Aug 20, 2024 Budget Oversight Committee

IT HAS BEEN WONDERFUL.

UM, IS THERE ANY DISCUSSION ON THIS ITEM FROM MY, UH, COMMITTEE COLLEAGUES? SEEING NONE, UM, WE CAN GO AHEAD AND TAKE PUBLIC COMMENT.

IF THERE ARE ANY MEMBERS OF THE PUBLIC THAT WOULD LIKE TO SPEAK ON ITEM NUMBER ONE IN PERSON, PLEASE LINE UP AT THE PODIUM AT THIS TIME.

AND IF THERE ARE ANY IN THE ZOOM THAT WOULD LIKE TO SPEAK ON ITEM ONE, PLEASE USE THE RAISE HAND FEATURE NOW OR DIAL STAR NINE IF CALLING IN, SEEING NONE, BOTH IN PERSON AND IN THE ZOOM THAT CONCLUDES PUBLIC COMMENT FOR ITEM NUMBER ONE.

UM, THEN WE CAN GO AHEAD AND VOTE.

I CAN GET A FIRST AND A SECOND PLEASE.

COUNCIL MEMBER DUGGAN AYE.

VICE CHAIR URANGA AYE.

UM, CLERK, CAN YOU PLEASE READ ITEM NUMBER TWO? YES.

ITEM TWO IS A RECOMMENDATION TO RECEIVE AND FILE A PRESENTATION ON THE STATUS OF OIL ABANDONMENT AND STRUCTURAL REDUCTION ON RELIANCE AND OIL REVENUE STRATEGY INCLUSIVE OF THE CURRENT STATE AND BUDGETARY DEPENDENCE ON GENERAL FUND AND TIDELANDS FUND.

AND IF

[2. 24-54546 Recommendation to receive and file a presentation on the status of oil abandonment and structural reduction on reliance and oil revenues strategy, inclusive of the current state and budgetary dependance on General Fund and Tidelands Fund. Suggested Action: Approve recommendation. ]

DUGGAN FIRST, ANG SECOND.

UH, I BELIEVE WE HAVE A STAFF REPORT, UM, FOR THIS ITEM.

UH, RESERVE HAS INCREASED FROM 300 MILLION TO ABOUT 345 MILLION CURRENTLY, UH, AND WILL CONTINUE TO GROW.

UH, WE HAVE BOB DOWELL, DIRECTOR OF ENERGY RESOURCES AND KEVIN RIPER, DIRECTOR OF FINANCIAL MANAGEMENT TO, UH, DO THE PRESENTATION.

SO I'LL TURN IT OVER TO THEM.

YEAH, GOOD AFTERNOON.

THE UH, ER PORTION OF TODAY'S PRESENTATION WILL BE GIVEN BY, UH, SCOTT BEDI.

HE'S OUR OIL OPS, UH, BUREAU MANAGER, SCOTT.

GREAT, THANK YOU.

I'LL COVER THE FIRST FEW SLIDES TALKING ABOUT OIL WELL ABANDONMENT COSTS.

ALRIGHT.

THE, UH, WILMINGTON OIL FIELD ABANDONMENT LIABILITY IS CURRENTLY OVER $1.4 BILLION.

UH, THE WILMINGTON OIL FIELD IS MADE UP OF WEST WILMINGTON AND THE LONG BEACH UNIT.

WEST WILMINGTON IS PRIMARILY IN THE, UH, PORT AREA AND LONG BEACH UNIT ARE THE ISLANDS IN THE, UH, IN THE HARBOR, UH, OF THAT $1.4 BILLION IN ABANDONMENT LIABILITY, THE LARGEST SHARE IS WITH THE STATE.

UH, THEY OWN THE MAJORITY OF THE MINERALS AND THEIR LIABILITY IS OVER $1 BILLION.

THE CITY HAS THE SECOND LARGEST, UH, LIABILITY AT $185 MILLION.

UH, THE TOWN LOT, WHICH ARE ALL THE, UH, SMALL, UH, OWNERS THAT OWN, UH, PARCELS.

UH, ON LAND THERE'S ABOUT 7,700 THERE TOWN LOT OWNERS WITH AN AVERAGE OF ABOUT $10,600 A LIABILITY EACH.

THAT CAN BE A LITTLE BIT MISLEADING BECAUSE THERE ARE SEVERAL LARGE, UH, TOWN LOT OWNERS AND THEN MANY VERY, VERY SMALL TOWN LOT OWNERS.

SO THE AVERAGE IS AROUND 10,000, BUT SOME OWN SIGNIFICANTLY MORE THAN THAT AND SOME OWN, UH, LESS.

AND THEN CRC, OUR FIELD CONTRACTOR, UH, HAS $95 MILLION IN ABANDONMENT LIABILITY.

SO OF THE, UH, ABANDONMENT LIABILITY, THERE ARE EXISTING RESERVES, UH, TO COVER THAT FOR THE STATE.

THEY HAVE $354 MILLION, UH, OF, OF RESERVE FOR LIABILITY, AND THAT'S ABOUT A THIRD OF THEIR, UH, TOTAL LIABILITY.

THE CITY HAS $88 MILLION, WHICH IS ABOUT HALF OF, OF OUR LIABILITY, THE TOWN LOT.

ALL THOSE SMALL OWNERS, UH, WE DON'T KNOW, UH, HOW MUCH THEY HAVE SET ASIDE.

UM, WE THINK IT MAY NOT BE, UH, SUFFICIENT.

AND CRC PER STATE LAW, THEY HAVE A BOND FOR THEIR SHARE OF THE ABANDONMENT LIABILITY.

SO KIND OF AN IMPORTANT, UH, UH, PIECE IS THE, UH, AB 3 53 IN SEPTEMBER OF 2022.

UM, THIS WAS, UH, SIGNED GOING BACK TO 2005.

UH, THE OIL TRUST FUND WAS CREATED TO SAVE A PORTION FOR THE STATE'S TITLE, UH, OF THE STATE'S TITLE AND OIL EXTRACTION PROFITS, UH, TO COVER THE STATE'S COSTS WHEN, UH, THE WELLS ARE FINALLY ABANDONED.

UM, THAT WAS CAPPED AT $300 MILLION.

AB 3 53 UH, RAISED THE CAP ON, UH, THAT MONEY THAT THE STATE COULD SET ASIDE FOR ABANDONMENT LIABILITY, ALLOWING THEM TO ADD, UH, MORE FUNDS FOR FUTURE, UH, ABANDONMENT LIABILITY.

SO THE, THE PIECES OF IT SAY THAT THE STATE CONTROLLER WILL TRANSFER $2 MILLION OR 50%, UH, OF THE REMAINING OIL REVENUE, WHICHEVER IS LESS TO FUND, UM, OIL, UH, LIABILITY ABANDONMENT LIABILITY ON A MONTHLY BASIS STARTING IN JANUARY OF 2023.

SO THAT'S WHY THE STATE'S,

[00:10:01]

UM, AND THAT MONEY IS APPROPRIATED TO THE STATE LANDS COMMISSION TO FINANCE THE COSTS OF WELL ABANDONMENT, PIPELINE REMOVAL, FACILITY REMOVAL, REMEDIATION, AND OTHER, UH, ASSOCIATED, UH, COSTS RELATED, UH, TO THE LONG BEACH UNIT TIDELANDS.

SO FOR OUR PLANNING, UM, CURRENTLY THE UNECONOMIC WELLS ARE ABANDONED ANNUALLY USING OPERATING REVENUE TO DECREASE THE INVENTORY OF IDLE WELLS.

UM, WHEN THE OIL OPERATIONS DO CEASE, THE CITY WILL BID FOR A NEW CONTRACTOR FOCUSED EXCLUSIVELY ON, UH, ABANDONING WELLS AND CLOSING OUT THE OIL FIELD.

UM, WE EXPECT THE ABANDONMENT PROGRESSION TO OCCUR FIRST IN AREAS THAT HAVE BECOME UNECONOMIC TO OPERATE.

SO IT MAY, UH, IT MAY START IN ONE AREA AND, AND WORK ITS WAY THROUGH THE, UH, DIFFERENT VAULT BLOCKS.

UM, IT'S ANTICIPATED THE ABANDONMENT WORK WILL TAKE THREE TO FIVE YEARS TO COMPLETE.

AND, UH, POST-PRODUCTION INJECTION WILL CONTINUE FOR AT LEAST FIVE YEARS AFTER OIL OPERATIONS CEASE.

UH, THE CITY DOES HAVE FUNDS TO SUPPORT POST-PRODUCTION INJECTION.

SO ABOUT RISKS TO OUR, UH, OIL FIELD ABANDONMENT PLANNING.

UM, ONE RISK WOULD BE OIL PRICE COLLAPSE.

SO OIL PRICES NEEDED TO SUPPORT THE FUNDING EVENT.

ABANDONMENT RESERVES, UH, ALSO PROVIDE NET REVENUE TO THE CITY TO PROVIDE, UH, UH, SUPPORT SERVICES.

SO IF, IF OIL PRICES WERE TO DROP SIGNIFICANTLY, UM, LIKE THEY DID DURING COVID, THAT MAKES IT HARDER FOR US TO FUND OUR SET ASIDE FOR, UH, ABANDONMENT LIABILITY.

AND IT ALSO, UH, LEADS LESS MONEY, UM, TO, TO GO BACK TO THE CITY.

UH, THE COST TO ABANDON THE OIL FIELD INCREASE.

IF THE OIL, IF THE COST TO ABANDON THE OIL FIELD INCREASES FASTER THAN WE ANTICIPATE, UM, THAT WOULD BE A RISK AS WELL.

WE ASSUME THAT THERE SHOULD BE COST SAVINGS WHEN THE ENTIRE FOCUS OF THE OPERATION WILL BE ON ABANDONING THE OIL FIELD.

SO WE TH CURRENTLY ARE DOING OUR ESTIMATES BASED ON, UM, WHAT IT COSTS TO ABANDON WELLS CURRENTLY.

AND WE, UH, WE ABANDON 30 OR SO WELLS EACH YEAR, BUT WHEN WE'RE DOING VERY LARGE PACKAGES AND WE CAN, UH, BID THOSE OUT TURNKEY, WE EXPECT SOME SAVINGS WHICH WILL HELP TO OFF OFFSET, OFFSET INCREASES IN THE, THE OVERALL COST.

UM, ANOTHER RISK WOULD BE REGULATION CHANGES THAT WOULD INCREASE THE COST OF ABANDONMENT OR SHORTEN THE ECONOMIC FIELD LIFE.

UH, BEFORE THE, UH, UH, THE CITY'S, UH, ABANDONED RESERVE BECOMES FULLY FUNDED AROUND 2035.

UH, WE'RE CURRENTLY TARGETING HAVING THE CITY'S PORTION OF THE ABANDONMENT LIABILITY FUNDED BY 2035.

BUT, BUT AS I MENTIONED, IF UH, THERE ARE REGULATORY CHANGES OR OTHER CHANGES, UM, THAT SIGNIFICANTLY DECREASE, UH, THE REVENUE AVAILABLE FROM THE FIELD OR, UH, OTHER REGULATIONS THAT, THAT INCREASE THE COSTS, THAT COULD CHANGE OUR ABILITY TO DO THAT FUNDING.

UM, AND THEN, UH, ANOTHER RISK COULD BE A FINANCIAL SITUATION THAT WOULD REQUIRE THE CITY TO USE ABANDONMENT RESERVES FOR ANOTHER PURPOSE.

WITH THAT, I'LL HAND IT OVER.

THANK YOU, SCOTT.

LET'S TALK ABOUT THE INTERACTION BETWEEN OIL PRICES AND OIL PRODUCTION ASSUMPTIONS AND GENERAL FUND REVENUE.

SO THAT'S WHAT THE NEXT THREE SLIDES, UH, ADDRESS BEFORE WE MAKE A REVENUE FORECAST.

UM, EVERYBODY HAS TO MAKE ASSUMPTIONS THAT UNDERLIE THAT FORECAST.

SO THIS SLIDE DESCRIBES THE CONSERVATIVE FORECAST ASSUMPTIONS UNDER UNDERLYING THE GENERAL FUND FORECAST OF OIL RELATED REVENUE.

THERE'S A LONGSTANDING COUNCIL PRACTICE OF, UH, ASSUMING A RELATIVELY LOW PRICE PER BARREL OF OIL WHEN MAKING REVENUE FORECASTS.

