall be deemed to waive or limit any rights and remedies that the parties would otherwise have against the other relating to matters not covered by this Agreement. 5.2 Termination of Agreement. 5.2.1 As to the Property and all of the rights of E&B hereunder, and except as otherwise provided in this Agreement, this Agreement shall be deemed terminated and of no further effect upon the expiration of the Term of this Agreement unless earlier terminated pursuant to this Agreement. Subject to the notice and cure provisions set forth in Section 5.1.2, the City shall have the right to terminate this Agreement as to the Property and the rights of E&B hereunder, in the event E&B defaults and fails to cure such default within the respective cure period. Subject to the notice and cure provisions set forth in Section 5.1.2, E&B shall have the right to terminate this Agreement and the rights of the City hereunder in the event the City defaults and fails to cure such default within the respective cure period. Upon the termination of this Agreement, neither party shall have any further right or obligation with respect to the Property hereunder except with respect to any obligation to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination (other than commencement of construction of either phase) or with respect to any obligations which are specifically set forth as surviving this Agreement. Termination of this Agreement pursuant to this Section 5.2 shall cause the rights and benefits afforded by this Agreement to no longer be vested (subject to planning and zoning law) and as a result, the City shall no longer be limited from taking any action which may adversely affect the Property or the Project. 5.2.2 Termination by E&B Prior to Development. E&B is free, in its sole and subjective business judgment, not to proceed with development of the Project and, in such an event, to terminate this Agreement. The City acknowledges that such a right is consistent with the intent, purpose and understanding of the parties to this Agreement. In the event E&B decides not to proceed with development of the Project and to terminate this Agreement, E&B shall provide written notice to the City of that decision and of the final, irrevocable termination of this Agreement. Immediately upon the giving of such written notice to the City, the parties’ rights and obligations under this Agreement shall cease, except with respect to any obligations which are specifically set forth as surviving this Agreement. In the event of such written notice to the 27 Development Agreement between City of Hermosa Beach and E&B Natural Resources City terminating this Agreement, all Project Approvals (but not the Lease, Settlement Agreement and those included in the City’s General Plan and/or the Municipal Code), shall terminate and be extinguished. Termination by E&B shall not affect any of E&B’s obligations to pay assessments, liens or taxes incurred prior to the effective date of termination. 6 GENERAL PROVISIONS 6.1 Term. 6.1.1 Term. The Term of this Agreement shall commence upon the Commencement Date and shall be coterminous with the term of the Lease, unless terminated, modified or extended pursuant to the provisions of this Agreement or by the voters of the City. The Term of this Agreement shall be tolled during any period of time in which a Force Majeure Delay exists. 6.1.2 Additional Rights. Expiration or termination of this Agreement shall not affect any right vested under law independent of this Agreement. 6.2 Approval, Execution and Recordation Procedure. The following procedure shall govern approval of this Agreement: (a) The voters shall have approved Ballot Measure __ approving this Agreement; (b) Following voter approval, the Hermosa Beach City Council shall declare the vote in accordance with Elections Code Section 9217 and execute the Development Agreement; (c) As provided in Section 65868.5 of the Development Agreement Act, following execution by the City, the City shall cause a copy of this Agreement to be recorded with the County Recorder within ten (10) days. Any recording costs shall be paid by E&B; and (d) Following execution and recordation, the Coastal Commission shall have approved this Agreement (which shall include any revisions to this Agreement authorized by Section 10.F of the Ballot Measure Ordinance); 28 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.3 Cooperation and Implementation. City represents that it will cooperate with E&B to the fullest extent reasonable and feasible to implement this Agreement. Upon satisfactory completion by E&B of all of its preliminary actions and payments of appropriate fees, City shall promptly commence and diligently proceed with reasonable diligence to complete all steps necessary for the implementation of this Agreement and the development of the Property in accordance with the terms of this Agreement, including, but not limited to, the processing and checking of any and all Project Approvals, agreements, covenants and related matters required under the conditions of this Agreement, building plans and specifications, and any other plans necessary for the development of the Property, requests for inspections and certificates of occupancy, filed by or on behalf of E&B. E&B shall, in a timely manner, provide City with all documents, plans and other information necessary for the City to carry out its obligations hereunder, and pay for all necessary fees, costs, and expenses incurred by the City to facilitate implementation of this agreement that are not identified as the City’s responsibility. 6.4 Legal Challenges. 6.4.1 Defense. If any legal action or other proceeding is instituted by a third party or parties, other governmental entity or official challenging the validity of any provision of the Project Approvals, of the EIR or of this Development Agreement, E&B and the City shall cooperate in defending any such action. The City shall notify E&B of any such legal action against City within ten (10) days after the City receives service of process, except for any petition for a Temporary Restraining Order, in which case the City shall notify E&B immediately upon receipt of notice thereof. 6.4.2 Continued Processing. The filing of any lawsuit(s) by a third party (not a party to this Agreement) after the Approval Date against the City and/or E&B relating to this Agreement or to other development issues affecting the Project shall not delay or stop the processing or issuance of any permit or authorization necessary for development of the Project, unless required by court order. the City in good faith determines that such delay is legally required. 6.5 Indemnity. Formatted: Highlight 29 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.5.1 E&B Indemnity. To the fullest extent permitted by law, and notwithstanding the indemnification provisions set forth in the Lease and notwithstanding the limits of the insurance policies required herein, E&B hereby agrees, at its sole cost and expense, to defend, protect, indemnify, and hold harmless the City and its elected officials, officers, attorneys, agents, employees, consultants, volunteers, successors, and assigns (collectively "Indemnitees") from and against any and all third party damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens, and losses of any nature whatsoever, including reasonable fees of accountants, attorneys, engineers, consultants or other professionals and all costs associated therewith, arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to any act, failure to act, error, or omission of E&B or any of its officers, agents, servants, lessees, employees, contractors, subcontractors, materialmen, suppliers or their officers, agents, servants, lessees, or employees, or arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to this Agreement or Project Approvals, or any approval subsequently granted by the City for the development of the Property, any construction permitted pursuant to this Agreement or Project Approvals, or any subsequent use of the Property, or any portion thereof, permitted by this Agreement or Project Approvals except for any actions resulting from the gross negligence or intentional acts of an Indemnitee. The City may elect to participate in the litigation, in which case E&B agrees to reimburse the City for its litigation costs and fees, including the retention of outside counsel to be selected by the City at the City’s sole discretion. Neither party shall settle any such lawsuit without the consent of the other party. 6.5.2 Survival of Indemnity. The indemnity provisions contained in Sections 6.4 and 6.5 shall survive the termination of the Agreement and are in addition to any other rights or remedies which Indemnitees may have under the law. Payment is not required as a condition precedent to an Indemnitee's right to recover under these indemnity provisions, and an entry of judgment against an Indemnitee shall be conclusive in favor of the Indemnitee's right to recover under these indemnity provisions. E&B shall pay Indemnitees for any reasonable attorneys’ fees and costs incurred in enforcing these indemnification provisions. 6.6 Notices. All notices or other communications required hereunder shall be in writing and shall be personally delivered (including by means of professional messenger service), or sent by registered or certified mail, postage prepaid, return receipt required, or by 30 Development Agreement between City of Hermosa Beach and E&B Natural Resources electronic mail (provided the email transmission is followed by delivery of a "hard" copy), and shall be deemed received on the date of receipt personally, by registered or certified mail or by facsimile. Unless otherwise indicated in writing, such notice shall be sent addressed as follows: If to the City: City Manager City of Hermosa Beach 1315 Valley Drive Hermosa Beach, CA 90254 With a copy to: Michael Jenkins, Esq. Jenkins & Hogin 1230 Rosecrans Avenue, Suite 110 Manhattan Beach, CA 90266 Telephone: (310) 643-8448 Fax: (310) 643-8441 If to E&B: E & B Natural Resources Management Corporation 1600 Norris Road Bakersfield, CA 93308 Telephone: (661) 679-1797 Fax: 31 Development Agreement between City of Hermosa Beach and E&B Natural Resources With a copy to: [name] Telephone: Fax: 6.7 No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the parties to this Agreement and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 6.8 Time of Essence. Time is of the essence for each provision of this Agreement of which time is an element. 6.9 Modification, Amendment or Extension. Subject to any notice and hearing requirements imposed by law, this Agreement may be modified, amended and/or extended from time to time by mutual written consent of the City Council and E&B as set forth in Government Code Sections 65867, 65867.5 and 65868 and as authorized by Section 10.G of the Ballot Measure Ordinance and Chapter 19.66 of the Municipal Code. 6.10 Conflicts of Law. In the event that state, regional or federal laws or regulations enacted after the Approval Date or the action or inaction of any other affected governmental jurisdiction prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, the parties shall (a) provide the other party with written notice of such state, regional or federal restriction, provide a copy of such regulation or policy and a statement of conflict with the provisions of this Agreement, and (b) E&B and the City staff shall, within thirty (30) days, meet and confer in good faith in a reasonable attempt to modify this Agreement, but only to the minimum extent necessary to comply with such federal, regional or state law or regulation. Thereafter, regardless of whether the parties reach an agreement on the effect of such federal, regional or state law or regulation upon this Agreement, the matter shall be 32 Development Agreement between City of Hermosa Beach and E&B Natural Resources scheduled for hearings before the Council. Ten (10) days’ written notice of such hearing shall be given, pursuant to Government Code Sections 65090 and 65867. The Council, at such hearing, shall determine the exact modification or suspension which shall be necessitated by such federal, regional or state law or regulation. E&B, at the hearing, shall have the right to offer oral and written testimony. Any modification or suspension shall be taken by the affirmative vote of not less than a majority of the authorized voting members of the Council. Any suspension or modification may be subject to judicial review. The City shall cooperate with E&B in the securing of any permits which may be required as a result of such modifications or suspensions, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this agreement), and the indemnity provisions in Section 6.5 of this agreement. If E&B and the City do not agree on the modification or suspension, either party may elect to terminate this Agreement pursuant to the provisions of Section 5.2 of this Agreement., upon 30 days’ written notice to the other Party. 6.11 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought and referring expressly to this Section. No waiver of any right or remedy in respect of any occurrence or event shall be deemed a waiver of any right or remedy in respect of any other occurrence or event 6.12 Successors and Assigns. Except as expressly provided to the contrary in this Agreement, the burdens and obligations of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement and all successors in interest to the Property or any portion thereof or any interest therein, and shall be covenants running with the land. 6.13 Governing State Law. This Agreement shall be construed in accordance with the laws of the State of California. 6.14 Constructive Notice and Acceptance. Every person who now or hereafter owns or acquires any right, title or interest in or to any portion of the Property is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person 33 Development Agreement between City of Hermosa Beach and E&B Natural Resources acquired an interest in the Property. 6.15 Statement of Compliance. Within thirty (30) days following any written request, in accordance with the notice provisions of this Agreement, which either party may make from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, the other party shall execute and deliver to the requesting party a statement certifying that: (a) this Agreement is unmodified and in full force and effect or, if there have been modifications hereto, that this Agreement is in full force and effect, as modified, and stating the date and nature of such modifications; (b) that this Agreement is in full force and there are no current uncured defaults under this Agreement or specifying the dates and nature of any such defaults, and manner of cure; (c) any other information reasonably requested. The failure to deliver such statement within such time shall be conclusive upon the party which fails to deliver such statement that this Agreement is in full force and effect without modification except as may be represented by the requesting party and that there are no uncured defaults in the performance of the requesting party. Said statement(s) shall be in the form reasonably satisfactory to the City, E&B and to any purchaser, lender, title company, governmental agency, or other person reasonably requesting such statement(s) in connection with sale, use, development, construction, financing or marketing of the Property. The City and E&B, for their own respective uses, shall also be entitled to obtain a statement of compliance at any reasonable time. 6.16 Insurance. 6.16.1 E&B shall obtain and maintain insurance required by this Section 6.16, which shall also serve to satisfy the insurance requirements of section 18(b) and Exhibit C to the Lease. All insurance required to be carried by E&B shall be with companies rated A:X or better, in the then most recent edition of Best’s Insurance Guide, and licensed to provide the relevant insurance in the State of California. Certificates of Insurance required to be delivered by this Section 6.16 shall contain liability limits not less than those set forth in this Section 6.16, and shall list the City and the California State Lands Commission as an additional insured. E&B shall give the City an unqualified thirty (30) day notice of cancellation, non-renewal or material amendment thereof. E&B shall deliver the required Certificates of Insurance evidencing the insurance required by this Section 6.16 promptly upon obtaining the same. Formatted: Outline numbered + Level: 2 + NumberingStyle: 1, 2, 3, … + Start at: 1 + Alignment: Left + Aligned at: 0" + Indent at: 0.4" Formatted: Font: Times New Roman 34 Development Agreement between City of Hermosa Beach and E&B Natural Resources In the event any insurance (including the limits that are required to be obtained and maintained by E&B pursuant to this Section 6.16 and/or naming the City as an additional insured), other than insurance required to be obtained and maintained by applicable law, shall not be available and commercially feasible to obtain and maintain in the commercial insurance market, E&B shall provide written notice of that occurrence to the City. Said written notice shall be accompanied by a written report prepared by an independent insurance advisor of recognized national standing and reasonably acceptable to City, certifying that such insurance is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, or in the case where any required insurance amount is not so available, certifying as to the maximum amount that is so available, and in each case explaining in detail the basis for such conclusions. [UNDER DISCUSSION] Should this occur, E&B shall have the right to self-insure in order to obtain additional policy limits and/or coverage as long as the financial capability of E&B is sufficient to obtain self-insurance coverage that would be equivalent that required by this Section 6.16. Should E&B be unable to satisfy this requirement for financial capability in order to self-insure, E&B and the City shall negotiate in good faith and attempt to agree upon alternative adequate means of financial assurance to substitute for the insurance or the portion of the insurance that is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, taking into consideration the type and amount of insurance which has become unavailable, the potential magnitude of any loss not covered by insurance. E&B may self-insure and/or provide other alternative adequate means of financial assurance to the City only for so long as and to the extent that any insurance required by this Section 6.16 is not then reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. Said differently, E&B will again be required to obtain and maintain all of the insurance required by this Section 6.16 once the same is reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. 6.16.2 Required Insurance. LESSEE shall procure, pay for and keep in full force and effect during the term of this Agreement each and all of the following insurance. 6.16.2.1 Commercial General Liability Insurance. Commercial General Liability, including: Bodily Injury; Property Damage; Personal Injury; Blanket Contractual Liability, or equivalent; Broad Form Property Damage; Premises and Operations; Fire Legal Liability; Sudden and Accidental Pollution Liability; Products and Completed Operations; Explosion, Collapse and Underground Hazard; and Advertising/Personal Injury Coverage, and pollution occurring from the same in an amount not less than One Million Dollars Formatted: Font: Times New Roman 35 Development Agreement between City of Hermosa Beach and E&B Natural Resources ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate. 6.16.2.2 (Loss Of) Control Of Well And Pollution Liability Coverage. (Loss Of) Control of Well insurance and Operators Extra Expense Coverage with total of Forty Million Dollars ($40,000,000.00) limited liability for Sections 1A (Well Out Of Control Insurance), 1B (Redrill/Extra Expense), and 1C (Seepage, Pollution, Cleanup and Contamination) and a total of Five Million Dollars ($5,000,000.00) limited liability for Section 2 (Care, Custody and Control) and coverage for bodily injury, property damage, including cleanup costs and defense costs resulting from a Well Out Of Control incident. Notwithstanding the foregoing, E&B shall be obligated to maintain the specified Control of Well coverages only during actual drilling of a well, which includes drilling, completing and/or testing of the well. E&B shall provide the City with a copy of E&B’s Control of Well policy prior to commencing any actual drilling, along with the Certificate of Insurance, and such policy shall be maintained throughout the entire course of each actual drilling operation. 6.16.2.3 Worker’s Compensation Insurance. Worker’s Compensation insurance as required by law, together with Employer’s Liability coverage with limits of not less than One Million Dollars ($1,000,000.00). Such coverage shall include a Waiver of Subrogation in favor of the City and an “alternate employer” endorsement. 6.16.2.4 Owned, Non-Owned Or Hired Auto Insurance. Owned, Non-Owned or Hired Auto insurance with limits of not less than One Million Dollars ($1,000,000.00) per occurrence or accident. 6.16.2.5 Following Form Excess Or Umbrella Liability Insurance. Following Form Excess or Umbrella Liability insurance in an amount of not less than Twenty-Five Million Dollars ($25,000,000.00) per occurrence and aggregate per policy period to apply as excess coverage over coverage required by Subsections 6.16.2.1, 6.16.2.3 and 6.16.2.4. 6.16.2.6 Additional Insurance Required To Comply With Law. If the amounts of minimum insurance coverage as specified above in this Section 6.16.2 are insufficient or become insufficient to meet in any respect the minimum insurance coverage requirements set forth in or required by any applicable legal requirements of any governmental entity or regulatory body or agency by statute, case law, rules and/or regulations, then in such event E&B shall procure and maintain sufficient amounts of insurance coverage to satisfy any such minimum insurance coverage requirements in addition to the insurance required by Subsections 6.16.2.1, 6.16.2.2, 6.16.2.3, 6.16.2.4 and 6.16.2.5. 6.16.2.7 [Review of Insurance Amounts During Term of Development Agreement] [UNDER DISCUSSION] 6.16.3 Drilling or Other Contractors. Exhibit C to the Lease states: “Each drilling or other contractor performing work for the joint account shall be required to 36 Development Agreement between City of Hermosa Beach and E&B Natural Resources maintain in force, with respect to the work performed by such contractor, to the extent applicable and possible, the same insurance as specified above.” E&B also agrees to require each contractor to include the City as an additional insured to any such insurance maintained by the contractor. 6.16 E&B shall be subject to the insurance requirements of section 18(b) of and Exhibit C to the Lease, and the additional insurance requirements set forth herein. To the extent that the provisions set forth inconsistent terms, the provisions set forth herein shall prevail. E&B shall demonstrate to the City that it carries on the E&B Project General Liability Insurance, in an aggregate amount of not less than $15,000,000, combined limits, $15,000,000 in Well Control Drilling Insurance, and a policy of Pollution Legal Liability Insurance in an aggregate amount of not less than $30,000,000 combined limits. This insurance shall provide coverage for claims for bodily injury, environmental or property damage that result from pollution conditions at, on or emanating from the E&B facilities. The General Liability Insurance policy shall include the following endorsements or similar endorsement providing equivalent coverage: CG 04 20 (Pollution—Limited Exception for a Short-Term Pollution Event); and CG 22 62 (Underground Resources and Equipment Coverage). There shall be no modification of the General Liability Insurance policy limiting the scope of coverage for liability arising from oil and gas producing operations, using any of the following endorsements or their equivalents: CG 22 73 (Exclusion—Oil or Gas Producing Operations); CG 22 57 (Exclusion—Underground Resources and Equipment); CG 22 47 (Exclusion—Saline Substances Contamination); and CG 21 42 (Exclusion—Explosion, Collapse, and Underground Property Damage Hazard (Specified Operations)) or CH 21 43 (Exclusion—Explosion, Collapse, and Underground Property Damage Hazard (Specified Operations Excepted)). The Pollution Legal Liability Insurance policy may not contain an exclusion of onsite remediation costs if such an exclusion would exclude, remove or impair coverage for onsite remediation performed in response to a governmental order, demand, warning or other legally enforceable requirement. Should an exclusion exist in the policy, E&B shall post a bond to cover costs associated with remediation. The insurance policies must be secured through an insurance company having a Best’s rating of “A – VII” or better. E&B shall submit one or more certificates of insurance to the Formatted: Indent: Left: 0.4", No bullets or numbering Formatted: Indent: Left: 0.4" 37 Development Agreement between City of Hermosa Beach and E&B Natural Resources Community Development Department to be approved by the City Risk Manager. The General Liability and Pollution Legal Liability Insurance policies shall be in place prior to issuance of the Permit and shall remain in full force and effect until revocation of the permit. E&B shall submit certificates of insurance 30 days in advance of the renewal anniversary of each policy. Such certificate(s) shall evidence the coverages described above, shall name the City of Hermosa Beach as an additional insured as to each policy provided, and shall afford the City 60 days advance notice of cancellation or non-renewal. The City Risk Manager may adjust the aggregate coverage amount specified above over time depending on factors such as inflation, modifications to State and Federal oil spill financial responsibility guidelines, and project modifications. In making such adjustments, the City Risk Manager shall give due regard to the cost and availability of such coverage, and shall allow E&B a reasonable period of time in which to place such coverage. The Well Control Drilling Insurance policy shall only be required to be in effect while drilling operations are being conducted. E&B may satisfy the Well Control Drilling Insurance requirement by having its drilling contractor or subcontractors supply the required insurance, so long as the aggregate insurance maintains the total required. 6.17 Mortgagee Protection. The parties hereto agree that this Agreement shall not prevent or limit the right of E&B at its sole discretion, to encumber its leasehold interest in the Property or any portion thereof or any improvement thereon by any mortgage or other security device (collectively "Mortgage") securing financing of the purchase, development or operation of the Property or any portion thereof (including, without limitation, any combination of purchase financing, construction financing, bridge loans, take-out and permanent financing), as provided in this Agreement; provided, however, that any such Mortgage shall be subordinate to the rights and obligations under this Agreement. The City acknowledges that prospective lenders providing such financing may request certain acknowledgements, estoppels, interpretations and/or modifications of this Agreement, and agrees upon request, from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, to meet with E&B and representatives of such lenders to discuss in good faith any such request for acknowledgements, estoppels, interpretations and/or modifications. The City shall not unreasonably withhold its consent to and/or execution of any such requested 38 Development Agreement between City of Hermosa Beach and E&B Natural Resources acknowledgements, estoppels, interpretations and/or modifications which the City determines is consistent with the intent and purposes of this Agreement and reasonably protects the interests of the City under this Agreement. If the City timely receives a request from a Mortgagee requesting a copy of any notice of default given to E&B under the terms of this Agreement, the City shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of default to E&B, as the case may be. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement. Any Mortgagee who comes into possession of E&B’s interests in the Property, or any part thereof, pursuant to foreclosure of the mortgage, shall take the Property, or part thereof, subject to the terms of this Agreement; in no event shall any such Mortgagee or its successors or assigns be entitled to a building permit or occupancy certificate until all fees and other obligations due by E&B under this Agreement have been performed and/or paid to the City, all defaults have been cured, and all otherwise applicable conditions to such permit or certificate have been satisfied. 6.18 Covenant of Good Faith and Fair Dealing. No party shall do anything which shall have the effect of harming or injuring the right of the other parties to receive the benefits of this Agreement. 6.19 Covenant of Cooperation. E&B and the City shall cooperate with and assist each other in the performance of the provisions of this Agreement, including assistance in obtaining permits for the development of the Property or the Project which may be required from public agencies other than the City, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this Agreement), and the indemnity provisions in Section 6.5 of this Agreement. E&B reserves the right to challenge any ordinance, measure, moratorium or other limitation in a court of law if it becomes necessary to protect the development rights vested in the Property pursuant to this Agreement. 6.20 Justifiable Reliance. The City acknowledges that, in investing money and planning effort in and to the Project and all public improvements and dedication offers required hereunder, 39 Development Agreement between City of Hermosa Beach and E&B Natural Resources and in undertaking commencement of the Project, E&B will be doing so in reliance upon the City's covenants contained in this Agreement and upon the enforceability of this Agreement, and the City agrees that it will be reasonable and justifiable for E&B to so rely. 6.21 Project Is Private Undertaking. It is specifically understood and agreed to by and between the parties hereto that: (1) the subject development is a private development; (2) except for the obligations of the City described herein, if any, the City has no responsibilities for or duty to third parties concerning any public improvement until such time and only until such time that the City accepts the same pursuant to the provisions of this Agreement; (3) E&B shall have full power over and exclusive control of the development of the Project herein described subject only to the limitations and obligations of E&B under this Agreement and the Project Approvals; and (4) the contractual relationship between the City and E&B is such that E&B is not an agent of the City nor is City an agent of E&B. Notwithstanding the foregoing, nothing contained in this Agreement shall be deemed to waive or modify any otherwise applicable obligations the City, acting in its governmental capacity and not as a party to this Agreement, may have to E&B or any other party, under and in accordance with all applicable laws. 6.22 Further Actions and Instruments. The parties to this Agreement shall cooperate with and provide reasonable assistance to the other parties to the extent contemplated in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of any party, the other parties shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. 6.23 Section Headings. All Article and Section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 6.24 Enforced Delay (Force Majeure). 40 Development Agreement between City of Hermosa Beach and E&B Natural Resources (a) In addition to specific provisions of this Agreement, performance by any party hereunder, including making payments, shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, casualties, acts of God, litigation not commenced by a Party to this Agreement claiming the enforced delay (including without limitation, third party legal challenges to the Project, the Project Approvals or the environmental clearance for the Project Approvals and the Project), unavailability of materials, unforeseeable events beyond the control of E&B, governmental restrictions including moratoria imposed or mandated by other governmental entities (as City is prohibited from imposing moratoria under Section 3.1.2) (but only as to delays or defaults on the part of E&B), enactment of conflicting state or federal laws or regulations (but only if the party claiming delay complies at all times with the provisions of this Agreement pertaining to such conflicting laws), delays caused by the delay or failure by any entity other than the party claiming such delay to provide financing for or construction of needed public facilities or infrastructure as contemplated or required by this Agreement, delays due to the enforcement of environmental regulations, litigation brought by third parties, or similar bases for excused performance. Any period of enforced delay provided for in this Section shall run concurrently with any period of enforced delay under the Lease. E&B shall only be required to provide one notice claiming such extension for enforced delay under both this Agreement and the Lease. (b) An extension of time for any such cause including an extension of the Term (a "Force Majeure Delay") shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other parties within thirty (30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within thirty (30) days after it obtains actual knowledge of the event. The time for performance due to a Force Majeure Delay will be extended for such period of time as the cause of such delay exists (whether or not it extends beyond the Term or the Extended Term) but in no event for longer than for such period of time. Formatted: Highlight 41 Development Agreement between City of Hermosa Beach and E&B Natural Resources (c) Notwithstanding the first sentence of paragraph (b), above, the following shall apply: (i) E&B shall be entitled to a Force Majeure Delay for a period longer than the period of enforced delay if the City Council determines that such longer period is reasonably required; and (ii) E&B shall be entitled to a Force Majeure Delay notwithstanding the fact that E&B may not have given timely notice to the City, if the City Council determines that such Force Majeure Delay is reasonably required. (d) A Force Majeure Delay shall not include the existence of any adverse or difficult market or economic conditions. 6.25 Emergency Circumstances. (a) If, as the result of specific facts, events or circumstances, the City believes that a severe and immediate emergency threat to the health or safety of the City or its residents, meeting the requirements of subparagraph (b), below, requires the modification, suspension or termination of this Agreement, the City will, after reasonable notice to E&B (in light of all the circumstances), hold a hearing on such facts, events or circumstances, at which E&B shall have the right to address the City Council. The City shall have the right to modify, suspend or terminate this Agreement, in whole or in part, if, following such hearing, the City Council determines that such modification, suspension or termination is required in order to protect the health and safety of the City and its residents. (b) This Section 6.25 governs generally applicable emergencies in the area not specifically related to or caused by the Project. For purposes of this Section 6.25, an emergency must meet each of the following criteria: (i) it must be based on genuine health, safety and general welfare concerns (other than general growth management issues); (ii) it must arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (iii) based upon its terms or its effect as applied, it does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such action by the City shall be taken in a manner so as to provide E&B with the rights and assurances provided under this Agreement. 6.26 Severability. Invalidation of any of the provisions contained in this Agreement, or of the 42 Development Agreement between City of Hermosa Beach and E&B Natural Resources application thereof to any person, by judgment or court order, shall in no way affect any of the other provisions hereof or the application thereof to any other person or circumstance, and the same shall remain in full force and effect, unless enforcement of this Agreement, as so invalidated, would be unreasonable or inequitable under all the circumstances or would frustrate the purposes of this Agreement and/or the rights and obligations of the parties hereto. 6.27 Interpretation. The language in all parts of this Agreement shall in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against any party. The parties hereto acknowledge and agree that this Agreement has been prepared jointly by the parties and has been the subject of arm's length and careful negotiation over a considerable period of time, that each party has independently reviewed this Agreement with legal counsel, and that each party has the requisite experience and sophistication to understand, interpret and agree to the particular language of the provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement shall not be interpreted or construed against the party preparing it, and instead other rules of interpretation and construction shall be utilized. 6.28 Counterparts. This Agreement may be executed in duplicate counterpart originals, each of which is deemed to be an original and all of which when taken together shall constitute one and the same instrument. 6.29 Entire Agreement. This Agreement consists of __ pages and ______________ exhibits (designated __ through __), which constitute the entire understanding and agreement of the parties, and, with the exception of (1) the Lease; (2) the Settlement Agreement; (3) the Agreement to Implement the Settlement Agreement dated July 23, 2014; and (4) the Reimbursement Agreement dated May 17, 2012 shall supersede any prior agreements, discussions, commitments, representations or agreements, written or oral, between the parties hereto with respect to this Aagreement. IN WITNESS WHEREOF, the parties have each executed this Agreement on the date first written above. 43 Development Agreement between City of Hermosa Beach and E&B Natural Resources CITY OF HERMOSA BEACH E&B NATURAL RESOURCES MANAGEMENT CORPORATION By:____________________________ By:___________________________________ Mayor President ATTEST: By: _____________________________ City Clerk APPROVED AS TO FORM: By: ____________________________ By: _________________________________ City Attorney Attorneys for E&B Natural Resources Management Corporation 44 Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-1” LEGAL DESCRIPTION 555 6TH STREET, HERMOSA BEACH, CALIFORNIA 90254 That portion of APN 4187-031-900 described as: That portion of Lot A lying south of a line commencing at the northeasterly corner of Lot 11, Block U, Tract 2002, as per Map recorded in Map Book 22, Pages 154 and 155, in the Office of the Recorder of the County of Los Angeles, and continuing along the easterly prolongation of the northerly line of said Lot 11, to the easterly line of Lot A; Lots 11 through 18, Block R, Tract 2002; Lots 11 through 18, Block U, Tract 2002; and the vacated portion of Bard Street adjoining said lots. Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-2” LEGAL DESCRIPTION 601 CYPRESS AVENUE , HERMOSA BEACH, CALIFORNIA 90254 APN 4187-030-037 Lots 11 Through 14, Block H, Tract 1686, M.B. 20- 188, City Of Hermosa Beach Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-3” LEGAL DESCRIPTION 636 CYPRESS AVENUE, HERMOSA BEACH, CALIFORNIA 90254 APN 4187-031-022 Lots 5 And Lot 6, Block I, Tract # 1686, M.B. 20- 188, City Of Hermosa Beach . Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “B” PROJECT DESCRIPTION (From Section 2.0 of FEIR) Revised with removal of City maintenance yard discussion The Proposed City Maintenance Yard Project described herein is a separate project that the City will undertake if the voters approve the Proposed Oil Project. This Development Agreement only applies to the Proposed Oil Project described below, and except for any obligations explicitly assigned to E&B herein and payments from E&B for the City Maintenance Yard Project, the Proposed City Maintenance Yard Project is not governed by this Agreement. To the extent feasible, references to the Proposed City Maintenance Yard have been removed from the Project Description. Project Description E&B Natural Resources Management Corporation (E&B), the Applicant, is proposing the E&B Oil Drilling & Development Project (Proposed Oil Project) on a 1.3-acre site located in the City of Hermosa Beach (City). The site for the Proposed Oil Project (Project Site), as shown in Figure 2.1, would be located at 555 6th Street, bounded on the east by Valley Drive and on the south by 6th Street, approximately seven blocks east of the beach and the Pacific Ocean. Oil and gas pipelines constructed and used by the Project would extend from the Project Site to one of four potential valve box locations for the oil line and to a Southern California Gas (SGE) metering station for the gas line. The Project Site is owned by the City and is currently used as the City (Public Works) Maintenance Yard. The Applicant has leased the Project Site from the City for the implementation of the Proposed Oil Project. The Proposed Project is composed of two parts: 1) the relocation of the City Maintenance Yard (called the Proposed City Maintenance Yard Project); and 2) the development of an oil and gas facility on the current City Maintenance Yard site (called the Proposed Oil Project). In order to clear the current City Maintenance Yard site (called the Project Site) for the construction of the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Directional Drilling Drilling wells at multiple angles to better reach and produce oil and gas reserves. Directional drilling allows for multiple wells from the same drilling location. proposed oil and gas facility, the City Maintenance Yard would be temporarily relocated during Phase 1 of the Proposed Project. If it is determined that the production of oil and gas on the Project Site would be economically viable (Phase 2 of the Proposed Project), construction of the permanent City Maintenance Yard would be completed once Phase 3 of the Proposed Project begins. The permanent Proposed City Maintenance Yard Project has two options: a Parking Option, which would add a net 97 parking spaces with a below grade parking garage, and a No Added Parking Option, which would have the same amount of parking as is currently available. This Project Description reflects information contained in the Project Application submitted to the City of Hermosa Beach by the Applicant, along with supporting information provided in conjunction with the Project Application (E&B Natural Resources, Planning Application and Appendices, Volumes 1 – 3, November 14, 2012; Response to Planning Application Completeness Review, April 11, 2013; Response to Requested Clarifications, June 24, 2013; Quantitative Risk Analysis, July 3, 2013; Errata, July 22, 2013).1Information related to the relocation of the City Maintenance Yard and construction and operation of the Proposed City Maintenance Yard is derived from information provided by the City of Hermosa Beach Public Works Department. The description of the Proposed Project incorporates the essential elements of the Project as it is proposed, including all phases and major components as well as the locations of all proposed offsite activities (in addition to those occurring on the Project Site). More detailed information related to some aspects of the Proposed Project (including proposed operational parameters and design features) may be found within individual sections of the Final Environmental Impact Report (EIR), where considered relevant to the discussion of specific environmental issues and/or effects. In addition, a description of the environmental setting and current conditions related to the environmental issues is presented in the Environmental Setting subsection of the individual sections of the Final EIR. 1 Information submitted by the Project Applicant is available for public review at the City of Hermosa Beach Community Development Department. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This section discusses the Project objectives, historical operations on the Proposed Project Sites, the four phases of the Proposed Oil Project, scheduling, vehicle trip and employee requirements, and necessary permitting associated with the Proposed Project. A number of technical drawings related to the Proposed Project design and layout are included in Appendix A to the Final EIR. 2.1 Project Overview The Applicant proposes the development of an onshore drilling and production facility site that would utilize directional drilling of 34 wells (30 oil wells, four wells for water disposal/injection) to access the oil and gas reserves in the tidelands (pursuant to a grant by the State of California to the City) and in an onshore area known as the uplands. Both of these areas are located within the Torrance Oil Field within the jurisdiction of the City. In addition, the Proposed Project would result in the installation of offsite underground pipelines for the transportation of the processed crude oil and gas from the Project Site to purchasers, extending through the Cities of Redondo Beach and Torrance. The Applicant proposes a laydown site for supply staging/storage within the basement level of the industrial building at 601 Cypress Avenue during the construction phases. The Applicant also proposes to construct a parking lot at 636 Cypress Avenue for use by some of its construction employees/contractors on weekdays and by the public at other times. The City Maintenance Yard is proposed to be relocated to a temporary facility to be established on the rear (westerly) portion of the City Hall site (1315 Valley Drive) prior to and during the initial phase of the Proposed Oil Project so that the maintenance operations could be moved when the existing City Maintenance Yard is demolished as part of Proposed Oil Project activities. The construction of the permanent City Maintenance Yard would be undertaken on the site now occupied by the Hermosa Self-Storage (552 11th Place) after the Applicant completes the testing phase of the Proposed Oil Project in Phase 2. As indicated below, the permanent City Maintenance Yard and the oil and gas facility on the Project Site would be constructed at the same time during Phase 3 of the Proposed Project. The timeframe from commencement of the Proposed Project until the permanent oil and gas facility would be operational is estimated to be approximately 3.25 years. The existing lease (Oil and Gas Lease No. 2) allowing drilling into the tidelands provides for a 35-year period. Table 2.1 summarizes events in the Proposed Project timeline. Specifics of each of the Proposed Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Project components are described in the following sections. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.1 Proposed Project Location Source: Project Application, Amendments and Appendices Hermosa Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.1 Proposed Project Schedule Summary Phase Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Temporary City Yard Oil Project Phase 1 Oil Project Phase 2 Drill Test Permanent City Yard Oil Project Phase 3* Oil Project Phase 4* Drill Operate Continuously for 30+ years Re-drills Average 30 days/year, max 150 days/yr** Note: * If the test phase is determined to be successful, Phase 3 and 4 would occur. For construction only. Does not include permitting timeframe. ** These are the maximum proposed by the Applicant. The 150 days per year would occur once every 5 years. Most likely re-drill activity would be lower. 2.2 Proposed Project Objectives Pursuant to Section 15124(b) of the California Environmental Quality Act (CEQA) Guidelines, the description of the Proposed Project is to contain “a clearly written statement of objectives” that would aid the lead agency in developing a reasonable range of alternatives to evaluate in the EIR and would aid decision makers in preparing findings and, if necessary, a statement of overriding considerations. The City is the lead CEQA agency which prepared the EIR, considered the EIR for certification and is placing the Proposed Project on the ballot. Project approvals will be made by the electorate of the City of Hermosa Beach. As part of the Project Application, the Applicant provided its stated objectives for the Proposed Oil Project, which consist of the following: 1. Develop the Proposed Oil Project consistent with the 1993 Conditional Use Permit and the March 2, 2012 Settlement Agreement, with the utilization of directional drilling Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources techniques from the Project Site, which is the current City Maintenance Yard; 2. Maximize oil and gas production from the Torrance Oil Field within the City’s jurisdiction, thereby maximizing the economic benefits to the City; 3. Provide an oil and gas development project on the Project Site that utilizes the latest technology and operational advancements related to safety and production efficiency in order to provide a project that would be safe and would meet the applicable environmental requirements; 4. Conduct construction and drilling activities on the Project Site incorporating technological advancements, operational practices, and design features related to air quality, odors, noise, hazards, and water quality to minimize the potential impacts on the adjacent community and the environment; 5. Provide landscaping, hardscape, signage, lighting, and other design features to minimize the visual effects of the Proposed Oil Project on the adjacent community; and 6. Implement operational practices and incorporate design features to provide safe vehicular ingress and egress during temporary construction activities and the ongoing operation of the Proposed Oil Project. Pursuant to the March 2, 2012 Settlement Agreement between the City of Hermosa Beach, E&B, and Macpherson Oil Co., the City’s primary objective is to comply with the California Environmental Quality Act and place on the ballot a measure allowing the City of Hermosa Beach electorate to decide whether or not to approve the Applicant’s Proposed Oil Project and a Development Agreement to vest the Project so that, if approved, the Project cannot later be invalidated by a vote of the people. In the event that voters approve the Proposed Oil Project, the City would need to relocate the City Maintenance Yard. Under those conditions, the City's objectives for relocation of the City Maintenance Yard would be to: 1. Provide City Yard Maintenance facilities that support provision of high-quality City services in an integrated and cost-efficient manner; 2. Consolidate City facilities and functions for maximum efficiency and flexibility; 3. Minimize disruption of City functions during relocation of the City Maintenance Yard; 4. Ensure the relocated City Maintenance Yard is compatible with surrounding uses; and 5. Ensure there is no net loss of public and employee parking spaces as a result of both the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Proposed Oil Project and the relocation of the City Maintenance Yard consistent with the Preferential Parking Program approved by the Coastal Commission. 2.3 Historical and Current Operations Oil drilling and production in the Los Angeles Basin has a long history. According to the California Division of Oil, Gas, and Geothermal Resources (DOGGR) database, almost 30,000 oil wells have been drilled in the Los Angeles Basin in the last 100 to 150 years. Figure 2.2 shows the location of these wells. The Proposed Oil Project would drill into the western edge of the Torrance Oil Field (see Figure 2.2). Most of the production from the Torrance Oil Field has been generated from wells drilled in the City of Torrance, with some drilling in the Cities of Redondo Beach and Hermosa Beach. There have been approximately 1,500 wells drilled in the Torrance Oil Field historically. Although the Project Site is relatively flat, it is underlain by windblown sand dunes that previously covered the region, resulting in uneven ground due to natural conditions. In the 1920s and 1930s, the northeastern portion of the Project Site had a large depression that was mined for sand. Around 1927, the City’s dump and refuse burner were located on the Project Site, and, by 1947, the depression was filled. The resulting former landfill is approximately 45 feet deep and is filled with glass, porcelain, and ceramic towards the bottom and soils containing miscellaneous metals, wires, glass, and other materials toward the top (i.e., closer to the ground surface). Between the depths of 3 feet and 25 feet below ground surface (bgs), the former landfill contains some soil with lead at concentrations above the Environmental Protection Agency (EPA) Region 9 Industrial Regional Screening levels. In addition, soils impacted with total petroleum hydrocarbons (TPH) were found at depths of 25 to 44 feet bgs within the central portion of the landfill. For a detailed discussion of the soil conditions on the Project Site, refer to Section 4.7, Geological Resources/Soils, of the Final EIR. Figure 2.2 Historical Wells Drilled in the Los Angeles Basin Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: DOGGR In 1930, an oil well (Stinnett Oil Well No. 1) was drilled in the western portion of the Project Site. The oil well was abandoned in 2005, consistent with the then-current standards of the DOGGR. During the mid-1940s, the first building was constructed on the Project Site for City maintenance uses, with the last building constructed in the 1980s. Since the 1990s, with the exception of the addition of trailers, storage containers, and sheds, the Project Site has generally Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources remained unchanged. The Project Site is currently developed as the City Maintenance Yard, and the Proposed Oil Project would require the relocation of the City Maintenance Yard. As indicated in Figure 2.3, existing development on the Project Site consists of three buildings, two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing, and masonry walls. In addition, within the boundaries of the Project Site, there is an asphalt parking area in the southern portion of the City Maintenance Yard that provides 15 parking spaces for employees (Monday through Thursday between the hours of 6:00 a.m. and 6:00 p.m.) and for the public after hours (6:00 p.m. to 6:00 a.m.) and on weekends and holidays. Existing site contamination from historical site uses is also shown in Figure 2.3. According to an Environmental Site Assessment prepared in 2012 (Brycon 2012), 10 of the 73 soil samples taken exceeded Regional Water Quality Control Board guidelines for total petroleum hydrocarbons, all within the mid range hydrocarbons (C13-C22). Volatile organic carbons were not present in any of the samples at concentrations above the EPA Region 9 Industrial Regional Screening Levels. Six of the samples exceeded the EPA Region 9 Industrial Regional Screening Levels for lead. In addition, a series of groundwater borings conducted in 2013 (Brycon 2013) found the presence of total petroleum hydrocarbons, lead, barium, and arsenic in the groundwater below the City Maintenance Yard that exceeded the Maximum Contaminant Levels (MCLs) established for drinking water by the Regional Water Quality Control Board. The immediately adjoining properties were sparsely developed into the 1940s, with a few residential units located to the northwest of the Project Site. Post 1940s, significant development occurred with industrial buildings being constructed to the south and west of the Project Site by 1953 and to the north of the Project Site by the 1960s. By 1960, the buildings to the west of the Project Site were identified as containing a building material warehouse, a boat repair shop, and a contractor’s storage yard. By 1960, the building to the south was being utilized as a planter mix manufacturing site. Since the 1960s, the various adjoining buildings have been utilized for multiple small businesses as industrial/commercial uses. To the east, from the late 1800s, there was a railroad right-of-way (ROW) that was utilized by the Santa Fe Railway. During the 1960s, the railroad ROW was converted to a greenbelt/park (Veterans Parkway - Hermosa Valley Greenbelt (Greenbelt)), Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources followed by a Council initiative in 1987 directing the City of Hermosa Beach to acquire the Railroad ROW for public use as parkland and open space in perpetuity; the property is zoned O-S-1 Restricted Open Space. Currently, other land uses adjacent to the Project Site (on the same block between 8th and 6thStreet and Cypress Avenue and Valley Drive) are commercial/industrial (Cypress Auto Body, A&B Heating, JB Plumbing, McGivern Surfboard Manufacturing, Buddhist Meditation Center, NUWORK, a recording studio and other various small commercial/industrial businesses), with some residential uses along 8th Street to the north. Adjacent blocks include residential uses located 150 feet to the north of the Project Site, 250 feet to the west and 180 feet to the east (east of the Greenbelt), with small commercial/industrial uses and the Beach Cities Self Storage facility located to the immediate south across 6th Street with its required parking lot abutting the southwest corner of the Project Site. Figure 2.4 shows the southern area of the City of Hermosa Beach along with land uses. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.3 Existing Site Conditions Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant Project Application, DOGGR well database, Phase 2 Environmental Site Assessments Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.4 Project Site and Area Land Uses (Zoning Map) Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: City of Hermosa Beach Zoning Map, November 2013 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 1 Site Preparation 6-7 Months 2.4 Proposed Oil Project Phases The Proposed Oil Project would occur in the following four phases: • Phase 1: Site Preparation; • Phase 2: Drilling and Testing; • Phase 3: Final Design and Construction; and • Phase 4: Development and Operations. Each phase is discussed in the following sections. The Applicant proposes a facility designed for a maximum capacity of 8,000 barrels per day (bpd) of crude oil and 2.5 million standard cubic feet per day (scfd) of produced gas at completion of the drilling stage of the Proposed Oil Project in Phase 4. The operational parameters of the Proposed Oil Project are summarized in Table 2.2. Prior to the initiation of the Proposed Oil Project, it would be required that plans be submitted by the Applicant to the City and other permitting authorities for review and approval. These would include coastal development permits, oil and gas well permits, demolition plans, grading plans, utility and electrical plans, cement/foundation plans, landscaping plans, street and ROW improvement/modification plans, and construction plans, amongst others. Figure 2.5 shows the Project Site along with the electrical and pipeline connections and the Cypress Avenue parking lot. 2.4.1 Phase 1 Site Preparation The purpose of Phase 1 would be to prepare the Project Site for drilling and testing as well as for the subsequent phases of the Proposed Oil Project. It is anticipated that Phase 1 would occur for approximately six months. Prior to Phase 1 activities, the temporary City Maintenance Yard would be installed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.1.1 Phase 1 Construction Activities Phase 1 would consist of the following construction activities: • Underground existing overhead utilities; • Construction of modifications to intersection of 6th Street and Valley Drive; • Relocation of City Maintenance Yard to the temporary site; • Clearance of Project Site; • Construction of retaining walls and rough grading; • Installation of perimeter fencing; • Construction of well cellar; • Installation of offsite electrical conduit and onsite electrical equipment; • Completion of onsite surface and entrance/exit; • Installation of temporary landscaping; and • Installation of 35-foot sound attenuation wall.(per Mitigation Measure NV-3a) Table 2.2 Proposed Oil Project Design Parameters Parameter Value Crude oil production Phase 2: Up to 800 bpd Phase 4: Up to 8,000 bpd Crude oil properties 18 API Natural gas production Phase 2: Up to 250,000 scfd Phase 4: Up to 2.5 million scfd Produced water disposal/injection Phase 2: Up to 1,600 bpd Phase 4: Up to 16,000 bpd Maximum number of wells Phase 2: 4 wells (3 production, 1 water disposal/injection) Phase 4: 34 total (30 production, 4 water disposal/injection) NGL production Up to 1 bpd mixed with crude oil Pipeline length and tie-in, gas Approx. 0.43 miles + 1.4 miles Pipeline length and tie-in, crude Approx. 3.55 miles Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water use, during construction Approx. 2,000 gallons per day during grading and earthwork (potable) Approx. 10,000 gallons per day during pipeline installation (potable) Approx. 20,000 gallons per month during facility construction (potable) Water use, during drilling 130,000 gallons per well (reclaimed water) (Approx. 4,500 gallons per day) Water use, during operations and maintenance (Landscaping- Reclaimed Water) (Domestic-Potable Water) 1,300 gallons per day (1,000 gallons per day for landscaping) (300 gallons per day for domestic use) Electrical use, Phase 2 4.5 megawatts (including drill rig) Electrical use, Phase 3 0.3 megawatts Electrical use, Phase 4 7.0 megawatts (including drill rig) 3.0 megawatts during normal ongoing operations Onsite electrical generation of 1 MW Well workovers, annually 90 days/year Well re-drills (full sized drilling rig, peak annually Up to 5 per year, up to 30 re-drills for the life of the Project Notes:bpd = barrels per day; kW = kilowatts; scfd = standard cubic feet per day; NGL = natural gas liquids; API = American Petroleum Institute; estimated peak values and maximums shown Source: Project Application, Amendments and Appendices. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.5 Project Site and Pipeline/Electrical Connections Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: E&B Supplemental Application materials, January 2014 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is discussed in the following subsections. Figure 2.6 shows the proposed arrangement of the Project Site under Phase 1. Appendix A of the Final EIR provides the conceptual grading plan, site plan, elevations, and landscape concept plan for the Proposed Oil Project at the completion of Phase 1. The laydown area (equipment and supply storage/staging) for the Proposed Oil Project would be in the basement of the building located at 601 Cypress Street on the northwest corner of Cypress Street/6th Street (See Figure 2.3). Underground Existing Overhead Utilities There are currently overhead power lines and communication lines on poles that run overhead through the existing trees along Valley Drive. These existing lines would be removed along the Project frontage and relocated underground adjacent to the Project Site in a location determined by the utility companies and the City. Appendix A of the Final EIR provides drawings showing the general location where the utility lines would be placed underground. Construction of Modifications to Intersection of 6th Street and Valley Drive The Proposed Oil Project would include the construction of modifications to the intersection of 6th Street/Valley Drive to provide the necessary turning radius for Project-related trucks. Appendix A of the Final EIR provides drawings showing the conceptual design of the proposed intersection modifications. These modifications would result in: • Removal of a portion of the landscaped area and entry driveway to the Beach Cities Self Storage facility; • Redesign of the sidewalk on the southwest corner of the intersection; • Relocation of the stop sign and striping for the northbound lanes on Valley Drive to address the redesign of the southwest corner; • Removal of a utility pole and underground utilities on the southwest corner of the intersection; • Removal of a utility pole and underground the utilities on 6th Street; and • The removal of two on-street parking spaces on 6th Street. As a part of the intersection modifications, the stop sign and striping for the southbound lanes on Valley Drive would be relocated to improve the line of sight to and from the intersection with 6th Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Street. This modification would be made concurrently with the addition of the perimeter fencing on the Project Site (See Figure 2.6). In addition, the curb on the northwest corner along 6th Street adjacent to the Project Site would be temporarily provided as a rolled asphalt curb for Phases 1 and 2. The two on-street parking spaces removed from 6th Street would be provided as part of the Project’s overall parking replacement program discussed further below. Relocation of the City Maintenance Yard Prior to Phase 1, a temporary City Maintenance Yard would be built at the New City Maintenance Yard location to the rear of City Hall at 1315 Valley Drive. At this point, the maintenance operations would be moved into the temporary City Maintenance Yard. Clearance of the Project Site Prior to the initiation of the site clearance activities, temporary 24-foot sound attenuation walls (per Mitigation Measure NV-1a) would be erected at the Project Site to reduce noise impacts related to construction. These sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise associated with Phase 1 demolition and construction activities. The temporary sound walls would be removed from the Project Site after the onsite construction activities in Phase 1 are completed. Following the relocation of the City Maintenance Yard , the Project Site would be cleared. The site clearance activities would include the removal of three existing buildings (one of which would be moved to the temporary site), two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing and masonry walls. In addition, the asphalt parking area to the west of the City Maintenance Yard would be removed, resulting in the removal of 15 parking spaces. The building located at 636 Cypress Avenue would also be demolished at this time to clear the parcel for the off-site temporary parking area. Prior to the demolition of both buildings, building materials would be assessed for asbestos content and presence of lead based paint, consistent with the requirements of the South Coast Air Quality Management District (SCAQMD). If asbestos containing materials or lead based paint are detected, the appropriate abatement process would be implemented. The building materials removed from the Project Site would be transported by truck to the recycling facility at Southern Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water Injection Pumping produced water back down the well hole into the oil reservoir from which it was originally extracted. California Disposal in Santa Monica, the recycling facilities at Hanson Aggregates in Long Beach, or another certified facility for recycling or disposal. The Proposed Oil Project would include an overall parking replacement program that meets the intent of the City’s Preferential Parking Program and Coastal Development Permit requirements. Section 2.4.5 discusses the parking plan for the Proposed Oil Project. Three of the four existing mature trees along the frontage of the Project Site on Valley Drive would be retained to help screen construction activities. The Applicant has concluded that the fourth tree should be removed because it is in poor health, and it would limit access to the Project Site (See Figure 2.6). The three remaining trees would be trimmed to keep branches from hanging over onsite equipment and to help prevent trespassing. Construction of Retaining Walls and Rough Grading Once the Project Site is cleared, retaining walls would be constructed along the western boundary of the Project Site and set back 10 feet along the western portion of the southern property boundary (See Figure 2.6). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.6 Proposed Oil Project Phase 1 Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources [need to fix this image] Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Rough grading would occur to allow for: • The construction of a well cellar for three test oil wells and a water disposal/injection well; • Surface drainage towards a temporary retention basin, which would contain a 100-year flood event; • A level area for the set up and movement of the drill rig; and • The installation of temporary production equipment. It is anticipated that the rough grading would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the retaining wall locations and rough grading at the completion of Phase 1. Installation of Perimeter Fencing Following the rough grading, the Project Site would be enclosed by a six-foot temporary perimeter chain link fence covered with green fabric. The fence would include secured gates for the entrance off Valley Drive and the exit to 6th Street. The Applicant proposes to include the appropriate signage consistent with the requirements of the City. Figure 2.6 shows the location of the fencing and gates at the completion of Phase 1, and Appendix A of the Final EIR shows an elevation of the fencing. Construction of Well Cellar A cement well cellar approximately 8 feet wide by 40 feet long by 12 feet deep would be constructed for three test wells and one water disposal/injection well to allow for the drilling of the wells in Phase 2. The well cellar would provide containment of any potential oil spillage during Phase 2. Figure 2.6 shows the location of the well cellar. Installation of Offsite Electrical Conduit and Onsite Electrical Equipment Electrical service for the Proposed Oil Project would be provided by Southern California Edison (SCE). The electrical conduit and onsite electrical equipment for all phases of the Proposed Oil Project would be installed in Phase 1. The electrical load during Phase 2 and Phase 3 would be 4.5 Megawatts (MW) and 0.3 MW, respectively. During Phase 4, the electrical load during Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources drilling would be 7.0 MW and during ongoing operations would be 3.0 MW. According to the Applicant, SCE has determined that the existing 16 kilovolt (kV) circuit running along 8th Street to the north of the Project Site has the necessary capacity to serve the Proposed Oil Project. To receive electrical service from SCE, the Proposed Oil Project would provide for the installation of an underground conduit for a linear distance of 280 feet under Valley Drive from 8th Street to the northeast corner of the Project Site (see Figure 2.6) Electrical equipment consisting of step down transformer(s), switchgear, and variable frequency drive units would be installed in the northeast corner of the Project Site designated as the New SCE Yard in Figure 2.6. The electricity would be used to provide power for well pumps, the temporary production equipment, the temporary construction trailer, safety system controls, onsite lighting, and the drill rig used in Phase 2 and Phase 4 (both drilling and re-drills). An uninterruptable power supply would be installed for critical systems such as the temporary production equipment safety systems and security lights. An emergency generator would be installed to provide power for the safe shutdown of the drilling operation in the event of a loss of power from SCE. Appendix A of the Final EIR provides the general location of the offsite underground conduit. Completion of Onsite Surface and Entrance/Exit The surface of the Project Site would be covered with crushed aggregate base material to serve as a dust inhibitor and driving surface. Temporary berms would be constructed around the areas where the drill rig and associated equipment would be set up and the temporary production equipment installed to provide secondary containment. In addition, a temporary berm would be provided around the well cellar to avoid surface flows from entering the well cellar. The existing driveway access from Valley Drive and 6th Street would be used. On both sides of the driveway on 6th Street, a rolled asphalt curb would be provided. Installation of Temporary Landscaping Landscaping would be provided along the eastern and southern perimeter of the Project Site to provide a visual buffer. The plant materials and irrigation would be consistent with the requirements of the City. The trees and other plant materials would be planted in a manner that Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources allows for their replanting as a part of the permanent landscaping provided in Phase 3. Reclaimed water supplied by West Basin Municipal Water District would be used for irrigation. The reclaimed water line serving the Greenbelt east of Valley Drive would be tapped and extended to the Project Site. Appendix A of the Final EIR includes a conceptual landscape plan and plant materials for the temporary landscaping provided at the completion of Phase 1. Installation of 32-Foot Sound Attenuation Wall Upon completion of the Phase I improvements, a 35-foot sound attenuation wall (per Mitigation Measure NV-3a) would be erected inside the chain link construction fence in order to attenuate noise generated during Phase 2 drilling and testing. The 35-foot sound wall would stay installed through the duration of Phase 2. 2.4.1.2 Phase 1 Site Preparation Detailed Schedule It is anticipated that Phase 1 would occur for a period of approximately six months as indicated in the schedule provided in Table 2.3. As required by the previous Conditional Use Permit and as proposed by the Applicant, the construction activities on the Project Site, including the operation of earthmoving equipment, would be conducted between the hours of 8:00 a.m. and 6:00 p.m. Monday through Friday (except holidays) and 9:00 a.m. and 5:00 p.m. on Saturdays. Offsite construction activities within the public ROW would occur between the hours of 8:00 a.m. and 3:00 p.m. Monday through Friday in the City of Hermosa Beach. Truck deliveries to the Project Site would be limited to the hours between 9:00 a.m. and 3:00 p.m. Monday through Friday, except in the case of an emergency and with the prior approval of the Director of Public Works. The Project-related truck trips would be limited to 18 round trips per day and limited to the designated truck routes. 2.4.1.3 Phase 1 Site Preparation Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 1 are provided in the detailed Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources listing in Appendix A of the Final EIR. Vehicle trips are summarized in Table 2.4. The Project- related personnel would utilize parking spaces in an offsite parking area provided consistent with the proposed parking plan described in detail in Appendix A. Table 2.3 Phase 1 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Construction of Temporary City Yard Underground overhead utilities 6thStreet & Valley intersection Relocation of Yard Remove buildings Remove other site structures Construct retaining walls Grade, well cellar, aggregate Construct chain link fence Construct well cellar Install electrical service Install landscaping Install 32-foot sound wall Note: relocation of Yard would only include moving of shop materials and equipment. The Temporary City Maintenance Yard would be construction prior to the start of Phase 1 and would take approximately 9 months. See section 2.5. 2.4.1.4 Phase 1 Truck Routes Truck trips would be required in order to deliver and remove construction-related materials and equipment to and from, respectively, the Project Site. Trucks would utilize roads designated as truck routes by the cities of Hermosa Beach, Redondo Beach, Manhattan Beach and Torrance. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Truck routes are shown in Figures 2.13 and 2.14. The routes identified by the Applicant as those utilized for all phases of the Project are as follows: Inbound Trucks 1. Inbound trucks from westbound Artesia Boulevard 2. Left on to southbound Pacific Coast Highway 3. Right on to westbound Pier Avenue 4. Left on southbound Valley Drive 5. Right into the Project driveway on Valley Drive Or 6. Inbound trucks from westbound 190th Street (which becomes Anita Street) 7. Right on northbound Pacific Coast Highway 8. Left on to westbound Pier Avenue 9. Left on to southbound Valley Drive 10. Right into the Project driveway on Valley Drive Outbound Trucks 11. Outbound trucks on to eastbound 6th Street 12. Right on to southbound Valley Drive 13. Left on to eastbound Herondo Street 14. Continue onto Anita Street, then 190th Street to the Interstate 405 (I-405)/ Crenshaw interchange Or 15. Outbound trucks on to eastbound 6th Street 16. Right on to southbound Valley Drive 17. Left on to eastbound Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 2 Drilling and Testing: Drilling for 3-4 Months Testing for 7-9 Months More 18. Left on to northbound Pacific Coast Highway 19. Right on to Artesia Boulevard. 2.4.2 Phase 2 Drilling and Testing The purpose of Phase 2 would be to conduct the drilling and testing of wells in order to determine the potential productivity and economic viability of the Proposed Oil Project. During this phase, up to three test wells and one water disposal/injection well (a total of four wells) would be drilled. These wells would be drilled utilizing directional drilling technology, which enables the wells to be drilled laterally for long distances, so that the bottom-hole locations may be located several thousand feet from the surface location of each wellhead on the Project Site (see Figure 2.7 and 2.8). 2.4.2.1 Phase 2 Site Geology and Drilling Objectives The Proposed Oil Project would utilize directional drilling techniques to access the crude oil and gas reserves in the tidelands (offshore) and uplands (onshore) in the portions of the Torrance Oil Field within the City’s jurisdiction. The Project Application states that "no hydraulic fracturing (or “fracking”) of wells will occur because the geologic zones for the Proposed Project are permeable and capable of yielding oil and gas without hydraulic fracture stimulation." Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.4 Phase 1 Vehicle Trip Summary Activity Trucks, Maximum RT/day* Autos/PU, Maximum RT/day Total, Maximum RT/day Underground overhead utilities 4 10 14 Construct 6th& Valley intersection 3 8 11 Remove buildings 10 8 18 Remove other existing site structures 15 6 21 Construct retaining walls 5 14 19 Grade, well cellar and aggregate 15 10 25 Construct chain link fence 1 4 5 Construct well cellar 4 8 12 Install electrical service 6 15 22 Install landscaping 1 2 3 Install 32-foot sound attenuation wall 3 12 14 Greatest number of trips in one day 18 (during week 9) 31 (during week 12) 43 (during week 10) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during week 9 with the installation of electrical service and the removal of existing structures. Maximum auto activity occurs during week 12 with the installation of electrical service and construction of the retaining wall. Maximum activity trucks and autos combined occur during week 10. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices The approximate extent of the City’s jurisdiction within the Torrance Oil Field is provided in Figure 2.7. Figure 2.8 provides a typical well cross section illustrating how wells can reach the oil reserves, within the tidelands, from the Project Site. The Project Application states the primary target zones are the Upper Main, Lower Main, and Del Amo Zones with some production potential within the Schist Conglomerate. As shown in Figure 2.8, the Upper Main Zone is the uppermost part of the Puente Formation. The Project Application states that it is expected to be the shallowest oil productive zone in the City. Of the three known producing horizons in the Torrance Oil Field, the Upper Main Zone is the most prolific. The Upper Main Zone beneath the Hermosa Beach tidelands and uplands is expected to be 300 feet thick and composed of inter-bedded thin sands and shales. The shales are currently fractured and provide both fractured porosity and permeability. The fractures are Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources critical to the performance of the reservoir in the area due to the fine-grained and thin-bedded nature of the sands. The Lower Main Zone lies below the Upper Main Zone in the Puente Formation. The Project Application states that similar to the Upper Main Zone, the shales of the Lower Main Zone are currently fractured and important for oil production. However, the Lower Main Zone has fewer interbedded fine-grained sands and is over 500 feet thick. Figure 2.7 Proposed Oil Project Lease Areas (below) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Final Environmental Impact Report 2-89 E&B Oil Drilling & Production Project Figure 2.8 Applicant Proposed Oil Project Lease Areas Cross Section Source: Project Application. Representative figure not to scale or reflective of the exact geology of the region. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The Del Amo Zone lies beneath the Lower Main Zone. It contains the least amount of thin- bedded sandstone in the Puente Formation. The Project Application states that similar to the other two zones, the shales of the Del Amo Zone are currently fractured and important for oil production. The Del Amo Zone varies the most in thickness and could be from 200 feet up to 700 feet thick. The Schist Conglomerate underlies the Del Amo Zone and is resting on metamorphic basement rock (Catalina Schist). The Schist Conglomerate could be as much as 400 feet thick and is composed of reworked fragments derived from erosion of the underlying Catalina Schist. The Project Application states that although it is unknown if the Schist Conglomerate is productive beneath the City, it is still a viable exploration target. The production test wells would target areas to the south-west, the north-west and the north areas of the lease (see Figure 2.7). The wells for the Proposed Oil Project would be at a true vertical depth of approximately 3,000 feet and a measured depth of approximately 9,000 feet. The actual well depth would vary depending on the area targeted. The Applicant indicates that the wellhead pressures anticipated during and immediately after drilling would be 0.0 pounds per square inch (psi) and that the wells are not anticipated to be free-flowing. DOGGR must review and approve an engineering study conforming to CCR Section 1724.6 and 1724.7 for operations. No Class II injection wells will be permitted prior to review and approval of the study. A Notice of Intent will need to be submitted for each proposed well. The Notice of Intent will be reviewed for accuracy and completeness and, if appropriate, a drilling permit issued. 2.4.2.2 Phase 2 Construction and Drilling Activities Phase 2 construction and drilling would consist of the following activities and improvements: • Installation of Temporary Construction Trailer • Delivery and Set Up of Drill Rig • Installation of Temporary Production Equipment Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources • Drilling of Wells • Testing and Operational Systems These activities are discussed in the following subsections. Phase 2 Installation of Temporary Construction Trailer A temporary construction trailer would be installed in the northeast portion of the Project Site (see Figure 2.9). In addition, the associated utilities, including potable water and sewer, would be extended from the existing lines currently located along 6th Street that serve the City Maintenance Yard. Water and sewer service would be provided by the California Water Service Company and the City, respectively. Electricity would be provided by Southern California Edison (SCE) as discussed above under Phase 1 construction activities. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.9 Proposed Conceptual Site Plan - Project Phase 2 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Automated Drilling Rig Ground Flare Phase 2 Delivery and Set Up of Drill Rig An electric drilling rig and its associated equipment would be brought to the Project Site on large trucks with trailers to be permitted by the City and the California Highway Patrol (CHP). The drilling rig would be an "automated drill rig" (ADR), which means that many of the drill rig procedures (loading pipe, etc,) would be done by mechanical means automatically. The approximately 87-foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, a generator, which would be a non-road portable diesel-fuel generator certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. Phase 2 Installation of Temporary Production Equipment Temporary oil, water, and gas production equipment would be installed on the Project Site. This temporary equipment would include a well test station, an induced gas flotation/filter skid, a gas combustor (enclosed ground flare), fluid handling tanks, piping, vapor recovery unit, pumps, and vessels. The production equipment would be delivered by trucks to the Project Site. The temporary production equipment would be installed in the eastern portion of the Project Site within an area enclosed by a containment berm as shown in Figure 2.9. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Phase 2 of the Proposed Oil Project would be designed as a closed-loop system, with pressure relief valves venting to a flare and tanks venting to a vapor recovery system. The control system would be computerized and would monitor the closed-loop system, providing warnings, corrective actions, and shutdowns, if necessary. Corrective actions could be closing valves, sounding alarms, shutting down wells or other process related functions. In addition, according to the Applicant, redundancy would be built into the system to provide an extra level of protection, ensuring there would be a backup for each safety device. All safety devices would be tested on a regular basis as per applicable codes and standards. Operators would be onsite 24 hours per day, seven days per week, to monitor all aspects of the Proposed Oil Project’s production process. Phase 2 Drilling of Wells Once the drill rig and associated equipment set up is complete, up to three test wells would be drilled utilizing directional drilling technology. This would enable the wells to be drilled laterally for long distances so that the bottom-hole locations may be located horizontally several thousand feet from the surface location of the well head on the Project Site. All wells would be permitted, drilled and cemented in accordance with the State Division of Oil, Gas, and Geothermal Resources (DOGGR) regulations. Drilling would proceed in the following manner: • Installation of conductor casing; • Drilling of wells; • Placement of casing and cementing of wells (in stages at various depths); and • Completion of the well, including installation of down-hole pumps and tubing. Installation of Conductor Casing The conductor casing is the initial hole drilled into the ground with a large diameter pipe installed to maintain integrity. The subsequent drilling of the well would take place through the conductor casing. Conductor casing would be installed with a small drilling rig, referred to as a dry-hole digger, which would be used to set the conductor casing for all of the intended wells in the Project Site. A large diameter hole, about 18 inches in diameter, would be drilled to an approximately 80-foot depth. This type of drilling is similar to boring a hole with an auger. Usually, no drilling fluid is needed to drill the hole, hence the name dry-hole digger. A large Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources diameter casing, commonly referred to as “conductor pipe”, typically 13-3/8 inches in diameter, is lowered to the bottom of the hole and is cemented in place with construction concrete. This forms the first seal of the near-surface formations and also serves as a steel conduit to allow the drilling fluid used in the next stage of the well drilling to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project test phase would be set at this time and the dry-hole digger moved off before the drilling rig would be mobilized and brought to the Project Site. Drilling, Casing and Completion of Wells The components of the drill rig and all necessary equipment would then be moved onto the Project Site with large specially equipped trucks. The drill rig height would be 87 feet. The drilling setup would include three main parts; the drilling structure (i.e., mast, substructure, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources catwalk, silicon-controlled rectifier (SCR) house, top drive, back-up generator, crown block, traveling block, iron rough neck, drill pipe, control cabin), the blow out preventer (BOP) system (i.e., BOP Stack, Shear Ram, BOP Controller, and Accumulator), and the mud system (i.e., mud tanks, mud shakers, mud pumps, mud return line). The drilling rig would also require other equipment such as a spare parts house, other tanks, and storage areas as needed to support the drilling operation. The substructure of the drill rig would be located over the first well conductor casing, the mast would be raised, and the other equipment would be aligned and connected. The drill pipe would be laid out on racks convenient to the rig floor so they may be used when needed. Water tanks would be filled, and drilling fluid additives would be stored on site. The drill rig for the Proposed Oil Project would be run on electric utility power, so an electrical hookup would be made at this time. Drilling operations would then begin. The initial mobilization and rigging up operation is expected to last about seven to ten working days. “Spudding in” is the term used to begin drilling operations. A large (12 ¼-inch diameter) drill bit is attached to the first joint of drill pipe (usually 30 feet long) and lowered into the conductor casing. As the first length of pipe is completely lowered in, another length of pipe is attached to the end, thereby increasing the length of the drill “string”. When the drill string reaches the bottom of the conductor casing at a depth of 80 feet, the drilling begins. In order to drill downwards through soil and rock, the drill bit requires rotation and downward force, which is provided by the weight of thick-walled pipe on top of the drill bit. A single, 30-foot long drill pipe for a larger diameter drill bit weighs approximately three tons. As the drill bit drills deeper, more drill pipe is placed on top, thereby increasing the downward force; this is collectively known as the drill string. The drill bit turns clockwise as the weight of the drill pipe column forces it downward. Drilling fluid, called mud, is pumped down the inside of the hollow drill pipe, through a hole in the drill bit, and flushes the drilled rock cuttings away from the bit and up the space between the wall of the borehole and the outside of the drill pipe, which is referred to as the “annulus.” When the mud reaches the surface, it circulates to a mud tank where the rock cuttings are separated out of the fluid by using a shaker, and the clean mud is pumped back down the hole in a continuous circuit, constantly circulating the drilled rock cuttings up and away from the drill bit as it penetrates deeper into the earth. The cuttings are analyzed, stored in 20 cubic yard bins, and then hauled offsite. Initially, a large diameter bit is used to drill to a predetermined depth. When the specified depth Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources is reached, drilling is stopped, the drilling string is removed and a large diameter pipe (a casing string) is assembled in 40-foot lengths and lowered to the bottom of the well bore. Cement is then pumped down the inside of the casing, around the bottom of the hole, and up the annulus between the casing and the well bore. When the cement hardens, it ensures that the entire casing and well bore are encased in cement, protecting the fresh water aquifers and surrounding subsurface areas from the production fluids inside of the casing. See Figure 2.10 for a schematic of the well bore and casing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.10 Typical Well Bore and Casing Source:Project Application Next, a piece of equipment known as a blowout preventer (BOP) is attached to the well head. The BOP is a safety system used during drilling operations in oil and gas fields to prevent the uncontrolled release of reservoir fluids and to immediately shut off the flow in the event that abnormal pressure is encountered in the well bore that cannot be controlled by the hydrostatic head of the drilling fluid when drilling resumes beneath the surface casing. Blow out prevention equipment shall conform to DOGGR’s publication M07 “Blowout Prevention in California, Equipment Selection and Testing 2006 edition. If the subsurface pressure begins to cause the well to flow, the BOP is activated, closing in the well and trapping the pressure until it can be bled off safely and drilling can continue. A BOP would be placed on each wellhead during the drilling and removed after the well is completed. A BOP utilizing Blind Shear Rams would be utilized. Blind Shear Rams are a type of BOP common in the offshore environment that allow for the shutting off of flow through the well even if drill pipe is in the wellbore. Pursuant to the requirements of the Code of Federal Regulation on Oil and Gas and Sulphur Operations in the Outer Continental Shelf(30 CFR part 250), the Applicant indicates that the BOP would be certified that the shear rams can actually shear the drill pipe prior to drilling. The surface casing serves three primary functions: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources • It isolates fresh water formations from contact with any fluids coming from deeper in the earth; • It serves as a mounting place for the blowout preventer; and • It serves as the support for the production casing that would be placed in the well if oil is found. Once the surface casing is cemented in, drilling operations resume with a smaller drill bit. This smaller hole is drilled to the total depth decided upon by the Applicant’s geologic and engineering staff. Usually, the only interruptions to drilling operations would be to remove the drill pipe (also known as tripping pipe) from the well to replace a dull drill bit, and then lowering the pipe back to the bottom of the well. In order to achieve the directional aspect of the drill hole, the well bore is bent. The act of “bending” a well out of the vertical axis typically begins after vertical drilling has progressed several hundred feet beneath the surface. Although the specifics of each well proposed for this Project have not been established, it is not uncommon to begin to deviate from vertical at a depth of about 600 feet and still reach a target formation located at a depth of 4,000 feet, but also almost 4,000 to 6,000 feet sideways from the surface spot location. This system would be used on virtually all of the wells drilled for the Proposed Oil Project. When the well reaches total depth (TD), drilling operations are halted and the drill pipe is removed from the well leaving mud in the hole to contain any potential production fluids located at the reservoir depth. A logging tool is then lowered into the hole to record petrophysical data of the formations through which the rig has drilled. If the well looks like it would produce oil, production casing is installed in a similar fashion to the installation of the surface casing. Production casing for the Proposed Oil Project is planned to be 7inches in diameter. Production casing would be cemented similarly to how the surface casing is cemented, as previously described. Once the cement has been allowed to fully harden, another electric logging tool, called a cement bond log, is lowered to the bottom of the well to evaluate the completeness and effectiveness of the cement on the outside of the production casing. If the cement is found to have defects, the casing can be perforated and cement forced into the well at a specific location or the casing can be removed and the well re-drilled. Devices are inserted to ensure any perforations are sealed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The well is then “completed”, which is a series of activities that allow for the production fluids to flow into the well bore inside the casing and to the surface. Table 2.5 shows a list of chemicals that would be used during drilling operations. The amounts listed are the estimated quantities consumed per well drilled. These materials are packaged by the manufacturer for shipping and would be delivered to the job site by conventional delivery or flatbed trucks. Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District from an existing reclaimed water line serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in Baker tanks (enclosed tanks that are approximately 12 feet tall by 40 feet long and hold up to 500 barrels each). Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed of each day by truck at an approved disposal site at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. In addition, all other waste generated by the test drilling would be transported by truck to the appropriate disposal site at Clean Harbors Buttonwillow Landfill, or a similar facility if closer to the Project Site. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.5 Phase 2 Drilling Chemicals Common/Trade Name Use Container Amount per Well Gel Wyoming Bentonite Used to enhance mud viscosity 100-pound sack 525 sacks DMA Sodium Polyacrylate Water absorbent mud additive 50-pound sack 82 sacks Benex Anionic Acrylamide Mud additive 2-pound sack 75 sacks GEOZan Xanthan Gum Mud viscosifier 25-pound sack 40 sacks Omniopol Sodium Polyacrylate Liquid Water absorbent mud additive - 380 gallons CFR Fatty Acid Liquid Mud additive to enhance lubricity - 600 gallons Bicarb Sodium Bicarbonate Mud additive for pH control 50-pound sack 40 sacks Citric Acid Mud additive for pH control 50-pound sack 11 sacks Walnut Hulls Filter medium, used to reduce torque and drag of drill pipe and for plugging of fractures and high porosity formations 50-pound sack 48 sacks Cement Bulk-Truck Used for well sealing - 3 bulk trucks Biotreat 8415 Treatment of water before injection into the oil reservoir Hydrochloric Acid 15%, used for acid washing during completion Bin varies Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Hydrofluoric Acid 3%, used for acidizing muds Bin varies Source: Project Application, Amendments and Appendices The Proposed Oil Project would comply with the 1993 CUP conditions of approval, proposed operational practices, and proposed design features. The noise reduction methods would include the following: • An electric drill rig would be utilized, reducing the need for diesel engines; • The drill rig would have no draw works or cables resulting in less noise; • A 35-foot-high acoustical barrier wall (per Mitigation Measure NV-3a) would be erected around the perimeter of the Project Site during all drilling activities. The wall would have a sound transmission class (STC) rating of at least 32; • The air inlets and vents of the hydraulic power unit would be fitted with silencers; • An acoustical shroud would enclose three sides of the rig mast to reduce the top drive noise (if applicable); • The mud pumps would be enclosed with acoustical barriers having a sound transmission class (STC) rating of at least 25; • An 8-foot high acoustical barrier with an STC rating of at least 25 would be installed around the shaker tables; • Drilling Quiet Mode Plan would be implemented at the drill site between 7:00 p.m. and 8:00 a.m., a plan which would provide for the following: disablement of all audible mobile equipment and truck backup alarms; minimization of pipe handling; cessation of cementing operations, maintenance, and tripping pipe; and limits within the delivery schedule; and • An automated and remotely managed system to connect/disconnect pipe (Iron Roughneck) would be used, which would reduce pipe handling; No processing of gas would occur during Phase 2. The gas separated from the oil and water would be directed to a gas combustor (enclosed ground flare), where disposal of it would occur through burning. The Applicant indicates that low levels of potential “native” hydrogen sulfide (H2S), in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources underlying oil reservoir. Because the produced fluids may contain some H2S, fixed H2S detection systems would be installed around the drilling site and continuous monitoring would be present during all drilling, workover, and well servicing operations. Sensors would be located in areas that are frequently used by personnel, selected drilling area locations, areas where H2S may accumulate, and any other areas determined by hazard analysis to pose a potential risk. Personnel would also carry personal H2S monitors attached to their clothing for immediate H2S detection during drilling. Figures 2.12 and 2.13 provide an outline of the City’s designated truck route for construction trucks through the cities of Hermosa Beach, Redondo Beach and Torrance. Phase 2 Testing and Operational Systems After the completion of the first test well and the water disposal/injection well, the extracted oil would go through production and testing. The temporary production equipment on the Project Site would be used to process the production fluid. The oil would be processed to a standard that would be suitable for sale. The produced water would be processed and re-injected back into the oil-producing reservoir below the oil water contact. Disposal of the gas produced during Phase 2 would occur through burning in the enclosed ground gas flare. Figure 2.11 shows the steps involved in processing the oil, water, and gas produced from the test wells in Phase 2. Processing of Production Fluids During Phase 2, the Proposed Oil Project is designed to handle up to 800 barrels of oil per day and up to 250,000 standard cubic feet of gas per day. After the oil is processed, it would be trucked from the Project Site to an offsite oil receiving facility at 2650 Lomita Boulevard in Torrance. The route used for crude haul trucks is detailed in Appendix A of the Final EIR. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.11 Phase 2 Process Flow Diagram Source: Applicant application The produced fluids would be sent from the wells to a three-phase separator, which would separate the fluid into gas, oil and water streams. The gas exits the top of the separator, the oil exits the middle, and the water exits the bottom of the separator. Each one of these fluids enters a specific system of treatment as follows. Oil Treatment System The produced oil would enter a series of stock tanks after leaving the three-phase separator. The stock tanks would be used if the oil needs to be further processed to remove excess water. The water removed from the oil and water mixture would be sent back to the three-phase separator through a drain system. Once the oil is processed to a standard suitable for sale, the oil from the stock tank would be loaded into a tanker truck and transported to the purchaser. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Gas Treatment System The produced gas would be sent directly to a compressor and then to the gas flare for combustion after leaving the three-phase separator. A vapor recovery system attached to the temporary Baker tanks would be utilized to capture vapors and to direct them to a vapor recovery compressor and to the gas system and flare. The vapor recovery, tank and flare system would be subject to Southern California Air Quality Management District (SCAQMD) permit requirements. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.12 Truck Routes from Highway 405 to Project Site Source:Project Application, Amendments and Appendices Figure 2.13 Truck Routes to Highway 405from theProject Site Source:Project Application, Amendments and Appendices The Proposed Project provides for the disposal of treated stormwater runoff and produced water from the drilling and production process back into the oil reservoir using water disposal/injection Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources wells. The injection of untreated water can result in the creation of H2S concentrations in the oil reservoir above preexisting levels (referred to as the “native” condition). Prior to the injection of produced water from the oil extraction process, or the injection of surface runoff from precipitation that collects on the Project Site, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff water and any other injected water, would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Facility Storm Drain System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for disposal/injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Safety Systems Operators would be onsite 24 hours per day, seven days per week, to monitor the Proposed Oil Project’s production process during Phase 2. A fire protection system as required by Federal, State, and local codes, ordinances and regulations would be installed by the Applicant prior to the drilling and testing activities on the Project Site. The Fire Protection Plan for Phase 2 of the Proposed Oil Project would be provided to the City of Hermosa Beach Fire Department for review and approval prior to the initiation of Phase 2. The design and operation of the Proposed Oil Project would be required to meet provisions Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources within the California Fire Code (CFC) and standards of the National Fire Protection Association (NFPA), including the requirements for the storage of hazardous materials, the installation and use of fire protection systems and devices, and the implementation of safety measures for employees and emergency responders. Onsite personnel and a site security program, including a closed circuit television system, a gate access system, and an intrusion and motion detection system, would control all access to and from the Project Site during Phase 2. In addition, temporary lighting would be provided. The lighting would be shielded/hooded and directed downward, as is consistent with City requirements. All tanks would have containment equal or greater in capacity than at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Water Treatment System The produced water would be pumped into a treatment system, including a gas flotation unit and a filter unit, to remove excess oil after leaving the three-phase separator. The primary objective of both units would be to clean the water of oil and solids such as sand. The water would then enter a water surge tank after leaving the filter unit and would be sent to the water disposal/injection pumps for disposal/injection into the oil-producing reservoir through the disposal/injection well. If determined to be needed, before it enters the water surge tank, the water would be injected with a biocide to eliminate any bacteria that may be in the produced water. Electrical Requirements Approximately 75 kilo-watt hours of electricity would be required to drill each well. Chemicals Project operations would require the use of chemicals. These chemicals would be documented in a required Hazardous Materials Business Plan. Typical chemicals utilized in the temporary production facility are shown in Table 2.6. Table 2.6 Phase 2 Testing Chemicals Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Common/Trade Name Use Maximum Quantity (Gallons) Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter/Cor 7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Source: Project Application, Amendments and Appendices Noise Abatement The Proposed Project would be implemented in compliance with the 1993 Conditional Use Permit conditions of approval. In addition, the applicant proposes to incorporate several operational practices and design features intended to abate noise. The conditions of approval, operational practices and design features that would be incorporated into the production operations include the following: • Heavy/large reciprocating equipment would be mounted on vibration isolators; • Pipe tripping would be restricted to daylight hours only; • Loudspeaker paging systems would be prohibited; • Well workover rigs or any other workover-type rig (not the main drilling rig) that is used would be operated only between 8:00 am and 6:00 pm during daytime weekday hours only, excluding holidays, except in an emergency as defined in the Conditional Use Permit (CUP) and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) would be muffled to reduce noise to an acceptable limit. The operator would use whatever means necessary, including, but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing; Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources • All oil maintenance equipment, vehicles and non-electrical motors would be equipped with manufacturer approved mufflers or housed in a sound-proofing device; • Noise monitoring would be conducted under the supervision of an independent certified acoustical engineer; • Each well pump would produce a sound power level no greater than 83 dBA. This may be achieved by fitting sound attenuating enclosures that provide an insertion loss of at least 15 dB; • The produced oil pumps, produced water pumps, water booster pumps and variable frequency drive electrical (VFD) cabinets would produce a sound power level no greater than 77 dBA; • The water injection pumps would produce a sound power level no greater than 83 dBA. • The vapor recovery compressors would produce a sound power level no greater than 83 dBA; and • The cooler for the compressors would produce a sound power level no greater than 85 dBA. Decision not to Proceed -Abandonment If it is determined that the production of oil and gas on the Project Site would not be economically viable, the Applicant would remove the sound attenuation walls, the temporary production equipment, and the temporary construction trailer and abandon the three test wells and the water disposal/injection well in accordance with the requirements of DOGGR. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. As the temporary City Maintenance Yard would already be constructed under the Proposed Project, the current City Maintenance Yard Site would be empty and would be available for development within the M-1 Light Manufacturing zoned area of Hermosa Beach. The Project Site would then be available for City or other development proposals, or for the temporary City Maintenance Yard to be relocated back to this site. However, any future use would need to be consistent with the lease agreement with the Applicant. Current site contamination would remain as part of the abandonment process and would be removed in accordance with the requirements of any future site use. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.2.3 Phase 2 Drilling and Testing Schedule It is anticipated that Phase 2 would occur for approximately 12 months as indicated in the schedule provided in Table 2.7. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take 120 days for drilling activities, 24 hours a day, which is approximately 30 days per well for four wells. After the drilling of the three oil wells and one water disposal/injection well is complete, the drill rig would be removed from the Project Site. As each well is drilled, the produced fluids from that well would go thorough production and testing, as described above. 2.4.2.4 Phase 2 Drilling and Testing Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 2 are provided in detail in Appendix A of the Final EIR. A summary of the vehicle trips is shown in Table 2.8. Parking for the employees would be provided in an adjacent parking area as previously discussed for Phase 1. Since Phase 1 prepares the Project Site for Phase 2, the conceptual landscape plan and elevations provided above for Phase 1 would also be applicable to Phase 2. Table 2.7 Phase 2 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 thru 54 Install trailer and associated utilities Deliver and set up drill rig/equipment Install oil, water, and gas equipment Drill 3 test wells and water well Testing of wells Remove drill rig and equipment Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.8 Phase 2 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day* 2-axle trucks, Autos, Maximum RT/day Total, Maximum RT/day Install trailer and associated utilities 2 5 7 Deliver and set up drill rig/equipment 7 20 27 Install oil, water, and gas equipment 6 15 21 Drill 3 test wells and water well 9 10 19 Testing of wells 13 5 18 Remove drill rig and equipment 5 20 25 Greatest number of trips in one day 18 (during weeks 15, 17, 19, 21-24) 25 (during weeks 7- 12 ) 37 (during week 7) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during drilling and testing of wells. Maximum auto activity occurs during weeks 7-12 with the installation of oil, water and gas equipment and the drilling of wells. Maximum activity trucks and autos combined occurs during week 7. Testing of wells would involve crude transportation by truck, by way of an average of 7 trucks per day/5 days per week or up to 12 trucks in one day (round trip). Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix A. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources each week. Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 3 Final Design and Construction: 16 Months 2.4.3 Phase 3 Final Design and Construction If it is determined that the production of oil and gas on the Project Site would be economically viable, the Applicant would begin Phase 3 of the Proposed Oil Project. The purpose of Phase 3 would be to utilize the production information from Phase 2 to prepare the final design of the facility, prepare the onsite area for facility installation, install the permanent oil and gas production facilities, and construct offsite Pipelines. 2.4.3.1 Phase 3 Onsite Construction Phase 3 onsite activities would involve the following construction activities: • Preparation of final engineering design; • Removal of temporary production equipment; • Removal of three remaining trees; • Removal of 35-foot sound attenuation wall and perimeter fencing (per Mitigation Measure NV-3a); • Installation of 24-foot sound attenuation wall (per Mitigation Measure NV-4a); • Implementation of remedial action plan; • Construction of remaining retaining walls and final grading; • Completion of construction of well cellars; • Construction of 35-foot block wall (per Mitigation Measure NV-6a); • Removal of 24-foot sound attenuation wall (per Mitigation Measure NV-4a); • Construction of small office building; • Installation of permanent production equipment; • Construction of final site improvements; • Construction of final street improvements along Project frontage; • Installation of final landscaping; • Installation of 32-foot sound attenuation wall; • Setting of conductor pipe; and • Installation of lighting systems. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is detailed in the discussion that follows. A site plan for Phase 3 is shown in Figure 2.14. The conceptual grading plan, site plan, elevations (with the 32-foot sound attenuation wall), and conceptual landscape plan for the Proposed Oil Project at the completion of Phase 3 are shown in Appendix A of the Final EIR. Prepare Final Engineering Design The final design of the permanent oil and gas production facilities, to be implemented during the first few months of Phase 3, would be based on the oil and gas analysis and production results from Phase 2 activities. Final design would include the sizing and development of the exact specifications for the oil, gas, and water separation production equipment and the detailed engineering to prepare the required final construction drawings. Remove Temporary Production Equipment The temporary oil, water, and gas production equipment installed on the Project Site during Phase 2 would be removed. The wells drilled during Phase 2 would be shut in, and steel plating would be placed on top of the well cellar. Remove Remaining Trees The three remaining mature trees along the frontage of the Project Site along Valley Drive would be removed to allow for the construction of final site improvements including a perimeter wall and the installation of permanent landscaping. Remove 32-Foot Sound Attenuation Wall and Perimeter Fencing The 35-foot sound attenuation wall (per Mitigation Measure NV-6a) and the 6-foot perimeter chain link fencing would be removed from the Project Site. Install 16-Foot Sound Attenuation Wall Prior to the initiation of earthmoving activities, a temporary 24-foot sound attenuation wall (per Mitigation Measure NV-4a) would be brought to the Project Site. The sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise and dust associated with the earthmoving activities needed for the implementation of the Remedial Action Plan and the final grading of the Project Site. The temporary sound walls Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources would be removed from the Project Site after the onsite earthmoving and grading activities are completed. Implementation of Remedial Action Plan The Remedial Action Plan would be implemented to address lead, barium, arsenic and total petroleum hydrocarbon (TPH) contaminated soil and groundwater within and beneath the former landfill area in the northeastern portion of the Project Site. It is anticipated that approximately 9,000 cubic yards of lead contaminated soil would be removed from the Project Site in accordance with the Remedial Action Plan and hauled to a Class 1 landfill at the Kettleman Hills Facility, approximately 190 miles from the Project Site. The TPH contaminated soil (approximately 4,500 cubic yards located deeper than 25 feet) would be treated onsite via vapor extraction. For a detailed discussion of the soil remediation that would occur prior to final grading of the Project Site, refer to the Remedial Action Plan provided in Appendix A of the Final EIR. Groundwater contamination attributed to historic use of the site has been documented (Brycon 2013). The RWQCB have indicated that the Regional Water Quality Control Board Site Cleanup Program reviewed the Report on Groundwater Assessment and indicated the matter would go on its large backlog of low priority cases. Construction of Remaining Retaining Walls and Final Grading Retaining walls (up to 6 feet high) would be constructed 10 feet back from the Valley Drive and 6th Street property lines, along the eastern boundary of the Project Site and along the eastern portion of the southern boundary of the Project Site (see Figure 2.14). In addition, retaining walls would be constructed within the Project Site for the containment area associated with the production equipment. After the completion of the retaining walls, the Project Site would be graded to allow for the installation of Project equipment and to allow for proper site drainage. The final grading of the Project Site would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the location of the retaining wall locations and the final grading of the Project Site. Complete Construction of Well Cellars The cement well cellar constructed in Phase 2 would be extended, and a second well cellar would be constructed to allow for the drilling of the remaining wells in Phase 4. At completion, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources the well cellars would be approximately 8 feet wide by 120 feet long by 12 feet deep, with stairs at each end and covered with expanded metal grating. The well cellars would be equipped with storm water collection sumps and pumps to direct the storm water to the drain sump. From the drain sump, water would be directed into the processing system and injected, by the water disposal/injection wells drilled in Phase 4, into the oil-producing reservoir below the oil water contact. Figure 2.14 shows the location of the well cellars. Construction of 16-Foot Split-Face Block Wall A 16-foot split-face block wall would be constructed around the perimeter of the Project Site. The wall would be set back 10 feet from the Valley Drive and 6th Street property lines to allow for a landscape area. The wall would have a gated entrance off Valley Drive (set back 70 feet from the sidewalk) and a gated exit to 6th Street. The gates would be metal and motor operated. The appropriate signage would be provided, as is consistent with City requirements. Remove 16-Foot Sound Attenuation Wall After the completion of the Remedial Action Plan, final site grading, and construction of the well cellars and perimeter wall, the 16-foot temporary sound attenuation wall would be removed from the Project Site. Construction of Small Office Building A small office building approximately 650 square feet in size would be constructed in the northeast portion of the Project Site to house employee offices and control and monitoring equipment. The building would have a restroom and break room. The improvements extended to the Project Site in Phase 1 would provide for associated utilities, including water, sewer, natural gas, and telephone. The California Water Service Company and the City would provide water and sewer service, respectively. Southern California Gas Company (SCGC) would provide natural gas, and electricity would be provided by Southern California Edison (SCE). Verizon would provide telephone service. Office related solid waste services would be provided by Athens Services or a future city franchisee. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.14 Phase 3 Proposed Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Installation of Permanent Production Equipment Permanent oil, water, and gas production equipment would be installed on the Project Site. The permanent oil production facilities would include tanks, vessels, piping, pumps, filters, and supporting metering equipment. These are listed in Table 2.9. A retaining wall around all of the vessels, tanks and other equipment containing oil would provide secondary containment. The design capacity of the secondary containment would exceed the fluid capacity of the largest tank by 110 percent plus the precipitation from a 100-year storm event. In Phase 4, the oil production facility would be used to separate gas, water, and solids from the oil, after which the oil would be stored in tanks prior to transport via pipeline from the Project Site. The separated water would be accumulated in tanks, filtered, and then injected into the oil- bearing reservoir by the four water disposal/injection wells. Gas from each well would be treated on the Project Site and then sold to the SCGC. The permanent gas production facilities would have compressors, vessels, a H2S and carbon dioxide (CO2) removal system, a moisture removal system, and an odorizing system. The use of this equipment is discussed in Section 2.4.4, Phase 4 Development and Operations. Table 2.9 Phase 3 and 4 Processing Equipment Listing Equipment Size and Number Oil Shipping Tanks 40 foot diameter by 16 feet high, 2900 BBLS, 2 tanks Water Clarifier 40 foot diameter by 16 feet high, 2900 BBLS, 1 tank Water Surge 30 foot diameter by 16 feet high, 1120 BBLS, 2 tanks Gas compressors 30 foot by 40 foot - 3 compressors DEA Skid (acid gas removal) 12 foot by 40 foot, 1 skid Low Temperature Separation (LTS) skid (propane refrigerant) 12 foot by 40 foot, 1 skid Flare/Gas Combustor 10 foot diameter by 22 feet high Vapor Recovery Compressor 17 foot by 28 foot IGF Skid 18 foot by 8 foot, 1 skid Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Filter Skid 25 foot by 18 foot, 1 skid Micro Turbines (five turbines) 200 kw each, 30 foot by 40 foot 3-Phase Separator 7 foot diameter by 35 feet long Lease Automatic Custody Transfer (LACT) Skid 5 foot by 12 foot Source: Project Application, Amendments and Appendices. BBLS=barrels (42 gallons), skid=a pre- fabricated unit. Construction of Final Site Improvements In addition to the areas where the concrete well cellar, the containment area, and the oil and gas production equipment have been constructed, the ground surface of the Project Site would be paved with concrete or asphaltic concrete and designed so that no fluids, including rain water up to a 100-year storm event, would leave the Project Site. Liquids, including rainwater, would be captured in the containment areas or in the well cellars, processed through the production facility, and injected into the oil-bearing reservoir via four water disposal/injection wells. Construction of Final Street Improvements Along Project Frontage The Proposed Oil Project would include the construction of street improvements along the frontage of the Project Site on 6th Street and Valley Drive. The improvements would include the installation of new curbs, gutters, and sidewalks. Installation of Final Landscaping Permanent landscaping would be provided along the perimeter of the Project. To the extent feasible, plant materials used in the temporary landscape plan installed in Phase 1 would be reused in the permanent landscaping. Reclaimed water supplied by the West Basin Municipal Water District would be used for irrigation. Appendix A provides the conceptual landscape plan and plant materials for the permanent landscaping that would be provided at the completion of Phase 3. Installation of 32-Foot Sound Attenuation Wall At the completion of the improvements in Phase 3, a 32-foot sound attenuation wall would be Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources erected inside the 16-foot block wall to provide for noise attenuation during Phase 4 drilling. Appendix A of the Final EIR provides the elevations of the Project Site, including the sound attenuation walls with the block walls, from Valley Drive and 6th Street at the completion of Phase 3. Set Conductor Pipe Prior to drilling in Phase 4, a dry-hole digger/auger would be used to set the conductor casing in the well cellars for all of the intended wells on the Project Site in a manner similar to the setting of the conductor pipe in Phase 2. A hole approximately 18 inches in diameter would be drilled to a depth of approximately 80 feet. A conductor pipe would be lowered to the bottom of the hole and cemented in place. This would form the seal of the near-surface formation and serve as a steel conduit to allow the drilling fluid used in the next stage of the well to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project would be set, and the dry hole digger/auger would be moved off the Project Site. Lighting Systems The permanent lighting for the Proposed Oil Project would be installed as a part of Phase 3. The lighting,as proposed in the Applicant’s Lighting Plan, would be designed to be directed downward and shielded in order to avoid obtrusive light spillage beyond the Project Site, reflective glare, and illumination of the nighttime sky. 2.4.3.2 Phase 3 Offsite Pipeline Construction During Phase 3, offsite pipelines for oil and gas would be constructed to transport the oil and gas to markets. Each route is discussed in the following subsections. Gas Pipeline Route As it leaves the Project Site, the offsite underground pipeline for the transport of gas would be constructed for a distance of 0.43 miles in the ROW of southbound Valley Drive (which is a one way street south of 2nd Street) in the City of Hermosa Beach to a tie-in to a SCG gas line in the Southern California Edison(SCE) Utility Corridor east of N. Francisca Avenue in the City of Redondo Beach. See Figure 2.15 for the proposed pipeline routes. Appendix A contains Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources detailed drawings of the route and valve box options. This portion of the gas pipeline would consist of two parallel pipelines, 4 inches in diameter, and located at a depth of approximately 3.5 to 4 feet below ground surface (bgs) within the road ROW until it ties into the SCG line at a proposed metering station immediately to the east of N. Francisca Avenue. The pipeline would be a loop system that allows for the gas to be returned to the Project Site for further treatment in the event that the produced gas does not meet SCG standards. The metering station site, which would be provided as a part of the Proposed Oil Project and is owned by SCG, would be approximately 40 by 60 feet in size and surrounded by an 8-foot high block wall. As shown in Figure 2.15, this first portion of the gas pipeline is bounded to the east by the Greenbelt and Ardmore Park and, further to the east, by Ardmore Avenue and residential development in the City of Hermosa Beach; to the west by the Beach Cities Self Storage facility, light manufacturing land uses, South Park, and residential development in the City of Hermosa Beach; and to the west in the City of Redondo Beach by facilities associated with the AES Power Plant. The gas line is designed for a maximum operating pressure of 465 pounds per square inch gauge (psig), but would typically operate at approximately 225 psig of pressure. Once the proposed gas pipeline from the Project Site ties into the SCG point of receipt at the proposed metering station, SCG would construct a six-inch gas pipeline that extends northeast for approximately 1.4 miles to connect to an existing SCG pipeline transmission facility (Line 1170) located on the south side of 190th Street near its intersection with Green Lane, between Flagler Lane and Beryl Street, in the City of Redondo Beach. After the first portion of the new six-inch gas pipeline leaves the proposed metering station and continues northeast, it would be located in an existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway. The new pipeline would exit the SCE Utility Corridor on the south side of the intersection of Herondo Street/Anita Street with Pacific Coast Highway, extend across Pacific Coast Highway, and continue northeast within the ROW of Anita Street/190th Street to its point of connection with the existing SCG pipeline transmission facility (Line 1170). If for some reason the first portion of the new pipeline could not be located within the existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway, it would leave the proposed metering station and continue for a short distance north within the ROW of N. Francisca Avenue and turn northeast at Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Pigging Passing a device through a pipeline that cleans or inspects the pipeline. A pig is usually a small rubber device slightly smaller in diameter than the pipeline. The pig is forced through it by product flow. Usually cylindrical or spherical, pigs sweep the line by scraping the sides of the pipeline within the ROW until it reaches the intersection of Herondo Street/Anita Street with Pacific Coast Highway. At that point it would continue to the northeast as described previously. Although SCG would obtain the necessary permits and construct the new gas pipeline, the Applicant would pay for the associated costs of construction. The proposed gas line from the proposed metering station to the existing SCG pipeline transmission facility is bounded to the north by commercial land uses and residential development in the City of Redondo Beach and to the south by commercial land uses, residential development, and public facilities including Dominguez Park and Redondo Beach Dog Park in the City of Redondo Beach. Oil Pipeline Route The offsite underground pipeline for the transport of oil to an area refinery via a connection to a valve location in the City of Torrance would be constructed for a distance of approximately 3.55 miles in one of three potential pipeline scenarios that would follow a route through the Cities of Hermosa Beach and Redondo Beach and terminate in Torrance. The selection of the pipeline route would occur after Project approval. Appendix A of the Final EIR shows the pipeline route scenarios in detail. The pipeline would be 8 inches or less in diameter, located at a depth of approximately 3.5 to 4 feet bgs depending on the grade. At one of four potential valve box locations, the pipeline would tie-in to an existing pipeline that transports oil to a refinery. Appendix A of the Final EIR provides the proposed alignments of the three oil pipeline scenarios, the respective jurisdictional boundaries, and the adjacent land uses. Appendix A of the Final EIR provides the four valve box location options that the pipeline could tie into. More details are included in Appendix A. The oil line would be designed for a maximum operating pressure of approximately 500 psig, but would typically operate at approximately 100 to 200 psig of pressure. The pipeline would Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources include pigging stations to send and receive maintenance pigs into and from the pipelines to clean or inspect the pipelines during ongoing operations. This would occur for the lifetime of the Proposed Oil Project. Pigging refers to the practice of using pipeline inspection gauges or 'pigs' to perform various maintenance operations on a pipeline without stopping the flow of the product in the pipeline (refer to sidebar for more information). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.15 Proposed Pipeline Routes Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source:Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources As shown in Figure 2.15, the oil pipeline would be constructed for a distance of 0.39 miles in the ROW of southbound Valley Drive (which is one-way starting at 2nd Street) in the City of Hermosa Beach to the corner of Valley Drive/N. Francisca Avenue and Herondo Street in the City of Redondo Beach. At this point, the oil pipeline would turn to the east along one of the following three pipeline scenarios (see Appendix A of the Final EIR): • Scenario 1 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street, Anita Street, and 190th Street in the City of Redondo Beach to the intersection of 190th Street/Hawthorne Boulevard in the City of Torrance. At this point, Scenario 1 would continue to one of the four valve box options presented later in this discussion; • Scenario 2 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street and Anita Street in the City of Redondo Beach and the ROW of 190th Street in the City of Torrance to the intersection of 190th Street/Hawthorne Boulevard. At this point, Scenario 2 would continue to one of the four valve box options presented later in this discussion; and • Scenario 3 consists of the construction of the oil pipeline towards the east within the SCE Utility Corridor in the Cities of Redondo Beach and Torrance. When the oil pipeline meets Hawthorne Boulevard in the City of Torrance, Scenario 3 would continue to one of the four valve box options presented later in this discussion. The function of the valve box is to house the valve on the new oil pipeline to isolate it from the main oil transmission line and allow for inspection, operation, and maintenance of the valve and line to be performed as required by Federal and State regulations. The site requirement for a valve box for the Proposed Oil Project would be approximately six feet wide by eight feet long by six feet high. The valve box would be a precast concrete box with walls that are typically eight to ten inches thick. The valve box would be located below grade and designed to State of California Highway “traffic-rated” standards to allow for vehicle travel over it. A standard 36-inch or 42-inch manhole cover would provide access down into the valve box from grade. The manhole cover, the weight of which takes two people to remove and replace, would be bolted into place with special tools, providing security for the valve box. The oil pipeline would end at one of the following valve box locations: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources • Valve Option 1 – For Pipeline Scenarios 1 and 2, the pipeline would continue from the Hawthorne Boulevard/190th Street intersection down 190th Street to the Exxon Mobil Refinery, where it would connect with a valve box location within the refinery site. For Pipeline Scenario 3, the pipeline would turn north in Hawthorne Boulevard and east in 190th Street to the refinery site; • Valve Option 2 - For Pipeline Scenarios 1 and 2, the pipeline would turn south in Hawthorne Boulevard to the SCE Utility Corridor where it would turn east to the valve box location. For Pipeline Scenario 3, the pipeline would continue east in the SCE Utility Corridor across Hawthorne Boulevard to the valve box location; • Valve Option 3 – For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location adjacent to the Santa Fe Rail Road line; and • Valve Option 4 - For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location northeast of the intersection of 190th Street/Hawthorne Boulevard. The oil pipeline would be equipped with a supervisory control and data acquisition system (SCADA), which would monitor pipeline pressure and flow and, if a leak is suspected, would notify the operators. The percentage that is set in the SCADA system would notify the operator of potential oil leak. The detection timeframes set by the Applicant would vary depending on the crude oil flow rate in the pipeline. When the flow rate is at the maximum anticipated production rate of 8,000 barrels per day, flowing on a continuous basis, the flow rate would be 5.5 barrels per minute, and the following would apply: • 15 minute time interval 5 % or 4.1 barrels • 1 hour time interval 2 % or 6.7 barrels • 24 hour time interval 1 % or 80 barrels If oil production is considerably less than the 8,000 barrels per day, the percentages would be adjusted upward to maintain essentially the same volume of oil previously noted based on the reduced flow rate in the pipe. Pipeline Construction Methods The gas and oil pipelines would be installed utilizing conventional trenching methods within Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources either one trench or two separate trenches within the roadway ROW. The construction and installation process would occur in stages consisting of approximately 237 feet in length each. Two stages would be constructed per day (a segment of 237 feet would be new construction, and another 237 feet would be the completion of the construction from the previous day). With the addition of approximately 126 feet for lane transitions and safety cones, a total of approximately 600 linear feet of roadway would be affected per day. A construction spread would be used to accomplish most aspects of the gas and oil pipeline construction along the alignments previously discussed. A construction spread is a clustering of construction equipment that moves along the pipeline route, sequentially removing asphalt roadway, trenching, laying pipe, filling, re-paving, and cleaning up. A pipeline construction spread consisting of several units would be organized to proceed in the following order: • Pre-construction activities • Asphalt removal and ditching or ROW grubbing and ditching • Pipe handling/welding • Pipe coating • Pipe lowering, backfilling, and street repair • Pipe testing and inspection • Metering, pigging, odorant station installation If the oil pipeline can be laid within the SCE Utility Corridor (Scenario 3 pipeline route), a construction spread similar in arrangement, but smaller, would be used since the alignment would not have asphalt. In addition, if it is determined that existing sleeves under streets crossing the SCE Utility Easement exist, trenching across some streets may not need to occur. The following describes the activities that would occur for the construction of the pipelines and Figure 2.16 depicts a typical pipeline construction spread. Pre-Construction Activity The pipeline alignment ROW would include roadways and/or land in existing paved streets and other property, potentially including private property. Approval to construct and operate a pipeline would be obtained from or authorized by franchise agreements or permits from the agency with jurisdiction over the roadways and, if needed, from affected property owners. The construction requirements in the municipal codes and ordinances of the Cities of Hermosa Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Beach, Redondo Beach, and Torrance allow for the construction on major roadways during the following weekday hours: • Hermosa Beach: 8:00 a.m. to 6:00 p.m. on weekdays and 9:00 a.m. to 5:00 p.m. on Saturday. No construction on Sundays and holidays; • Redondo Beach: 9:00 a.m. to 3:00 p.m. on weekdays. No construction on weekends and holidays; and • Torrance: 8:30 a.m. to 3:30 p.m. on weekdays. No construction on weekends and holidays. Figure 2.16 Typical Pipeline Construction Spread Note: All activities may not occur simultaneously. The pipeline construction activities would occur on weekdays between the hours of 9:00 a.m. and 3:00 p.m. (as per the CUP requirements), a time frame which is after morning peak commute hours (i.e., 7:00 a.m. to 9:00 a.m.) and before evening peak commute hours (i.e.: 4:00 p.m. to 6:00 p.m.) on the affected roadways. The Applicant proposes no construction activities during weekends and holidays. The Applicant would prepare a Construction Traffic Management Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources (CTMP) that would include the following: • Require the pipeline contractor(s) to obtain and follow Street Construction Permits in the affected Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities (Pacific Coast Highway and Hawthorne Boulevard); • Develop detour and traffic management plans consistent with the affected City’s Standard Roadway Plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH); • Revise pipeline construction segments to minimize access conflicts to adjacent residents and businesses; • Develop truck route plans to reduce traffic on the street network during peak traffic commute hours; • Avoid construction-related traffic to occur during peak travel periods; and • Implementation of staggered construction worker shifts to minimize Project traffic during the peak hours. Underground Service Alert would notify service providers of construction to avoid conflicts with existing utilities and disruptions of service to utility customers. Because construction would occur in either paved streets or an existing utility corridor, extensive grading is not proposed. Asphalt Removal and Ditching Once traffic control measures are in place, trenching operations would begin. Typically, a five- foot deep and 18- to 24-inch wide ditch (single pipe) or 36-inch wide ditch (double pipes) would be excavated (varying depths, depending on the conditions encountered). Backhoes and track hoes would excavate the ditch. However, hand digging would be necessary to locate buried utilities, such as other pipelines, cables, water mains, and sewers. Fugitive dust emissions at the construction site during earthmoving operations would be controlled by water trucks equipped with fine-spray nozzles. Spoils from cuts, including cuts in the streets, would be saved for backfill or would be removed, and the ditch would be backfilled with slurry material as approved by the local jurisdictional agency. Effort would be made to minimize the amount of excess material. Material unsuitable for backfill and not economically useful for other purposes at the pipeline location would be disposed of at a landfill according to local jurisdictional guidelines. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources When used for backfill, the spoils from the trenches would be hauled to previously disturbed sites, as determined by the construction contractor. Pipe Handling Special trucks would transport the pipe in 40- to 80-foot lengths from the shipment point or storage yard to the pipeline installation point. Where sufficient room exists, trucks would carry the pipe along the roadway, and sideboom tractors would unload the joints of pipe from the stringing trucks and lay them end to end beside the ditch-line for future line-up and welding. A portable bending machine would bend the pipe to fit the ditch contour both vertically and horizontally. Construction ROW conditions could occasionally require pipe bends that are not able to be accomplished in the field. In these cases, manufactured or shop-made bends would be used, and pipe would be bent prior to the application of coating. While the line-up crew lays the pipe, line-up clamps would hold the pipe sections in position until approximately 50 percent of the first welding pass is completed. The welding crew would then apply the remaining weld passes to comply with API 1104, ASME B31.4, or ASME 31.8.2 All pipeline welds would be radiographically inspected. Pipe Coating Protecting the pipe from moisture and air helps prevent corrosion, thereby preventing cracks, breaks, and leaks in the pipe. The steel pipeline would be coated externally with fusion-bond epoxy or a corrosion resistant tape wrap system. Pipeline coating would be applied at the mill before delivery to the construction site. However, field coating would be necessary on all field weld joints to provide a continuous coating along the pipeline. After the pipe has been welded and radiographically inspected, one of the following would be applied: two-part epoxy, heat- shrink polyethylene sleeves or polyethylene tape and tape primer. Pipe Lowering, Backfilling, and Street Repair The pipe would be lifted and lowered into the ditch by one or two sideboom tractors spaced so that the weight of unsupported pipe would not cause mechanical damage. Cradles with rubber rollers or padded slings would allow the tractors to lower the pipe without damage as they travel 2 ASME - American Society of Mechanical Engineers; API – American Petroleum Institute Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources along the ditch line. Additional welds could be required in instances where the ditch line is obstructed by other utilities crossing the pipe ditch. These welds would typically be made in the ditch at the final elevation. In addition to normal welding and weld inspection, each weld would require pipe handling for line-up, cutting to exact length, coating, and backfilling. Backfill material in roadways would most likely be slurry material or could be ditch spoils, according to local agency requirements. Slurry material would be delivered by concrete trucks and consist of sand and cement. Concrete trucks would be trucks from local commercial sources. The area would be repaved if it was previously an existing paved street. In areas where the pipeline would be in previously unpaved areas, the backfill would include topsoil preserved from the excavation for re-vegetation where needed. At the time of backfilling, a colored warning tape would be buried approximately 12 to 18 inches above the pipeline to indicate the presence of a buried pipeline to third-party excavators. The backfilled earth would be compacted using a roller or hydraulic tamper. The trench would be filled with slurry where approved or required by local regulations. Steel plates would cover any open trench at the end of each workday. Pipe Testing and Inspection All field welding would be performed by qualified welders that meet the Applicant’s specifications and in accordance with all applicable laws, ordinances, regulations, and standards, including API 1104, the Standard for Welding Pipe Lines and Related Facilities, and the rules and regulations of the U.S. Department of Transportation found in the Code of Federal Regulations. All welds would be visually and radiographically inspected. All rejected welds would be repaired or replaced as necessary and radiographically inspected again. The radiographic reports and a record of the location of welds would be maintained for the life of the pipeline. In addition to standard testing of all pipe and fittings at the mill, hydrostatic testing would be performed after construction and prior to startup. Federal regulations mandate hydrostatic testing of new, cathodically protected pipelines prior to placing the line into operation. This test involves filling a test section of the pipeline with fresh water and increasing pressure to a predetermined level. Such tests are designed to prove that the pipe, fittings, and weld sections would maintain mechanical integrity under pressure without failure or leakage. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Cathodic protection controls the corrosion of a metal surface by making it work as a cathode of an electrochemical cell. This is achieved by placing the cell in contact with the metal surface and another more easily corroded metal to act as the anode of the electrochemical cell. The cathodic protection system consists of power sources called rectifiers, buried anodes (either sacrificial or impressed current), and test stations along the pipelines. Metering and Pigging Station Installation A gas-metering station would be required at the custody transfer location where the Applicant’s proposed gas pipeline interconnects with the existing SCG pipeline. The metering station would measure and record gas volumes, gas quality, and gas characteristics and provide custody transfer of the gas to SCG. The metering station would be located adjacent to N. Francisca Avenue, southeast of the intersection of Herondo Street and N. Francisca Avenue. SCG would then construct a new six-inch pipeline to a tie-in location with the existing SCG pipeline transmission facility (Line 1170) as previously discussed in Section 2.4.3.2, Phase 3 Offsite Pipeline Construction. In addition to the metering station, a pigging station would be installed at the metering station and Project Site for the gas pipeline, as required by SCG, and at the tie-in point for the oil pipeline. An odorant station would be installed at the Project Site consisting of a 500 gallon odorant tank that would be filled approximately annually. The gas would be odorized before it leaves the site. 2.4.3.3 Phase 3 Hazardous Materials Hazardous materials used as part of Phase 3 would be associated with construction activities, including diesel fuels, lubricating oils, pipe coatings, solvents, etc. No storage of hazardous materials beyond standard consumer quantities (a few gallons) is anticipated in this phase. 2.4.3.4 Phase 3 Schedule It is anticipated that Phase 3 would occur for a period of approximately 14 months as indicated in the schedule provided in Table 2.10. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.10 Phase 3 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28- 38 39- 53 54 55 56 57 58 59 60 61 62 63 64 Remove temporary equipment Remove trees along Valley Remove32-foot sound wall Implement RAP Construct retaining walls Final grading Construct well cellars Construct 16-foot block wall Remove 16-foot sound wall Construct/install facilities Construct street improvements Install landscaping Construct offsitepipelines Start-up of equipment Install 32-foot sound wall Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Set conductor Note: Days are weekdaysSource: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.11 Phase 3 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Remove production equipment 6 15 21 Remove trees along Valley Drive 2 4 6 Install 16-foot noise wall 6 8 14 Implement Remedial Action Plan 18 8 28 Construct retaining walls 3 20 24 Final grading (balanced) 4 6 10 Construct well cellars 9 15 25 Construct 16-foot perimeter wall 5 20 25 Remove 16-foot noise wall 5 5 10 Construct/install onsite facilities 18 40 47 Construct street improvements 11 9 20 Install landscaping 1 7 7 Construct pipeline 18 22 54 Start-up production equipment 0 7 7 Install 32-foot sound wall 6 9 16 Set conductor 2 5 7 Greatest number of trips in one day 18 (during weeks 6-13, 23, 54) 62 (during weeks 39-53) 78 (during week 39-53) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips (RT). Maximum truck activity occurs during week 6-13 with RAP activities, week23 with construct well cellars, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 4 Development and Operations: 2.5 years drilling program. Operations - ongoing perimeter wall and onsite facilities and week 54 with construction of onsite facilities, pipeline construction and conductor setting. However, the majority of the pipeline construction traffic would occur away from the Project Site except during the installation of the sections of the pipeline located very close to the Project facility. Maximum auto activity occurs during weeks 39-53 with the facilities construction. Maximum activity trucks and autos combined occurs during weeks 39-53, however, the majority of the vehicles for the pipeline construction would be parked at the contractor’s facilities or near the pipeline alignment. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices 2.4.3.5 Phase 3 Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 3 are provided in Table 2.11. The vehicle trips required to transport employees and equipment for Phase 2 are also provided in Table 2.11. 2.4.4 Phase 4 Development and Operations The purpose of Phase 4 would be to maximize oil and gas recovery from the reservoirs by drilling additional wells and operating the permanent facility. To accomplish this, Phase 4 would involve the drilling of wells; the operation of the permanent oil production equipment; the transport of the oil and gas by pipeline to their respective destinations; and the ongoing Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources maintenance of the Proposed Oil Project. The Proposed Oil Project would be designed for a maximum capacity of 8,000 barrels of oil per day and 2.5 million cubic feet of gas per day. Figure 2.17 provides the conceptual site plan for Phase 4. Elevations and the conceptual landscape plan for the Proposed Oil Project during Phase 4 are included in Appendix A of the Final EIR. 2.4.4.1 Phase 4 Drilling Phase 4 drilling would involve delivery and setup of the drilling rig and the drilling of the remaining wells. Delivery and Set Up of Drill Rig The drilling rig and its associated equipment would be brought to the Project Site by trucks with trailers permitted by the City and the California Highway Patrol. The approximately 87-foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. The crane would be removed from the Project Site after the drill rig and supporting equipment have been set in place. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, the generator, which would be a non-road portable diesel-fuel generators certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. The drill rig and its associated equipment would require the same setup as described under Section 2.4.2, Phase 2 Drilling and Testing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.5 Drill Remaining Wells The drilling of the remaining oil wells and water disposal/injection wells, up to a total of 30 oil wells and four water disposal/injection wells, would involve the same activities as described for Phase 2. As previously discussed regarding Phase 2, once the drilling of a well is complete, the cemented casing would be run from the surface to the bottom of the wellbore where the well penetrates the oil-producing reservoir. The well would be plumbed into the temporary production equipment and pump system that had been installed. The pump system, installed below ground, would bring the oil, gas, and water to the surface for processing. In addition, up to three additional water disposal/injection wells (in addition to the single water disposal/injection well drilled during Phase 2) would be drilled to allow for the injection of processed produced water back into the oil-producing reservoir and at below formation fracture pressure. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take approximately 30 days to drill each well, including the time for placing the drilling rig in position and installing rigging. After the drilling of the wells is complete, the drill rig would be removed from the Project Site. Including set up for each well and removal from the Project Site, the total drilling time for Phase 4 would be about 30 months (2 ½ years). Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District conveyed via extension of an existing waterline serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in tanks. Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. All other waste generated by the test drilling would be transported by truck to Clean Harbors Buttonwillow Landfill or a similar facility closer to the Project Site. Noise abatement would be incorporated into the drilling process in the same manner as described for Phase 2, including a 32-foot high sound attenuation wall. After the drilling of the wells is Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources completed, the 32-foot sound attenuation wall would be removed from the Project Site. Re-Drilling of Wells Re-drilling of a well occurs if production from a well declines substantially or if problems exist with the well, affecting the well’s efficiency or viability. The same activities would be required for re-drills as for initial drilling, except that conductor piping would not have to be installed again, as the same conductor piping would be used for the re-drill. Although the Applicant does not expect the need for the re-drilling of wells, the activity may be required under extraordinary circumstances. Depending on the circumstances, a workover rig might be able to be used to complete a re-drill. However, for the purpose of providing a worst- case analysis, the Applicant estimates that up to 30 re-drills could occur over the life of the Proposed Oil Project, with up to five re-drills occurring during any given year. In the event that a re-drill would occur, noise attenuation design features, including the use of a 32-foot sound attenuation wall and acoustical covers, would be implemented on the Project Site. Re-drills would involve the same activities and equipment as the drilling proposed for Phase 2 and 4. 2.4.5.1 Phase 4 Processing and Operations During the drilling of the remaining oil wells and water disposal/injection wells, the production of the extracted oil would occur. Figure 2.18 shows the steps involved in processing the oil, water, and gas produced from the wells during Phase 4. The permanent production equipment on the Project Site would be used to process the oil and gas to a standard that would be suitable for sale. The produced water would be processed and injected into the oil-producing reservoir. The gas produced would be processed and sold to the gas company. The oil and gas produced would be transported offsite via pipelines constructed during Phase 3. Figure 2.18 Phase 4 Process Flow Diagram Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Noise abatement would be incorporated into operational practices and permanent production equipment. The anticipated personnel on the Project Site would be four personnel for a 12-hour daytime shift, two personnel for an 8-hourgraveyard shift, and two personnel for an 8-hour swing shift. Therefore, personnel would be present 24 hours per day on the Project Site. During the ongoing operation of the Proposed Oil Project, active wells would require periodic routine service. These activities could include the replacement of down-hole pumps, piping, and cleaning. These maintenance activities would typically be accomplished by utilizing a service rig, or “workover” rig, approximately 110 feet high. The workover rig would be operated on the Project Site a maximum of 90 days per year. The workover rig would be operated between the hours of 8:00 a.m. and 6:00 p.m. on weekdays only (excluding holidays). Only a single workover rig would be onsite at one time. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources In addition, there would be an occasional need for other services such as facilities repair and solid and liquid waste pick-up. Preventative maintenance would be performed on a routine basis to ensure the integrity of the operating equipment. The pipelines would be periodically inspected to ensure their continued integrity. The permanent production facility would be utilized to separate and treat produced oil, gas and water. The separation and treatment of these fluids allows for the oil and gas to be sold and subsequently transported via pipeline and for the water to be injected into the oil-producing reservoir below the oil water contact line. Figure 2.18 provides a simplified flow diagram of the flow of fluids through the permanent production facility. The following describes the steps of production and operational characteristics in Phase 4. Fluids Piped from the Wellhead to the Production Facility After a well has been drilled and completed (final down-hole equipment installed), the extracted fluids would be piped to the permanent production facility on site. The combination of fluids (i.e., oil, gas, and water mixture) is referred to as an emulsion. This emulsion would be sent via pipes to a production header, where it is commingled with the emulsion from all the wells in a gross line before entering a three-phase separator. There is also a test header that allows the diversion of emulsions from a single well through a well test station before the three-phase separator. The well test station allows for the testing of each well quality and flow characteristics. After the emulsion passes through the well test station, it would be directed back to the gross line where it would be commingled back with the emulsion from the production header and then enter the three-phase separator. The three-phase separator separates the oil, gas, and water. The gas exits the top, the oil exits the middle, and the water exits the bottom of the separator. Each of these fluids enters a specific system of treatment, as is discussed in the following subsections. Oil Treatment System After the produced oil leaves the three-phase separator, it would enter a stock tank, where it may need to be heated depending on the quality of the crude oil. This heating would allow excess water to drop from the oil. Heating, if necessary, would be provided by the microturbine exhaust waste heat recovery system. From the stock tank, the oil would be measured using a Lease Automated Custody Transfer Unit (LACT) and transported via pipeline to the purchaser. Any Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources water that drops out of the oil would be routed to the water treatment system. Vapors would be directed to the gas processing systems through the vapor recovery unit. Gas Treatment System During this phase, gas would be treated, sold, and subsequently transported via pipeline to the SCGC. Treatment of the gas would be required to meet gas pipeline specifications. After the gas leaves the three-phase separator, it would be sent to the first stage compressor. The first stage compressor would increase the pressure of the gas for treatment. The first stage of gas treatment is removal of H2S from the gas utilizing triazine using the SulfaScrub system. SulfaScrub is a non-regenerative batch process that requires replacement of the SulfaScrub materials periodically. The SulfaScrub process is a “scavenging” process, meaning it is used to remove H2S in process gas at low concentrations (up to concentrations of approximately 200 ppm). After leaving the SulfaScrub system, the gas would be sent through the amine system. This amine system removes CO2 from the gas. After leaving the amine system, the gas would pass through the second stage compressor, where pressure is increased prior to the gas’ entry into the low temperature separation system. The low temperature separation system removes any remaining moisture (mostly water) and gas liquids from the gas prior to sale. Propane would be utilized as a refrigerant in the low temperature separation system. Before the gas leaves the Project Site, it would be odorized using an odorizing substance (mercaptan or equivalent) as required by law. The gas would then be sent via pipeline through a metering station to a SCG pipeline constructed in Phase 3 located near the corner of Herondo Avenue and N. Francisca Drive to the south of the Project Site. Water Treatment System After the water leaves the three-phase separator, it would be sent to the clarifier tank. This tank would allow solids in the water to drop out. From the clarifier tank, the water would then enter the induced gas flotation unit for the removal of suspended matter, such as oil or solids. The induced gas flotation unit removes oil by injecting gas bubbles into the water. The bubbles adhere to the suspended matter, causing the suspended matter to float to the surface and form a froth layer, which is then removed by a skimmer. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources From the induced gas flotation unit, the water would then pass through a filter unit. The filter unit would be used to clean the water of any remaining oil and solids, such as sand. After the water has left the filter unit, it would enter the water surge tanks for storage before disposal/injection. From the water surge tank, the water would then flow through pumps and be sent to the disposal/injection wells for injection into the oil producing reservoir. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.17 Phase 4 Site Plan with Drilling Rig Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Vapor Recovery System Gas from all tanks and vessels not part of the gas processing system (the oil and water processing tanks and vessels), as well as pressure relief valves, would be gathered through pipes into a closed-system and directed to a vapor recovery compressor unit. The vapor recovery compressor would compress the gas and then add it to the gas in the gas processing system (from the three- phase separator, etc), where it would be processed and sent via pipeline to the metering station and the SCG system. Process Drain System All equipment would be connected to a drain system that would be directed to a drain tank. Liquids from the drain tank would be sent back to the three-phase separator for reprocessing. Solids from the drain system may periodically be removed to an offsite approved disposal facility. Electrical Generation System The facility would utilize a Microturbine system, which would consist of five 200 kw Capstone turbines configured as a single 1,000 kw package. Anticipated NOx emissions would be 4 ppm. Gas produced on the Project Site would be utilized as fuel for the turbines. Facility Storm Drainage System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the Project Site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation from a 100- year storm event. Waste Waste would be generated as part of the facility operations and the production process. Regular waste would include typical municipal trash such as paper, trash bags, food, and cups. Process waste would include generic oil field waste such as sandy oil (from the tank bottoms), spent H2S scavenger, spent filters, oily cloths (i.e., rags), gloves and Tyvek® suits. Intermittently the facility could generate hazardous waste. These wastes could include empty drums, rinse water, painting supplies, spilled chemicals, spent media, and hydraulic fluids. The Applicant indicates Section 2: Project Description Exhibit B that the Project Site would have an Environmental Protection Agency (EPA) and Department of Toxic Substances Control(DTSC) Identification Number. Phase 4 Safety and Security Systems The Fire Protection Plan for Phase 4 would be provided by the Applicant for review and approval by the City of Hermosa Beach Fire Department (Fire Department) and incorporated into the Phase 4 Site Safety Plan. Emergency access would be incorporated into the design of the Proposed Oil Project. An additional fire hydrant would be provided adjacent to the Project Site as a component of the Proposed Oil Project. The location of the hydrant would be determined by the Fire Department, and installation would occur as a part of the construction completed in Phase 3. A fire suppression system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed during Phase 3. The fire suppression systems would include a foam injection system and automated detection and annunciation systems. Automated alarm systems would be installed for the detection of chemicals and fire hazards to notify onsite personnel that an emergency situation is potentially occurring. If it is determined that a chemical fire or fire emergency exists, the onsite operator would activate the emergency shutdown system and notify the Fire Department. The Fire Department and their allied agencies would respond as indicated in their mutual and automatic aid agreement contracts. The onsite personnel for the Proposed Oil Projectwould be trained for initial spill response and activation of emergency systems at the site as per HAZWOPER requirements, but would not be trained for fire fighting and would rely on the Fire Department for response activities. The fire detection system would consist of thermal fire detection and optical surveillance systems that would monitor potential fire zones and activate warning indicators. The Applicant proposes Subsidence and Induced Seismicity Monitoring Programs to detect subsidence as a result of drilling activities. This would ensure that subsidence would not be tolerated to the degree that it could endanger the facility, offsite structures, and the shoreline. Also, an Induced Seismicity Monitoring Program would be designed to detect seismic activity that might result from drilling activities. The security system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed and initiated during Phase 3. Security on the Project Site would be provided by onsite personnel and a site security program that would include a Closed Circuit Television System, a gate access system, and an intrusion and motion detection system. The security system would Section 2: Project Description Exhibit B control all access to and from the Project Site. During the final design of the Proposed Project and submission of plans to the appropriate agencies for permits, the following plans and programs would be developed by the Applicant as part of the facility drilling and operations phases (Phase 2 and Phase 4 activities): • Odor Minimization Plan; • Air Monitoring Plan; • Fire Protection Plan; • Safety and Environmental Management Program; • Mechanical Integrity Program; • Hazardous Materials Business Plan; • Subsidence and Induced Seismicity Monitoring Programs; • Noise Monitoring Plan; • Quiet Mode Drilling Plan; and • Various plans related to grading, equipment design, electrical design, landscaping, etc. Safety devices would be installed within the piping, vessels, and tanks in the processing system. Safety devices would provide early warning, corrective action, or shut down of a specific segment of the system or the entire facility, if necessary. A number of safety devices are required or recommended by codes, standards and regulations, including: • High level warning systems; • High pressure warning systems; • Automatic shutdown valves; • Vessel and pipe design requirements; • Vapor recovery and component leakage limits; and • Fuel contaminant limits. Detailed piping and instrument diagrams would be provided by the Applicant during the detailed permitting stages, and reviews of the final design would be undertaken at that time. Specific measures to reduce the risk of hazardous material releases are addressed in Section 4.8, Safety, Risk of Upset, and Hazards. Phase 4 Hazardous Materials The operation would require the use of hazardous chemicals. The chemicals would be stored Section 2: Project Description Exhibit B onsite with secondary containment. The chemicals would be documented in a required Hazardous Materials Business Plan and submitted to the Los Angeles County Fire Department as the Certified Unified Program Agency (CUPA) and the Hermosa beach Fire Department. Typical chemicals utilized in the permanent production facility and the maximum quantities that would be onsite at any time are listed in Table 2.12. Hydrogen Sulfide The Applicant indicates that low levels of potential “native” H2S, in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the underlying oil reservoir. In order to have the capability to treat higher levels, the Proposed Oil Project has been planned to treat H2S levels of 15 ppm and has a maximum design capacity to treat H2S levels of up to 100 ppm. After treatment with the SulfaScrub system, the H2S levels of the gas would be reduced to less than 4.0 ppm. SCG’s specifications limit the H2S concentrations in gas delivered to the meter from a producer to less than 4.0 ppm. The Proposed Project provides for the disposal/injection of treated produced water from the drilling and production process back into the oil reservoir using water disposal/injection wells. Untreated produced water can result in the creation of H2S concentrations in the reservoir above the existing levels in the oil reservoir (referred to as the “native” condition). Prior to the disposal/injection of produced water from the oil extraction process, surface runoff from precipitation that collects on the Project Site, or any additional injected water, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff and additional water would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) Odorant/Mercaptan Odorize the sales gas 500 H2S Scavenger/Pertrosweet Gas treatment for H2S 9,000 Section 2: Project Description Exhibit B Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) HSE700 Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter Cor7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Glycol/TEG Gas treatment for water removal 55 Amine/DEA Gas Treatment for H2S removal 110 Methanol For oil treatment 55 Biotreat 8415 Water treatment prior tore- injection 55 Hydrochloric Acid 15%, used for acid washing during completion Varies Hydrofluoric Acid 3%, used for acidizing muds Varies Note: Project Application, Amendments and Appendices 2.4.5.2 Phase 4 Schedule It is anticipated that Phase 4 would occur for a period of approximately 30 to 35 years, as indicated in the schedule provided in Table 2.13. The drilling of the remaining wells would occur during the first 30 months of Phase 4, with periodic re-drills thereafter for the life of the project (averaging 30 days per year with a maximum of 150 days in one single year). The permanent production equipment would operate 24 hours a day, seven days per week. The Section 2: Project Description Exhibit B Project Site would be staffed 24 hours a day, seven days per week. Section 2: Project Description Exhibit B Table 2.13 Phase 4 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 through 131 132 133 134 135 Life of Project Deliver and Set up drill rig Drill remaining 30 wells Remove drill rig Remove 32-foot noise wall Facility operations and maintenance Continuous Re-drills Avg. 30 days/yr Max 150 days/yr* Well workovers Max 90 days per year Source: Project Application, Amendments and Appendices. To re-drill a well, a drilling rig similar to the one initiallyused to drill the wells would be used with the same setup, drilling and removal procedures. Workovers would use an 110-foot tall truck mounted drilling rig and would be conducted a maximum of 90 days per year. * This is the maximum number of days per year proposed by the Applicant. The 150 days per year is predicted to occur once every 5 years. Most likely re-drill activity would be lower. 2.4.5.3 Phase 4 Vehicle Requirements The number of vehicles estimated by the Applicant to be necessary for Phase 4 operations are provided in Table 2.14. During drilling, parking for Project employees would be provided as previously described under Section 2.4.1.1, Phase 1 Construction Activities, under the subsection Clearance of the Project Site. Parking for Project employees would be provided on the Project Site after the drilling of all the wells is completed and the drill rig has been removed from the Project Site. 2.4.6 Parking Requirements The Proposed Project construction and operation activities would result in increased parking demand. The elimination of existing parking would also make necessary the replacement of spaces lost. Parking requirements addressed in this FEIR include the following: • Temporary parking for a maximum of 40 Project employee vehicles, varying between Section 2: Project Description Exhibit B approximately 20 and 40 employee vehicles during construction and/or drilling activities in Phases 1-4, excluding ongoing production in Phase 4; • Long-term parking for four Project employees during the ongoing operation of the Proposed Project and four additional spaces for maintenance workers in Phase 4; Exhibit B Replacement of 15 parking spaces currently located at the City Maintenance Yard that supply free remote public parking on weekends under the City’s Preferential Parking Program approved by the Coastal Commission. These spaces are used by: • Maintenance Yard employees during working hours (i.e., Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays) and by the public at other times; and • Replacement of two on-street public parking spaces that would be eliminated by improvements to the southwest corner of 6th Street and Valley Drive. These spaces are not part of the City’s Preferential Parking Program. Table 2.14 Phase 4 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Deliver and Set up drill rig 6 20 26 Drill remaining 30 wells 12 11 23 Remove drill rig 5 20 25 Remove 32-foot sound wall 4 8 12 Facility operations and maintenance 5 13 18 Well workovers/Major Maintenance 4 14 18 Greatest number of trips in one day 17 (during drilling ) 34 (during drilling) 44 (during drilling) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum activity occurs during drilling of wells with facility operations and maintenance. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simple addition of the two. See Appendix A. Re-drilling would produce the same level of traffic as traffic produced during drilling activities. Exhibit B See Appendix A for details regarding vehicles, employees, trucks and construction equipment necessary for Project operations each week. Source: Project Application, Amendments and Appendices In order to comply with the City’s Preferential Parking Program and Coastal Development Permit requirements and be consistent with the City’s Coastal Land Use Plan (titled Local Coastal Plan) policies,, 17 public parking spaces would have to be generated under the Proposed Oil Project to replace the 15 parking spaces removed at the current City Maintenance Yard and the 2 on-street public parking spaces removed from 6th Street, Table 2.15 provides the Applicant’s assessment of parking demand for each phase of the Proposed Oil Project and the Applicant’s proposal for the development of the required parking as a component of the Proposed Oil Project. As indicated in Table 2.15, Phases 1, 2, and 3 and the drilling portion of Phase 4 would require temporary offsite parking. Exhibit B Table 2.15 Proposed Oil Project Parking Requirements Phase and Peak Activities Peak Number of Employees Number of Offsite Parking Spaces Needed Comments Phase 1: construct fence, wells cellar and install electrical service 27 20 Some employees would park onsite and others would use temporary parking lot. Phase 2: Install equipment and drill test wells. 22 12 Two 5 person shifts for drilling, some carpooling assumed. Phase 3: Construct wall, remove soundwall, construct onsite facilities 30-60 40 Peak employees occurs for constructing onsite facilities. Assumes some carpooling. Phase 4: Drilling and Operations 10 4 5 persons per shift with 2 shifts per day. Carpooling is assumed. Phase 4: Operations Only 2-4 0 No offsite parking needed. Source: Applicant submittals January 2014 The following information summarizes E&B’s proposal in the Project Application to meet parking demands. Cypress Parking Lot: Parking for 20 employees during temporary construction and drilling activities during Phases 1, 2, 3, and the drilling portion of Phase 4 would be provided in an offsite temporary parking lot to be developed at 636 Cypress Avenue adjacent to the western Project boundary (referred to as the temporary parking lot). The Applicant states it has entered into an agreement with the current owner of the subject property at 636 Cypress Avenue (Assessor Parcel No. 4187-031-22) for this use. Access to the parcel is provided from Cypress Avenue. While adjoining the Project Site at 555 6th Street, the temporary parking lot will not be accessible from the Project Site due to an elevation difference between the properties and the need for secured points of entry onto the Project Site. Exhibit B The 6,000-square foot parcel at 636 Cypress Avenue is a relatively level property. Itis currently developed with a single-story building that occupies approximately 75 percent of the parcel and a parking lot with approximately 6 parking spaces. The development of the parcel would comply with all City requirements. Development would require demolition of the existing building, removal of the current asphalt parking area, and minimal grading. The Cypress Parking Lot would be completed before the commencement of construction activities to occur under Phase 1 Site Preparation of the Proposed Project. Improvements that would be made to the new 60-foot by 100-foot parking lot with 20 parking spaces would include drainage, landscaping with irrigation, lighting, a trash container, and other elements to comply with the City of Hermosa Beach Municipal Code. Details of the redeveloped parcel are shown in Figure 2-18. The Applicant has requested that the City supply the required 17 replacement spaces as part of the City Maintenance Yard relocation. If the No Added Parking option is constructed, then the 17 spaces would be provided on a temporary basis at the proposed temporary parking lot at 636 Cypress Avenue and on a permanent basis as indicated below.. The City has not agreed to supply any replacement spaces regardless whether the Parking option or No Added Parking option were to be constructed Additional 20 Temporary Parking Spaces (Phase 3):During peak construction activities in Phase 3, parking for a maximum of 20 temporary parking spaces, in addition to the 20 temporary parking spaces provided at the off-site temporary parking area at 636 Cypress Avenue , would be provided at one or more sites, not yet identified, that would be leased or rented by the Applicant. Employees would walk to or be shuttled to the Project Site. The Applicant proposes to ensure to the City, through the submittal of any required documentation, that the parking spaces would be available during the temporary construction and drilling activities for the Proposed Project. If spaces are “remote,” located farther than 5 to 8 blocks from the Project Site as defined by the Applicant, a van pool shuttle service from the remote parking spaces would be provided to the Project Site by the Applicant. The Applicant proposes to obtain all required approvals and entitlements from the City and to make any required modifications to conform with City codes, identified as mitigation measures in the certified EIR, and any other requirements that may be imposed as a result of the Development Agreement or ballot measure. Construction Vehicle Parking (Phases 1-4 excluding permanent operations): The Applicant Exhibit B indicates that it has an agreement to utilize the below-ground parking area at 601Cypress Street for non-hazardous equipment storage and construction vehicle parking. Parking for construction vehicles and staging would be provided both at the Project Site at 555 6th Street and within the building at 601 Cypress Street during Phases 1-4. Parking for Ongoing Operations in (Phase 4): The long-term parking for a maximum of four Project employee vehicles during ongoing operations and maintenance will be supplied by four marked parking spaces on the Project Site at 555 6th Street. Additional parking required for maintenance activities for ongoing operations would also be accommodated onsite along the perimeter wall as indicated in Figure 2-18. No additional offsite parking would be required for long-term Project operations. Replacement of Spaces Eliminated by the Project: Fifteen parking spaces at the Project Site at 555 6th Street are used by City Maintenance Yard employees during working hours of Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays. These spaces also supply free remote public parking on weekends under the City’s Preferential Parking Program, approved by the Coastal Commission, and are otherwise used by the public when available. The Application proposes to replace 15 spaces for free remote public parking in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The City would be responsible to supply parking for its Maintenance Yard employees as part of its City Maintenance Yard relocation plan. Two on-street public parking spaces would also be eliminated by Project improvements to the southwest corner of 6th and Valley Drive; these spaces are not part of the City’s Preferential Parking Program. The Application proposes to replace these two spaces in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The Application indicates potential overlap with onsite employee scheduling during the drilling portion of Phase 4, requiring four parking spaces at 636 Cypress Avenue to be vacant as one shift arrives and another shift is leaving. This results in the availability of 16, rather than 17, parking spaces for a period of approximately one hour. The Application indicates that relocation of the 17 public parking spaces requires a coordinated approach between the Applicant and the City and proposes that this relocation be governed by the Lease Agreement (Section 13). The Applicant proposes the relocated City Maintenance Yard be developed in a manner which could supply the permanent public parking spaces on weekends Exhibit B and at night, similar to the way in which the existing parking spaces at the current City Maintenance Yard are utilized. If the relocation of the City Maintenance Yard does not become the location for the permanent public parking spaces, then the Applicant proposes to provide 15 replacement public parking spaces as well as the additional 2 public parking spaces, prior to the commencement of Project operations, at the offsite temporary parking lot at 636 Cypress Avenue or to provide other suitable public parking spaces consistent with requirements of the City’s Preferential Parking Program, the California Coastal Act, and a framework proposed by the Applicant. 