SO AS NOT TO OVERCOMMIT EXPECTED EXPENDITURES FROM A REVENUE SOURCE CAN BE PRETTY VOLATILE, UM, BECAUSE OBVIOUSLY OIL PRICES HISTORICALLY HAVE BEEN QUITE VOLATILE, NOT SO MUCH THE LAST COUPLE YEARS, BUT CERTAINLY OVER THE DECADES, OIL PRICES HAVE BOUNCED AROUND A LOT.

SO, UM, THE BUDGET OFFICE ALWAYS ASSUMES AN OIL PRICE OF $55 A BARREL FOR, UM, BUDGETARY PLANNING IN THE GENERAL FUND.

THE SECOND ASSUMPTION THAT WE MAKE, AND, AND GREG SORENSON OF THE BUDGET OFFICE WILL GET INTO THIS IN MUCH MORE DETAIL IN THE NEXT PRESENTATION ON TIDELANDS BECAUSE THE ASSUMPTION OF, UH, ABOUT THE STATE'S REGULATION OF, UM, THE INJECTION GRADIENT IS MUCH BIGGER IMPACT ON THE TIDELANDS FUND THAN IT IS ON THE GENERAL FUND.

SO I'M JUST MENTIONING IN PASSING HERE THAT OUR ASSUMPTION IS A RELATIVELY CONSERVATIVE SIX MONTH ASSUMED PHASE IN OF THE INJECTION GRADIENT REGULATION.

WE'RE, UH, AS A RESULT OF THAT ASSUMPTION, UH, WE'RE ASSUMING A 10.5% DECLINE EVERY YEAR IN OIL PRODUCTION.

SO IF THE OIL PRICE HOLDS STEADY, AN OIL PRODUCTION DROPS BY 10.5%, THEN YOU'RE GONNA HAVE 10

[00:15:01]

POINT A HALF PERCENT LESS REVENUE EACH YEAR GOING FORWARD.

HENCE THE DECLINES IN PROJECTED REVENUE FROM OIL PRODUCTION IN THE GENERAL FUND.

AND THEN THE FOURTH ASSUMPTION, WHICH SCOTT ALLUDED TO IS WE ARE, UM, FORECASTING THAT WE'LL SET ASIDE ENOUGH MONEY EACH FISCAL YEAR THROUGH 2035, SUCH THAT BY THE END OF 2035, THE CITY'S LIABILITIES FOR TIDELANDS AND UPLANDS THAT SCOTT DESCRIBED ON SLIDE THREE ARE FULLY FUNDED.

UM, AND, AND REMEMBER, UH, I'M GONNA GO BACK TO SLIDE THREE.

WE ARE WAY AHEAD OF THE STATE IN FUNDING OUR LIABILITY, RIGHT? WE'RE, WE'RE 16 PERCENTAGE POINTS AHEAD OF THE STATE ALREADY IN FUNDING OUR LIABILITY.

WE'RE ALMOST HALFWAY THERE, AND THE STATE ISN'T, ISN'T EVEN A THIRD OF THE WAY THERE.

NONETHELESS, WE'RE ASSUMING SETTING ASIDE ENOUGH OIL RELATED REVENUE TO BE FULLY FUNDED ON OUR LIABILITY BY THE MIDDLE OF THE NEXT DECADE.

UM, NOW TO THE, TO THE NUMBERS, THE TOP ROW SHOWS OIL RELATED REVENUE EXCLUDING THE TAXES.

THIS IS OIL RATED REVENUE IN THE GENERAL FUND FROM OIL PRODUCTION FROM UP, FROM UPLANDS OIL PRODUCTION.

UH, AND AS I WAS EXPLAINING ON THE PREVIOUS SLIDE, THE BASE CASE IS THE FIRST ROW, UH, WE'RE ASSUMING A SIX MONTH IMPLEMENTATION OF CAL GM AND ALSO WE'RE ASSUMING SB 137 IS IN EFFECT BECAUSE IT'S IN EFFECT, IT'S NOT GOING ON THE BALLOT IN NOVEMBER ANYWAY.

SO THERE'S TWO FACTORS, UM, STATE IMPOSED THAT ARE, UH, RESTRICTING PROJECTED OIL PRODUCTION.

AND THAT'S WHY YOU SEE THE REVENUE LINE DECREASING FROM ABOUT TWO AND THREE QUARTER MILLION DOLLARS OF UPLANDS OIL REVENUE, THE GENERAL FUND IN THE BUDGET YEAR FY 25, DOWN TO JUST A MILLION BY FISCAL YEAR 30, IF BY CHANCE, UM, THE CAL GM REGULATIONS ON RESTRICTING OIL PRODUCTION ARE SPREAD OVER, ARE IMPLEMENTED OVER A FIVE YEAR PERIOD INSTEAD OF JUST THE CONSERVATIVE SIX MONTHS THAT THE BUDGET OFFICE IS ASSUMING, THEN THE REVENUE DECLINES, UM, MUCH LESS.

IT STILL GETS DOWN TO ABOUT A MILLION DOLLARS BY FY 30, BUT BECAUSE OF THE PHASE IN, WE'D HAVE, UH, 4.7 INSTEAD OF 2.7 MILLION IN THE BUDGET YEAR IN FY 25.

AND THE DIFFERENCE SHOWN IN THE THIRD ROW, THE POTENTIAL ADDITIONAL REVENUE FOR FROM JUST THE DIFFERENCE IN THE TIME PERIOD OVER WHICH CAL GM, UH, IMPLEMENTS ITS INJECTION GRADIENT REGULATION IS 2 MILLION IN THE FIRST YEAR.

AND IT'S ALMOST, IT'S NEGLIGIBLE BY FY 30.

SO THE FISCAL YEAR 25 PROPOSED BUDGET, UM, BECAUSE WE HAVE A LONG-TERM NECESSITY AND PLAN TO WEAN OURSELVES OFF OF OIL RELATED REVENUE AND ON A STRUCTURAL BASIS IN THE GENERAL FUND, UM, THE FY 25 BUDGET PROPOSES TO TAKE A MILLION AND A QUARTER OF UPLANDS OIL AND OIL PRODUCTION TAX REVENUE OUT OF THE GENERAL FUND AS STRUCTURAL AND RECORD IT OR PROJECT THAT IT AS LIKELY TO BE AVAILABLE FOR ONE TIME EXPENDITURES.

AND THIS TABLE SHOWS A, UH, SIX YEAR IMPLEMENTATION OF WEANING OFF OF OIL RELATED REVENUE IN THE GENERAL FUND, SUCH THAT BY FISCAL YEAR 30, IF IF THIS FORECAST AND THESE PLANS PLAY OUT, UM, WE WOULD HAVE REMOVED FROM THE STRUCTURAL GENERAL FUND FORECAST $17 MILLION OF OIL RELATED REVENUE.

AND THEN THE SECOND BULLET, JUST TO HIGHLIGHT ANY OIL RELATED REVENUE THAT DOES COME IN, WILL TREAT US ONE TIME AND CAN BE ALLOCATED FOR CAPITAL IMPROVEMENTS OR OTHER, UM, ONE TIME EXPENDITURES OR EVEN FOR ADDITIONAL ABANDONMENT SET ASIDE IF THE ABANDONMENT LIABILITY GOES UP, THE BUDGET OFFICE AND I AND THE ENERGY RESOURCES DEPARTMENT DO NOT EXPECT THE OIL REVENUE TO DISAPPEAR IMMEDIATELY.

WE'RE JUST TAKING IT OUT OF THE GENERAL FUND FORECAST AND NOT RELYING ON IT AS STRUCTURAL.

INSTEAD, WE'RE GOING TO BE COUNTING, WE'RE GOING TO BE COUNTING IT AS ONE-TIME REVENUE AS IT DEVELOPS, AS IT ACTUALLY COMES IN.

AND WITH THAT ENERGY RESOURCES, AND I ARE HERE TO ANSWER YOUR QUESTION, ANY QUESTIONS? THANK YOU FOR THE PRESENTATION.

UM, I'LL START WITH MY, UH, COUNCIL COLLEAGUES, UH, COUNCIL MEMBER DUGGAN, OR COUNCIL MEMBER ARANGO.

DO EITHER OF YOU HAVE ANY QUESTIONS? I DO.

SO I DON'T THINK LISTED HERE.

THANK YOU FOR THE PRESENTATION.

THOSE ARE, THIS IS VERY INTERESTING.

UM, SO DID I SEE WHAT YOUR AVERAGE COST IS FOR ABANDONMENT PER WELL, UH, NO, IT'S BAKED IN, YOU KNOW, THE TOTAL AMOUNT FACTORS IN THE NUMBER OF WELLS WE'LL HAVE TO ABANDON BY OUR, OUR ESTIMATED COST

[00:20:01]

PER WELL, BUT WE DIDN'T PUT THAT COST PER WELL EXPLICITLY ON THE SLIDES, SOMEONE HAD MENTIONED THAT YOU ABANDONED APPROXIMATELY 30 WELLS A YEAR, IS THAT CORRECT? CURRENTLY, THAT'S WHAT WE'VE DONE THE LAST COUPLE OF YEARS.

DO WE HAVE A COST FOR 2023 ON HOW MUCH IT COST TO ABANDON THE 30 WELLS? I CAN GET BACK TO YOU ON THAT, BUT I MEAN, I'M GONNA SAY IT'S IN THE $300,000 RANGE.

300,000, YES.

BECAUSE THOSE ARE PER, WELL ALREADY WELLS THAT ARE, UM, I BELIEVE NOT PRODUCING VERY MUCH OIL.

IS THAT CORRECT? AND IT COSTS LESS? UM, TYPICALLY THOSE WELLS HAVE BEEN IDLE FOR A WHILE AND HAVE BEEN ON OUR ABANDONMENT LISTS AND CURRENTLY WE'RE, UH, COMPLYING WITH CAL GYM'S, UH, IDLE WELL MANAGEMENT, UM, PROGRAM.

AND SO WE'RE ABANDONING ABANDONING THOSE WELLS.

AND THE AVERAGE COST IS COMING IN AT AROUND 300,000 PER WELL, SO, YOU KNOW, 300,000 PER WELL FOR 30 WELLS, THAT'S, YOU KNOW, $9 MILLION AND ALL THAT DOESN'T HIT THE CITY.

YOU KNOW, THAT'S SHARED AMONG THE WORKING INTEREST OWNERS.

AND SO DEPENDING ON EXACTLY WHERE THE WELL SITS AND WHAT OUR PERCENTAGE INTEREST IS, UM, THE CITY PAYS THEIR PORTION AND ABANDONED WELLS USUALLY COSTS LESS TO, I'M SORRY, INACTIVE WELLS, IS THAT WHAT YOU CALLED IT? UH, YEAH, IDLE WELLS.

IDLE WELLS COST LESS TO ABANDON, IS THAT CORRECT? UM, LESS MONEY.

IT REALLY JUST DEPENDS ON THE DEPTH OF THE WELL, BUT YEAH, I MEAN, WELLS TYPICALLY BECOME IDLE, UM, BEFORE WE ABANDON THEM, SO.

THAT, WE ASSUME THE OIL PRICE WILL AVERAGE $55 THROUGHOUT THE FISCAL YEAR.

HOLD ON JUST A MOMENT.

CAN YOU, UH, PLEASE EXPLAIN POST-PRODUCTION INJECTION? YEAH, SO ONE OF THE MAIN, UM, EFFORTS IN, IN, UH, LONG BEACH ENERGY RESOURCES IS TO MAINTAIN STABLE ELEVATIONS WITHIN THE CITY OF LONG BEACH.

SO WE CURRENTLY, UM, DO ELEVATION SURVEYS AND MANAGE PRODUCTION AND INJECTION TO MAKE SURE THAT WE CAN KEEP, UM, STABLE ELEVATIONS WITHIN THE CITY.

SO ONCE WE STOP PRODUCING, UM, WE PROJECT THAT FOR THREE TO FIVE YEARS AT LEAST, WE'RE GONNA NEED TO KEEP INJECTING A SMALL AMOUNT, UM, AND CONTINUE TO, UH, MONITOR ELEVATIONS WITHIN THE CITY TO ENSURE THAT EVERYTHING, UH, STAYS AT A STABLE ELEVATION.

SO THAT'S POST-PRODUCTION INJECTION IS JUST ENSURING THAT WE KEEP, UM, YOU KNOW, THE CITY OF LONG BEACH STABLE ONCE PRODUCTION FINALLY CEASES.

THANK YOU FOR THAT EXPLANATION.

HAS THERE BEEN DISCUSSION WITH THE STATE ON HOW THEY'RE GONNA COVER THEIR LIABILITY, OF WHICH THEY'RE WAY LESS THAN HALF COVERED AS OF RIGHT NOW? UH, I CAN ANSWER THAT.

UH, WE'VE STRESSED THAT POINT TO THEM, UH, AT NUMEROUS OPPORTUNITIES THROUGH THE, UH, PROGRAM PLAN THAT WE DO EVERY OTHER YEAR, UH, IN-PERSON MEETINGS WITH THEM, AND THEY ARE KEENLY AWARE, AND I BELIEVE SOME OF THE OTHER REGULATORS ARE STARTING TO PUT, UH, EMPHASIS ON, ON THAT.

BUT IF, YOU KNOW, IN THE LAW IT SAYS HALF OF THEIR MONTHLY PROCEEDS OR $2 MILLION, WHICH IS EVER IS LESS, IT KIND OF NEEDS TO BE FLIPPED.

IT SHOULD BE WHATEVER IS MORE.

BUT, UH, CERTAINLY THEY HAVE ASSURED US THAT, UH, IN SOME WAY OR FASHION, IF, IF ABANDONMENT HAD TO, HAD TO COMMENCE, UH, THEY WOULD FIND THE FUNDING TO, TO SUPPORT THEIR SHARE OF THE, UH, ABANDONMENT COSTS.

AND ONE THING I'LL POINT OUT ON, ON THE ABANDONMENT NUMBERS THAT WE'RE SHOWING, REMEMBER THERE'S WELLS, BUT THERE'S ALSO THE SURFACE FACILITIES AS WELL.

SO IF YOU TAKE ALL THE NUMBER OF WELLS AND MULTIPLE MULTIPLYING TIMES 300,000 OR 300,000, YOU DON'T GET THE NUMBER WE'RE SHOWING, BUT ALMOST HALF OF THE MONEY IS ALSO BEING SPENT ON THE REMOVAL OF THE SURFACE FACILITIES, THE ABANDONMENT OF THE PIPELINES IN PLACE.

AND SO IT'S A COMBINED NUMBER OF THE TWO, UH, THAT WE'RE DISCUSSING FOR THE OVERALL FIELD ABANDONMENT LIABILITY.

THANKS FOR THAT EXPLANATION.

HOW IS IT THAT IT WENT FROM 300,000 TO 345, IF THE LESSER OF TWO NUMBERS BY THE STATE? UM, STARTING IN 2021, CORRECT? I I THINK IT WAS 2023.

THEY WERE CAPPED AT 300 MILLION FOR A VERY LONG PERIOD OF TIME.

UH, AND WE CONTINUED TO TRY TO PUSH THAT THEY NEEDED TO SET ASIDE MORE.

UH, AND SO WHEN THAT LEGISLATION WAS APPROVED, UH, IT'S ONLY BEEN ONE YEAR, SO IT, THEY'RE ONLY PUTTING 24 TO $25 MILLION A YEAR INTO THEIR OVERALL TOTAL, UH, LIABILITY.

THERE'S SOME INTEREST, I'M SURE THEY'RE EARNING ON THAT.

UH, BUT NONETHELESS, IT, IT TAKES FOUR YEARS THEN TO GET TO A HUNDRED MILLION AND THEY'RE ABOUT 600.

UH, SO THEY'RE ABOUT 25 YEARS AWAY FROM BEING WHERE THEY NEED TO BE.

THANK YOU FOR THAT.

JUST A COUPLE MORE QUESTIONS.

YOU WANT ME TO KEEP GOING? GREAT.

SO $55, THAT'S A ROLLING AVERAGE WE'RE USING, IS THAT CORRECT FOR THE OKAY.

IT'S NOT CORRECT.

WE ASSUME

[00:25:01]

IT'S NOT A ROLLING AVERAGE, IT'S AN AVERAGE FOR THAT FISCAL YEAR, AN ASSUMED AVERAGE FOR THAT FISCAL YEAR.

AND WE HAVEN'T CHANGED THAT NUMBER IN HOW LONG? UH, I'D HAVE TO DEFER TO THE BUDGET OFFICE THAT WAS HERE LONGER THAN I, I THINK IT'S FOUR, AT LEAST FOUR YEARS.

GERALDINE? UH, THAT'S CORRECT, KEVIN.

UM, IT, THE $55 PER BARREL WAS ASSUMED SINCE FISCAL YEAR 19.

UH, PRIOR TO THAT IT WAS A LITTLE BIT LOWER AT 45.

AND I HAVE, UM, WHY DON'T WE GO AHEAD AND GO TO, UM, NEXT QUESTIONS.

THANK YOU VERY MUCH, COUNCILMAN MORONGO.

DID YOU HAVE ANY QUESTIONS? UH, JUST A FEW.

UH, WHEN YOU SAY A ABANDONMENT OF OIL FIELDS, WHAT FIELDS ARE YOU TALKING ABOUT? UH, FOR OUR ABANDONMENT LIABILITY, WE'RE FOCUSED ON WILMINGTON, WHICH IS, UH, WEST WILMINGTON, WHICH IS IN THE PORT AREA AND LONG BEACH UNIT, WHICH IS IN THE HARBOR AREA, THE THE FOUR ISLANDS AND, AND PIER J.

UH, THE BIG BULK OF OUR REVENUE COMES FROM THOSE TWO FIELDS.

CORRECT.

SO THAT'S A SIGNIFICANT AMOUNT OF LOSS, REVENUE LOSS THAT WE'RE LOOKING AT IN WHAT, THREE TO FIVE YEARS, RIGHT? IS THAT CORRECT OR WHAT? WELL, I THINK IF YOU SAW THE REVENUE'S GONNA DECREASE APPROXIMATELY 10% PER YEAR.

UH, SO IF YOU START WITH THE FIRST YEAR, IF YOU RECALL THE, UH, AUDITOR'S REPORT THEY SHOWED $300 MILLION OVER, UH, THE NEXT 10 YEARS.

AND THAT WAS A COMBINED OF WHAT, STARTING WITH 2023 IS THE STARTING YEAR, I BELIEVE THAT'S CORRECT.

AND THEN SO IT IS DECLINING, UH, THEREAFTER, BUT KEVIN MIGHT BE MORE FAMILIAR WITH THAT.

BUT WE JUST ASSUME A 10% DECLINE FROM FY 23 ACTUALS PER YEAR, PER YEAR, PER YEAR, 10.5% DECLINE IN PRODUCTION EVERY YEAR FOR SIX YEARS, 25 THROUGH 30.

WELL, MY CONCERN WOULD BE MORE WITH, UH, PERSONNEL AS WELL.

SO WILL THERE BE A DECLINE IN PERSONNEL AFTER OIL GOES AWAY, THAT, THAT, THAT, THAT SECTION OF YOUR DEPARTMENT? RIGHT NOW, THE CITY'S, UH, THE OIL OIL OPERATIONS BUREAU IS MORE OF AN OVERSIGHT ROLE.

THE, THERE'S 17 TO 20 EMPLOYEES APPROXIMATELY.

THEIR, THEIR JOB IS TO OVERSEE OUR FIELD CONTRACTOR, WHICH IS CALIFORNIA RESOURCES CORPORATION.

THEY'RE THE ONES THAT ARE ACTUALLY THE BOOTS ON THE GROUND DAILY OUT THERE, AND WE OVERSEE THEIR OPERATIONS TO ENSURE THAT THEY'RE COMPLIANT WITH THEIR DUTIES AND RESPONSIBILITIES.

UH, SO THEY WOULD PROBABLY BE THE ONES THAT WOULD SEE A DOWNSIZING IN THEIR STAFF, UH, AS THE REVENUES DECREASE IF THEY'RE NO LONGER GONNA DO ANY DEVELOPMENT WORK, UH, MEANING ANY ADDITIONAL NEW WELL DRILLING OR ANYTHING LIKE THAT, CERTAINLY THEIR DEVELOPMENT STAFF, UH, NEEDS TO BE LOOKED AT IS DO THEY NEED TO SERVE THAT FUNCTION ANY FURTHER.

SO THAT'S WHERE YOU WOULD SEE THE REDUCTION IN WORKFORCE OCCUR, UH, IN, IN KEVIN'S GROUP.

UH, PROBABLY NOT UNTIL SUCH TIME AS WE CEASE ALL PRODUCTION AND GO INTO A ABANDONMENT MODE, BUT WE STILL HAVE THE POST-PRODUCTION AND INJECTION PERIOD AS WELL.

AND THAT WILL BE A CRITICAL PERIOD OF TIME SO THAT WHEN WE ONCE IN ALL DECIDE THAT SUBSIDENCE IS NO LONGER, UH, AN ISSUE WITHIN THE CITY, THEN WE COULD COMMENCE WITH THE TOTAL FIELD ABANDONMENT, AND YOU STILL NEED RESOURCES TO OVERSEE AND ADMINISTER THAT WORK.

THAT'S ALL I HAVE.

COUNCIL MEMBER RANGA.

UM, I HAD A COUPLE QUESTIONS TOO, AND ONE WAS JUST, I JUST WANNA MAKE SURE THAT PEOPLE WHO ARE WATCHING UNDERSTAND, SO WHEN WE TALK ABOUT POST-PRODUCTION INJECTION, UM, AND THE ISSUES OF SUBSIDENCE, UM, IN SIMPLE TERMS, RIGHT? WHEN WE TALK ABOUT ELEVATION CHANGES, WE'RE WE'RE TRYING TO PREVENT SUBSIDENCE, WHICH MEANS WE'RE TRYING TO PREVENT THE GROUND FROM SINKING BECAUSE WE ARE, UM, EXTRACTING OIL FROM IT, AND WE'RE REPLACING THAT OIL WITH ANOTHER LIQUID, RIGHT? WHICH IN THIS CASE, I BELIEVE IS SEA WATER, IS THAT CORRECT? IT'S WATER, BUT IT'S NOT.

WE DO USE RECLAIMED WATER.

WE USE PRODUCED WATER.

UM, YOU KNOW, THAT THAT'S WHAT WE'RE USING.

UH, FIRST EXTRAORDINARY SESSION.

I JUST WANTED TO MAKE SURE PEOPLE UNDERSTOOD, BECAUSE I, WHEN WE USE THE TERMS LIKE ELEVATION OR, UH, INJECTION, LIKE I DON'T KNOW THAT THE, THE, THE GENERAL PUBLIC UNDERSTANDS WHAT WE'RE SAYING, SO I JUST WANNA MAKE SURE THAT PEOPLE HAVE A CONCRETE UNDERSTANDING OF, UH, OF WHY THAT'S IMPORTANT AND WHY WE HAVE TO CONTINUE THAT WORK FOR THREE TO FIVE YEARS, EVEN ONCE WE STOP, UM, EXTRACTING OIL.

UM, AND THEN I JUST HAD A COUPLE OF ADDITIONAL QUESTIONS THAT I WANTED TO ASK.

UM, WHAT IS, I DON'T KNOW THAT, UM, BEFORE I WAS ON COUNCIL OR THAT MOST OF THE GENERAL PUBLIC UNDERSTANDS THE LEGAL REASONS WHY THE CITY'S RESPONSIBLE FOR THE ABANDONED OIL WELLS.

UM, CAN SOMEONE TALK THROUGH, UM, THAT KIND OF LET LEGAL LANDSCAPE, WHAT'S THE CITY'S RESPONSIBILITY AND SAY LIKE, NOT THE, WHY THE STATE ISN'T PAYING FOR THE ONE, SAY FOR INSTANCE, IN THE CITY OF LONG BEACH? YES.

UM, SO UNDER OUR UNIT AGREEMENT, THE CITY HAS A FIDUCIARY DUTY, UH, FOR THE ABANDONMENT OF THE OIL

[00:30:01]

WELLS.

UM, IN ADDITION TO THAT CONTRACTUAL BASIS, UH, THERE'S A LEGAL BASIS UNDER STATE LAW.