2.4.7 Project Life and Decommissioning Under the Proposed Oil Project, the oil and gas resources would be developed until they are depleted and developing them is no longer economically viable, for up to 35 years. Currently, the amount of crude oil that could be produced from the field is unknown, and future crude prices are difficult to assess. According to the Lease Agreement, the Proposed Oil Project could operate for up to 35 years. Figure 2.19 shows the estimated crude oil, gas and water production for the life of the Proposed Oil Project. If during Phase 2 the Applicant does not consider the level of production from the Project Site to be economically feasible, then decommissioning of the installed equipment would commence. Decommissioning would involve the removal of the drilling and temporary testing equipment and would include abandonment of wells according to the Division of Oil, Gas and Geothermal Resources (DOGGR) requirements. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. At the end of the Proposed Oil Project, when the owner applies to DOGGR and to the City to abandon the facility, a separate permit process and CEQA environmental review would be required to evaluate decommissioning of the entire Project Site. Since the timing of the decommissioning is unknown, the Applicant has not submitted a detailed decommissioning plan, and therefore any assessment of decommissioning activities would be speculative at this time. Exhibit B Figure 2-18 Cypress Parking Area Source: E&B Updated Parking Plan 1/8/2014 Exhibit B Figure 2.19 Estimated Production Levels Source: Based on Applicant submitted estimates 2.4.8 Project Scheduling Summary Under the Proposed Oil Project, there are a number of different activities with various allowances for time of day, day of week and annual limits. These are summarized in Table 2.16. Table 2.16 Proposed Oil Project Scheduling Summary Activity Allowed Period Annually Days and Hours per Day Workover Rig Maximum 90 days per year 8 am - 6 pm weekdays only Exhibit B Drilling Rig Phase 2 - 120 days Phase 4 - 30 months 24 hours per day Re-drills 30 days per year average, up to 150 per year max 24 hours per day Phase 1 and Phase 3 Construction Any 8 am - 6 pm weekdays and 9 am - 5 pm Saturdays Offsite ROW Construction Any 8 am - 3 pm weekdays only in the City of HB Truck deliveries Any 9am - 3 pm weekdays or emergencies Quiet mode drilling Phase 2 and Phase 4 Drilling, Re-drills 7 pm - 8 am Pipeline construction activities Phase 3 9 am - 3 pm weekdays. Exhibit B Exhibit C EXHIBIT “C” PUBLIC BENEFITS OF PROJECT With the approval of the Project by the voters of the City, the public benefits of the Project provided by the Lease include: a) the royalties as further described in the Lease, that have been recently estimated to range from [insert amount] pursuant to the City’s Cost Benefit Analysis to [insert amount] pursuant to E&B’s Economic Analysis;[UNDER DISCUSSION] and b) the minimum annual royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled as further described in the Lease (“Minimum Royalty”). In addition, and as consideration for the benefits provided to E&B through the approval of this Agreement by the voters of the City, E&B has agreed to provide the additional public benefits as follows: 1) Advances Commencing with Issuance of City Drilling Permit for First Well: E&B shall pay to the City, as an advance, One Million Dollars ($1,000,000) per year, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Drilling Permit Advance” or collectively, “Drilling Permit Advances”). (For clarity, this period is estimated to continue for approximately five years, for a total of Five Million Dollars ($5,000,000).) The Drilling Permit Advances are not restricted and may be used in accordance with applicable City laws. Each $1,000,000 Drilling Permit Advance would be adjusted by any royalties received by the City in that year to ensure that the City receives a minimum of $1,000,000 each year. The Drilling Permit Advances shall be repaid by the City from royalties, including royalties from tidelands, without interest, and will be added to the advance amount and subject to the repayment process set forth in Section 13.d(4) of the Lease. If royalties are not sufficient to repay the Drilling Permit Advances, then the City is not required to repay the Drilling Permit Advances. 2) Additional Payment During Years 4-13 To Ensure $1,000,000 Minimum Amount: The Lease provides for a Minimum Royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled and continuing to the 13th anniversary (“Years 4-13”). If royalties provided to the City during Years 4-13 do not exceed One Million Dollars ($1,000,000), E&B shall pay to the City an additional amount equal to the difference between the Minimum Royalty and One Million Dollars ($1,000,000). For clarity, given that the Minimum Royalty is Five Hundred Thousand Dollars ($500,000), this payment would be an additional amount of up to Five Hundred Thousand Dollars ($500,000), for a total of One Million Dollars ($1,000,000). Exhibit C 3) Remediation of City Maintenance Yard: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, E&B shall implement the proposed Remedial Action Plan as described in Exhibit B to this Agreement in Phase 3 of the Project; however, if E&B determines as a part of Phase 2 not to proceed with Phase 3 of the Project, then E&B shall conduct any necessary remediation activities at the Project site to allow the site to be used for industrial or commercial purposes (e.g., City maintenance or commercial activities), in a manner consistent with its obligations under the Lease, the Settlement Agreement and this Agreement. E&B shall not be obligated to remediate the property for any other future uses, such as commercial or residential uses. [If voters do not approve ballot measure, this document would not be vehicle for determining clean-up, but in any case, E&B is will not remediate site if project is not approved.] 4) Educational Funding: E&B’s Proposal: E&B shall pay 1% of gross revenues (currently estimated to be Thirty Seven Million Dollars ($37,000,000)) to the Hermosa Beach Education Foundation (“Foundation”), and if the Foundation does not accept the donation, the amount shall be provided to the City to be used for any municipal purposes. Councilmember DiVirgilio’s proposal: Education Funding: E&B shall pay 1% of its gross annual revenues directly to the Hermosa Beach School District. In the event that the School District does not accept the funds, E&B shall pay 1% of its gross annual revenues directly to the Hermosa Beach Education Foundation. Payment shall be made monthly each year the Development Agreement is in effect, commencing the month that production commences. The School District and the Education Foundation, as the case may be, are third party beneficiaries of this obligation and may enforce it as though parties to this Development Agreement. The City is not an indispensable party in any such action. In the event neither the School District nor the Education Foundation accepts the funds, this requirement will be deemed satisfied. Councilmember Fangary would delete this paragraph 4. [UNDER DISCUSSION] 5) Relocation of City Maintenance Yard: If the voters approve the Project, the City may determine to relocate the City Maintenance Yard to a temporary location and then to a permanent location or alternatively, to relocate the City Maintenance Yard directly to a permanent location, without a temporary location. With respect to either of these options, E&B agrees as follows: a. $3.5 Million Forgiven Upon Issuance by City of Drilling Permit for First Well: Upon the issuance by the City of the drilling permit for the first well, the City shall not be required to repay the Three Million Five Hundred Exhibit C Thousand Dollars ($3,500,000), plus interest, to E&B as further described in Section 4.6.b of the Lease. b. $6.5 Million Advance for Permanent Relocation: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, then E&B shall advance Six Million Five Hundred Thousand Dollars ($6,500,000) to the City for the permanent relocation of the City Maintenance Yard. 6) Matching Funds to Property Owners for Undergrounding Utility Lines in the City: If E&B determines as a part of Phase II of the Project to proceed with Phase III of the Project, E&B agrees to provide up to Thirty Million Dollars $30,000,000 in matching funds (50% of the costs) to property owners for the purpose of undergrounding utility lines in the City. Property owners in the City may utilize the City process to create a district for this purpose or, alternatively, coordinate directly with the utility to achieve the undergrounding of utilities. The costs would be confirmed through the City process or by the utility, and any costs incurred by the City (that would otherwise be reimbursed by the property owner) would be included in the cost amount. These matching funds would be funded through gross revenues from the Project, with an initial amount of One Million Dollars ($1,000,000) to be contributed by E&B at the commencement of the program. [UNDER DISCUSSION] 7) Hermosa Beach Residential Property Fund: Purpose: To provide owners of residential properties within 600 feet of the Hermosa Beach Oil Recovery Project (Project) with assurance that they will incur no loss, as a result of the Project, to their property’s fair market value (Market Value), in the event of a sale of their property. Such assurance is offered through voluntary participation in a Hermosa Beach Residential Property Fund (Fund). Offer: The Fund will pay the difference between an eligible property's actual negotiated sale price and the appraised Market Value of the property, which will be determined as if the Project had not been built. A predetermined independent appraisal process will demonstrate if there is a loss in the Market Value of an owner's residential property. Participation: Participation in the Fund is entirely voluntary. Eligibility: Owners of residential properties that are located within the “eligibility area” (within 600 feet of the Project, measured property edge to property edge) are eligible to participate. The claim must be made by the then current owner of the property and only one claim per property will be allowed; however, the owner need not own the property when the Fund commences in order to be eligible for a claim. By way of example only, if the original owner of the property does not make a claim in connection with its sale to a buyer, then so long as the sale occurs during the Fund term, the buyer would automatically succeed to the rights of the selling property owner with respect to the Fund, Exhibit C including the right to make any claim, subject to the other requirements for participation in this Fund. Costs: There is no monetary cost to participating residential property owners to receive the benefits of the Fund, now or in the future. All costs, including the costs of obtaining required appraisals, are paid by the Fund. Cap: There will be a $20,000,000 cap (Funding Cap) on the total amount of benefits that the Fund can pay out. Term: The Fund will commence upon issuance of the City Drilling Permit for First Well by the City of Hermosa Beach and will continue in effect until the first to occur of (a) six years from commencement of the Fund, or one year after the completion of the final Project well, whichever is later, or (b) the entire Funding Cap has been disbursed to eligible residential property owners. The six-year aspect of the Fund term described in subpart (a), above, will be extended consistent with any extension of the term of the Development Agreement in accordance with Section 6.24 of the Development Agreement. Administration: E&B Natural Resources (E&B) will establish the Fund and designate a qualified, independent Fund Administrator. The Fund Administrator will not be an officer, employee, or affiliate of E&B. Application: To receive benefits, a selling owner of a residential property within the eligible area will submit to the Fund Administrator: (1) a signed Program Participation Agreement setting forth the terms of the Fund program (Program) and a signed claim form; (2) a copy of an accepted written offer to purchase the residence on arms-length terms from a buyer who is not related to or affiliated with the selling residential property owner and that complies with the Program requirements; and (3) a current (dated not earlier than six months prior to the property owner’s application) appraisal reflecting the Market Value of the property, which will be determined as if the Project had not been built. The appraisal must be prepared by an MAI or RM designated appraiser who is licensed in California and has at least five years of experience appraising similarly-situated residential properties in the South Bay region of Los Angeles County, California. Benefits: Within 14 calendar days after receiving a selling residential property owner’s application materials, the Fund will either agree to pay the amount of the claim, or obtain another appraisal of the residential property using the same criteria as the owner's appraisal. If the Fund obtains an alternate appraisal and the difference between the two appraisals is within 10% of the higher appraised Market Value, the Market Value for purposes of the residential property owner’s claim on the Fund will be equal to the average of the two appraised Market Values. If not, a third appraiser will be selected by the first two appraisers, and the Market Value determination in the Exhibit C third appraisal will be deemed the Market Value of the property. The owner and the Fund will be conclusively bound by the third appraisal. The difference between the Market Value of the residence, as so determined, and the property’s actual negotiated sale price will be paid by the Fund to the selling homeowner either at closing or within 10 calendar days after the Market Value of the residence has been determined, whichever takes place later. Market Value: Each appraisal obtained will determine the Market Value of the homeowner’s residential property as of the date of the appraisal and as if the Project had never been built. Claims: By submitting a claim to the Fund, the homeowner agrees to be bound by the terms of Program, and to accept reimbursement from the Fund for a loss in the Market Value of the owner’s residential property in exchange for foregoing any legal action to receive compensation for a decrease in the Market Value of the owner’s residential property that is caused by or results from the Project. Any offer that a participating owner enters into for sale of its residence must disclose that E&B has a right of first refusal to purchase the property for a price equal to the Market Value determined by the appraisal process without incurring any broker's commission. Any claim against the Fund must be submitted before the sale of the eligible residential property is completed; no claim will be considered or paid by the Fund after the closing of the sale of the residential property. Funding: E&B will ensure that, at all times during the Fund term, there is a minimum balance of $1,000,000 in the Fund, and E&B will ensure that at least $1,000,000 is in the Fund upon expiration of the six-year Fund term. E&B will regularly replenish the Fund up to the Funding Cap, as and if disbursements are made, to ensure that the Fund has readily-available funds to satisfy potential claims asserted by owners of eligible residential properties under the Program. E&B will also provide additional funding totaling a maximum of $4,000,000 from contributions based on 1.5% of gross project revenues on an annual basis until either a total of $4,000,000 has been contributed to the Fund from gross project revenues or the Funding Cap has been reached. Distribution: E&B will ensure that upon expiration of the Fund term, the Fund will have a remaining balance of at least $1,000,000 and up to a maximum sum of $5,000,000, depending on the total amount of claims that have been made against and paid by the Fund. The remaining amount in the Fund at the end of the Term shall be distributed to the then current owners of all otherwise-eligible residential properties located within 300 feet of the Project for which there has not previously been made any claim. The owner of each such residential property will be entitled to an equal, pro rata share of the amount remaining in the Fund at the end of the Fund term (after all appraisal costs and other Fund administrative expenses have been deducted). The pro rata share of the Fund balance to which each owner will be entitled will be based on the total number of properties entitled to share in the distribution. By way of example only, if at the end of the Fund Exhibit C term, there are 60 residential properties within 300 feet of the Project for which no claim has been made against, and no distribution received from, the Fund, then the owner of each such residential property will be entitled to 1/60 of the amount then remaining in the Fund after all appraisal costs and other Fund administrative expenses have been deducted. With the approval of the Project by the voters of the City, the public benefits of the Project include: a) the royalties as further described in the Lease, estimated to range from [insert amount] pursuant to the City’s Cost Benefit Analysis to [insert amount] pursuant to E&B’s Economic Analysis; and b) the minimum annual royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled as further described in the Lease (“Minimum Royalty”). In addition, and as consideration for the benefits provided to E&B through the approval of this Agreement by the voters of the City, E&B has agreed to provide the additional public benefits as follows: 1) Advances Commencing with Issuance of City Drilling Permit for First Well: E&B shall pay to the City, as an advance, Five Hundred Thousand Dollars ($500,000) per year, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Drilling Permit Advance” or collectively, “Drilling Permit Advances”). (For clarity, this period is estimated to continue for approximately five years, for a total of Two Million Five Hundred Thousand Dollars ($2,500,000).) Each $500,000 Drilling Permit Advance would be adjusted by any royalties received by the City in that year to ensure that the City receives a minimum of $500,000 each year. The Drilling Permit Advances shall be repaid by the City from royalties, including royalties from tidelands, without interest, and will be added to the advance amount and subject to the repayment process set forth in Section 13.d(4) of the Lease. If royalties are not sufficient to repay the Drilling Permit Advances, then the City is not required to repay the Drilling Permit Advances. 2) Minimum Royalty Increased by Rental Value of Storage Yard: To compensate the City for the loss of rental income from the Storage Yard (the permanent site for the new City Maintenance Yard), which is estimated to be One Hundred Eighty Thousand Dollars ($180,000) annually, E&B agrees to increase the Minimum Royalty from Five Hundred Thousand Dollars ($500,000) to Six Hundred Eighty Thousand Dollars ($680,000). Exhibit C 3) Remediation of City Maintenance Yard: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, E&B shall implement the proposed Remedial Action Plan as described in Exhibit B to this Agreement in Phase 3 of the Project; however, if E&B determines as a part of Phase 2 not to proceed with Phase 3 of the Project, then E&B shall conduct any necessary remediation activities at the Project site to allow the site to be used for industrial purposes (e.g., City maintenance activities), in a manner consistent with its obligations under the Lease, the Settlement Agreement and this Agreement. E&B shall not be obligated to remediate the property for any other future uses, such as commercial or residential uses. [If voters do not approve ballot measure, this document would not be vehicle for determining clean-up, but in any case, E&B is will not remediate site if project is not approved.] 4) Residential Property Trust: [See attached summary.] 5) Educational Funding: E&B shall pay a percentage of gross revenues [insert percentage] [currently estimated to be Thirty Million Dollars ($30,000,000)] to the Hermosa Beach Education Foundation or to an organization established under Section 501(c)(3) of the Internal Revenue Code for educational purposes to benefit the Hermosa Beach community [insert timing of payment]. 6) Relocation of City Maintenance Yard: If the voters approve the Project, the City may determine to relocate the City Maintenance Yard to a temporary location and then to a permanent location or alternatively, to relocate the City Maintenance Yard directly to a permanent location, without a temporary location. With respect to each of these options, E&B agrees as follows: a. Temporary and Permanent Relocation: i. For the temporary relocation of the City Maintenance Yard, E&B agrees to increase the maximum temporary relocation advance amount of Seventy Five Thousand Dollars ($75,000) and the Rent Reimbursement advance amount of Two Thousand Five Hundred Dollars ($2,500) per month set forth in Section 13.c of the Lease by the applicable Consumer Price Index (“CPI”) at the time the amounts are to be paid. ii. For the permanent relocation of the City Maintenance Yard, E&B agrees as follows: i) E&B agrees to increase the advance amount of Five Hundred Thousand Dollars ($500,000) set forth in Section 13.d of the Lease by the applicable CPI at the time the trust is to be established; and ii) E&B agrees to guarantee the amount to be paid by the City for the permanent relocation of the City Maintenance Yard, whereby the City would utilize its financing capacity to fund the permanent relocation, but if the royalties Exhibit C from the Project were not sufficient to compensate the City for the relocation cost (including financing costs), E&B would pay for any remaining cost of the relocation not covered by royalties. Further, only royalties in excess of the increased Minimum Royalty of Six Hundred Eighty Thousand Dollars ($680,000) shall be considered in the determination of whether the royalties are sufficient to compensate the City for the relocation cost. iii. The base year for the application of the CPI shall be 1992. iv. The advances for the temporary and permanent relocation combined with the guarantee for the permanent relocation described above shall not exceed Ten Million Dollars ($10,000,000), which may be increased in E&B’s discretion, provided that certain criteria are met. v. To the extent that the permanent relocation of the City Maintenance Yard includes excess parking spaces for public purposes, such parking spaces, or some portion of them, may be utilized to satisfy any public parking conditions of the project. b. Permanent Relocation (without a Temporary Relocation): i. E&B agrees to increase following advances by the applicable Consumer Price Index (“CPI”) at the time the amounts are to be paid (described below): i) the maximum temporary relocation advance amount of Seventy Five Thousand Dollars ($75,000) in Section 13.c of the Lease; ii) the Rent Reimbursement advance amount of Two Thousand Five Hundred Dollars ($2,500) per month set forth in Section 13.c of the Lease; and iii) the advance amount of Five Hundred Thousand Dollars ($500,000) set forth in Section 13.d of the Lease. ii. The $500,000 advance (increased by CPI), shall be paid at the same time as the $75,000 advance (increased by CPI), as set forth in the Lease. iii. E&B agrees to guarantee the amount to be paid by the City for the permanent relocation of the City Maintenance Yard, subject to the limit set forth below, whereby the City would utilize its financing capacity to fund the permanent relocation, but if the royalties from the Project were not sufficient to compensate the City for the relocation cost (including financing costs), E&B would pay for any remaining cost of the relocation not covered by royalties. Further, only royalties in excess of the increased Minimum Royalty of Six Hundred Eighty Thousand Dollars ($680,000) shall be considered in the determination of whether the royalties are Exhibit C sufficient to compensate the City for the relocation cost. iv. The base year for the application of the CPI shall be 1992. v. E&B’s guarantee for permanent relocation described above shall not exceed [insert amount], which may be increased in E&B’s discretion, provided that certain criteria are met. vi. To the extent that the permanent relocation of the City Maintenance Yard includes excess parking spaces for public purposes, such parking spaces, or some portion of them, may be utilized to satisfy any public parking conditions of the project. 7) Matching Funds: E&B shall make available matching funds up to an amount of [insert amount] for City projects to underground utilities, to implement green initiatives, to beautify the City or to implement similar projects, where E&B’s matching funds would be provided on a [provide ratio of City dollars to E&B dollars], utilizing the following process: [describe process]. 8) $3.5 Million Forgiven If Project Does Not Proceed to Phase 3: If E&B determines as a part of Phase 2 not to proceed to Phase 3 of the Project, the City shall not be required to repay the Three Million Five Hundred Thousand Dollars ($3,500,000), plus interest, to E&B as further described in Section 4.6.b of the Lease. City may utilize this $3.5 Million to conduct additional remediation activities at the Project site to commercial or residential standards. 9) Fracking: E&B agrees not to engage in any well stimulation activities as defined in Senate Bill 4. 10) Fire Marshal: Mitigation Measure 11) Fire Department Training: Mitigation Measure 12) HIA Recommendations: TBD Exhibit C HERMOSA BEACH RESIDENTIAL PROPERTY FUND ______________________________________________________________________________ Purpose: To provide homeowners who own homes within XXX feet of the Hermosa Beach Oil Recovery Project (Project) with assurance that they will incur no loss, as a result of the Project, to their home’s fair market value (Market Value), in the event of a sale of their property. Such assurance is offered through voluntary participation in a Hermosa Beach Residential Property Fund (Fund). Offer: The Fund will pay the difference between an eligible property's actual negotiated sale price and the appraised Market Value of the property, which will be determined as if the Project had not been built. A predetermined independent appraisal process will demonstrate if there is a loss in the Market Value of a homeowner's residence. Participation: Participation in the Fund is entirely voluntary. Eligibility: Owners of residential properties with up to and including two dwelling units that are located within the “eligibility area” (within XXX feet of the Project, measured property edge to property edge) when the Fund commences are eligible to participate. Costs: There is no monetary cost to participating homeowners to receive the benefits of the Fund, now or in the future. All costs, including the costs of obtaining required appraisals, are paid by the Fund. Cap: There will be a $20,000,000 cap (Funding Cap) on the total amount of benefits that the Fund can pay out. Term: The Fund will commence upon issuance of the City Drilling Permit for First Well by the City of Hermosa Beach and will continue in effect for up to six years or until the entire Funding Cap has been disbursed to eligible homeowners, whichever happens first. The six-year Fund term will be extended consistent with any extension of the term of the Development Agreement in accordance with Section 6.24 of the Development Agreement. Administration: E&B Natural Resources (E&B) will establish the Fund and designate a qualified, independent Fund Administrator. The Fund Administrator will not be an officer, employee, or affiliate of E&B. Application: To receive benefits, a selling homeowner of a residence within the eligible area will submit to the Fund Administrator: (1) a signed Program Participation Agreement setting forth the terms of the Fund program (Program) and a signed claim form; (2) a copy of an accepted written offer to purchase the residence on Exhibit C arms-length terms from a buyer who is not related to or affiliated with the selling homeowner and that complies with the Program requirements; and (3) a current (dated not earlier than six months prior to the homeowner’s application) appraisal reflecting the Market Value of the property, which will be determined as if the Project had not been built and an appraisal with the existing project. Both must be prepared by an MAI or RM designated appraiser who is licensed in California and has at least five years of experience appraising residential properties in the South Bay region of Los Angeles County, California. Benefits: Within 14 calendar days after receiving a selling homeowner’s application materials, the Fund will either agree to pay the amount of the claim, or obtain another appraisal of the residence using the same criteria as the owner's appraisal. If the Fund obtains an alternate appraisal and the difference between the two appraisals is within 10% of the higher appraised Market Value, the Market Value for purposes of the homeowner’s claim on the Fund will be equal to the average of the two appraised Market Values. If not, a third appraiser will be selected by the first two appraisers, and the Market Value determination in the third appraisal will be deemed the Market Value of the property. The owner and the Fund will be conclusively bound by the third appraisal. The difference between the Market Value of the residence, as so determined, and the property’s actual negotiated sale price will be paid by the Fund to the selling homeowner either at closing or within 10 calendar days after the Market Value of the residence has been determined, whichever takes place later. Market Value: Each appraisal obtained will determine the Market Value of the homeowner’s residential property as of the date of the appraisal and as if the Project had never been built. Claims: By submitting a claim to the Fund, the homeowner agrees to be bound by the terms of Program, and to accept reimbursement from the Fund for a loss in the Market Value of the homeowner’s residential property in exchange for foregoing any legal action to receive compensation for a decrease in the Market Value of the homeowner’s property that is caused by or results from the Project. Any offer that a participating homeowner enters into for sale of its residence must disclose that E&B has a right of first refusal to purchase the property for a price equal to the Market Value determined by the appraisal process without incurring any broker's commission. Funding: E&B will ensure that, at all times, there is a minimum balance of $500,000 in the Fund (or if the remaining balance of the Funding Cap is at any time less than Exhibit C $500,000, then E&B shall maintain the entire, remaining balance of the Funding Cap in the Fund), and E&B will regularly replenish the Fund up to the Funding Cap, as and if disbursements are made, to ensure that the Fund has readily- available funds to satisfy potential homeowner claims. E&B will also provide additional funding totaling a maximum of $3,000,000 from contributions based on 1.5% of gross project revenues on an annual basis until a total of $3,000,000 is reached. Distribution: Any remaining amounts in the Fund at the end of the Term shall be distributed to [to be determined]. : Exhibit D EXHIBIT “D” CONDITIONS OF PROJECT APPROVAL Exhibit D includes: 1. Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this agreement) 2. Exhibit D-2 Additional Project Conditions 3. Exhibit D-3 Mitigation Measures/Mitigation Monitoring Plan- from Section 8.0 of Final Environmental Impact Report (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). Exhibit D Exhibit D-1 Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this Agreement) (Amendments to conditions necessary for consistency with Project Description, Mitigation Measures and other conditions and terms are reflected herein) SECTION 1. GENERAL 1. The testing phase for all production shall be a maximum of one year from the date drilling is initiated. 2. A minimum of one annual site audit shall take place to inspect for soil contamination as a result of accidental spills in any area not paved and expose. Auditor shall be hired by City. 3. The maximum number of days the work over rigs or any other rig (other than a drill rig) that is to be used on-site shall be 90 days per year, and shall be operated weekdays 8:00 A.M. to 6:00 P.M. excluding holidays. 4. In the event that a residence with solar panels is affected by shading, a site specific study paid for by the oil contractor shall be conducted to determine economic impact. 5. Pursuant to Assembly Bill 3180 the operation shall be monitored for all condition of the approval of which the City has responsibility which includes (but not limited to) noise monitoring and inspection of the site for proper maintenance. 6. The proposed plans shall be submitted to the State Division of Oil, Gas & Geothermal Resources for their review and recommendation; a. Any recommendation by the State Division of Oil, Gas & Geothermal Resources shall be taken into consideration prior to approval, and may be included as condition of approval. 7. Drill cuttings and other wastes, shall be collected in above ground containers and disposed of at an approved disposal site. Receipts for all disposal of waste product shall be provided within ten (10) days of disposal to the Public Works Director. Exhibit D-1 8. All requirements, standards, conditions stated within the oil Production Code, Chapter 21-A, of the City’s Municipal Code shall be met, unless more restrictive requirements are imposed through mitigation measures; where it cannot be clearly determined whether the City’s Oil Ordinance, Chapter 21-A or mitigation measure are more stringent, the appropriate City staff shall make a determination; appealable to the City Council. 9. Three (3) copies of final building plans including site, elevation, and floor plans shall be submitted for review and approval by the Planning Director prior to the issuance of any Building Permit. 10. The proposed development shall be in substantial conformance with submitted plans. Any minor modification shall be reviewed and may be approved by the Planning Director. 11. All wells must be drilled and completed within 55 months from the start of drilling of the first exploratory well in accordance with the following schedule: PHASE 1 SITE PREPARATION 6 MONTHS PHASE 2 DRILLING AND TESTING PHASE 12 MONTHS (Exploratory drilling, production testing) PHASE 3 FINAL DESIGN AND CONSTRUCTION PHASE 14 MONTHS (Permanent facility construction) PHASE 4 DEVELOPMENT AND OPERATIONS (DRILLING) 34 MONTHS (Development Drilling, 1 month per well) If the Drilling Contractor is delayed at any time in the progress of work by any act or neglect of the City of Hermosa Beach or any other governmental body having authority over this project, or by labor disputes, adverse weather conditions, by law, war, riots, strikes, Exhibit D-1 unavoidable casualties, unusual delays in receiving material or equipment or by an act of God, or causes beyond the control of the Drilling Contractor, when justified, the time period may be extended to a reasonable time to correspond with the delay incurred by the Drilling Contractor. SECTION 2. LAND USE 1. The maximum size for any storage tank of any type shall be forty feet in diameter and sixteen feet in height, appurtenances not included. 2. Prior to construction and prior to obtaining building permits for oil production, a complete soil analysis shall be performed and approved by all applicable governing agencies having jurisdiction over the project. 3. Not more than five tanks shall be installed, and shall be submerged in a concrete basin which contains 10% above the volume required by the State Division of Oil, Gas & Geothermal Resources and the Uniform Fire Code which is as follows: the volumetric capacity of the diked area shall not be less than the greatest amount of liquid that can be released from the largest tank within the diked area. The capacity of the diked areas enclosing more than one tank shall be calculated by deducting the volume of the tanks other than the largest tank below the height of the dike. 4. All wells shall be drilled and cemented in accordance with State Division of Oil, Gas and Geothermal Resources regulations to protect underground aquifers. 5. The electrical service systems shall be designed with sufficient capacity to minimize surging impacts. 6. The well cellars shall be concrete lined and shall be designed to hold contaminated run-off from on-site sources; or a sump shall be provided. 7. Solid state control console linked to a control system to perform energy conservation functions such as start/stop time programming of motor equipment, data logging of energy consumption and maintenance and service scheduling shall be provided. a. All Electrical machinery where possible shall have a minimum coefficient of Exhibit D-1 efficiency of 0.75. SECTION 3. PUBLIC SAFETY 1. The site shall be enclosed by a solid masonry or concrete wall with solid gates during all operations, protecting both against public entry, observation and attraction. A chain link fence to provide security is acceptable only through Phases 1 and 2. 2. Security personnel shall be employed at all times during the drilling stage (24 hours) and emergency phone numbers shall be posted during production Phases 2 and 4. 3. Signs warning of unauthorized entry and safety hazards shall be posted on all sides. 4. Access to facilities shall be limited to authorized personnel only. 5. Trees shall be maintained at a distance from all walls to prohibit children and others from unauthorized entry. 6. All site personnel shall be instructed on required safety procedures if hydrogen sulfide concentrations are encountered. Documentation of training and instruction shall be made available to the City Manager. 7. Both solid and liquid wastes shall be sampled and tested to determine if it needs to be treated as a hazardous waste. 8. An Oil Spill Prevention Control Countermeasures (SPCC) Plan and an Oil Drilling Contingency Plan will be Prepared for the Project and approved by the State Division of Oil, Gas and Geothermal Resources, and the City of Hermosa Beach Fire and Building and Safety Departments. 9. Drillsite and production facilities shall be constructed in accordance with the State seismic standards, and designed in accordance with U. B.C. seismic requirements for hazardous facilities. 10. A soils engineering report and engineering geology report prepared by a licensed Exhibit D-1 geologist and engineer shall be prepared and reviewed in conjunction with the plans for all physical improvements. Said report shall address potential seismic hazards, such as liquefaction, due to soils or geologic conditions. All recommendations contained in said reports shall be incorporated in the construction documents. 11. An emergency response plan, including a blowout prevention and control plan, shall be prepared for review and approval by the State Division of Oil, Gas & Geothermal Resources and the Hermosa Beach Fire Department. 12. When a leak or spill occurs, it shall be contained, the fluid shall be recovered and the area restored to its original condition. SECTION 4. FIRE SAFETY 1. Adequate fire detection and fighting equipment and supplies, approved by the Fire Department, shall be maintained on the drillsite and tank production facility at all times. 2. A supplementary analysis by a professional consultant shall be provided detailing any necessary improvements the Fire Department may need to prevent, and to halt oil related fires and shall also include the following: public notification, warning and evacuation plan. 3. Oil sumps, drip pans, etc. shall be cleaned at regular intervals to reduce fire hazards and prevent minor spills. 4. Oily rags, paper and miscellaneous waste shall be disposed of in an appropriate manner to reduce fire hazards 5. Signs warning of flammable fluids and prohibiting smoking shall be installed where appropriate. 6. The drillsite and production facility shall be protected by automatic fire detection sensors and suppression systems. The fire suppression systems shall include a tank- cooling sprinkler system. Exhibit D-1 7. Drilling operations shall be conducted in accordance with appropriate State Division of Oil, Gas & Geothermal Resources regulations and shall utilize all required blowout prevention equipment and safety devices. 8. Fire flows to service the operation shall meet Fire Department regulations. 9. All equipment necessary to contain an oil fire or blowout shall be provided and/or maintained on site and all fire personnel shall be trained on its use. SECTION 6. VEHICLE TRAFFIC AND CIRCULATION ON AND OFF SITE 1. All truck deliveries shall be limited to daylight hours (9:00 AM – 3:00 PM), Monday through Friday, except for an emergency situation, as defined by this agreement and reported to the City in accordance with the notification requirement, which have been reported to the Director of Public Works in advance of the delivery. 2. Operation of earthmoving equipment shall be limited to daytime hours between 8 AM and 6 PM. 3. Equipment deliveries shall be made only during daytime hours between 9 AM and 3 PM. 4. Project related truck travel shall be restricted to specific truck routes and access points as approved by the Public Works Department. 5. Signs shall be installed to direct detour traffic as approved by the Public Works Director. 6. The number of truck trips shall be limited to a maximum of 18 round trips per day, except in an emergency, as defined by this agreement and reported to the City in accordance with the notification requirement. 7. Maintenance Yard site access shall be designed to enable trucks to turn into the site without inhibiting traffic movement on Valley Drive or Sixth Street. 8. Minor curb radii reconstruction shall be done by the operator as determined by the Exhibit D-1 City Public Works depending on the length and necessary turning radii for project related trucks. 9. Area residents shall be notified of pipeline construction prior to commencement. Signs shall be installed to direct detour traffic. 10. All trucks arriving or departing the drill site shall be washed to prevent spillage of earth and all routes shall be swept and washed by the driller as required by the City. 11. An evaluation of the structural condition of the existing pavement shall be performed by a soils engineer on all access streets and the proposed truck routes prior to commencing any site preparation or construction and prior to the issuance of any necessary permits. The evaluation shall include as a minimum: a) the number, type, size and weight of trucks for export of materials or product, b) the number, type, size and weight of truck deliveries of building supplies, drilling supplies etc., c) the number, type, size and weight of equipment transported to the site, d) other associated transportation items, e) other anticipated loading. The evaluation shall contain recommendations as to the actions required to maintain said streets and routes in their current condition throughout the planned development phase, planned production phase, and in the close out phase. 12. The operator shall perform the actions on the existing pavement as recommended by the soils or highway engineer, the operator will hire a licensed contractor and provide street profiles, drawings, and engineering to the satisfaction of the Public Works Department prior to work commencing. 