UM, SPECIFICALLY THE CITY WAS MADE TRUSTEE FOR THE STATE WHEN THE LONG BEACH UNIT WAS CREATED UNDER CHAPTER 1 38, UH, THE CHAPTER 1 38 STATUTES OF 1964.

UM, AS THE TRUSTEE, THE CITY HAS A LEGAL OBLIGATION TO ADMINISTER OIL AND GAS OPERATIONS, INCLUDING WELL ABANDONMENT AND PLUGGING.

UM, ADDITIONALLY, ANY ENTITY THAT OWNS A MINERAL INTEREST IN AN OIL AND GAS WELL IS ESSENTIALLY THE OWNER OF THE WELL AND THEREFORE HAS A RESPONSIBILITY TO PAY FOR THE ABANDONMENT AS LONG AS IT IS STILL AN OWNER IN THE WELL UNDERSTOOD.

THANK YOU FOR THAT.

UM, ON, I THINK IT'S ON PAGE SIX OF THE SLIDES WE'RE TALKING ABOUT IN THE, UM, OIL WELL ABANDONMENT, COULD YOU EXPLAIN WHAT LVER, UM, STANDS FOR AND JUST, JUST KIND OF DESCRIBE WHAT IT DOES, LIKE WHAT DOES THAT MEAN? I'D BE HAPPY TO.

UM, SO IN THE CONTEXT OF TODAY'S PRESENTATION, UH, THE CITY OF LONG BEACH ENERGY RESOURCES DEPARTMENT, WHICH WE CALL LBER, LONG BEACH ENERGY RESOURCES, UM, MANAGES, UH, IN AN ENVIRONMENTALLY SAFE MANNER, UH, THE CITY OF LONG BEACH AND THE STATE OF CALIFORNIA'S ONSHORE AND OFFSHORE PRODUCTION OF OIL AND GAS TO MAXIMIZE PRODUCTION LEVELS AND REVENUES.

UM, LBER IS THE UNIT OPERATOR FOR THE WILMINGTON OIL FIELD, UM, OIL AND GAS PRODUCTION ACTIVITIES, AND HOLDS VARIOUS INTERESTS IN SMALLER FIELDS THROUGHOUT THE CITY.

UM, THESE OPERATIONS ARE SIGNIFICANT WITH OVER 2,400 ACTIVE WELLS, UM, ACTIVE IN IDLE, WELL, SORRY, AND, UH, PRODUCES ALMOST 8 MILLION BARRELS OF OIL ANNUALLY, UH, WITH AN EXEMPLARY SAFETY RECORD.

EXCELLENT.

UM, AND THEN ON SLIDE SEVEN, UM, FOR EVERYONE WATCHING, WHAT IS CAL GYM? THAT'S A GOOD QUESTION.

UM, CAL GYM IS THE CALIFORNIA, UH, GEOLOGIC ENERGY MANAGEMENT DIVISION SHORTENED TO CAL GM.

UM, IT'S ONE OF FIVE DIVISIONS UNDER THE CALIFORNIA DEPARTMENT OF CONSERVATION.

THE DOC, UH, CAL GM PRIORITIZES PROTECTING PUBLIC HEALTH SAFETY AND THE ENVIRONMENT AND ITS OVERSIGHT OF OIL, NATURAL GAS, AND GEOTHERMAL INDUSTRIES.

UH, WHILE WORKING, UH, TO HELP CALIFORNIA ACHIEVE ITS CLIMATE CHANGE AND CLEAN ENERGY GOALS, IT'S ESSENTIALLY THE STATE'S REGULATOR OF OIL AND GAS IN THE STATE OF CALIFORNIA.

GREAT.

UM, AND COULD YOU GO OVER AGAIN BECAUSE I THINK, I DON'T KNOW THAT I QUITE, COMPLETELY FOLLOWED.

WHAT IS THE, WHAT IS THE SIX MONTH PHASE IN OF CAL GM'S INJECTION GRADIENT REGULATION? SO, CAL GM, UH, ISSUED A LETTER REQUESTING, UM, THAT WILMINGTON INJECTION GRADIENT BE, BE LOWERED.

SO THAT'S THE PRESSURE AT WHICH YOU, UH, INJECT THE WATER BACK INTO THE FORMATION.

UM, SO INITIALLY THE UNDERSTANDING WAS IT WOULD HAVE TO BE DONE WITHIN SIX MONTHS, UM, THROUGH, UH, TECHNICAL DISCUSSIONS, UH, THAT OUTLOOK HAS CHANGED, AND NOW, UH, IT LOOKS LIKE THERE'LL BE A FIVE YEAR PHASE IN OF REDUCING THE INJECTION GRADIENT, UM, DOWN TO THE, THE TARGETS THAT CAL JIM IS SEEKING.

AND THAT'S REALLY, UH, DRIVEN A LOT BY, UM, LBER AND THE FIELD CONTRACTOR WANTING TO MAKE THAT CHANGE IN A SAFE WAY.

UM, WE FELT A, A RADICAL CHANGE IN THE INJECTION PRESSURE, UM, COULD BE VERY DIFFICULT, UM, TO MANAGE KEEPING STABLE ELEVATIONS AND, AND, UM, SAFE OPERATIONS.

SO A, A LONGER TERM PHASE IN, UM, ALLOWED FOR A MUCH SAFER, UH, REDUCTION IN THE, UH, UH, FIELD INJECTION PRESSURE.

NOW WHY WOULD, UM, WHY, WHY WOULD CAL GM BE INTERESTED IN HAVING US CHANGE THE INJECTION GRADIENT? WHAT'S THE REASON FOR THAT? UH, IT'S, IT'S HARD TO SAY, UH, WE'VE OPERATED THIS WAY FOR 60 YEARS, SO WE DON'T SEE ANY, UH, PROBLEM, BUT THEIR, UH, LETTER STATES, YOU KNOW, PROTECTION OF, OF, UH, UH, GROUNDWATER, UH, WATER SOURCES, WE'VE NEVER SEEN ANY EVIDENCE OF, OF ANYTHING LIKE THAT.

AND THAT'S PART OF WHY WE'VE HAD THESE TECHNICAL DISCUSSIONS, UM, OVER THIS, AND THIS HAS BEEN GOING ON FOR, FOR MANY YEARS, UM, ON THIS DISCUSSION.

UM, BUT IN ORDER TO MAINTAIN OUR ABILITY, UM, TO OPERATE, UH, WE COMPLIED WITH THIS, UH, UM, LETTER.

UM, AND THEN AS A SIX MONTH PHASE IN, I GUESS MY QUESTION IS SIX MONTHS FROM WHEN, SO IS THAT SIX MONTHS AFTER YOU ABANDONED A, WELL, THAT'S SIX MONTHS FROM WHAT TIME PERIOD? SO WE RECEIVED THE LETTER AND IN THE LETTER IT SPECIFIED, UM, REACHING THE NEW GRADIENT WITHIN SIX MONTHS.

SO YEAH, THERE WERE NEGOTIATIONS THAT WENT ON, BUT THAT'S WHERE THE SIX MONTH TARGET CAME FROM.

OR WE MOVE TO THE FIVE YEAR INJECTION GRADIENT, RIGHT.

AND THEN I KNOW THAT TARGET AFFECTS THEN THE PROJECTIONS THAT WE SEE ON SLIDE EIGHT MM-HMM.

, RIGHT? SO WHETHER OR NOT WE ASSUME A SIX MONTH, UM, INJECTION GRADIENT

[00:35:01]

WHY DOES THAT SIGNIFICANTLY CHANGE THE PR THE POTENTIAL REVENUE PROJECTIONS? SO WE'RE A WATER FLOOD, SO WE REMOVE, UH, OIL AND WATER FROM THE FORMATION AND THEN WE RE-INJECT, UH, THE WATER INTO THE FORMATION.

UM, AT OUR EXISTING INJECTION GRADIENTS, UH, WE ARE AT A VERY MUCH STEADY STATE WHERE WE REMOVE FLUIDS AND WE RE-INJECT ACTUALLY MORE, UM, THAN WE PRODUCE AND, UH, CONTINUE TO, TO PROCESS THE RESERVOIR AT A LOWER INJECTION GRADIENT.

WE CANNOT PUT AS MUCH WATER BACK INTO THE FORMATION, SO THEREFORE WE CAN'T TAKE AS MUCH OUT.

SO WHEN YOU CAN'T TAKE AS MUCH OUT, YOU'RE NOT TAKING AS MUCH OIL AND WATER OUT AND THE OIL HAS VALUE.

SO THE LOWER INJECTION PRESSURE, LESS WATER GOES IN, LESS FLUID COMES OUT AND LESS REVENUE.

UM, AND THEN LEMME SEND ME JUST CHECK AND SEE IF I HAVE ANY ADDITIONAL QUESTIONS.

UM, UM, AND THEN JUST LAST THING FOR CLARIFICATION FOR EVERYONE, COULD YOU JUST GO OVER, UM, THE GENERALS OF LIKE, WHAT, WHAT IS MEASURE US AND WHAT IS PROPOSITION H? SURE, I'LL TAKE THAT QUESTION CHAIR.

UM, MEASURE US IS A GENERAL PURPOSE BUSINESS LICENSE TAX IN THE CITY'S GENERAL FUND, AND IT'S A BUSINESS LICENSE TAX ON OIL PRODUCTION.

UH, IT WAS FOUR YEARS AGO, IN NOVEMBER OF 2020, THAT LONG BEACH VOTERS DOUBLED THE PRODUCTION TAX FROM 15 CENTS PER BARREL OF OIL PRODUCED TO 30 CENTS PER BARREL OF OIL PRODUCED.

AND THAT SAME BALLOT MEASURE ADDED AN INFLATION COMPONENT TO THE TAX.

SO BY TODAY, UH, INFLATION HAS THE PER BARREL PRODUCTION TAX UP TO 35 CENTS.

UH, I THINK IT WAS JUST A COUPLE OF MONTHS BEFORE THE NOVEMBER, 2020 ELECTION THAT CITY COUNCIL PASSED A RESOLUTION OF INTENT ON HOW IT EXPECTED, HOW THE COUNCIL INTENDED TO SPEND THE ADDITIONAL 15 CENTS PER BARREL, IF NOT 20 CENTS PER BARREL, OF UM, OIL PRODUCTION, TAX REVENUE, AND THE COUNCIL RESOLUTION CALLED ON THAT MONEY TO BE SPENT IN THREE CATEGORIES, UM, CHILDREN AND YOUTH SERVICES PROGRAMS, COMMUNITY HEALTH AND CLIMATE CHANGE IN THE ENVIRONMENT.

AND I THINK IT'S PAGES 1 56 AND 1 57 OF THE BIG BOOK THAT CONTAIN TWO FULL PAGES OF DETAIL ON, UH, HOW THAT MEASURE US MONEY WOULD BE SPENT IN FY 25.

WELL, THANK YOU FOR GIVING US THE, UH, THANK YOU FOR GIVING US THE, THE 2 CENTS SUMMARY, UM, FOR THOSE WHO MISSED THOSE PAGES.

UM, ALRIGHT, WELL THAT BEING SAID, THANK YOU FOR THAT.

UM, I DON'T HAVE ANY FURTHER QUESTIONS.

UH, WE CAN MOVE TO PUBLIC COMMENT.

IF THERE ARE ANY MEMBERS OF THE PUBLIC THAT WOULD LIKE TO SPEAK ON ITEM NUMBER TWO IN THE ZOOM, PLEASE USE THE RAISE HAND FEATURE NOW OR DIAL STAR NINE IF CALLING IN.

AND IF THERE ARE ANY MEMBERS IN PERSON THAT WOULD LIKE TO SPEAK ON ITEM TWO, PLEASE LINE UP AT THE PODIUM AT THIS TIME.

WE HAVE ONE IN THE ZOOM.

DAVE, YOU CAN GO AHEAD AND UNMUTE YOURSELF.

UH, CAN YOU HEAR ME? YES.

THANK YOU VERY MUCH.

AND, UH, UH, MY NAME IS DAVE SHUKLA, UH, FROM THIRD DISTRICT AND UH, I'D JUST LIKE TO FIRST, UH, COMMEND, UH, MY COUNCILWOMAN, UH, CHRISTINA DUGGAN ON HER QUESTIONS.

THEY'RE VERY GOOD, THANK YOU.

UM, AS WELL AS THE OTHER COUNCIL MEMBERS, UH, FOR THEIR QUESTIONS.

UM, AS YOU KNOW, MY PERSPECTIVE IS THAT OF THE TREMENDOUS HEALTH AND ENVIRONMENTAL AND INTERGENERATIONAL COSTS THAT DRILLING FOR THAT OIL, WHICH TODAY WE SAY HAS VALUE, BUT TOMORROW WE COULD SAY IS JUST LIABILITY.

WHAT DRILLING FOR THAT OIL DOES NOT ONLY TO THE CITY TO CITY BUDGET, BUT ALSO TO ITS CITIZENS.

UM, I'D LIKE TO THANK SENATOR LEN GONZALEZ FOR LEADERSHIP ON FB 1137.

IT'S IMPORTANT THAT THE PUBLIC KNOW THAT THERE ARE VERY GOOD SCIENTIFIC REASONS, HEALTH REASONS WHY YOU DON'T WANT TO DRILL FOR OIL AND GAS ANYWHERE NEAR HOSPITALS, SCHOOLS, CHURCHES, PLAYGROUNDS, PARTS, ET CETERA.

IT IS TOXIC AND UNHEALTHY TO THOSE POPULATIONS.

FULL STOP.

WE KNOW THIS.

SO IT'S IMPORTANT TO RECOGNIZE THAT SB 1137 IS IN ADVANCE FOR ALL OF US AND IT'S SOMETHING IF WE WERE TALKING IN 2014 TERMS THIS CITY COULD HAVE PAID FOR.

YES, WE, IT HAS BEEN THE PRACTICE FOR THE PAST FEW YEARS TO BUDGET AT $55 PER BARREL WOOD.

IN 2020 BRIEFLY, OIL WAS A BIT BELOW THAT, BUT THIS CITY KNOWS PAST FEW YEARS, OIL HAS REGULARLY TRADED

[00:40:01]

OVER 70.

THIS CITY KNOWS THAT IT HAS A RESPONSIBILITY TO GET AHEAD OF THE FACT THAT THE CITY AND THE STATE BOTH USE THE OIL REVENUE AND THE TIDELANDS FUND LIKE AN ATM, THE LONG BEACH UNIT IS THE SITE.

THOSE ISLANDS ARE THE SITE OF TREMENDOUS CONSTANT INNOVATION AND CHANGE AND NEW DRILLING TECHNIQUES.

NOW THE QUESTION ABOUT PRESSURE'S AN IMPORTANT ONE BECAUSE THESE ARE QUESTIONS THAT RIGHT NOW ARE IN OUR CONTROL RIGHT NOW WE CAN SAY SOMETHING ABOUT, BUT IF THERE'S A BIG ENOUGH STORM SURGE, THERE'S A BIG ENOUGH EARTHQUAKE, THEN IT'S A WHOLE OTHER CONVERSATION.

AND THESE PROJECTIONS THAT WE HAVE TODAY ARE ACADEMIC.

THE SIX MONTH TIMELINE HAS GOOD REASONS BEHIND IT.

SIX MONTH TIMELINE.

EVEN IF LONG BEACH ENERGY RESOURCES BEING THE HOMERS THAT WE ARE CAN TWIST THE STATE'S ARM AND INTO SAY, NO, NO, NO, NO, NO.

LET'S, LET'S, LET'S DRILL A LITTLE BIT LONGER.

COME ON JUST A LITTLE BIT LONGER.

IT'S A QUESTION THAT NEEDED TO BE AS IT USUALLY IS DOMINATED BY THE HOME TEAM.

IT COULD BE TAKEN OUT OF OUR HANDS.

A REAL, REAL CASE IN POINT, LADIES AND GENTLEMEN, I THINK PERSONALLY THE 2030 TIMELINE IT PLEASE WRAP UP YOUR COMMENT.

YOUR TIME HAS ENDED.

OH, SORRY.

FINALLY TO WRAP IT UP IN A SENTENCE, COME 2028, DO YOU WANNA BE TELLING THE REST OF THE WORLD THAT WE'RE STILL PAYING FOR THINGS THAT THEY'RE STILL HAVING TO PAY FOR TOO? BECAUSE THEY'RE BREATHING IT.

THE PROOF IN THE PUDDING IS IN THE AIR.

THEY'RE BREATHING.

WE HAVE, HAVE ONE MORE IN THE ZOOM.

KATHY, YOUR TIME STARTS NOW.

PLEASE UNMUTE YOURSELF.

HELLO, MY NAME IS KATHY SNUS AND I AM FORMERLY THE BLACK AND INFANT HEALTH PROJECT COORDINATOR FROM NINE NINE TO 2008, AND ALSO THE FORMER VIOLENCE PREVENTION COORDINATOR, LONG BEACH ADVANCING PEACE.

UH, WHERE I WAS, UH, RELEASED IN 2023, I WAS WANTING TO COMMENT ON MEASURE US, UH, FUNDING.

YOU MENTIONED THAT CHILDREN AND YOUTH AND COMMUNITY HEALTH WERE SOME OF THE PRIORITIES USED FOR THE FUNDING.

AND SO I JUST WANNA REITERATE WHAT WE'VE BEEN SAYING ALL OVER COMMUNITY IS THAT WE HAVE A NEED FOR SUSTAINABLE FUNDING TO HELP FUND AND SUPPORT AND STRENGTHEN OUR PUBLIC SAFETY MEASURES.

UM, VIOLENCE PREVENTION, WHICH IS A BIG ISSUE ALL ACROSS THE CITY, IS NEEDING A LOOK, NEEDING SUSTAINABLE FUNDING THAT COULD BE ROBUST AND USED PROPERLY AND EFFECTIVELY AS WELL AS MANAGED.

I JUST WANNA MOVE OR ASK THAT WE CONSIDER MAYBE DOING SOMETHING AROUND SUGARY DRINK TAXES OR SOMETHING OF THAT NATURE.

A WHILE AGO IN THE NINETIES WE USED TOBACCO TAXES TO DO SOME VIOLENCE PREVENTION WORK.

AND NOW, UM, A LOT OF THIS FUNDING IS BEING SUPPOSEDLY USED BUT IS NOT REACHING COMMUNITY IN THE WAY THAT IT SHOULD.

IT'LL BE GREAT IF WE HAD SOME OVERSIGHT AND SOME REAL INVESTMENT IN PUBLIC SAFETY IN GENERAL.

I'M TALKING ABOUT TRAFFIC SAFETY AS WELL AS VIOLENCE PREVENTION, HATE BASED, HATE BASED CRIMES, RACE-BASED CRIMES, AND ALL OF THE THINGS THAT WE'RE HEARING THAT ARE HAPPENING THROUGHOUT THE COMMUNITY.

SO I JUST WANTED TO BRING IT TO YOUR ATTENTION THAT ALTHOUGH THERE ARE LOTS OF DIFFERENT WAYS THAT MEASURE US FUNDING MAY OR MAY NOT GO, WE DO NEED TO MAKE SURE THAT WE TRY TO INVEST IN COMMUNITY HEALTH AND CHILDREN AND YOUTH.

THAT CONCLUDES PUBLIC COMMENT FOR ITEM NUMBER TWO.

ALRIGHT, WONDERFUL.

THANK YOU ALL THE SPEAKERS.

UM, ANY ADDITIONAL COMMENTS FROM MY COUNCIL COLLEAGUES? SEEING NONE, UH, WE CAN GO AHEAD AND TAKE A VOTE.

COUNCIL MEMBER DUGGAN AYE.

VICE CHAIR URANGA AYE.

UH, PLEASE READ THE NEXT ITEM.

ITEM THREE IS A RECOMMENDATION TO RECEIVE AND FILE A PRESENTATION ON AN OVERVIEW OF THE TITLES FUND GROUP AND ON THE CURRENT STATE AND BUDGETARY DEPENDENCE ON GENERAL FUND AND TIDELANDS FUND.

IF I CAN GET A PERSON A SECOND VERBAL

[3. 24-54548 Recommendation to receive and file a presentation on an overview of the Tidelands Fund Group and on the current state and budgetary dependance on General Fund and Tidelands Fund. Suggested Action: Approve recommendation. ]

MOVE.

DUGGAN FIRST.

SECOND.

CAN YOU TURN YOUR SPEAKER ON FOR ME? SECOND.

AND SECONDED BY WANKA.

WE HAVE FIRST AND A SECOND.

UH, I BELIEVE WE HAVE A STAFF PRESENTATION HERE AS WELL.

IN TODAY'S PRESENTATION WE'LL DISCUSS AN OVERVIEW OF THE TITLES, FUNDS, IT'S EXPENDITURES AND REVENUES, SOME OF THE CHALLENGES FOR CURRENT OIL PRODUCTION, OIL PRODUCTION, OIL REVENUE PROJECTIONS, AND OVERALL SURPLUS AND DEFICIT PROJECTIONS FOR THE TIDELANDS OPERATING FUNDS.

WE HAVE GREG SORENSON, BUDGET ANALYSIS OFFICER HERE TO PROVIDE THE PRESENTATION.

WELCOME BUDGET OVERSIGHT COMMITTEE MEMBERS TO THIS BOC PRESENTATION ON THE TITLES OPERATING FUND.

FOR THOSE OF YOU THAT ARE VIRTUAL AND FOLLOWING ALONG ON PRINTOUTS, I WILL BE CALLING OUT WHICH SLIDE NUMBER WE'RE MOVING ON TO.

SO LET'S START BY MOVING ON TO SLIDE TWO.

[00:45:03]

NEXT TO SLIDE THREE, THE TIDELANDS FUND GROUPS ARE COMPRISED OF MARINA FUNDS, QUEEN MARY FUNDS, AND TIDELANDS OPERATING FUNDS.

WHILE THE MARINA AND QUEEN MARY FUNDS ARE RESTRICTED ONLY TO THE GENERAL TIDELANDS AREA, OUR POLICY IS TO ONLY UTILIZE MARINA FUNDS FOR REINVESTMENT IN THE MARINA AND ONLY UTILIZE QUEEN MARY FUNDS FOR REINVESTMENT IN THE QUEEN MARY.

WE DO NOT USE MARINA OR QUEEN MARY FUNDS TO SUBSIDIZE THE TIDELANDS OPERATING FUNDS.

HOWEVER, THE TIDELANDS OPERATING FUNDS CAN BE USED TO SUBSIDIZE MARINA OR QUEEN MARY FUNDS, BUT THE MARINA FUNDS HAVE HAD A HEALTHY RESERVES AND ARE STRUCTURALLY BALANCED AND HAVE NOT NEEDED ANY SUBSIDIES FROM THE TIDELANDS OPERATING FUND.

THE QUEEN MARY FUNDS HAVE RECEIVED TRANSFERS FROM TIDELANDS OPERATING WHEN THE PREVIOUS SHIP OPERATOR DECLARED BANKRUPTCY AND THEN THE COVID PANDEMIC CLOSED THE SHIP.

TIDELANDS OPERATING FUNDS WERE UTILIZED TO PAY FOR THE QUEEN MARY'S CAPITAL PROJECTS, REOPENING COSTS, OPERATIONAL NEEDS AND DEBT SERVICE.

BUT IN FISCAL YEAR 23, THE QUEEN MARY GENERATED A SURPLUS AND FUTURE YEAR PROJECTIONS ALSO ANTICIPATE A SURPLUS.

SO IT IS NOT ANTICIPATED THAT THE QUEEN MARY WILL NEED FURTHER FUNDING FROM THE TITLES OPERATING FUNDS.

THIS PRESENTATION WILL NOT FOCUS ON THE MARINA AND QUEEN MARY FUNDS WILL FOCUS ON THE TIDELANDS OPERATING FUNDS.

MOVING ON TO SLIDE FOUR.

SLIDE FOUR SHOWS THE TYPES OF OPERATING EXPENSES IN THE TIDELANDS OPERATING INCLUDING LIFEGUARDS, SAND AND BEACH MANAGEMENT.

THE CONVENTION CENTER UTILITIES, WHICH ARE A FIXED COST, BUT THE NET OPERATING COSTS OF THE CONVENTION CENTER WILL BE AN EXPENSE IF IT RUNS A DEFICIT OR A REVENUE IF IT RUNS A NET SURPLUS.

THERE ARE ALSO CURRENT OPERATING COSTS FOR THE BELMONT POOL, PARKING GARAGES, DEBT SERVICE, AND HOMELESS RESPONSE.

WE'LL TALK A LITTLE MORE ABOUT THE VARIOUS DEBT SERVICES NEXT ON SLIDE FIVE.

SLIDE FIVE SHOWS THE VARIOUS DEBT SERVICES.

THERE WAS REINVESTMENT IN RAINBOW HARBOR, SEAWALLS BOARDWALK AND PARKING AREAS, AND THIS DEBT SERVICE WAS PAID OFF IN FISCAL YEAR 23.

THERE IS A CURRENT DEBT SERVICE FOR THE QUEEN MARY, WHICH WAS PAID TEMPORARILY BY THE TITLES OPERATING FUNDS WHEN THE QUEEN MARY DIDN'T HAVE ENOUGH FUNDING TO PAY THIS DEBT.

BUT IN FISCAL YEAR 24 FORWARD, THE QUEEN MARY IS ABLE TO PAY THIS DEBT THAT WILL END IN FISCAL YEAR 28.

THERE ARE DEBT SERVICE COSTS FOR THE AQUARIUM AND ASSOCIATED GARAGE THAT WILL END IN FISCAL YEAR 30 AND THE PIKE PARKING GARAGE DEBT SERVICE WILL END IN FISCAL YEAR 33.

MOVING ON TO SLIDE SIX, THE NEXT TWO SLIDES SHOW THE TYPES OF CAPITAL PROJECTS IN T TIDELANDS AND THE APPROPRIATION THAT HAS ALREADY BEEN COLLECTED BUT IS STILL REMAINING FOR THESE GROUPS OF PROJECTS.

TIDELANDS CAPITAL INVESTMENTS INCLUDE THE BELMONT BEACH AQUATIC CENTER, THE CONVENTION CENTER, BEACH FACILITIES, THE QUEEN MARY ALAMEDA BAY AND RAINBOW LAGOON.

MOVING ON TO SLIDE SEVEN, FURTHER INVESTMENTS INCLUDE PARKING, BELMONT PIER PLAYGROUNDS AND SEA WALLS, DOCKS AND BOAT LAUNCHES OUTSIDE OF THE MARINA AREA.

THE NEXT FEW SLIDES WILL SHOW HOW THE ANNUAL SURPLUS IN THAILAND'S OPERATING HAS BEEN INVESTED IN CAPITAL PROJECTS.

SLIDE EIGHT SHOWS THAT FISCAL YEAR 22 HAD A $26 MILLION SURPLUS AND HOW THAT SURPLUS WAS REINVESTED IN TID.

LYNN'S NEEDS THE ITEMS IN RED SHOW THE TID LYNN'S SURPLUS AMOUNTS THAT WERE SET ASIDE FOR THE QUEEN MARY REPAIRS AND REOPENING COSTS.

SLIDE NINE SHOWS THAT FISCAL YEAR 23 HAD AN $11 MILLION SURPLUS AND HOW THAT SURPLUS WAS ALLOCATED.

AND SLIDE 10 SHOWS US HOW WE USE OUR FINANCIAL PROJECTIONS TO INCLUDE CAPITAL INVESTMENTS IN THE FOLLOWING YEAR'S BUDGET.

AT THE TIME OF THE BUDGET DEVELOPMENT, WE WERE PROJECTING A $12 MILLION SURPLUS, BUT SINCE THOSE ARE JUST PROJECTIONS, WE CONSERVATIVELY ALLOCATED 7 MILLION INTO THE FISCAL YEAR 25 BUDGET.

AT YEAR END WHEN THE ACTUAL SURPLUS IS CALCULATED, ADDITIONAL SURPLUS BEYOND 7 MILLION CAN BE ALLOCATED FOR ADDITIONAL TIDELANDS NEEDS.

MOVING ON TO SLIDE 11.

[00:50:03]

SLIDE 11 SHOWS THE TYPE OF OPERATING REVENUES IN THAILAND'S OPERATING, INCLUDING THE HARBOR TRANSFER OF 5% OF GROSS OPERATING REVENUES, OIL REVENUES, RENTALS AND LEASES, PARKING INTEREST SLIP AND MOORING FEES FOR RAINBOW HARBOR, WHICH AGAIN ARE THAILAND'S OPERATING AND NOT MARINA FUNDS.

FEES FOR BOAT LAUNCH USE SWIMMING POOL, USE FILMING, AND MISCELLANEOUS PERMIT FEES.

ALSO, AS MENTIONED EARLIER, IF THE CONVENTION CENTER PRODUCES AN OPERATING SURPLUS, THIS COMES TO THAILAND'S OPERATING AS REVENUES.

MOVING ON TO SLIDE 12.

SLIDE 12 SHOWS THE BREAKDOWN OF REVENUES FOR FISCAL YEAR 23, EXCLUDING TRANSFERS AND REIMBURSEMENTS, MEANING THESE ARE THE REVENUES THAT CONTRIBUTE TO TITLE'S OPERATING FUND SURPLUS OR DEFICIT.

IN FISCAL YEAR 23, OIL REVENUES COMPRISED 34% OF NET OPERATING REVENUES.

THE HARBOR TRANSFER COMPRISED 32% OF THE T'S NET OPERATING REVENUES.

AS YOU CAN SEE, THESE TWO REVENUE SOURCES WERE BY FAR THE LARGEST CONTRIBUTORS IN FISCAL YEAR 23 TO THE $11 MILLION SURPLUS THAT WAS AVAILABLE AT THE END OF FISCAL YEAR 23 FOR REINVESTMENT IN T'S CAPITAL NEEDS.

WHILE THE HARBOR TRANSFER IS PROJECTED TO GROW SLIGHTLY EACH YEAR BY ABOUT ONE TO $2 MILLION, DEPENDING ON HARBOR'S REVENUE GROWTH.

BUT WE'LL SEE ON THE NEXT FEW SLIDES THAT OIL REVENUES ARE ANTICIPATED, ANTICIPATED TO DECLINE BY A MUCH LARGER AMOUNT, THUS REDUCING THE ANNUAL SURPLUSES AND LEADING TO FUTURE DEFICITS IN THE FUND.

THE NEXT FEW SLIDES WE'LL DISCUSS OIL PRODUCTION CHALLENGES AND HOW THEY'RE PROJECTED TO AFFECT OIL REVENUES AND SUBSEQUENT SURPLUSES AND DEFICITS.

STARTING WITH SLIDE 13, THE FIRST OIL PRODUCTION CHALLENGE THE CITY'S EXPERIENCING IS SB 1137, WHICH CREATED A HEALTH PROTECTION ZONE THAT AFFECTS ANY OIL OR GAS WELL WITHIN 3,200 FEET OF VARIOUS FACILITIES.

SB 1137 RESTRICTS ANY NEW WELLS OR FACILITIES WITHIN THE HEALTH PROTECTION ZONE AND ALSO RESTRICTS REPAIRING OF ANY SUCH WELLS IF THAT REPAIR NEEDS A PERMIT.

THE EFFECT OF THIS IS AS WELLS BREAK DOWN AS PART OF THE NORMAL WELL LIFECYCLE, IF A WELL CAN BE REPAIRED WITHOUT NEEDING A PERMIT, THEN THAT WELL CAN BE REPAIRED AND CONTINUE TO PRODUCE.

BUT IF THE WELL NEEDS A PERMIT FOR REPAIR, THEN THAT WELL WILL NEED TO BE TAKEN OFFLINE PERMANENTLY AND WILL NO LONGER CONTRIBUTE TO OVERALL PRODUCTION.

SO FUTURE PROJECTIONS.

KEEP IN MIND THE NORMAL BREAKDOWN CYCLES OF WELLS IN THIS ZONE AND FUTURE PRODUCTION IS LOWERED.

THE NEXT OIL PRODUCTION CHALLENGE IS THAT CAL GEM, WHICH OVERSEES OIL AND NATURAL GAS INDUSTRIES, HAS CREATED NEW REGULATIONS WHICH REDUCE INJECTION PRESSURES IN WELL ACTIVITIES, WHICH REDUCES THE AMOUNT OF OIL THAT CAN BE EXTRACTED.

ORIGINALLY, CAL GM HAD INSTRUCTED LONG BEACH TO RAMP DOWN INJECTION PRESSURES WITHIN SIX MONTHS, AND WE HAD REVISED PROJECTIONS BASED ON A SIX MONTH TIMELINE, WHICH WAS USED AS PART OF THE FISCAL YEAR 25 BUDGET PROJECTIONS.

SINCE THEN, THE CITY HAS BEEN IN CONVERSATIONS WITH CALJAM ABOUT RAMPING DOWN INJECTION PRESSURES OVER FIVE YEARS INSTEAD OF SIX MONTHS.

AND THE CITY'S OIL OPERATIONS ARE CURRENTLY UTILIZING THE FIVE-YEAR PLAN.

NEXT WE'LL MOVE ON TO SLIDE 14, WHICH SHOWS THE EFFECTS OF THESE OIL PRODUCTION CHALLENGES ON OIL REVENUE PROJECTIONS.

SLIDE 14 SHOWS HOW OUR OIL REVENUE PROJECTIONS HAVE CHANGED AS THE OIL PRODUCTION PROJECTIONS HAVE CHANGED.

THE TOP TABLE DISPLAYS WHAT OUR OIL REVENUE ASSUMPTIONS WERE BACK IN JANUARY OF 2023.

BEFORE SB 1137 AND CAL GM REGULATION CHANGES THE FISCAL YEAR 22 AND FISCAL YEAR 23 COLUMNS SHOW THE AVERAGE PRICE OF OIL AND THE ACTUAL OIL REVENUES FOR THOSE YEARS.

THE FISCAL YEAR 24 COLUMN SHOWS PROJECTED AVERAGE OIL PRICES AND THE SUBSEQUENT PROJECTED OIL REVENUES.

FISCAL YEARS 25 THROUGH 28 SHOW AN ASSUMED OIL PRICE OF $65 PER BARREL AND OIL REVENUES BASED ON OIL PRODUCTION PROJECTIONS AT THE TIME.

THE SECOND TABLE SHOWS PROJECTIONS WITH SB 1137 IN EFFECT AND UTILIZING THE SIX MONTH REDUCTION SCENARIO.

THIS HIGHLIGHTS THE REVENUE REDUCTIONS SOLELY DUE DUE TO OIL PRODUCTION REDUCTIONS.

AS YOU CAN SEE, THE OIL PRICES ASSUMPTIONS

[00:55:01]

HAVE NOT CHANGED, BUT THE NET OIL REVENUES FROM FISCAL YEAR 24 FORWARD HAVE DECREASED AS COMPARED TO THE TOP TABLE.

THE THIRD TABLE SHOWS PROJECTIONS WITH SB 1137 IN EFFECT, BUT UTILIZING THE FIVE YEAR REDUCTION SCENARIO INSTEAD OF THE SIX MONTH SCENARIO, THIS SHOWS THE OIL REVENUE BENEFITS BY EXTENDING THE TIMEFRAME FOR REDUCING INJECTION PRESSURES AS COMPARED TO THE SECOND TABLE NOTICE, THE MAJORITY OF THE BENEFIT OF THE FIVE YEAR PLAN IS FROM FISCAL YEAR 24 THROUGH FISCAL YEAR 26.

THESE YEARS WILL HAVE LARGER ANNUAL SURPLUSES, BUT FISCAL YEAR 27 IS ONLY 1.2 MILLION DIFFERENT AND FISCAL YEAR 28 IS ONLY $200,000 DIFFERENT.

IT ALSO SHOWS HOW STAFF IS WORKING HARD TO MAXIMIZE OIL REVENUES IN ORDER TO MAXIMIZE TITLE AND SURPLUSES AND REINVESTMENTS.

THE FIVE-YEAR PLAN IS PROJECTED TO PRODUCE ABOUT $9 MILLION IN ADDITIONAL REVENUE FROM FISCAL YEAR 24 TO FISCAL YEAR 26.

THAT CAN BE USED FOR TITLES, CAPITAL REINVESTMENT NEEDS.

THE BOTTOM TABLE GIVES US A DIFFERENT PERSPECTIVE ON HOW SB 1137 AND CAL GM IS AFFECTING OUR PRODUCTION CAPABILITIES USING FISCAL YEAR 22 ACTUAL OIL PRODUCTION AS A BASELINE.

THIS TABLE SHOWS THE PRODUCTION PERCENTAGE AS COMPARED TO FISCAL YEAR 22.

NOTICE THAT BY FISCAL YEAR 27, OIL PRODUCTION IS PROJECTED TO BE LESS THAN HALF OF WHAT IT WAS IN FISCAL YEAR 22.

THE NEXT SLIDE WILL SHOW HOW THESE PRODUCTION CHALLENGES AFFECT THE OVERALL T'S SURPLUS DEFICIT PROJECTIONS.

SLIDE 15 SHOWS THE ANNUAL SURPLUS OR DEFICIT PROJECTIONS BY FISCAL YEAR FOR BOTH THE SIX MONTH INJECTION REDUCTION PLAN AND THE FIVE-YEAR PLAN.

FISCAL YEARS 22 AND FISCAL YEAR 23 SHOW THE ACTUAL SURPLUSES FOR THOSE YEARS.

AND STARTING IN FISCAL YEAR 24, WE SEE THE DIFFERENCE IN SURPLUSES BETWEEN THE TWO INJECTION PLANS.

AS STATED EARLIER, WE SEE A BIGGER DIFFERENCE BETWEEN THE TWO INJECTION PLANS FROM FISCAL YEAR 24 TO FISCAL YEAR 26, BUT BY FISCAL YEAR 27 THERE IS NOT A MAJOR DIFFERENCE.

NOW BECAUSE EACH YEAR'S SURPLUS IS REINVESTED AT YEAR END, THESE AMOUNTS ARE NOT CUMULATIVE AND DO NOT INCREASE RESERVES AS THE GRAPH DEMONSTRATES AT AN ASSUMED $65 PER BARREL AVERAGE PRICE OF OIL AND INTEGRATING NEW OIL PRODUCTION ESTIMATES BASED ON SB 1137 AND CAL GM INJECTION REGULATIONS, THE FUND IS PROJE PROJECTED TO SHOW AN ANNUAL DEFICIT AFTER FISCAL YEAR 27.

AS MENTIONED EARLIER, THE MARINA FUNDS AND QUEEN MARY FUNDS ARE USED ONLY FOR THOSE PURPOSES.

SO ANY TIDELANDS OPERATING DEFICIT WILL NEED TO BE SUPPORTED BY THE GENERAL FUND.

THE AMOUNTS SHOWN ON THIS GRAPH ONLY PROJECT THE AMOUNT OF SUPPORT NEEDED TO KEEP THE TITLES OPERATING FUND NEUTRAL FOR THAT YEAR AND DO NOT INCLUDE ANY ADDITIONAL CAPITAL REINVESTMENTS.

THIS CONCLUDES OUR PRESENTATION AND WE'RE READY FOR ANY COMMENTS OR QUESTIONS YOU MAY HAVE.

UH, THANK YOU FOR THAT PRESENTATION.

UM, ANY QUESTIONS FROM MY COMMITTEE? UH, COLLEAGUES? I JUST HAVE A COMMENT.

IS THAT OKAY? CHAIR? OH, PLEASE GO AHEAD.

COUNCIL MEMBER ARANGA.

I KNOW I NEED YOUR PERMISSION.

I DON'T WANT TO JUST JUMP ON YOU.

YOU KNOW, , I APPRECIATE IT.

GO AHEAD.

UM, NO, JUST THE COMMENT IS THAT, UM, BASED ON THE REDUCTION IN REVENUES THAT WE'RE GONNA BE GETTING AND THE OPERATIONAL EXPENSES THAT WE HAVE LISTED ON SLIDES FOUR AND FIVE, WE HAVE OUR WORK CUT OUT FOR US TO MAKE UP THOSE DIFFERENCES AND THAT'S WHAT I'M GONNA SEE.

YES, WE DO.

UH, COUNCIL MEMBER DUGGAN, NO COMMENTS, QUESTIONS.

IS, UH, A BIT OF A MORE REALISTIC ASPECT BASED ON THE CURRENT PRICE OF OIL.

UM, I JUST HAD A COUPLE, UH, ONE BEING I KNOW IN THE PREVIOUS PRESENTATION, UM, UM, WE DISCUSSED THE FACT THAT FOR WHEN RELATED TO THE GENERAL FUND WE'RE DOING BUDGET PROJECTIONS, WE ASSUME A PRICE PER BARREL OF $55.

UM, BUT IN THIS PARTICULAR PRESENTATION RELATED TO TIDELANDS, WE WERE DOING PROJECTIONS BASED OFF OF $65.

I WAS JUST WONDERING WHY IS THERE A DIFFERENCE WHEN WE'RE PROJECTING TIDELANDS? WE USE 65 BECAUSE WHAT WE'RE TRYING TO ACHIEVE IN OUR PROJECTIONS

[01:00:01]

UM, THE $55 USED IN THE GENERAL FUND, UH, I BELIEVE CAN BE, UH, SPOKEN TO, UH, BY GERALDINE, BUT IT IS MORE OF A BUDGETARY TOOL.

UH, WHEREAS FOR MY TITLE'S PRESENTATION, IT'S MORE OF A PROJECTIONS TOOL.

SO I WILL ACTUALLY EXPAND ON THAT A LITTLE BIT.

SO, UM, FOR BOTH FUNDS, STRUCTURAL BUDGET IS AT 55, BUT FOR THE PURPOSES OF A MORE EXPECTED LEVELS FOR THIS PRESENTATION, UH, THAT'S, UH, WHAT GREG WAS EXPLAINING AS, UH, 65 PER BARREL BECAUSE WE DO KNOW OIL IS TRENDING HIGHER THAN OUR BUDGETED STRUCTURAL CONSERVATIVE LEVEL.

SO OUR GENERAL FUND PROJECTIONS ARE ON THE, ARE CONSERVATIVE AND WE KNOW THAT MOST LIKELY WE WILL BE MAKING, WE'RE GETTING MORE REVENUE THAN WE ARE BUDGETING FOR AS PART OF THIS BUDGET OF PART OF THE BUDGET CYCLE.

UM, THE PRESENTATION THAT WE RECEIVE RIGHT NOW WAS BASED, UM, MORE IN WHAT WE ARE EXPECTING TO SEE, UH, RELATED TO CURRENT, UM, BARREL PRICES.

THAT'S CORRECT.

UM, AND I HAD A COUPLE MORE QUESTIONS.

UM, SO I, I KNOW WE WERE ONLY TALKING ABOUT THE TIDELANDS OPERATING FUND, BUT I THOUGHT THAT THE SLIDE THREE WHERE IT SAYS, UH, TALKED ABOUT THE, THE FUNDS THAT THE TI THE TIDELANDS IS COMPRISED OF.

SO THE MARINA, THE QUEEN MARY, AND THEN THE YEAH, THE TIDELANDS OPERATING FUNDS.

SO IT, SO THE MARINA SAYS RESTRICTED TO GENERAL TIDES EXPENSES AND THE REVENUES ARE, UH, UTILIZED FOR MARINA UM, EXPENSES.

SO FOR THE MARINA FUND, YOU GET REVENUE FROM MARINA EXPENSES, UM, BUT THE REVENUE THEN CAN GO BACK TO THE MARINA OR TO THE TI OR BE SPENT ON TITLES EXPENSES.

IS THAT CORRECT? MY UNDERSTANDING IS THAT THE MARINA FUNDS CAN TECHNICALLY BE USED ANYWHERE WITHIN THE TS GENERAL TIDELANDS AREA.

HOWEVER, SINCE THE MAJORITY OF THOSE FUNDS COME FROM MOORING AND SLIP FEES, WE HAVE AS A POLICY THAT WE, WE DO NOT USE THOSE MARINA FUNDS FOR ANYTHING ELSE OTHER THAN FOR MARINA PURPOSES BECAUSE OF WHAT WE'RE CHARGING IN THE, THE SLIP AND MOORING FEES.

UM, AND THEN I GUESS THAT WAS, SO THAT WAS, AND THAT WAS THE SAME QUESTION ABOUT THE, THE CLEAN MARY, 'CAUSE IT'S RESTRICTED TO GENERAL THAILANDS EXPENSES.

UM, BUT SPECIFICALLY THE THAILANDS EXPENSE THAT WE'RE TALKING ABOUT IS CLEAN MARY.

SO THE IDEA OF BEING THAT WE'VE BEEN DOING INVESTMENTS IN THE QUEEN MARY, UM, IN THE FUTURE WHEN IT BECOMES, UM, FULLY PROFITABLE, THE MONEY THAT THEN IS MADE BY THE QUEEN MARY WOULD THEN BE REINVESTED INTO THE QUEEN MARY, CORRECT? THAT IS CORRECT.

UM, COULD SOMEONE EXPLAIN, I'M NOT SURE THAT PEOPLE KNOW WHAT A DEBT SERVICE IS.

I WAS LOOKING AT SLIDE FIVE.

SO WE SAID THAILAND'S OPERATING FUNDS AND THEN WE HAD DEBT SERVICE.

DID SOMEONE TALK ABOUT WHAT DEBT SERVICES? DEBT SERVICE IS PRINCIPAL AND INTEREST ANNUAL PAYMENTS ON MUNICIPAL BONDS SOLD FOR LONG-TERM CAPITAL IMPROVEMENTS.

GOTCHA.

UM, AND THEN SLIDE SIX, UM, WE WERE TALKING ABOUT SEVERAL, UM, CAPITAL PROJECTS, UM, THAT ARE, OR FACILITIES IN THE THAILANDS AREA.

SO BELMONT BEACH, YOU KNOW, AQUATIC CENTER, THE CONVENTION CENTER, BEACH FACILITY, ET ET CETERA.

AND WE, WE TALK ABOUT REMAINING APPROPRIATION.

WHAT DOES THAT MEAN? OVER THE YEARS AS THE TITLES, OPERATING FUNDS HAVE GENERATED A SURPLUS, UH, THEN THOSE SURPLUSES HAVE BEEN ALLOCATED OUT TO VARIOUS PROJECTS.

UM, SOMETIMES THE PROJECT IS FULLY ALLOCATED RIGHT UP FRONT.

SOMETIMES IT'S ALLOCATED, UH, A PORTION OVER MANY YEARS.

UM, BUT THE PROJECT ITSELF MAY NOT BE COMPLETELY FINISHED.

IT MAY BE ON HOLD, IT MAY BE STILL ONGOING.

AND SO WHAT THESE NUMBERS ON THESE SLIDES REPRESENT IS THE MONEY THAT'S ALREADY BEEN, UH, EARNED AND SET ASIDE.

UH, BUT IT'S STILL THERE REMAINING TO FINISH OFF THOSE PARTICULAR PROJECTS.

AND, AND AGAIN, THESE ARE GROUPS OF PROJECTS.

THEY WILL HAVE INDIVIDUAL PROJECTS, UH, THAT FALL WITHIN THOSE GROUPS, BUT THAT'S THE REMAINING FUNDS THAT WE ALREADY HAVE SET ASIDE FOR THOSE CAPITAL INVESTMENTS.

UH, AND THE LAST QUESTION WAS ON SLIDE 14 THAT WAS COMPARING THE DIFFERENT, UH, THE ACTUALS AND THE PROJECTIONS UNDER DIFFERENT SCENARIOS.

AND SO JUST SO I'M CLEAR, THE THE TOP ROW THAT SAID JANUARY, 2023 PRE SB 1137.

SO THAT'S BASICALLY PROJECTING OUT, IF WE WERE UNDER THE CONDITION THAT 1137 HAD NOT BEEN ENACTED, THIS IS HOW MUCH REVENUE WE WOULD EXPECT, UM, WITH THOSE, UM, THAT THAT PRICE PER BARREL THAT WE'RE ASSUMING EACH YEAR.

AND THEN THE NEXT COLUMN IS SAYING, OR THE NEXT ROW I SHOULD SAY, UM, IS SAYING UNDER, UM, A SCENARIO WHERE WE HAVE SB SB 1137, BUT WE'RE UNDER THOSE CAL GYM

[01:05:01]

THE THIRD ROW IS IN THE FIVE YEAR ASSUMPTION THAT WHICH IS WHAT WE'RE PROPOSING.

UM, AND THEN THE BOTTOM, UM, IS A COMPARISON.

SO, OR PRODUCTION PERCENT COMPARED TO FY.

SO LET'S SAY LOOKING AT FY 22, WHICH IS THE 33 MILLION, UM, VERSUS THE, THE COMPARISON TO THE, THE THIRD ROW HERE, WHICH IS THE FIVE YEAR REDUCTION.

IS THAT SAYING HOW MUCH THE DI THE PERCENTAGE DIFFERENCES IN THE PROJECTED REVENUE? UM, PARTIALLY, UH, SO WHAT WE WERE TRYING TO DO WITH THE TOP THREE TABLES IS TO SHOW SOME CONTEXT ON HOW THINGS HAVE CHANGED QUITE A BIT, UH, JUST RECENTLY AND WHERE WE WERE WITH OUR PROJECTIONS, UH, ORIGINALLY AND THEN WHERE WE WERE, UH, WITH OUR PROJECTIONS WHEN WE WERE ASSUMING CAL GM WAS GONNA BE IN EFFECT.

BUT THE SIX MONTH PLAN AND THEN THE THIRD TABLE WAS WE SWITCHED OVER TO THE FIVE YEAR PLAN.

SO TO GIVE YOU SOME CONTEXT OF HOW THAT CHANGES THE PROJECTIONS, THE FINAL TABLE AT THE BOTTOM IS SIMPLY JUST A DIFFERENT WAY OF LOOKING AT HOW MUCH THE ACTUAL PRODUCTION IS BEING AFFECTED.

AND SO WE DECIDED JUST TO USE FY 22 AS A BASELINE FOR THE PURPOSE OF THESE NUMBERS TO SHOW THAT IF WHATEVER WE WERE PRODUCING IN FY 22, THEN YOU SEE HOW MUCH IT GOES DOWN THE NEXT YEAR, HOW MUCH IT GOES DOWN THE FOLLOWING YEAR.

AND BY A CERTAIN YEAR YOU COULD SEE THAT OUR PROJECTION IS, IS CUT IN HALF AS COMPARED JUST TO WHATEVER OUR PRODUCT PROJECTION WAS.

OUR PRODUCTION WAS IN FISCAL YEAR 22.

WE'RE, WE'RE NOT REALLY SHOWING THE PRODUCTION NUMBERS, WE'RE JUST TRYING TO GIVE CONTEXT OF BY PERCENTAGE HOW MUCH IT'S DECREASING SINCE FISCAL YEAR 22.

NO.

YEAH.

I GET, AND SO THAT, THAT MAKES SENSE.

SO JUST, UH, ONE FOLLOW UP.

SO ON THAT LAST ROW, WHEN IT SAYS FISCAL YEAR 28, 90 8%, UM, WHAT ARE THE TWO NUMBERS YOU'RE USING TO CALCULATE THAT? 98%.

SO THAT WOULD BE THE PRODUCTION, THE NUMBER OF, YOU KNOW, BARRELS OF OIL, UH, OF PRODUCTION IN THE SECOND YEAR AS COMPARED TO FISCAL YEAR 22.

SO IT'S, IT'S 98% OF WHAT IT WAS THE PREVIOUS YEAR.

SO IT WENT DOWN BY 2%.

GOTCHA.

SO THIS ISN'T, THIS ISN'T, THIS ISN'T REVENUE.

THIS IS LITERALLY JUST THE NUMBER OF BARRELS.

RIGHT.

AND HOW MUCH YOU'RE ABLE.

GOTCHA.

THAT'S THE PART I MISSED.

I THOUGHT IT WAS BASED ON THE, THE, THE NET OIL REVENUES.

AND I WAS LIKE, THOSE PERCENTAGES DON'T MAKE SENSE, BUT NOW I UNDERSTAND WHAT THAT WAS SUPPOSED TO BE.

UM, THAT IS, UH, ALL OF MY QUESTIONS.

UH, WE CAN GO TO A PUBLIC COMMENT.

IF THERE ARE ANY MEMBERS OF THE PUBLIC THAT WOULD LIKE TO SPEAK ON ITEM NUMBER THREE IN PERSON, PLEASE LINE UP AT THE PODIUM AT THIS TIME.

AND IF THERE ARE ANY IN THE ZOOM, PLEASE USE THE RAISE HAND FEATURE NOW, OR DIAL STAR NINE OF CALLING IN.

WE CAN START IN PERSON.

TO GET AHEAD OF THE OVERALL RISK AND LIABILITY, THE, THE, THE STRUCTURAL RISKS, SYSTEMIC RISKS TO OUR CITY.

UH, THANK YOU.

UH, DAVE SHUKLA THIRD DISTRICT, UH, DID MY FIRST COMMENT FROM THE 1 21 BUS.

UM, I'D LIKE TO START WITH, UH, THAT LAST SLIDE.

UH, SLIDE 14.

UM, IF THE ACTUALS FOR FYA 23 ARE 98%, THEN THAT MEANS IMPLICITLY SB 1137 WAS ALREADY BEING COMPLIED WITH, WITH, AND SO THAT 2% IS DUE TO SB 30 11 37 COMPLIANCE.

THERE WERE CERTAIN WELLS THAT NEEDED TO BE CLOSED.

UM, SO, UH, FULL DISCLOSURE, I JUST SPENT THE PAST YEAR AS A CLIMATE FELLOW FOR THE CITY OF OAKLAND.

I AM NO LONGER, I AM NOT SPEAKING HERE IN THAT CAPACITY.

I GREW UP IN TOWN.

UM, IF I WERE TO MAKE A SLIDE LIKE THIS, UH, IT WOULD BE TO TELL A STORY.

AND THE STORY TO BE TOLD IS, PLEASE JUST LET US DRILL FOR A LITTLE BIT MORE OIL.

IT'LL JUST BE A LITTLE BIT MORE PROFITABLE, A LITTLE BIT LONGER.

THE PROBLEM WITH THAT STORY IS THAT IT DOESN'T INCLUDE THAT HEALTH AND SAFETY, THE ENVIRONMENTAL COSTS, ALL THE THINGS THAT ARE PUSHED OFF TO OTHER POPULATIONS, POPULATIONS THAT DON'T TAKE THE 1 21 BUS DOWNTOWN ON A TUESDAY AFTERNOON TO COME GIVE A PUBLIC COMMENT.

UM, SB 1137 IS LITERALLY IN ADVANCE FOR EVERY SINGLE PERSON WHO BREATHES THE AIR IN THE CITY OF LONG BEACH.

IT ISN'T SOMETHING THAT, UH, IS A IMPEDIMENT OR A, A CHALLENGE OR THREAT, UH, TO THE OIL PRODUCTION.

IT'S A REALITY OF IT.

IT'S A REALITY THAT YOU'RE PUT IN BECAUSE PREVIOUS CITY COUNCILS AND PRE PREVIOUS ADMINISTRATIONS IN THE CITY REFUSED AND DELAYED IT.

AND TO TELL THAT STORY, YOU'RE TELLING THE SAME STORY THAT THEY DID.

NOW, THIS CITY COUNCIL SHOULD BE COMMENDED FOR THE FACT THAT THEY ARE MAKING FORWARD PROGRESS IN NOT ONLY THIS COMPLIANCE, BUT ALSO IN THE REALITY.

AS WE SAW WITH SLIDE THREE, UH, SORRY, SLIDE SIX, THAT THERE'S ONLY SO MANY THINGS UNDER OUR CONTROL.

AND AS MUCH AS WE'VE SET ASIDE, WE'VE NOT YET SPENT ALL OF THESE SURPLUSES.

THE CITY COUNCIL FOR THE FIRST TIME REALLY IS PRIORITIZING THAT WE HAVE TO GET AHEAD OF THE OIL ABANDONMENT COSTS.

WE HAVE TO GET, UH, AHEAD OF THE INFLATIONARY PRESSURES WE HAVE

[01:10:01]

UM, THAT MAY MEAN THAT WE'RE GONNA HAVE TO TIGHTEN OUR BELT IN OTHER PLACES.

'CAUSE THE LONGER WE WAIT, THE MORE THESE NECESSARY, YOU KNOW, EXPENDITURES ARE GONNA COST.

AND YOU SEE THAT.

FINALLY, UM, TO WRAP UP MY COMMENTS ON SLIDE 15, I MEAN, WE'RE GONNA HAVE TO PAY FOR, YOU KNOW, SUBSIDENCE CONTROL FOR YEARS AND YEARS AFTERWARDS.

WE'RE GONNA BE PAYING FOR WITH THE HEALTH AND ENVIRONMENTAL COSTS TO OUR POPULATIONS AND THE INTERGENERATIONAL COSTS OF CLIMATE CHANGE FOR DECADES AFTERWARDS.

WE CAN'T WAIT ANY LONGER.

THAT CONCLUDES PUBLIC COMMENT FOR ITEM NUMBER THREE.

UM, IF NO OTHER, UH, COMMENTS FROM MY COMMITTEE MEMBERS, UH, WE CAN ALL LET 'EM TAKE A VOTE.

COUNCIL MEMBER DUNIN AYE.

VICE CHAIR URANGA AYE.

CHAIR, RICK SODI.

AYE.

MOTION CARRIES.

UM, NEXT ITEM PLEASE.

ONE SECOND.

ITEM FOUR IS A RECOMMENDATION TO RECEIVE AND FILE A LIST OF FOLLOW-UP ITEMS FROM THE BUDGET HEARINGS AND OR BUDGET OVERSIGHT COMMITTEE MEETINGS.

IF I CAN GET A FIRST AND A SECOND VERBALLY PLEASE.

SO MOVED.

SECOND.

DUG IN AS A FIRST.

ANG SECOND.

[4. 24-54547 Recommendation to receive and file a list of follow-up items from the Budget Hearings and/or Budget Oversight Committee meetings. Suggested Action: Approve recommendation. ]

GREAT.

UM, AND I BELIEVE THAT WAS SENT OUT AS AN AN EMAIL TO ALL THE COMMITTEE MEMBERS.

THIS IS A QUESTION TO STAFF.

NO.

ANY FOLLOW UPS? UH, NO.

THIS DOCUMENT IS JUST A RESPONSE TO QUESTIONS FROM THE BUDGET OVERSIGHT COMMITTEE MEETING ON AUGUST 13TH.

IN ADDITION TO, UH, QUESTIONS OR COMMENTS RAISED BY MEMBERS OF THE COUNCIL AT THE BUDGET HEARING ON AUGUST 13TH AS WELL.

OH YEAH, THAT'S WHAT I WAS ASKING.

THAT WAS SENT OUT, UM, ALREADY TO, THAT WAS MADE, THAT WAS ALREADY MADE PUBLIC.

CORRECT.

THAT WAS CLARIFIED.

UM, ANY QUESTIONS FROM MY, UM, COMMITTEE MEMBERS RE REGARDING THOSE RESPONSES? SEEING NONE, UH, WE CAN GO AHEAD.

WE CAN DO PUBLIC COMMENT.

IF THERE ARE ANY MEMBERS OF THE PUBLIC THAT WOULD LIKE TO PROVIDE PUBLIC COMMENT ON ITEM NUMBER FOUR IN PERSON, PLEASE LINE UP AT THE PODIUM.

AND IF IN THE ZOOM, PLEASE USE THE RAISE HAND FEATURE NOW OR DIAL STAR NINE OF CALLING IN.

WE HAVE ONE IN PERSON.

MY NAME IS CHRISTOPHER COVINGTON.

GOOD AFTERNOON.

UM, IN REGARDS TO THE BUDGET FOLLOW-UP ITEMS, UM, I'M WONDERING IF THIS IS GONNA BE A RECURRING ITEM, UH, FOR THE BUDGET OVERSIGHT COMMITTEE.

UH, IF SO, UH, I WOULD LIKE TO ENCOURAGE THAT.

UM, SOME QUESTIONS BE BUILT INTO SAFE PASSAGES AND VIOLENCE PREVENTION.

UH, VIOLENCE PREVENTION FUNDING IS A COST SAVING INVESTMENT IN THE CITY.

IT FREES UP OUR, UM, POLICE DEPARTMENT TO ACTUALLY SOLVE CRIME.

UM, AND WE NEED THOSE SERVICES TO CONTINUE.

MANY OF THOSE FUNDINGS ARE DRYING UP.

UH, I KNOW THAT WE'RE RELYING ON SURPLUS FUNDING TO CONTINUE THESE PROGRAMS MOVING FORWARD.

HOWEVER, UH, WE CANNOT HOPE AND WISH FOR THOSE DOLLARS TO COME OUT.