13. The City Council may restrict the use of certain street, alleys, or roadways in connection with the permittee’s operation. In the event any street, alley or roadway is Exhibit D-1 damaged by the permittee’s operations, such damages shall be paid for by the permittee upon demand by the City, and the failure to pay such damages, being the reasonable cost of the repair of any such damaged portions, shall be grounds for the revocation of the permit and the collection of such damages. SECTION 7. SANITARY SEWER 1. Use of sanitary sewer is prohibited, except for the minimal use associated with the office and restroom facilities. Any water from oil production shall be disposed in the four disposal wells. SECTION 8. NOISE /VIBRATION 1. Tripping will be restricted to daylight hours only. 2. Loudspeaker paging systems shall be prohibited. 3. Well workover rigs or any other rig that is used shall be operated only between the hours of 8:00 A.M. and 6:00 P.M. during daytime weekday hours only, excluding holidays, except in an emergency, as defined herein and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) shall be muffled to reduce noise to an acceptable limit. The operator shall use whatever means necessary, including but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing. 4. All oil maintenance equipment, vehicles and non-electrical motors shall be equipped with manufacturer approved mufflers or housed in a sound-proofing device. 5. Noise monitoring shall be conducted under the supervision of an independent certified acoustical engineer paid for by the permittee. Reports shall be submitted to the Planning Director within three working days after the completion of each phase of the monitoring. The monitoring shall include the following: a. Pre-drilling phase monitoring. Prior to the start of the drilling phase, noise measurements shall be obtained during the operation of the specific drilling rig which has been selected and the measurements shall be related to those Exhibit D-1 experienced at the nearest residential boundaries to the drilling site. In addition, the noise control measures which have been (or will be) applied to the rig as needed for compliance with the City of Hermosa Beach noise ordinances shall be identified. b. Start of Drilling. Noise measurements shall be obtained during the nighttime hours (10:00 P.M. to 7:00 A.M.) for at least six hours on each of the three nights within the five day period from the start of the drilling phase. Monitoring is to occur at the nearest residential boundary to the actual drilling operation. c. During the drilling phase. Noise monitoring shall occur during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each month during the drilling phase of the project. The noise level data obtained shall be compared to the City of Hermosa Beach Noise Ordinance standards by the Planning Department. Where an exceedence of the standards is identified, noise control measures shall be required. Production phase. Noise measurements shall be obtained during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each year during the production and completion phase.SECTION 9. LANDSCAPING 1. A Detailed Landscape Plan for Phases 2 (exploratory drilling and testing) and Phase 4, indicating the type, size and quantity of plant materials shall be submitted to the Planning Commission, and shall comply with Section 21A-2.9 of the Oil Code. 2. During Phase 2, test facility, landscaping consisting of 24” box, or larger size trees may be installed without permanent planting. 3. Minimum 24” boxed trees for Phases 2 and 4 shall be adequate in size to create a buffer effect to obscure visibility of oil production activity. Permanent trees planted around the perimeter of the site for Phase 4 shall be a minimum sixteen (16) feet high at planting. 4. Trees along the lot perimeter shall be provided to create a dense landscape buffer to the satisfaction and field review of the Planning Director. Exhibit D-1 5. The aesthetic impact of the exposed masonry walls on the west and northern sides shall be softened with the planting of climbing vines to the satisfaction and review of the Planning Director. 6. Landscaping shall be maintained in a neat and clean condition. 7. A complete automatic sprinkler system shall be provided prior to commencement of Phases 2 and 4. SECTION 10. AESTHETICS 1. The tanks, acoustical wrap and wall, and production facility shall be painted a neutral color to blend in with in with the surroundings; color shall be reviewed and approved the Planning Commission. 2. The use of architectural lighting beyond safety and security requirements shall be prohibited. 3. The site for drilling equipment and the storage facilities shall be depressed in combination with walls so that the visual impact is minimized. 4. All outdoor lighting shall be shielded and directed inward of the site. 5. Lighting shall be limited solely to the amount and intensities necessary for safety and security purposes. 6. Certain activities which might involve unshielded lighting (i.e., site preparation and restoration) activities shall be limited to daylight hours and thus not require nighttime lighting. 7. A wall maintained graffiti free of a minimum of 12 feet in height shall be provided; wall materials shall be reviewed and approved by Planning Director. During test drilling minimum 6’high fencing shall be provided. See Mitigation Measures for Noise and Vibration in D-3 below for additional requirements for this wall. Exhibit D-1 8. Tanks shall be submerged 6 to 8 feet or more below grade and will be adjacent to the 35-foot high privacy wall. 9. If the drill derrick remains idle for more than one year, review and approval by the City Planning Commission or the City Council shall be required, or the derrick shall be dismantled at the expense of the operator. 10. All production equipment and structures shall be painted to blend with the surrounding environment with review and approval by the Planning Director. 11. On-site signs shall be limited to those needed for public health and safety. 12. All derricks masts hereafter erected for drilling, re-drilling or remedial operations or for use in production operations shall be removed within 45 days after completion of the work unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources of the state. 13. The operator shall diligently and continuously pursue drilling operations until the all 30 oil wells and all four (4) water disposal wells are completed or abandoned to the satisfaction of the Division of Oil, Gas & Geothermal Resources of the state and upon completion or abandonment shall remove all drilling equipment from the drill site within 45 days following completion or abandonment of the well unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources. SECTION 11. ODORS/VAPOR/AIR POLLUTION 1. A vapor recovery system shall be installed to recover 99% of hydrocarbon emission during storage and transfer of crude oil. 2. Raw gas shall not be allowed into the atmosphere. 3. Gas and vapor detection systems shall be installed at appropriate locations. 4. All project site activities shall be conducted such as to eliminate escape of gas in accordance with best available control technology and practices which shall be reviewed and approved by the City. Exhibit D-1 5. All requirements of AQMD shall be met at all times. 6. A state-of-the-art scrubber shall be employed for the exploratory phase to eliminate odors from waste gases, and any flame shall be enclosed. 7. Tanks shall be designed and located so that no odors or fumes can be detected from the adjacent areas outside the exterior walls of the project. 8. Operators shall not blow lines to the atmosphere, except in an emergency, as defined below in Section 14. and reported to the City in accordance with the notification requirement. 9. Construction equipment and vehicles shall be maintained in proper tune. 10. Odorless drilling muds shall be used. 11. Well tubing and rods shall not remain out of the well during workover operation less than 8-hours. The tubing will be surface washed with a detergent solution to remove odor bearing residual hydrocarbons if exposed longer than 8-hours. 12. Odor control will be further enforced by the SCAQMD under Rules 402, 466.1 of their regulations, and the commercial recovery system shall be employed for the permanent facility. 13. There shall be no open flames allowed. 14. The permittee shall monitor drilling mud during drilling on the site for odorous substances and take such measures to eliminate any odor which would be perceptible outside the drill site. 15. The permittee shall undertake no refining process or any process for the extraction of products from natural gas, except for such minor processeds as necessary to make natural gas acceptable to the City gas mains for domestic use. [correction of typo] 16. Well cellars shall be maintained in a clean and efficient manner to prevent waste accumulation and shall be frequently steam cleaned. Exhibit D-1 SECTION 12. GRADING/STORM WATER/SITE RUNOFF 1. Grading shall not be performed when wind speeds exceed 20 mph. The contractor shall maintain a wind speed monitoring device on site during grading operations. The contractor shall continually keep the soil moist during grading operations. At no time shall any dust be allowed to leave the work site. 2. Normal wetting procedures shall be employed during grading. Review and approval of procedure shall be by Public Works Director. 3. Graded surfaces shall be paved or landscaped per approved plan. 4. Project site shall be graded so that all contaminated runoff is collected and treated on-site and disposed of according to all laws. 5. Site shall be graded in a manner so that all hazards or contaminated fluids and runoff are directed toward a cellar and approved pit and disposed of properly. 6. No water from the site shall be allowed to enter the storm drainage system or any public area. 7. No water from the site shall be allowed to surface flow across the public beach. SECTION 13. PIPELINE CONSTRUCTION 1. The pipeline operators shall adhere to all applicable federal, state, regional, and local statutes governing design, construction, operation, and maintenance of the pipelines and related equipment. 2. A detailed pipeline survey shall be conducted in order to locate existing pipelines prior to excavation for pipeline construction. 3. A responsible agent paid for by the applicant shall be present during excavations. 4. Areas of construction and maintenance activities shall be delineated by signs, Exhibit D-1 flagmen, pavement markings, barricades, and lights, as determined by permit requirements of all local agencies. 5. Where pedestrian activities are affected during construction, appropriate warning signs shall be installed and pedestrians will be diverted. Pedestrian access to businesses and residences will be maintained during construction. Special facilities, such as handrails, fences, and walkways shall be provided, if necessary, for the safety of pedestrians. 6. Obstruction of emergency vehicle operations will be partially mitigated by ensuring that providers of emergency services are kept informed of the location, nature, and duration of construction activities so alternate routes can be chosen. It is essential that fire department access is maintained to all buildings adjacent to construction activities. For this reason, a minimum of at least one lane for streets undergoing construction will be kept open at all times, and fire hydrants in construction areas will remain accessible. 7. If public transit stops along pipeline routes need to be temporarily relocated during construction, the applicant shall provide signs directing riders to the temporary stop location. 8. When hauling excavated and waste materials from construction sites, substandard roadways will be avoided and local jurisdiction regulation governing hauling vehicles will be adhered to. 9. Pipeline construction and operation of earth moving equipment shall be limited to daylight hours between 8:00 AM and 3:00 PM and shall not be permitted during weekend periods. Additionally, construction-related trucks should not be operated during peak traffic hours of 7 to 9 AM and 3 to 7 PM. Pipeline construction at major intersections shall be limited to daylight hours between 9:00 AM and 3:00 PM to avoid peak traffic periods. 10. Equipment deliveries shall be made only during daytime hours between 8 AM and 3 PM. 11. In order to reduce visual impacts and possible safety hazards, storage of pipes and Exhibit D-1 other materials, as well as construction equipment, shall not be permitted on any street during non-construction hours. 12. Area residents within 300’ shall be notified about the pipeline construction operation prior to commencement of construction. 13. Detour signs on pipeline construction routes shall be placed at appropriate locations. 14. Steel plates covering pipeline excavation trenches shall be placed to permit traffic movement during non-construction hours. 15. Pipelines shall be designed with ample safety factors, pressure-tested prior to being placed in operation, and monitored for corrosion once in operation. 16. Safety shut-down devices that respond to drops in pipeline pressure shall be incorporated into the project in order to stop the flow of the pipeline contents in case of a pipeline rupture. 17. Groundwater level and land subsidence shall be monitored to insure that pipeline damage does not occur as a result of geologic and hydrologic phenomena. The annual subsidence survey shall include a report to the City on monitoring efforts to insure pipelining damage has not occurred. 18. Pipeline construction along Valley Drive shall be approved by the Director of Public Works prior to issuance of a permit. 19. Pipeline construction shall not occur in the area known as the Hermosa Valley Greenbelt except that the permittee may connect to West Basin Municipal Water District’s existing reclaimed water line for the purposes and as described in Exhibit B to this Agreement. 20. Storage of materials shall not be allowed on the Hermosa Valley Greenbelt. The storage or dumping upon the greenbelt of any materials, construction equipment, debris, oil drilling equipment, drilling rigs, piping, etc., and any and all equipment and vehicles necessary for the construction and maintenance of the pipeline and oil development site shall be prohibited. The use of the greenbelt as a staging area for Exhibit D-1 construction of the oil facility or pipeline shall be prohibited. There shall be no parking or standing of any vehicles on the greenbelt for any time period. 21. Trenches shall be covered during non-working hours to minimize traffic circulation problems. SECTION 14 Definition and notification requirements for emergency situations: I. For purposes of these conditions, “Emergency” is defined as follows: A threat to the health and safety of persons in the surrounding area to the drill site and the following conditions which require immediate action: A. Conditions which could lead to potential spill or well blowout: 1. Entry of oil and gas into the wellbore while drilling, tripping or out of the hole which may be indicated by one or more of the following: a. Pit volume gain b. Well flowing with pumps off c. Flow rate increases with circulation d. Improper hole fill-up on trips e. Sudden increase in drilling rate f. Pump pressure decreases and pump rate increases g. Decrease in returning mud rate h. Sloughing shale i. Changes in mud salinity and/or mud flow properties 2. Lost circulation or loss of ability to circulate 3. Casing or wellhead failure while drilling 4. Stuck pipe and/or equipment during any of the following operations: Exhibit D-1 a. Drilling b. Tripping drill pipe and tools c. Wireline logging d. Drill stem testing e. Running casing f. Perforating and stimulating completion interval 5. Loss of rig power or equipment failure while drilling or tripping. B. Injuries to personnel at the Drill Site C. Conditions which could reduce the stability and safety of the rig and production equipment: 1. Natural events: a. Excessive winds, rain and lightning b. Floods c. Subsidence d. Earthquakes 2. Other events a. Riots/Demonstrations b. Fire II. Notification Required: In the case of an emergency, as defined above, the permittee shall give immediate notice to the City of the occurrence of the emergency event. The City will provide the permittee with a list of phone numbers of City personnel to call for notification purposes. A written notice, including a detailed description of the emergency condition, and the actions take and/or proposed to be taken to correct the situation, shall be provided within 24 hours of the occurrence of the emergency event. SECTION 15 Exhibit D-1 1. Each of the above conditions is separately enforced, and if any of the conditions of approval is found to be invalid by a court of law, all the other conditions shall remain valid and enforceable. 2. The subject property shall be developed, maintained and operated in full compliance with the conditions of this grant and any law, statute, ordinance or other regulation applicable to any development or activity on the subject property. Failure of the permittee to cease any development or activity not in full compliance shall be a violation of these conditions. Exhibit D-2 Exhibit D-2 ADDITIONAL PROJECT CONDITIONS A. GENERAL E&B (herein “Operator”) is the owner and Operator of this project, responsible for implementing and complying with all applicable conditions. A-1 Project Description This Development Agreement, and associated conditions, is based upon and limited to the project described in Exhibit B to the Development Agreement. A-2 Acceptance of Conditions Execution of this agreement shall be deemed as acceptance of all conditions herein and waiver of any objections thereto. A-3 Costs of Implementing and Enforcing Conditions The Operator shall be fully responsible for all reasonable costs and expenses incurred by the City or any City contractors, consultants, or employees, in implementing, monitoring, or enforcing this approval, including but not limited to, costs for permitting, permit conditions implementation, mitigation monitoring, compliance monitoring, reviewing and verifying information contained in reports, undertaking studies, research and inspections, administrative support, and including the fully burdened cost of time spent by City employees on such matters. Draw-Down Account. The Operator shall maintain a draw-down account with the City, from which actual costs will be billed and deducted for the purpose of defraying the expenses involved in the City’s review and verification of the information contained in any required reports or plans and any other activities of the City, including but not limited to: enforcement, permitting, inspection, coordination of compliance monitoring, administrative support, technical studies, and the hiring of independent consultants. The initial amount to be deposited by the Operator shall be $500,000. In the first year, if withdrawals from the Exhibit D-2 account have reduced its balance to less than 50 percent of the amount of the initial deposit ($250,000), the Operator shall deposit $50,000 in supplemental funds within 30 business days of notification. After the first year, if the balance in the draw-down account is reduced at any time to $50,000 or less, the Operator shall deposit $50,000 in supplemental funds on each occasion that the account is reduced to $50,000 or less within 30 business days of notification. There is no limit to the number of supplemental deposits that may be required. At the discretion of the Operator, the amount of an initial or supplemental deposit may exceed the minimum amounts specified in this subsection. The City Manager or Designee may, from time to time, increase the minimum $50,000 figure to account for inflation or the City’s experience in obtaining funds from the account. Operator shall be entitled to reasonably review during normal business hours the expenditures from the deposit to ensure the expenditures are related to the Project. Should Operator object to an expenditure, Operator shall submit a request in writing to the City Manager for a detailed written explanation of the expenditure. Following receipt of the written explanation from the City and should Operator continue to object to payment of the expenditure, it shall file such objection in writing with the City Council explaining why such expenditure is not appropriate from the draw down account or why the amount of the expenditure is not appropriate for the work. Following City Council consideration of the matter and decision, the Council’s determination on the expenditure shall be final and binding on the parties. A-4 Substantial Conformity The Project shall be designed, constructed, and operated in substantial conformity with the Project Description in Exhibit B and all conditions of approval set forth in this Exhibit D. A-5 Conflicts Between Conditions In the event that any condition or mitigation measure contained in this development agreement is determined to be in conflict with any other condition contained herein, then where principles of law do not provide to the contrary, the condition most protective of natural environmental resources and public health and safety shall prevail to the extent feasible. A-6 Facility Throughput and Source Limits All facilities constructed under this approval shall be limited to the following maximum Exhibit D-2 production volumes: Phase 2 shall be limited to 800 barrels of oil and up to 250,000 standard cubic feet per day of gas. Phase 4 shall be limited to 8,000 barrels of oil per day and 2.5 million standard cubic feet of gas per day. A-7 Alternative Mitigation if Condition Invalidated If any condition of this project is invalidated by a court of law in a final adjudication, this approval shall be suspended pending imposition of a substitute condition or mitigation measure that will achieve equivalent results or reduction of impacts. A substitute condition or mitigation measure shall be incorporated into the Development Agreement in accordance with Section 4.2 of the Agreement- Changes and Amendments to Project before the suspension shall be lifted and the project is allowed to proceed. A-8 Applicability of Conditions to Construction and Operations These conditions are intended to apply to the E&B Project during both the construction and the operation of the permitted facilities. The term "operations" shall be understood to encompass both construction and operation phases unless such an interpretation would be inappropriate. A-9 Compliance Plans to have Same Force and Effect as Conditions All elements of the plans and programs required under this Exhibit D shall have the force and effect of a project condition. The remedies available to the City upon Operators failure to comply with such plans and programs includes but is not limited to those remedies which are available to the City upon Operator’s failure to comply with a project condition. A-10 Performance Security The Operator shall be subject to the following provisions: a. Performance Bond. Prior to issuance of the first drilling permit, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in a commercially reasonable amount to be determined by the City Manager taking into account existing bonds to the extent they overlap, payable to the City and executed by a corporate surety acceptable Exhibit D-2 to the City and licensed to transact business as a surety in the State of California to cover the exploratory phase of the Project. The exploratory phase performance bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, financing spill response connected with exploration. Should the Project proceed to the oil production phases of the Project, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in the sum to be determined by the City Manager, payable to the City and executed by a corporate surety acceptable to the City and licensed to transact business as a surety in the State of California Such bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, financing spill response and shall be in a format and include terms approved by the City Manager connected with the production phases of the project. These bonds shall be in addition to any other bond required by law (including without limitation Public Resources Code Sections 3202, 3204, 3205, 3205.2 and 3206 and 14 C.C.R. § 1722.8. These bonds shall satisfy the bond requirement in Section 23 of the Lease, and in the City Manager’s discretion, may satisfy the bond requirement in Condition E-1 below. b. Change of Operator. The performance bond(s) required above shall continue in force for one (1) year following any sale, transfer, assignment, or other change of Operator of the Project Site, or of the current Operator’s termination of activities at the Project Site. The City may release said bond prior to the end of the one (1) year period upon satisfaction by said Operator of all its obligations. Notwithstanding the foregoing, the performance bond shall not be terminated or released upon the sale, transfer, assignment, or other change of Operator until the new Operator has delivered a replacement bond complying with the provisions of this section. c. Funding Options. At its sole option, the City may accept Certificates of Deposit, Cash Deposits, or U.S. Government Securities in lieu of commercial bonds to meet the above bonding requirements on terms approved by the City Manager. B. PROJECT REVIEW B-1 Review by Community Development Director Prior to commencement of construction or operation for Phase 1, 2, 3 and 4, and for subsequent modifications, Operator shall submit to Community Development Department Exhibit D-2 relevant construction plans, engineering drawings and supporting text demonstrating compliance with the relevant conditions of this approval. Construction or operation may not commence until City has reviewed and approved the appropriate submittal, consistent with applicable conditions. The City agrees to make a good faith attempt to review the submittal for completeness as expeditiously as possible, which may involve retaining consultants with the appropriate technical expertise to review the submittal, and to provide a list of deficiencies. When the submittal is deemed complete, the City agrees to provide written notice of approval of construction plans as expeditiously as possible, or indicate in writing the conditions which have not been met, or notify the permittee that the Community Development Director review shall be completed within a period of time specified by the City, based on sound engineering practices. When such conditions have been met and city confirms in writing, construction or operation may be commenced. The City may require post-construction inspections or review of as-built drawings, as necessary to confirm consistency with the approved submittal. B-2 Condition Scheduling Conflicts In the event that scheduling requirements among or between conditions in this approval (or with this approval and conditions imposed by other agencies) conflict with respect to timing, Community Development Department (in consultation with other departments, agencies, and Operator as appropriate) shall resolve such conflict. B-3 Authority to Begin Construction Operator shall not commence construction without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to construction of Phase 1, Phase 2, and Phase 3, as specified by this approval, have been satisfied. B-4 Authority to Begin Operations After construction and prior to start-up, Operator shall not commence operations without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to start-up, as specified by this approval, have been satisfied. Start-up, for purposes of this condition, is defined as the introduction of hydrocarbons into Exhibit D-2 the facility production equipment for both Phase 2/4. C. MANAGEMENT AND MONITORING C-1 Environmental Quality Assurance Program (EQAP) Under EM-1 below in Exhibit D-3, Operator is required to provide funding for implementation and administration of an environmental monitoring program, including an environmental monitor (“Monitor”), to ensure compliance with the environmental conditions of approval. The Monitor shall assist in condition compliance and mitigation monitoring for all applicable construction and operational stages of the project. The monitor shall be under contract with the City and funded by the Operator. 1. In accordance with EM-1, the Monitor will create a monitoring program for the project that includes a post-construction component to monitor measures that extend beyond the construction period and the operational phase of the project. 2. The Monitor will prepare a working monitoring plan that reflects the approved environmental mitigation measures and conditions of approval. The monitor’s plan will include: a. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; b. Lines of communication and reporting methods; c. Daily and weekly reporting of compliance; d. Construction crew training regarding environmental sensitivities; e. Authority to stop work; and f. Action to be taken in the event of non‐compliance. 3. Under EM-1 and other conditions, Operator is also responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, noise engineer, etc.). The Monitor will coordinate the monitoring efforts of the specialists, including communication with the City and responsible Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). To assist the Monitor in creating and implementing its working monitoring plan, Operator shall prepare and obtain Community Development Department approval of an Environmental Quality Assurance Program (EQAP) prior to commencement of Phase 1 construction activities, and obtain Community Development Department approval of a revised EQAP Exhibit D-2 prior to commencement of Phase 2, Phase 3, construction activities and Phase 4, Operations. The approved EQAP and all approved revisions to the EQAP shall be submitted to the Monitor prior to commencement of each Project phase. This EQAP shall encompass both construction and operations phases of the E&B Project, and shall describe the steps Operator will take to assure compliance with the conditions contained in the approval for this project. The EQAP is intended to provide a monitoring and reporting framework for compliance with all conditions, programs and plans specified by these conditions and the mitigation measures. As such, it will become a comprehensive reference document for the City, the Monitor, other agencies, and the public regarding the E&B Project. The EQAP shall include, without limitation: a. All plans, as required by these conditions and mitigation measures, relevant to construction and operation of the permitted facilities (including the Risk Management Program, SIMQAP, Emergency Response Plan, Hazardous Material and Waste Management Plan, Site Security Plan, and Fire Protection Plan). To the extent there is any overlap or redundancy between plans required under Exhibits D-2 and D-3, upon E&B request the Monitor may in its discretion authorize E&B to combine required plans into one submittal; b. Provisions for regularly communicating with and reporting to the Monitor; c. Provisions for ensuring knowledge of and compliance with these conditions; d. Provisions for the submittal to Community Development Department and the Monitor of monthly compliance reports throughout construction and annual summary reports during operations unless more frequent reporting is deemed necessary by Community Development or the Monitor. Upon receipt of compliance reports, Community Development Department or the Monitor shall advise Operator of what additional compliance items require reporting prior to the next report. These compliance reports shall describe: 1. Project status, including but not necessarily limited to: i. the extent to which construction has been completed on various project phases ii. the background and experience of the construction labor force Exhibit D-2 iii. the rate of production/throughput during operation, iv. environmental planning and implementation efforts, and v. any revised time schedules or timetables of construction and/or operation that will occur in the next one-year period. 2. Condition compliance, including but not necessarily limited to the results of the specific mitigation requirements identified in these conditions and any compliance plans. 3. Results and analyses of all data collection efforts being conducted by Operator pursuant to these permit conditions. d. Copies of all local, state, and federal permits relative to the E&B Project, and any amendments thereto. The EQAP shall be updated regularly to include all up-to-date compliance plans required under these conditions of approval. C-2 24-Hour Emergency Contact Prior to issuance of the Permit for Phase 1, Operator shall provide to the Community Development Department and the City Fire Department the current name and position, title, address, and 24-hour telephone numbers of the person in charge of the facility, person in charge of construction, and other representatives who shall receive all orders and notices, as well as all communications regarding matters of condition and permit compliance at the site and who shall have authority to implement a facility shutdown pursuant to this agreement or other City ordinances. There shall always be such a contact person(s) designated by the Operator. One contact person shall be available 24 hours a day in order to respond to inquiries received from the City, or from anyone in case of an emergency. If the address or telephone number of Operator’s agent should change, or the responsibility be assigned to another person or position, Operator shall provide to Community Development Department the new information within 24 hours of the effective date of such change. Exhibit D-2 C-3 Operator to Provide Copies of Permits to Community Development Department Operator shall furnish to Community Development Department and Monitor copies of all local, state, and federal permits relative to the E&B Project within 30 days of receipt by Operator. C-4 Pipeline Construction Confined to Right-of-Way All pipeline construction activities, including work areas and staging and storage areas of pipe, shall be confined to the area defined in the encroachment permit. C-5 Capacity and Throughput Reports Operator shall report to Community Development Department and Monitor the volumes and rates of: (1) inlet volumes; (2) transferred for sales into the Southern California Gas Company transmission line; and (3) Oil volumes transported to Pipeline. Reports shall be made on at least a monthly and annual basis and supporting documentation will be provided upon request from Community Development Department or Monitor. Upon approval from the Community Development Director and the Monitor, these reports may be combined with and submitted at the same time as Royalty Statements under Section 4 of the Lease. C-6 Risk Mitigation Program A Risk Management Program to substantially reduce the risks of project-related accidents which may result in loss of life and/or injury, and damage to property and/or the natural environment shall be submitted for approval to the Hermosa Beach City Community Development, Fire and Public Works Departments. Other City departments, as deemed necessary, may be consulted. All reasonable costs associated with this City review shall be borne by Operator. Operator shall be entitled to participate fully in the review process. The Program shall include all appropriate construction plans, Process Hazards Analyses (PHA), and Hazard and Operability Studies (HAZOPs) for the proposed facility and ancillary equipment to the City who may employ a third-party technical review in order to evaluate project design and help identify possible design hazards prior to issuance of ministerial permits. The HAZOPs shall be reviewed and approved by the City prior to construction for each Phase of the project. This review shall also evaluate all mitigation identified in the EIR. Exhibit D-2 The City may require as-built inspections and the submittal of as-built drawings for approval prior to the operation of any plant modifications. C-7 Safety Inspection, Maintenance And Quality Assurance Program Operator shall submit a detailed Safety Inspection, Maintenance and Quality Assurance Program (SIMQAP) for all facilities and pipelines which shall be implemented during construction and operations. Separate SIMQAP plans may be submitted for Phase 1 and Phase 2/3/4 activities. The SIMQAP shall be reviewed and approved by the City, including the Hermosa Beach City Community Development Department, Hermosa Beach Fire Department and the Monitor. Other City departments, as deemed necessary, may be consulted. The SIMQAP for construction shall be approved prior to construction, and the SIMQAP for operation shall be approved prior to operation for each Phase of the project. The plan is a dynamic document and, as such, updates including new procedures, safety and maintenance technologies and processes, shall be reviewed jointly by Operator and the City. The SIMQAP shall be revised as appropriate. The SIMQAP shall include, but not be limited to, evaluation of staffing levels for safe operation of the plant in emergency situations, establishing procedures for review of safety inspection records, regular maintenance and safety inspections, periodic safety audits, development of safety system testing protocols, training and experience standards for personnel and use of simulation techniques in training programs, inspections of all trucks carrying hazardous and/or flammable material prior to loading, monitoring of critical safety devices and systems, and review of the routing of all trucks carrying hazardous material. Operator shall implement the approved plan and shall provide for involvement of the Monitor, City staff, or its consultants in all inspections as appropriate. Prior to construction and operations, Operator shall demonstrate that employees (and subcontractors) are trained in the safety, inspection, maintenance and operations requirements of the project. All costs associated with this review process shall be borne by Operator. C-8 Emergency Response Plan Operator shall submit to the applicable City Departments and the City Fire Department an Emergency Response Plan (ERP) that addresses response procedures to be implemented by Operator for accidental events that pose significant threats to public health and safety, property, or the environment. Exhibit D-2 The ERP shall be reviewed and approved by the City Fire, Community Development and Public Works Departments prior to commencement of drilling operations. Separate ERPs may be required for Phase 1 and Phase 2/3/4 activities. The ERP shall include specific measures to avoid impacts on cultural resources, sensitive habitats, and sensitive biological resources identified in the project EIR whenever possible without affecting emergency response. Operator shall demonstrate the effectiveness of its ERP by responding effectively as determined by Fire to one emergency response drill prior to Phase 1 and prior to approval of the Plan by Fire. The ERP shall be submitted sufficiently prior to Operator’s projected start-up date so as to allow reasonable time for review and the planning of a drill required prior to ERP approval. The ERP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when warranted to incorporate new planning strategies or procedural changes, new technologies, and the acquisition of more effective, feasible response equipment as it becomes available. Any changes shall be submitted to the City Fire, Community Development and Public Works Departments for their review and approval, prior to implementation. Operator shall demonstrate the ongoing effectiveness of the ERP by responding to no more than two surprise drills each year which may be called by the City. If critical operations are underway, Operator need not respond to the drill at that time but shall explain the nature of the critical operations and why response is not possible. The City may then call for an additional surprise drill in the same year. Operator shall implement all reasonable changes based on review of drill performance, which will further enhance overall emergency response planning and capabilities. Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-9 Hazardous Material and Waste Management Plan Prior to start-up, Operator shall submit a Hazardous Material and Waste Management Plan (HMWMP) to the City Fire Department and Community Development Department for all facilities. The HMWMP shall be reviewed and approved by Fire and Community Development prior to start-up. The Plan shall demonstrate compliance with the provisions of the Uniform Fire Code as adopted in Chapter 15 of the Hermosa Beach Municipal Code and the provisions of the Health and Safety Code §25500 et seq, Chapter 6.95 Business Plan Requirements, with the Exhibit D-2 exception of emergency response procedures which are complied with above. The Hazardous Material and Waste Management Plan shall include but not be limited to the following: a. Locations and methods for storing hazardous materials and wastes, both within the facility and along the OIL pipeline right-of-way. b. Treatment procedures, or justification where none are used, to reduce the hazardous nature of the materials before they are permitted to leave the site. c. Specific routes for transportation of hazardous waste materials to Class I disposal sites consistent with City policy. d. Letter of commitment that the materials are transferred by a carrier licensed in hazardous material transport. e. Letter of commitment ensuring complete accounting of intake, processing, and exit of hazardous material and wastes. f. Detailed description of a monitoring system to be installed, capable of detecting hazardous material and wastes that may escape from primary storage devices. g. A revised Hazardous Materials Business Plan which accurately reflects the revised chemical inventory of the project site to Environmental Health Services for review and approval, in accordance with the California Health & Safety Code, Chapter 6.95, Section 25,500 et seq. The HMWMP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when parties mutually agree it is warranted to incorporate new planning strategies, changes in procedures, new technologies, or changes in materials, or when required by law. Any changes requested by Operator or City shall be submitted to Fire and Community Development for their review and approval, prior to implementation. C-10 Site Security Plan Exhibit D-2 Prior to issuance of a Permit for Phase 1, Operator shall submit to the Community Development and the Hermosa Beach City Police Department for review and approval a site security plan. The plan shall describe the procedures to be implemented by Operator which will prevent intentional damage to the drilling and production facilities which may result in environmental damage or public safety hazards. The plan shall include placement of security cameras to the satisfaction of the Community Development and Police Departments, and employment of security personnel at all times during drilling stages (24 hours) (see condition 3.2 in D-1) and employment of security personnel from dusk until dawn at all other times. The plan shall be reviewed and revised as warranted to require incorporation of new planning strategies, new technologies or changes in plant operation, and changes in notification procedures. C-11 Fire Protection Plan All E&B Project facilities shall have fire protection features installed in accordance with the provisions of an E&B Project Fire Protection Plan (FPP), and as such features may be required under this Exhibit D. All facilities, construction activities, process equipment, and fire protection equipment shall comply with the standards of the National Fire Protection Association (NFPA), American Petroleum Institute, Uniform Fire Code as adopted in Chapter 15, Building and Construction of the Hermosa Beach Municipal Code, and the Hermosa Beach City Fire Department. In the event of a conflict between these standards, the Fire Marshal, in consultation with the Operator, shall make a cost/benefit decision regarding which standards apply. Prior to construction, Operator shall receive Fire Department approval of an FPP which addresses both construction and operation of the E&B Project. Operator shall distribute copies of the approved contingency plans to applicable City Departments and the City Fire Department. All plan recipients are to be notified of contingency plan changes via formal contingency plan updates. Separate FPPs may be submitted for Phase 1 and Phase 2/3/4 activities. The FPP shall include, but may not be limited to, discussions of the following:  Onsite firefighting equipment and systems  Fire and detection  Access  Vegetation management  Employee training and safe practices Exhibit D-2  Process control and monitoring analysis  Drainage and containment  Safety, inspection (including City inspectors) and maintenance practices Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-12 Prevention of Internal Pipeline Corrosion Operator shall implement techniques to prevent internal corrosion in accordance with the requirements of the California State Fire Marshal (Title 5 §51010-5-019 of the California Government Code), 49 CFR 192 Parts 150, 475 and 477, and 49 CFR 195.418 as part of the Oil and pipeline maintenance procedures. The internal inspection records shall be submitted to and reviewed by the appropriate governmental agencies. Such activities shall include routinely scheduled pigging of the pipeline to remove pockets of accumulated fluids that contribute to internal corrosion (such as hydrogen sulfide, carbon dioxide, and water), the use of corrosion inhibitors and corrosion coupons, and periodic testing by a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents, cracks and other defects have occurred. Specific measures are discussed below: a) Whenever any section of the pipelines are removed for any reason, they shall be inspected for possible internal corrosion and records retained for inspection by the State Fire Marshal. b) The pipeline shall be tested with a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents cracks and other defects have occurred. State-of- the-art pigging will be capable of defining wall-thickness contours around any area of reduced wall thickness. The smart pigging will be done prior to operation of the Oil and natural gas pipelines and at a subsequent interval to be determined by the California State Fire Marshal. A program of maintenance shall be developed to ensure that permits to perform the work are obtained as soon as possible and that pipeline defects are rectified within one month of securing the necessary permits for severe defects, and within six months for moderate defects. This procedure shall be noted in the SIMQAP and receive approval by the SSRRC prior to operations of either the OIL or natural gas pipelines. Exhibit D-2 C-13 Prevention of External Pipeline Corrosion Operator shall undertake the following provisions to avoid external pipeline corrosion: a) The Oil and natural gas pipelines shall be coated to reduce the potential for external corrosion. Final selection of pipeline coating will be demonstrated, to the satisfaction of the California State Fire Marshal, that the selected coating would provide the maximum level of protection of available coatings for all expected operating conditions; and b) A baseline pipe-to-soil cathodic profile and reading shall be obtained after the pipeline has been installed, but before any cathodic protection facilities are connected. Other utilities shall disconnect their bonds as well. This measure shall be included on the construction plans which shall be reviewed by the City. C-14 Pipeline Hydrotesting The oil and natural gas pipelines shall be hydrotested prior to operation, and every five years thereafter or sooner if warranted by major ground movement that has the potential to undermine the structural integrity of the pipeline. This procedure shall be noted in the SIMQAP which shall be reviewed and approved prior to operations. C-15 Structural Support for Underground Utilities Operator shall provide structural support for underground utilities in and near the construction area during work in the trench and backfilling operations to prevent damage to such facilities during construction activities. C-16 Underground Utility Damage Operator shall halt work in the immediate vicinity in the event of inadvertent damage to an underground utility, until the owner of the utility has been contacted and repairs have been effected. C-17 Underground Pipeline Warning Marker A plastic ribbon or other suitable material shall be buried 12 to 18 inches above the oil and Exhibit D-2 natural gas pipelines and shall cover the length of the pipeline. The material shall be brightly colored and be labeled with a warning that this area contains a hazardous liquid pipeline trench. This measure shall be noted on the design and construction plans to be reviewed and approved by the City. C-18 Pipeline Route Warning Signs The entire pipeline route shall be marked with pipeline warning signs a minimum of every 500 feet. Spacing of markers may be greater in agricultural areas provided markers are clearly within sight of each other. Bright colored markers shall be installed above new pipelines that extend offsite of the proposed facility. This type of measure helps reduce the likelihood of external mechanical interference, of which third party damage associated with excavation near the pipelines is the most common cause of pipeline failures. C-19 Underground Service Alert Notification Operator shall notify owners through the office of Underground Service Alert of any underground facilities (including electrical, water, petroleum pipelines, fiber-optics and agricultural water delivery and drainage pipelines) 48 hours in advance of excavation in the vicinity of these facilities. Operator shall have an electrical contractor on-call at all times during construction near the potentially affected facility to repair any circuits if required by the owner in the event they are damaged during construction. The appropriate response to hazards associated with damage to natural gas pipelines will be determined in consultation with Southern California Gas Company. The City Fire Department shall be notified of the schedule for construction activities in the vicinity of natural gas and other oil pipelines. C-20 Finished Pipeline Route Maps Upon completion of pipeline construction, Operator shall provide all jurisdictional agencies with at least two copies of maps showing the finished pipeline route and shall include locations accessible by fire department emergency response vehicles. Said maps shall be 7 1/2 minute quadrate scale, (one inch equals 24,000 inches), and shall represent topographical features. C-21 Supervisory Control and Data Acquisition and Emergency Shutdown Systems Exhibit D-2 The pipeline supervisory control and data acquisition (SCADA) and Emergency Shutdown (ESD) systems, including inspection, maintenance and quality assurance procedures for the SCADA and ESD systems, shall be reviewed and approved by the Fire Department and the Building Department and Public Works Department prior to operations of either the oil or natural gas pipelines, and as appropriate thereafter. The SCADA and ESD systems shall comply with the provisions of Fire Department Development Standard No. 7 and the National Electrical Code Article 760. Operator shall conduct a comprehensive safety and reliability analysis of the SCADA system as well as the processing facility and oil and natural gas pipelines control room prior to commencement of pipeline operations, and as appropriate thereafter. The analysis shall meet or exceed the guidelines developed by the Institute of Electronic and Electrical Engineers. Any improvements identified in the study shall be included in the suggested hardware and software. Results of the study shall be provided to the Community Development Department. Company shall design the project such that the entire project will integrate the supervisory control and data acquisition (SCADA) or other monitoring system for all the components of this project in a manner so as to provide timely and efficient detection, shutdown, notification and response to an emergency involving any of the project components. Any break, rupture, and/or damage to the facilities shall result in the orderly shutdown of the pumping operations, and will activate the shut off valves in a manner which will minimize environmental damage. C-22 Update of Operational Risk Assessment Upon City request, Operator shall fund the updating of the operational risk assessment subject to ministerial permitting, as needed, so that any surrounding land use proposals are aware of existing risk, if any. D. FACILITY DESIGN D-1 Submittal of As Built Drawings Within one year after initial start-up of the E&B Project (Phase 1), and again within one year of commencement of Phase 2 operations, Operator shall submit as-built drawings of the Exhibit D-2 entire facility(s) to City. Any facility modifications required for Phase 3 operations shall also be documented on facility as-built drawings within one year of their construction. Operator shall submit as many sets of drawings (up to ten sets) as requested by the Community Development Department. D-2 Solid Waste Disposal Solid waste generated on the site shall be collected by the City’s franchised commercial trash hauler. Construction waste shall be transported by E&B’s own efforts to a facility authorized to accept construction waste in accordance with the provisions of the Hermosa Beach Municipal Code. Hazardous waste shall be transported by E&B’s own efforts to a facility authorized to accept hazardous waste in accordance with all local, state and federal laws. D-3 Water Conservation Measures The design of all new and/or modified onsite facilities shall incorporate the use of cost- effective water-conserving fixtures, including by way of example indoor and outdoor plumbing fixtures and irrigation. D-4 Energy Conservation Measures Throughout the project life, as equipment is added or replaced, cost-effective energy conservation techniques shall be incorporated into project design, including by way of example indoor and outdoor lighting, HVAC, drill equipment, vehicles, and microturbines. E. ABANDONMENT E-1 Abandonment Procedures In implementing Section 26 of the Lease and Article VII of the Hermosa Beach Municipal Code - Oil Code Chapter 21A, Operator shall secure all necessary permits and proceed in accordance with a City Council approved abandonment and restoration plan within one year of permanent shut down. The abandonment plan shall be processed with environmental review of the plan. Operator shall post a performance bond, or other security device Exhibit D-2 acceptable to City Council, prior to commencement of Phase 1 construction for estimated costs of abandoning Phase 1 facilities. Operator shall also post a performance bond, or other security device acceptable to City Council, prior to commencement of Phase 2 for estimated costs of abandoning Phase 2 facilities. E-2. Abandonment Costs All costs associated with abandonment or removal shall be borne by Operator. E-3. Wellsites Prior to permanent shutdown or termination of this agreement or the lease, any well drilled by Operator shall be plugged and abandoned within three months from the date it is determined that such well is no longer capable of production, subject to weather and rig availability, and capped, in accordance with the rules and regulations of the State Division of Oil, Gas & Geothermal Resources. Thereafter, the wellsite shall be restored as near as practicable to its original condition. F. Miscellaneous Conditions F-1. Hydraulic Fracturing Prohibited The use of hydraulic fracturing as a well stimulation technique for enhanced hydrocarbon production shall be prohibited on the project site. F-2. Pipelines All pipelines installed for the Project shall not go below the depth authorized by the State Division of Oil, Gas & Geothermal Resources. After completion of the construction of any such pipelines, Operator shall restore the surface of the area impacted by the construction of such pipeline as nearly as practicable to its condition immediately prior to such construction. F-4. Fire Marshal Position Operator shall fund a full-time dedicated Fire Marshal position for the Hermosa Beach Fire Department for the full Term of the Development Agreement. Exhibit D-2 F-5. Training Operator shall pay for annual training for Hermosa Beach Fire Department personnel and fire personnel from the City’s automatic aide partners on fighting oil fires. F-6. Odor (from HIA) In the event of frequent reports of odor emanating from the site, Operator shall pay for additional studies and/or periodic air monitoring. If the studies or monitoring indicate that additional control measures should be implemented to reduce the frequency of noticeable odors, Operator shall include those measures as project conditions. F-7. Notice (from HIA) During Phase 3 pipeline construction, Operator shall provide written notification of impending construction activities, including the dates and times of activities that may produce excessive noise, to all residents within 100 feet of the construction activities. Notice shall be provided no less than 72 hours before construction begins. F-8. Light impact reduction (from HIA) Operator shall pay for or provide black-out blinds or curtains for bedrooms with direct line- of-sight to the exposed side of the electric drill rig that will be lit at night. The amount of payment or the brand of blinds/curtains shall be pre-approved by the City Manager, and may be provided through a direct mail program. F-9. Community Relations (from HIA) As recommended in Intrinsik’s Health Impact Assessment for the project, and at the City Council’s discretion, the Operator may be required to pay for the costs associated with (1) organizing a Community Liaison Committee; (2) a follow-up Community Health Assessment; and/or (3) a quality of life health survey. Exhibit D-2 [Continue to following page for Mitigation Measures] Exhibit D-3 EXHIBIT “D-3” Mitigation Measures/Mitigation Monitoring Plan from Section 8.0 of FEIR (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). 8.0 Summary of Mitigation Measures and Mitigation Monitoring Plan 8.1 Mitigation Monitoring Program As the Lead Agency under the California Environmental Quality Act (CEQA), the City of Hermosa Beach (City) is required to adopt a program for reporting or monitoring regarding the implementation of mitigation measures for this Project, if it is approved, to ensure that the adopted mitigation measures are implemented as defined in this Environmental Impact Report (EIR). This Lead Agency responsibility originates in Public Resources Code Section 21081.6(a) (Findings) and the CEQA Guidelines Sections 15091(d) (Findings) and 15097 (Mitigation Monitoring or Reporting). 8.2 Monitoring Authority and Enforcement Responsibility The purpose of a Mitigation Monitoring, Compliance, and Reporting Program (MMCRP) is to ensure that measures adopted to mitigate or avoid significant impacts are implemented. A MMCRP can be a working guide to facilitate not only the implementation of mitigation measures by the Project proponent, but also the monitoring, compliance, and reporting activities of the City and any monitors it may designate. The City may delegate duties and responsibilities for monitoring to other environmental monitors or consultants as deemed necessary, and some monitoring responsibilities may be assumed by responsible agencies, such as affected jurisdictions and cities. The number of monitors assigned to the Project will depend on the number of concurrent activities and their locations. The City or its designee(s), however, will ensure that each person delegated any duties or responsibilities is qualified to monitor compliance. Any mitigation measure study or plan that requires the approval of the City must allow at least 60 days for adequate review time. When a mitigation measure requires that a mitigation program Exhibit D-3 be developed during the design phase of the Project, the Applicant must submit the final program to City for review and approval for at least 60 days before any activity begins. Other agencies and jurisdictions may require additional review time. It is the responsibility of the environmental monitor assigned to the Project to ensure that appropriate agency reviews and approvals are obtained. The City or its designee will also ensure that any deviation from the procedures identified under the monitoring program is approved by the City. Any deviation and its correction shall be reported immediately to the City or its designee by the environmental monitor assigned to the Project. The City is responsible for enforcing the procedures adopted for monitoring through the environ- mental monitor assigned to the Project. Any assigned environmental monitor shall note problems with monitoring, notify appropriate agencies or individuals about any problems, and report the problems to the City or its designee. 8.3 Mitigation Compliance Responsibility The Applicant is responsible for successfully implementing all the mitigation measures in the MMCRP, and is responsible for assuring that these requirements are met by all of its contractors and field personnel. Standards for successful mitigation also are implicit in many mitigation measures that include such requirements as obtaining permits or avoiding a specific impact entirely. Other mitigation measures include detailed success criteria. Additional mitigation success thresholds will be established by applicable agencies with jurisdiction through the permit process and through the review and approval of specific plans for the implementation of mitigation measures. 8.4 General Monitoring Procedures Environmental Monitors. The City and the environmental monitor(s) are responsible for integrating the mitigation monitoring procedures into the construction or operation process in coordination with the Applicant. To oversee the monitoring procedures and to ensure success, the environmental monitor assigned to the Project must be on site during that portion of the construction or operation that has the potential to create a significant environmental impact or other impact for which mitigation is required. The environmental monitor is responsible for ensuring that all procedures specified in the monitoring program are followed. Exhibit D-3 Construction and Operations Personnel. A key feature contributing to the success of mitigation monitoring will be obtaining the full cooperation of construction and operations personnel and supervisors. Many of the mitigation measures require action on the part of the supervisors or crews for successful implementation. To ensure success, the following actions, detailed in specific mitigation measures, will be taken: • Procedures to be followed by construction or operations companies hired to do the work will be written into contracts between the Applicant and any contractors. Procedures to be followed by construction and operations crews will be written into a separate document that all personnel will be asked to sign, denoting agreement. • One or more meetings will be held to inform all and train personnel about the requirements of the monitoring program. • A written summary of mitigation monitoring procedures will be provided to supervisors for all mitigation measures requiring their attention. General Reporting Procedures. Site visits and specified monitoring procedures performed by other individuals will be reported to the environmental monitor. A monitoring record form will be submitted to the environmental monitor by the individual conducting the visit or procedure so that details of the visit can be recorded and progress tracked by the environmental monitor. A checklist will be developed and maintained by the environmental monitor to track all procedures required for each mitigation measure and to ensure that the timing specified for the procedures is adhered to. The environmental monitor will note any problems that may occur and take appropriate action to rectify the problems. Public Access to Records. The public is allowed access to records and reports used to track the monitoring program. Monitoring records and reports will be made available for public inspection by the City or its designee on request. 8.5 Mitigation Monitoring Table The Tables below present a summary of monitoring and reporting plan requirements for the mitigation measures identified in Chapter 4 of the EIR as applicable to the Proposed Project. The Table provides the following information, by column: • Mitigation Measure (description of the mitigation measure identified in Chapter 4); • Monitoring/Plan Requirements (monitoring or plan requirements necessary to verify compliance with the mitigation measure); Exhibit D-3 • Method of Verification (this is how the responsible agency can determine if the mitigation measure has been implemented); • Timing (this identifies when action needs to be taken on mitigation measure); and • Responsible Agency (this is the agency that is responsible for assuring compliance with the mitigation measure). Table 8-1 Aesthetics and Visual Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party EM-1 Prior to issuance of the first grading and/or construction permits, the Applicant shall enter into agreements with the City to provide funding for the implementation and administration of an environmental monitoring program, including an environmental monitor, to ensure compliance with each Agency’s environmental Conditions of Approval. The monitor shall assist the Agencies in condition compliance and mitigation monitoring for all applicable construction and operational stages of the Oil Project, as specified in a scope of work, as approved by the Agencies. The monitoring program shall include a post‐construction program to monitor measures that extend beyond the construction period (e.g., success of landscaping, etc.), as well as monitor certain mitigation measures required during the operational phase. The monitor will prepare a working monitoring plan that reflects the Agencies ‐ approved environmental mitigation measures/conditions of approval. This plan will include: 1. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; 2. Lines of communication and reporting methods; 3. Daily and weekly reporting of compliance; 4. Construction crew training regarding environmental sensitivities; 5. Authority to stop work; and 6. Action to be taken in the event of non‐compliance. The environmental monitor shall be under contract to the Agencies. Costs of the monitor, monitoring program, and any Agency administrative fees, shall be paid by the Applicant. The Applicant shall also be responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, Conditions included within the Development Agreement, including administrative measures to ensure bonding, payment methods and insurance Before the start of Phase 1 City of Hermosa Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party noise engineer, etc.). The Agencies’ environmental monitor will coordinate the monitoring efforts of the specialist, including communication with the Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). AE-1a Material choice of electrical drill rig acoustical shroud shall be of neutral sky color which is selected for its ability to reduce visual impact, in coordination with and approval by the City Community Development Director. Approval of Construction Documents and Specifications and field- demonstration Prior to issuance of permits City of Hermosa Beach AE-1b The sound attenuation wall shall be replaced by a permanent wall with design features installed at the end of Phase 3. The intent is to provide stability of views and opportunities for positive visual elements that partially mitigate the visual presence of the walls from the Hermosa Greenbelt and other sensitive views in the immediate Project vicinity. The permanent wall shall be allowed to be provided in lieu of the 16-foot block wall. Landscape design shall be allowed to be adjusted to respond to façade articulations, though quantities and densities shall be maintained. The permanent wall shall be designed with architectural features in coordination with and approval of the City Community Development Director. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2a Design of the sound attenuation wall exterior façade shall be required to include design articulations that are complementary to the character, scale, and quality of the surrounding environment. The intent is to mitigate the visual impact of the wall from the Hermosa Greenbelt and other sensitive views in the immediate project vicinity. The following measures of success shall be met: 1) Articulations of façade decrease scale and proportion of mass into smaller increments that more closely resemble those of adjacent buildings; and 2) Colors, detailing and material use are varied to a level consistent with existing visual environment. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AE-2b Planting area growth medium shall be capable of supporting the long term health and growth of the landscape design. Requirements shall be: 1) Demonstrated free of debris and construction waste (asphalt, concrete, etc) to a minimum depth of 3 feet within all planted areas. Wall footings shall be designed to limit encroachment into planted areas; 2) Soils analysis report shall be conducted by a certified soil scientist. Report shall include recommendations to meet the intent of this mitigation measure; and 3) If soils are determined to be unsuitable to support plant growth, they shall be amended or removed/replaced to meet requirements of soils analysis for plant pallette selected. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2c Vine plantings where used shall meet the following conditions: 1) be self- attaching or structure supported; 2) have demonstrated success in the City; 3) be planted at a density to achieve full coverage at maturity; 4) be planted at a minimum 5 gallon size; and 5) be required on the visible portion of the west wall at the temporary parking facility. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2d All trees shall be required to be a minimum of 20’ in height at installation and meet the American Standard for Nursery Stock (ANSI Z60.1-2004). If a tree species alternate is proposed, it shall be required to be an equal to the species proposed in the Project Application in the following characteristics: 1) Dense evergreen with similar form and habit; 2) Probability of achieving a minimum of 35-40 feet at maturity; and 3) Comply with Municipal Code Chapter 8.60 and 8.56. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-3a Pipeline alignments and valve box locations shall be designed to avoid the removal or modification of trees, hedgerows, and/or large shrubs to the extent feasible. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach, and Torrance Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AE-3b If landscaped areas, streetscapes, plazas and/or parklands are required to be temporarily disturbed, they shall be restored to their previous condition following completion of construction. Avoidance of disturbance shall be the preferred option, especially where landscape elements act to screen views (hedges, large shrubs, etc) or where they act as community gateways (Redondo Beach at Hwy-1). Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach and Torrance AE-3c Block color/s selection and pattern (if applicable) shall be complementary to adjacent buildings. A buffer of shrubs and vines shall be planted to match the existing character and quality of the adjacent properties. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach and Torrance AE-4a Final acoustical cover material selection shall be required to be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4b Colors and finishes of equipment and surfaces within the soundwall (including the interior face of the soundwall, the interior face of the drill rig acoustical cover, and the physical structure of the drill rig within the acoustical shield) shall have a reflectivity rating of 0.3 or lower. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4c All proposed site lighting fixtures associated with the drilling activities shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5a Colors and finishes of surfaces within the facility, including the interior face of the soundwall, ground materials (darker or asphalt), wall paints and equipment Approval of Construction Prior to issuance of City of Hermosa Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party paints to the extent feasible shall have a low reflectivity rating of 0.3 or lower to reduce the potential for glow. Documents and Specifications and Inspection permits and during construction Beach AE-5b Final sound wall material/s selection/s (including gates) shall be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5c All proposed site lighting, including fixtures outside the wall, shall be fully shielded. Fully shielded shall be defined as: A luminaire constructed and installed in such a manner that all light emitted by the luminaire, either directly from the lamp or a diffusing element, or indirectly by reflection or refraction from any part of the luminaire, is projected below the horizontal plane through the luminaire’s lowest light-emitting part (IES/IDA, 2011) Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5d The LZ-2 parameters of the Model Lighting Ordinance (IES/IDA, 2011) shall be used to demonstrate that maximum vertical illuminance for the site are not exceeded. For site lighting inside the wall, Table B allowances shall be used. Lighting outside the wall at site entrances shall not exceed that of existing street lighting, which produces a maximum of 1 footcandle. For the purposes of measuring vertical illumination, the plane of the property line shall be extended to an elevation equal to the height of the electric drilling rig. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5e All proposed site lighting fixtures shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-6a Any proposed metering station site lighting shall be fully shielded and shall incorporate permanent features (shields, hoods, etc.) shall incorporate permanent features which prevent light spillage beyond the property line. Approval of Construction Documents and Prior to issuance of permits and City of Redondo Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Specifications and Inspection during construction AE-6b Light levels and quantities of fixtures shall not exceed that which is needed for security and safety. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Redondo Beach and Torrance Table 8-2 Air Quality and GHG’s Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AQ-1a The Applicant shall submit and implement a Fugitive Dust Control Plan that includes SCAQMD mitigations for fugitive dust mitigation, according to Rule 403, and SCAQMD CEQA Guidelines. Fugitive dust mitigation measures in the plan shall include the following (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - Apply water every 3 hours to disturbed areas and unpaved roads within a construction site (61 percent reduction). - Require minimum soil moisture of 12 percent for earthmoving, by using a moveable sprinkler system or water truck. Moisture content can be verified by lab sample or moisture probe (69 percent reduction). - Limit onsite vehicle speeds on unpaved roads to 15 mph and posting of speed limits. - All trucks hauling dirt, sand, soil, or other loose materials are to be tarped with a fabric cover and maintain a freeboard height of 12 inches (91 Plan review, site inspections Before and during construction Both Oil Project and City Yard SCAQMD City of Hermosa Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party percent reduction). - Install gravel bed trackout apron (3 inches deep, 25 feet long, 12 feet wide per lane, and edged by rock berm or row of stakes) to reduce mud and dirt trackout from unpaved truck exit routes (46 to 80 percent reduction). - Water storage piles by hand or apply cover when wind events are declared, according to SCAQMD Rule 403 when instantaneous wind speeds exceed 25 miles per hour (90 percent reduction). - Appoint a construction relations officer to act as a community liaison concerning onsite construction issues, such as dust generation. AQ-1b The Applicant shall implement a NOx reduction program including the following, or equivalent, measures to the satisfaction of the SCAQMD (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - All off-road construction equipment shall be tuned and maintained according to manufacturers’ specifications. - Any temporary electric power shall be obtained from the electrical grid, rather than portable diesel or gasoline generators. - All off-road diesel construction equipment with greater than 100- horsepower engines shall meet Tier 3 NOx requirements. - Limit onsite truck idling to less than 5 minutes. - A copy of the certified tier specification, best available control technology documentation, or the CARB or SCAQMD operating permit for each piece of equipment shall be kept onsite during all operations. Plan review, site inspections Before and during construction SCAQMD City of Hermosa Beach AQ-3a The Applicant shall limit flaring during Phase 4 to a total of 5 hours per day at the full flaring capacity (or to an equivalent volume of flared gas) during all emergency or routine flaring events in order to ensure that NOx emissions are reduced below the thresholds. Lower NOx emission combustors or other equivalent measures can also be used to satisfy the requirement. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-3b The Applicant shall implement methods to reduce the off-gassing of muds by at Plan review, Before Phase SCAQMD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party least 90 percent through the installation of fully enclosed mud pit areas with vapor control (either through carbon canisters or vapor recovery) and/or the use of mud degassing units routed to vapor control systems. The Applicant shall monitor the muds vapor immediately above the muds exit point from the wellbore and at other areas above the mud pits where muds may be exposed to the atmosphere in order to ensure that hydrocarbon vapors are captured at the minimum rate of 90 percent. site inspections 2 and Phase 4 drilling City of Hermosa Beach AQ-4 The Applicant shall limit the microturbine PM emissions to 0.0035 lbs/mmbtu, or an equivalent reduction in the number and/or size of the microturbines, in order to reduce emissions to below the localized thresholds. The City shall be responsible for ensuring that the applicant will be subject to permit conditions that limit emissions from the set of microturbines, not just individual permit units. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-5a The Applicant shall at all times have a gas buster and SCAQMD-approved portable flare at the site and connected for immediate use to circulate out and combust any gas encountered during drilling. The flare shall be capable of recording the volume of gas that is flared. The operator shall report any flared gas from drilling to the Hermosa Beach Fire Chief and the SCAQMD. Plan review, site inspections Before Phase 2 drilling SCAQMD City of Hermosa Beach AQ-5b The Applicant shall install a compressor seal vent collection system. In the event of a seal leak, vapors shall be collected and sent to the vapor recovery system or flare for destruction. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-5c The Applicant shall develop and implement an Odor Minimization Plan, submitted to and approved by the City and the SCAQMD. The Odor Minimization Plan shall address reducing the frequency from potential sources of odors from all site equipment, including wells and drilling operations, temporary operations such as truck loading, and measures to reduce or eliminate these odors (e.g., containment, design modifications, carbon canisters). The Plan shall address issues such as facility information, buffer zones, signs with contact information, logs of odor complaints, the protocol for Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party handling odor complaints and odor release investigations and methods instituted to prevent a re-occurrence. The Plan shall require that all odor complaints and issues be immediately communicated to the City and that the City shall have the authority to implement and enforce contingency measures to ensure that any nuisance odors from the facility are eliminated. AQ-5d The Applicant shall develop and implement an Air Monitoring Plan. The Plan shall provide for the monitoring of total hydrocarbon vapors and hydrogen sulfide and total hydrocarbon vapors at all perimeter locations of the facility as well as at strategic locations near processing equipment. At all times during operations, drilling, redrilling and workover operations, the Operator shall maintain monitoring equipment that shall monitor and digitally record the levels of hydrogen sulfide and total hydrocarbon vapors. Such monitors shall provide automatic alarms that are audible and visible to the Operator of the drilling equipment, and gas plant, and shall be triggered by the detection of hydrogen sulfide or total hydrocarbon vapors. Alarm points shall be set at a maximum of 1 5 and 5 10 ppm H2S and 500 and 1,000 ppm hydrocarbons, with the higher level requiring shut-down of drilling or plant operations and the lower level requiring notification to appropriate agencies, including the Hermosa Beach Fire Department and SCAQMD. A meteorological station to monitor wind speed and direction under the guidance and specification of the SCAQMD shall be installed at the site. The Air Monitoring Plan shall be reviewed and approved by the City and the SCAQMD. Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach AQ-5e The Applicant shall use an odor suppressant spray system on the mud shaker tables, and shall install carbon capture canisters on all tanks (permanent and portable) that are not equipped with vapor recovery, containing potentially odiferous materials (for example; the mud baker-type tanks) for all drilling operations so that no odor can be detected at the closest receptor. Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach AQ-5f The fugitive component leak detection program under Rule 1173 shall utilize a Leak Detection and Reporting (LDAR) level of monthly detections with an action Plan review, site inspections Before Phase 2 operations SCAQMD City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party level of 100ppm, the installation of bellows valves where applicable (valves 2 inches or smaller) and the use of IR cameras or equivalent during monthly detections to ensure that leaking components are minimized at the facility. Hermosa Beach AQ-6 The Applicant shall provide credits for all GHG emissions generated above the threshold of 10,000 MTCO2e per year. A GHG Reporting and Reduction Plan shall be submitted to the SCAQMD and the City detailing the measures to be implemented to achieve the required reductions, updated annually, and shall include specifications on the protocol, vintage, and registry for any offsite mitigation. The following mitigation credits shall not require prior City or SCAQMD approval: 1. Credits generated within Los Angeles County per an approved SCAQMD protocol; 2. Credits generated within the State of California per an approved SCAQMD protocol; 3. Credits that are generated and verified under the CAPCOA GHG Rx program; 4. Credits that are generated and verified under the voluntary SCAQMD Regulation XXVII; 5. Verified credits registered with the Climate Action Reserve or the American Carbon Registry. In addition, independently verified GHG credits available through other carbon registries that follow specific protocols may be eligible for offsite mitigation, subject to review and prior approval by the City and the SCAQMD. The general criteria for acceptable credits include: • Real: emission reduction must have actually occurred, as the result of a project yielding quantifiable and verifiable reductions or removals. • Additional/Surplus: an emission reduction cannot be required by a law, rule, or other requirement. • Quantifiable: reductions must be quantifiable through tools or tests that Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party are reliable, based on applicable methodologies, and recorded with adequate documentation. • Verifiable: The action taken to produce credits can be audited and there is sufficient evidence to show that the reduction occurred and was quantified correctly. • Enforceable: An enforcement mechanism must exist to ensure that the reduction project is implemented correctly. • Permanent: Emission reductions or removals must continue to occur for the expected life of the reduction project. Operational/drilling GHG emissions from stationary and mobile sources shall be quantified and reported to the City and to the SCAQMD annually. Emissions reporting will follow the same reporting format and procedures as required by the Mandatory Reporting Rule. AQ-7a All diesel equipment used at the site shall meet EPA Tier 3 emission requirements and be equipped with a CARB Level 3 diesel particulate filter to reduce Diesel PM emissions. Workover rigs operated at the project site shall have cumulative total DPM emissions below 1.5 lbs/year or shall utilize electric drive/sources . Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-7b Vapor recovery on crude oil tanks shall achieve a minimum of 99 percent recovery of fugitive emissions. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Table 8-3 Biological Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party BIO-1 To minimize potential impacts to nesting native bird species, and in compliance with the federal Migratory Bird Treaty Act and Sections 3503, 3503.5, or 3513 of the California Fish and Wildlife Code, initial vegetation removal/trimming shall be done outside the breeding season (breeding season is defined herein as January 15 through August 31 for raptors and February 15 through August 31 for all non- raptor species). If vegetation removal/trimming must be completed during this period, then surveys for nesting birds must be conducted by a qualified, City-approved Biologist, within 3 days prior to vegetation removal or other construction-related disturbances. If nesting birds are observed within the project area, then a minimum 100-foot buffer from any non-raptor species and 500 foot buffer from any raptor nest would be established and maintained for the duration of vegetation removal/trimming activities or until nestlings fledge from the nest. Plan review, site inspections Before and during construction City of Hermosa Beach BIO-2 The Applicant shall submit for City approval and shall implement an Emergency Response Plan that would, in compliance with the California State Oil Spill Contingency Plan (CDFW, OSPR 2014),address protection of biological resources and possible revegetation of any areas disturbed during an oil spill or cleanup activities. The Emergency Response Plan shall, at a minimum, include specific measures to avoid impacts to native vegetation and wildlife habitats, plant and animal species, and environmentally sensitive habitat areas during response and cleanup operations. The Emergency Response Plan shall include provisions for containment and cleanup measures and responsibilities. The plan shall contain: • Definition of the authorities, responsibilities, and duties of all entities involved in oil removal operations, and methods of emergency action agency coordination during and after an oil spill; • Agreements and statements from all resource agencies involved in an oil response and removal operation; • Procedures and frequencies for regular monitoring and inspections of Plan review Before construction City of Hermosa Beach OSPR Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party pipelines and facilities; • Procedures for early detection and timely notification of an oil discharge; • A description of the necessary onsite equipment and details on the placement of the material required to quickly control, contain, and remove any discharged oil; • Assurance that full resource capability is known and can be committed following a discharge; • A description of sensitive biological resources in the SMB that should be prioritized for clean-up activities in the case of an oil spill into the marine environment; • Actions for after discovery and notification of a discharge; • Procedures to facilitate recovery of damages and enforcement measures. The Emergency Response Plan shall be approved by the California Department of Fish and Wildlife (CDFW) Office of Spill Prevention and Response (OSPR). When habitat disturbance cannot be avoided, the Emergency Response Action Plan shall provide stipulations for development and implementation of site-specific habitat restoration plans and other site-specific and species-specific measures appropriate for mitigating impacts to local populations of special-status wildlife species and to restore native plant and animal communities to pre-spill conditions. Access and egress points, staging areas, and material stockpile areas that avoid specific habitat areas shall be identified. The Emergency Response Action Plan shall include species- and site-specific procedures for collection, transportation and treatment of oiled wildlife. The Emergency Response Plan shall be approved by the City prior to commencing any construction activities. ______________________________________________________________________________ _______________________________________ Table 8-4 Cultural Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party CR-1 Prior to beginning demolition of the existing City Maintenance Yard Building, guidelines shall be developed for the careful exposure of extant elements of the historic brick and mortar furnace. Once exposed, detailed documentation of the furnace shall be undertaken. Documentation shall be guided by the Historic American Engineering Record (HAER) standards. This documentation shall include production of high quality 35-mm photographs and plan drawings of building elements exposed, including but not limited to, a floor plan, any character-defining building features, and elevation drawings. All work carried out pursuant to the recordation of the furnace building shall be conducted by, or under the direct supervision of a person or persons meeting, at a minimum, the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994) as an architectural historian. A written report detailing the HAER-like documentation shall be provided to the City upon completion the work. This report shall be produced on archivally stable materials and filed with the Hermosa Beach Historical Society. Development and implementation of a monitoring and documentation plan by a qualified archaeologist. During building demolition within areas of recorded historical resources. Project Proponent and Construction Contractor CR-2a The design of the New City Maintenance Yard Building shall be compatible in design, styling, material, and massing of the adjacent City Hall complex. The building design should not attempt to replicate the New Formalist style, but it shall not conflict or contrast with the existing building style. The buildings constructed in the New City Maintenance Yard shall be no more than two stories high. They shall not overpower or overshadow the existing building complex. Design of the New City Maintenance Building and landscape Design Phase Project Proponent and City CR-2b The landscaping associated with the proposed New City Maintenance Yard shall replicate the planting types surrounding the City Civic buildings, to the extent possible, in order to blend the new construction into the existing Complex. The final design of both the new building and landscape should be Design of the New City Maintenance Building and Design Phase Project Proponent and City Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party developed in consultation with an historic architect or architectural historian who meets Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). landscape CR-3a Prior to any ground-disturbing activities or building removal within the Proposed Project sites, an Archaeological Monitoring Plan shall be developed by a qualified archaeologist with provision for review and input by concerned Native Americans and approval by the City. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. The Plan is to include provisions for archaeological and Native American monitoring, detailed documentation of all early twentieth-century artifact-bearing deposits exposed during ground- disturbing site work, and development of a clear collection policy for both prehistoric and historic artifacts, subsequent artifact analysis, reporting of findings, and disposition and/or curation of any significant artifacts recovered. All reports of findings shall be filed with to SCCIC. Development and implementation of a monitoring plan by a qualified archaeologist in consultation with concerned Native American tribes. The monitoring plan shall be submitted for review by the City of Hermosa Beach and approval prior to beginning development. Plan shall be implemented prior to and during construction. Project Proponent and Construction Contractor CR-3b Any significant archaeological deposits remaining in the area of the previous City of Hermosa Beach Dump following over-excavation at the Proposed Oil Development Project site must be protected in place. Stabilization and covering of these archaeological deposits shall be monitored by a qualified historical archaeologist meeting the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). Following construction any remaining archaeological deposits must be stabilized and covered for protection. Following over- excavation Project Proponent and Construction Contractor CR-4 Should Project-related excavations be designed to exceed 45 feet in depth at the City Dump, or depths greater than 15 feet along the pipelines, or otherwise A paleontological The monitoring Project Proponent Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party be shown to have the potential to impact intact San Pedro Sand deposits as described above, a Paleontological Resources Monitoring and Mitigation Plan (PRMMP) shall be developed by a qualified paleontologist in consultation with the City and implemented prior to or during Project-related ground disturbing activities. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. resource monitoring and mitigation program (PRMMP) for treatment of the paleontological resources will be developed and implemented. plan shall be submitted for review by the City of Hermosa Beach and approval prior to beginning development. Plan shall be implemented prior to and/or during construction. and Construction Contractor CR-5 Ground-disturbing activities in the area of the discovery shall immediately be halted or redirected. A temporary construction exclusion zone shall be established surrounding the site to allow for further examination and treatment of the find. A City representative shall immediately notify the Los Angeles County Coroner’s office by telephone. By law, the Coroner will determine within two working days of being notified if the remains are subject to his or her authority. If the Coroner recognizes the remains to be Native American, he or she shall contact the Native American Heritage Commission who will appoint the Most Likely Descendent (MLD). Additionally, if the remains are determined to be Native American, a plan will be developed regarding the treatment of human remains and associated burial objects and the plan will be implemented under the direction of the MLD. The Native American Heritage Commission (NAHC) must be contacted by the Los Angeles County Coroner, and a Most Likely Descendant must be designated. Any further Upon discovery of human remains. Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party treatment of the remains will occur in consultation with the MLD, the NAHC, and a qualified archaeologist. ______________________________________________________________________________ ____________________________ Table 8-5 Fire Protection and Emergency Response Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party FP-1a The Applicant shall ensure adequate (3,000-5,000 gpm) water supplies are available from the existing water lines and hydrant system, by extending the 8 inch water main or some other source for water supplies that provides sufficient water supply rates, pressure and duration to comply with codes, standards and requirements of the LACFD and the HBFD. Installation of a fire pump, or installation of a piping connection to area water mains that can supply the flows, may be required to ensure the appropriate water flow and pressure requirements. The Applicant shall ensure that all area hydrants and water supplies are tested annually as to the NFPA standards for water flows and pressures, and shall ensure that the results are reported to the City of Hermosa Beach and the Hermosa Beach Fire Department. Review of water flow calcs and tests, annual reviews Before Phase 2 City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party FP-1b The Applicant shall coordinate with the HBFD to integrate a community alert notification system for the proposed project into the City's existing alert system to automatically notify area residences and businesses in the event of an emergency at the project site that would require residents to take shelter or take other protective actions. The Applicant shall implement programs to ensure that all immediate neighbors are provide ample opportunity to participate in the notification system. Review and testing of system Before Phase 2 City of Hermosa Beach HBFD FP-1c The Applicant shall fund an additional FTE position at the HBFD, or equivalent, for personnel with specific capabilities in inspection and code compliance associated with oil and gas production facilities. This arrangement shall be to the satisfaction of the HBFD. Training and hiring completed at HBFD Before Phase 2 City of Hermosa Beach HBFD FP-1d The Applicant shall develop emergency response plans addressing the facility's fire-fighting capabilities pursuant to the most recent NFPA requirements, Los Angeles County Fire Code, LACFD, California Code of Regulation, and API requirements, in coordination with and to the satisfaction of the LACFD and the City of Hermosa Beach Fire Department. These plans shall include, but not be limited to, fire monitor placement, water capabilities, fire detection capabilities, fire foam requirements, facility condition relating to fire-fighting ease and prevention, and measures to reduce impacts to sensitive resources. The plan should also address coordination with local emergency responders and area schools and daycare facilities. Review and approval of plans Before Phase 2 City of Hermosa Beach HBFD FP-1e The Applicant shall ensure that the emergency response planning includes development of evacuation plans of neighbors for an emergency scenario at the facility,. The plan shall be reviewed by the LACFD, HBFD and the City annually and updated as needed. The relevant portions of the plan shall be distributed to the public utilizing a method determined by the reviewing Agencies. Review of plan revision Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-1f The Applicant shall ensure and make funding available to 1) upgrade the dispatch system and procedures within Hermosa/Torrance/Redondo to implement a CAD-to-CAD system to improve dispatch times; and 2) extend the Review of Mutual Aid agreement Before Phase 2 and Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party mutual aid agreements to become automatic aid agreements between the Hermosa Beach Fire Department, Redondo Beach Fire Department and the Torrance Fire Department and to include the Torrance HAZMAT unit, or provide for funding to provide additional equipment and to train a sufficient number of Hermosa Beach, Redondo Beach and/or Manhattan Beach Emergency Response personnel to provide first response HAZMAT capabilities. revision HBFD FP-1g The Applicant shall ensure, during Phase 2 and Phase 4, that the site shall have sufficient water containment capabilities, as per guidance and approval of the Fire Department. Area storm drains along 6th Street and Cypress Avenue shall be equipped with flapper-type valves to enable the closure of the storm drain system in the event of potential overflow. Review of plan and onsite inspections Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-2a The Applicant shall ensure that design and construction comply with applicable codes and standards for equipment spacing, particularly those related to flare location and distances to public areas and distances from well drilling equipment to buildings. If this cannot be achieved, additional requirements shall include the construction of thermal radiation barriers or insulation on the crude oil tanks, installation of thermal barriers/walls around the flare stack, increasing the height of the flare stack during drilling, relocation of the flare stack, providing thermal radiation modeling to estimate the impacts of equipment on the crude tanks and process piping and public areas and the design and construction of blast walls as per API 752. Fire rated barriers shall be established, as per LACFD requirements, to ensure that all buildings within 100 feet of well drilling would be protected from thermal radiation. Thermal assessments shall be completed to ensure that the thermal radiation from the flare is within acceptable levels (as per API RP 521) and does notproduce damage to other equipment or nearby walls/soundwalls. The design and construction compliance status shall be verified by third-party audits under the direction of the City. Third party audit report review Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-2b Fire protection measures specific to the crude oil containment system shall be Review of Before Phase City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party provided, including the installation of manual fire foam systems with automatic detection and notification (to both the operators and the HBFD) capable of foaming in the perimeter of the crude oil containment system, wellhead area and the area immediately adjacent to combustion or spark producing equipment within or immediately adjacent to the crude oil containment area. The system shall be capable of being remotely activated from a safe location in the event of a crude oil fire. The highest level electrical classification achievable shall be designated for all equipment located within the crude oil containment and wellhead area. design documents 2 and Phase 4 Hermosa Beach HBFD ______________________________________________________________________________ _______________________________________ Table 8-6 Geological Resources/Soils Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party GEO-1a In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds a ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil field infrastructure is structurally sound. Inspection by a California Registered Civil Engineer Following any seismic event that results in substantial ground accelerations at the Project Site, as pre- determined by a California- licensed geotechnical City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party engineer. GEO-1b All seismic related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. These measures shall include, but not be limited to the following: - Drilled-in-place piles or cast-in-drilled-hole piles shall be constructed for foundations in the landfill area, i.e., northeast Project Site, to reduce seismically induced settlement. - Ground improvement techniques, including high pressure grout injection, i.e., compaction grouting, shall be used in the landfill area to reduce seismically induced settlement and allow construction of conventional shallow foundations. - Seismic design criteria for horizontal and vertical accelerations, identified in Tables 10 and 11 of the geotechnical report, shall be used during Proposed Project design (including incorporation of updated seismic design criteria from the 2013 California Building Code). - During Phase 1, the upper 2 to 4 feet of soil in the vicinity of the proposed well cellars shall be excavated and replaced with compacted fill. In addition, the basement under the maintenance building shall be removed and filled in with compacted fill. In addition, the basement under the maintenance building shall be removed and filled in with compacted fill. - During Phase 3, the eastern portion of the site shall be excavated approximately 7 feet deeper than the majority of the proposed building pad, with a minimum of 3 feet of overexcavation below design grades, and recompacted to provide a uniform fill blanket below proposed tanks, compressors, and other equipment. - Asphalt pavement and underlying subgrade soils shall be designed to accommodate the proposed drill rig. Positive surface drainage shall be provided to direct runoff away from slopes and structures and toward suitable drainage devices. Ponding of water on structural pads shall not be allowed. Review and approval of geotechnical report. Approve geotechnical report prior to issuance of grading permit. City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party GEO-2a Injection pressures associated wastewater injection shall not exceed reservoir fracture pressures as specified in California Code of Regulations Title 14, Division 2, Section 1724.10, and as approved by the California Division of Oil, Gas, and Geothermal Resources.. Comparing pressure measurements on each injection well to formation fracture pressure During waste water injection operations California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Department GEO-2b In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). Readings from the accelerometer shall be recorded at the Oil Field and transmitted in real-time to the Caltech Seismological Laboratory. The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil field infrastructure is structurally sound. Monthly City of Hermosa Beach GEO-2c In the event that monitoring indicates that Proposed Oil Project-induced seismicity is occurring, wastewater injection operations shall be adjusted to alleviate such seismicity. The drilling operator shall first receive approval from the California Division of Oil, Gas, and Geothermal Resources prior to any change (increase) in the injection operations. Seismicity monitoring Following monthly monitoring, as necessary City of Hermosa Beach GEO-3 All slope stability related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. Temporary Submit temporary Prior to permit issuance City of Hermosa Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party excavations shall be stabilized per the latest edition of Cal/OSHA requirements for loose sands, including shoring or laying back of trench walls. Shoring along the northern perimeter of the Project Site shall be designed by an experienced structural engineer due to the proximity to existing buildings that must be protected from potential settlement and lateral movements. shoring plans and calculations. Beach GEO-4a Prior to approval of the first Phase 4 drilling permit, the Applicant shall have submitted and the City of Hermosa Beach and the California Coastal Commission shall have approved a Subsidence Monitoring and Avoidance Program, for both onshore and offshore areas. The onshore monitoring plan shall be completed throughout the life of this project, in accordance with Appendix A, Subsidence Monitoring Program, of the Subsidence and Induced Seismicity Technical Report, E&B Oil Development Project (Geosyntec Consultants 2012), included as Appendix _F of this EIR. The offshore monitoring plan shall be completed throughout the life of this project in accordance with the Offshore Subsidence Monitoring Program and Possible Mitigation Measures, Hermosa Beach, California (Coastal Environments 1998), included as Appendix _F of this EIR. The latter shall be updated, as applicable, to reflect advances in science since 1998. In addition, Section 7.6, Mitigation of Onshore Subsidence, of the latter report, shall not be applied to this mitigation measure, as the onshore monitoring program would be completed in accordance with the Geosyntec Consultants (2012) report. Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department GEO-4b The Subsidence Monitoring Program shall include: Ground elevation survey methodologies with high vertical resolution; including onshore surface elevations and offshore bathymetric elevations; Prior to Phase 4 II drilling, establishment of a network of onshore and offshore survey or subsidence monitoring locations, including continuous GPS stations, GPS benchmarks, and tautly anchored offshore monitoring points, positioned within the City, outside the City, and in offshore areas, that are sufficiently Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party spaced to draw conclusions about subsidence within the zone of influence of the Project; Because subsidence can occur for a variety of reasons, establishment of control points outside the zone of influence to allow differentiation of possible subsidence effects related to other activities; Use of InSAR imagery technology to evaluate regional subsidence patterns both within and beyond the proposed oil field; Sufficient monitoring frequency to establish trends in subsidence in order to distinguish background ground movement from any subsidence caused by proposed oil field operations; Reservoir monitoring, including documentation of produced fluid volume (oil, gas and water) and reservoir pressures at similar frequency to ground elevation measurements; Reporting requirements; and Action levels, as specified in the onshore and offshore subsidence monitoring reports. Surveying for both vertical and horizontal ground movement shall be completed along the perimeter and throughout the interior of the oil field, including both onshore and offshore areas, utilizing Global Positioning System technology in combination with a network of ground stations. The onshore continuous monitoring GPS stations shall include: Hermosa Beach Pier. The pier will serve as the furthest offshore point in the onshore monitoring program. Longfellow Outfall. This Outfall is larger and more structurally stable than some of the other outfalls along the City’s coast. King Harbor Jetty. This location was selected to achieve a distribution of continuous monitoring points along the coast of Hermosa Beach. This will help provide a limited regional picture of the subsidence between survey events. GEO-4c An onshore and offshore baseline subsidence report shall be completed and Coordinate with At least two Hermosa Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party made available to the City of Hermosa Beach and the California Coastal Commission at least two months and no more than six months prior to planned commencement of Phase 4 II drilling operations. Subsidence monitoring reports shall be completed annually and the results shall be forwarded to the California Coastal Commission and the City of Hermosa Beach for review, no more than one month following the end of each annual monitoring cycle. In addition, results shall be forwarded to the adjoining City of Redondo Beach and City of Manhattan Beach. Hermosa Beach Public Works Department months prior to Phase 4 2 drilling operations Beach Public Works Department GEO-4d In the event that the Global Position System monitoring indicates that significant subsidence, as defined by the onshore and offshore subsidence monitoring reports described in GEO-4a, is occurring in and/or around the Proposed Project area, wastewater or water reinjection operations shall be increased to alleviate such subsidence. The Applicant shall coordinate with the California Division of Oil, Gas and Geothermal Resources, which will approve increased levels of wastewater or water reinjection operations in accordance with the approved Subsidence Monitoring Program. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. Coordinate with California Division of Oil and Gas and Geothermal Resources (DOGGR) Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Department GEO-4e In the unlikely event that subsidence related mitigation induces seismicity, corrective actions related to subsidence shall proceed until baseline surface elevations have been achieved, as subsidence related damage would likely be more pronounced in comparison to damage associated with Project related micro-seismicity. Upon reestablishment of baseline elevations, drilling operations shall cease until a balance between subsidence avoidance and induced seismicity avoidance can be established, as agreed upon by the California Division of Oil, Gas and Geothermal Resources, the California Coastal Commission, and the City of Hermosa Beach. Coordinate with California Division of Oil and Gas and Geothermal Resources (DOGGR) Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Department GEO-6 A Registered Civil Engineer shall analyze surficial and near-surface soils at the Project Site subsequent to grading and prior to on-site construction, to determine whether expansive soils are present. Similarly, soils at the Proposed City Maintenance Yard Project Site and along the proposed pipeline route shall be analyzed for soil expansion potential. In the event that clay-rich, expansive soils are present, foundations shall be designed to accommodate expansive soils and pipelines shall be placed within a blanket of non-expansive soils to prevent structural damage and/or failure. Foundation and pipeline design shall be reviewed and approved by a Registered Civil Engineer. Soil auger and analytical laboratory Prior to final design City of Hermosa Beach GEO-7a Proposed Oil Project design must conform to the recommendations of HDR Schiff (2012), included within Appendix C in NMG Geotechnical (2012), or as per the City Engineer, and should occur prior to completion of the final Project design. Design for protection against corrosion Prior to final design City of Hermosa Beach GEO-7b All buried metal pipelines shall be coated and placed under impressed cathodic protection. To monitor for internal corrosion, corrosion coupons or equivalent measures can be utilized. Under impressed cathodic protection Prior to final design City of Hermosa Beach GEO-7c External pipe inspections shall be conducted for the exposed pipeline sections to ensure atmospheric coatings are in good conditions. All external inspections shall be documented and reviewed by the operations management and repairs documented, when necessary. Visual inspections Monthly City of Hermosa Beach GEO-7d In accordance with California Division of Oil, Gas, and Geothermal Resources pipeline regulations (Public Resources Code Sections 3013 and 3782), a pipeline management plan shall be implemented for the Project Site. Similarly, in accordance with United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration regulations, a pipeline management plan shall be implemented for proposed pipelines located beyond the perimeter of the Project Site. These plans shall include, but not be limited to mechanical Prepare under guidance of California Department of Conservation Division of Oil, Gas, and Prior to final design California Division of Oil and Gas and Geothermal Resources (DOGGR), United States Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party testing, including ultrasonic and hydrostatic testing. Geothermal Resources and United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration Department of Transporta- tion, Pipeline and Hazardous Materials Safety Administra- tion, and Cities of Hermosa Beach, Redondo Beach, and Torrance GEO-7e All concrete in contact with the high sulfate or corrosive soils shall be Type V concrete in accordance with the 2010 California Building Code. Pour proper concrete adjacent to corrosive soils During construction City of Hermosa Beach ______________________________________________________________________________ _____________________________ Table 8-7 Safety, Risk of Upset and Hazards Proposed Oil Project and Pipeline Mitigation Measures Mitigation Requirements Compliance Verification Measure Method Timing Responsible Party SR-1a The Applicant shall cause to be prepared an independent third-party audit, under the direction and supervision of the City, of the gas and crude oil plants and pipelines, once constructed, including the well pads, to ensure compliance with Fire Code, applicable API and NFPA codes, EPA RMP, OSHA PSM, DOGGR and SPCC and emergency response plans requirements. All audit items shall be implemented in a timely fashion, and the audit shall be updated annually, as directed by the City and the Los Angeles County Fire Departments. The final installation of the facilities shall include a seismic assessment, including walkthroughs, of equipment to withstand earthquakes prepared by a registered Structural Engineer in compliance with Local Emergency Planning Committee Region 1 CalARP guidance and the seismic assessment shall be updated, with walkthrough inspections, annually to ensure compliance with the codes and standards at the time of installation. Review of audit reports Before Phase 4 operations and annually thereafter LACFD HBFD Cities of Redondo Beach and Torrance SR-1b The Applicant shall ensure that the crude oil spill containment areas shall be designed as Class I Division I areas according to NFPA and NEC, or that spark producing equipment (such as the flare) would be isolated from the containment area, in order to reduce the potential for crude oil fires. The refrigeration system shall utilize non-flammable refrigerant. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1c The Applicant shall ensure that all crude-oil truck haulers and a sufficient number of onsite personnel (at least two per shift) are trained in HAZMAT (to the HAZWOPER technician level at least) spill response and that each truck carries a spill response kit. Site inspections, review of contracts Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1d The Applicant shall install automatic valves on the gas pipeline that will automatically shut down under a low pressure scenario at the Processing Facility Area for all pipelines leaving the processing plant, and shall install a backflow prevention device at the main gas pipeline tie-in location, to prevent the release of gas from the main transmission pipeline in the event of a rupture in the gas pipeline. The second, return pipeline shall remain isolated from the main gas pipeline during normal operations. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1e The Applicant shall ensure that warning tape is installed above the pipelines within the pipeline trench to warn third parties that pipelines are located below the warning tape and that the pipelines are capable of utilizing a smartpig. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1f The odorant system shall have its own, smaller containment area around it limiting the spilled pool size to the minimum size attainable, in order to prevent any offsite impacts. Transfer of odorant shall utilize carbon canisters and a canister change-out/maintenance program to ensure that filling of odorant tanks do not cause offsite impacts. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1g The comingled produced gas shall be continuously monitored for hydrogen sulfide. If H2S levels in the produced gas from any individual well exceeds 100 ppm, then that well shall be shut in and abandoned as per DOGGR requirements. Wells shall be tested when fluids first flow, when the well is placed into production and periodically thereafter in order to ensure that all wells operate below 100 ppm H2S. Review of design documents and in-field inspections Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-2 The Applicant shall sample soil during Phase 1 grading to ensure that soil lead contamination levels are below 9,500 mg/kg and that soil contaminated with TPH are below the regulatory guidelines. If soils are encountered above these levels, then those soils shall be removed from the site and transported to a disposal site. This may necessitate implementing the RAP during Phase 1 if substantial amounts of contamination are encountered. Review of design documents and in-field inspections Phase 1 City of Hermosa Beach ______________________________________________________________________________ _______________________________________ Table 8-8 Hydrology and Water Quality Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2a The Applicant shall properly maintain the associated crude oil pipelines, storage tanks, and processing facilities within and outside the Project Site, including smart-pigging according to State of California Office of the State Fire Marshal requirements and the standards outlined by the Department of Oil, Gas and Geothermal Resources, and the Los Angeles Regional Water Quality Control Board. The Applicant shall visually inspect onsite storage tank and processing equipment at least daily and provide a visual inspection of the crude oil pipeline right-of-way inspections on a weekly basis. Review of maintenance reports Before Phase 4 operations Annually Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2b The Applicant shall install a leak detection system for crude pipelines to the Exxon Mobil Refinery transfer of custody location. The system shall include pressure and flow meters, flow balancing, supervisor control and data acquisition system, and a computer alarm system in the event of a suspected leak. Temperature, pressure, and flow shall be monitored at each pipeline entry and exit. If any variable deviates by more than 10 percent of the normal operating range, the system shall trigger both audible and visual alarms. Flow balancing shall be conducted every 5 minutes, 1 hour, 24 hours, and 48 hours with the accuracy defined once the system is established and tested. Review of system design and testing results Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2c Personnel at the site shall be trained in equipment use and containment and cleanup of an oil spill. Dry cleanup methods, such as absorbents, shall be used on paved and impermeable surfaces and shall be included in a spill trailer maintained onsite. Spills in dirt areas shall be immediately contained with an earthen dike and the contaminated soil shall be dug up and discarded in accordance with local and state regulations. Review of training and equipment Before Phase 2 and Phase 4 operations and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2d Oil spills shall be contained and cleaned according to measures outlined in the then-current California Stormwater Quality Association Best Management Practice Handbook. Review of training and incident reports Before Phase 2 and Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2e A United States Environmental Protection Agency, Spill Prevention, Control, and Countermeasure Plan, approved by the City of Hermosa Beach Fire Department, shall be implemented in the event of a spill. The Plan, which shall include a spill response trailer, equipment, and personnel training shall be completed prior to Phase 2 and Phase 4, and in compliance with the California State Oil Spill Contingency Plan (California Department of Fish and Game, Office of Spill Prevention and Response 2010) and the Los Angeles/Long Beach Oil Spill Contingency Plan (California Department of Fish and Wildlife 2011). Spill cleanup shall be completed under the oversight of the lead regulatory agency, with respect to oil spills, as identified in the Spill Prevention, Control, and Countermeasure Plan. Review of reports Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2f The well cellar shall be lined with an impermeable membrane to prevent oil- based substances from seeping into groundwater supplies. All drilling muds storage shall be contained within Baker-type enclosed tanks, which shall be sized to accommodate high intensity rainfall events without overtopping. Review of design documents, field inspection Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2g The Applicant shall install a check valve in the crude oil pipeline at the Herondo and Valley drive where the crude oil pipeline turns eastward and starts uphill. Review of design documents, field inspection Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2h The Applicant shall fund and install, under the direction of the Hermosa Beach Public Works Department, an oil/grit separators or oil/water separator located along Herondo Street downstream of Valley Drive, in order to capture small to medium sized spills before they reach the ocean. Installation and maintenance costs shall be provided by the Applicant and the devices shall be inspected by the Applicant to ensure that the "trap" is operational before any storm events. Review of design documents, field inspection Before Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2i The Applicant shall utilize a smaller 6" ERW pipe and a heat and impact resistant coating at a minimum comparable to a 3-layer fusion bonded epoxy (such as BrederoShaw 3LPP) and weld coverings equivalent to sleeves with epoxy primer. Specification of the pipe and coating shall approved by the City. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach, CSFM HWQ-2j The Applicant shall install a 3 sack slurry starting 6 inches above the pipe to the base of the pavement or ground surface and lay strips of warning tape over the top to prevent third-party damage. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach Table 8-9 Noise and Vibration Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-1a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 1). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1b The gates on the east and south sides of the site shall be 24-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-2a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2g The acoustical shroud around the drilling mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2h Provide acoustical treatment within the combustor fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2i Eliminate use of the combustor during drilling in Phase 2 or prior to the initiation of production occurring concurrent with drilling in Phase 2, acoustical treatment shall be provided: within the combustor fan housing and/or ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA; and to the combustor stack to limit the power level radiated by the stack to 80 dBA.. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2j During the drilling portion of Phase 2, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 2; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV2a through NV2i in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-3a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3d Provide acoustical treatment within the combuster fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-4a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 3). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-4b The gates on the east and south sides of the site shall be 25-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-4c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-6a Increase the height of the noise barriers on all sides of the site from 32-feet to35-feet (35-feet is the maximum height allowed by zoning code). Minimum sound insulation performance of the barrier material shall be STC-32. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. In the event that a permanent 35-foot wall is built, the interior surfaces of the wall (i.e. those facing inwards towards the drilling and production operations) shall be treated with exterior grade acoustical panels offering equivalent sound absorption performance to that specified in this Measure above a height of 10-feet from the ground. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6g The acoustical shroud around the drilling rig mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6h During the drilling portion of Phase 4, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 4; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV6a through NV6g in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours of Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7a Increase the height of the masonry walls on the north and west sides of the site to a minimum of 27-feet. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7b Apply outdoor acoustical panels to all available surfaces of the north and west walls that face the production operations above a height of 10-feet above the ground. The purpose of the acoustical panels is to control reflection of production noise in the direction of the sensitive uses to the east and south. The acoustical panels shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.28, 0.68, 0.95, 0.86, 0.89, 0.72. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-7c Well workover rigs shall be powered by electric drive/sources or “ultra-quiet” generators or engines - either diesel or natural gas-powered - that are capable of operating below the noise significance thresholds for daytime operation. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Table 8-10 Transportation and Circulation Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1a For Phases 1-3, the Applicant shall fund, through and in consultation with the School District and Safe Routes to School, an afternoon crossing guard to be stationed at the Project Site area to ensure pedestrians passing nearby the Project Site have assistance in crossing the streets and the entrances/exit of the Project Site. Alternately, the Applicant shall ensure that trucks do not travel to and from the Project Site unless school is in session (i.e. truck travel prohibited on Valley Drive after 2:48 p.m., on Wednesdays after 1:45 p.m. or on school minimum days after 12:45 p.m.). The Applicant shall consult with the School District to ensure timing is current. Review of contracts and site inspections Prior to construction activities City of Hermosa Beach TR-1b For Phases 1-3, the Applicant shall install, subject to the approval of the City Public Works Department, warning signs and blinking yellow lights one block north and south (if applicable with possible one-way on Valley Drive) of the Project Site warning vehicle traffic that trucks may be entering and exiting the roadway. Blinking lights shall only operate when trucks are utilizing the roadway (not 24 hours per day). Review of design documents and site inspections Prior to construction activities City of Hermosa Beach TR-1c The Applicant shall ensure that all trucks accessing the Project Site and utilizing the Pier Avenue/Valley Drive intersection are less than 65 feet long to prevent safety hazards at the double intersection on Pier Avenue between Valley Drive and Ardmore Avenue. If trucks longer than 65 feet are required, then flagger shall be used at the Pier Avenue and Valley/Ardmore intersection. Review of contracts and site inspections Phase 1-4 Prior to construction activities City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1d For Phases 1-3, the Applicant shall, with the approval and coordination of the City Public Works Department, either 1) restripe Valley Drive south of Pier Avenue to be a southerly directed one-way street. No on-street parking shall be allowed on Valley Drive between 6th Street and 8th Street to allow for sufficient line of sight for trucks entering and exiting the Project Site; or 2) restripe the section of Valley Drive between 2nd Street and Herondo Street to make it two- way and direct all truck traffic along Herondo Street to approach the project site from the south. Review of design documents and site inspections Prior to pipeline construction activities City of Hermosa Beach TR-2a Pipeline construction activities within the Pipeline right-of-way shall be limited to weekday between the hours of 9:00 a.m. and 3:00 p.m., unless the applicable municipality approves a specific exception to the time limit for periods of limited duration, subject to measures required by the municipality to protect the public health and safety. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Review of design documents and site inspections Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance TR-2b The applicant shall implement a Construction Traffic Management Plan (CTMP) during Pipeline construction that includes the following pursuant to the procedures and subject to approval of the applicable municipality: 1) Require the Pipeline contractor(s) to obtain and follow street construction permits in the affected areas (Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities - PCH and Hawthorne Boulevard); 2) Develop detour and traffic management plans consistent with the affected City’s standard roadway plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH); 3) Revise Pipeline construction schedules to minimize access impacts to adjacent residents and businesses; and 4) Ensure that all affected residences and business have adequate emergency access during all times and phases of construction. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Approval of CTMP Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-3a The applicant shall be prohibited from routing Proposed Oil Project-related heavy truck exceeding 20,000 pounds on 190th Street between Anza Avenue and PCH, except during Pipeline construction. The Applicant shall comply with all requirements of the applicable city. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3b The applicant shall route inbound and outbound heavy (>20,000 pounds) truck traffic along PCH and Artesia Boulevard, which are designated truck routes. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3c Applicant shall supply private parking sufficient to meet all parking demands and shall direct all employees and contractors to park within Applicant’s private parking areas, or to utilize an alternative parking program approved by the City. Review of Plans and onsite inspections Phase 1-4 City of Hermosa Beach TR-4a The City shall design the permanent Proposed City Maintenance Yard so that it does not enter/exit directly onto Valley Drive. Review of Plans Phase 3 City of Hermosa Beach TR-4b If the permanent Proposed City Maintenance Yard Project affects the sidewalk, then the design shall incorporate a sidewalk design along Valley Drive which utilizes a landscape buffer to separate the pedestrians from the street. Review of Plans Phase 3 City of Hermosa Beach Table 8-11 Water Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-1 Prior to approval of demolition and new construction, a Registered Civil Engineer in the State of California shall evaluate the capacity of the existing sewer line system, beginning at the proposed tie-ins on Valley Drive for the Proposed City Maintenance Yard Project and 6th Street for the Proposed Oil Project, and continuing downstream to the Sanitation Districts of Los Angeles County sewer system, prior to any connections. A 7-day capacity performance test shall be performed, based on Sanitation Districts of Los Angeles County average wastewater generation factors, to determine baseline and peak flows, and to ensure the sewer has adequate capacity in the downstream areas. The capacity analysis shall be submitted to the City Public Works Department and the Districts for review and approval. In the event that existing sanitary sewer facilities are insufficient to accommodate increased flows from the Project Site, the Applicant shall provide mobile sanitary facilities (i.e., toilet, sink, and urinal) for onsite personnel, as necessary. Area study of the proposed sewer line and a 7-day performance capacity test should be performed at select downstream locations to verify the adequacy of the existing sewer. Prior to issuance of permit City of Hermosa Beach WR-2 Implement MM HWQ-2a through HWQ-2d. See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ-2d WR-3a The Applicant shall complete a site-specific Area of Review/Zone of Endangering Influence analysis, per Division of Oil, Gas, and Geothermal Resources requirements, to determine if oil and gas wells are present that might serve as conduits for injected liquids to migrate upward to underground sources of drinking water. In the event that such wells are present, those wells shall be plugged and abandoned such that underground sources of drinking water (i.e., less than 10,000 mg/L total dissolved solids) are protected. Plugging and abandonment of those wells shall include zonal isolation plugs outside all casings and shall be completed per current Division of Oil, Gas, and Geothermal Resources standards. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to initiation of injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-3b The Applicant shall confine injected fluids into the intended zone of injection in order to adequately protect underground sources of drinking water. Injection well cement shall be placed at the base of all underground sources of drinking water, and not just at the base of fresh water, to protect water with total dissolved solids content ranging from 3,000 mg/L to 10,000 mg/L. Coordination with Division of Oil, Gas, and Geothermal Resources During injection well drilling and injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3c The Applicant shall complete step-rate tests, using bottom-hole and surface pressure gauges, such that maximum allowable surface injection pressures are set at a maximum of 95 percent of the fracture pressure of the formation being injected. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3d The Applicant shall ensure that the hydrostatic pressure in overlying West Coast Basin aquifers is not exceeded during injection over the active life of the disposal wells. To ensure that this does not occur, the static reservoir pressure shall be monitored on a periodic basis, per Division of Oil, Gas, and Geothermal Resources requirements, and injection into the receiving zone shall cease if and when the hydrostatic pressure is exceeded. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3e The Applicant shall meet with Division of Oil, Gas, and Geothermal Resources staff annually to review the status of the waste water injection wells. Any deficiencies identified by Division of Oil, Gas, and Geothermal Resources staff shall be immediately rectified by the Applicant. Coordination with Division of Oil, Gas, and Geothermal Resources Annually following initiation of Phase 2 City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources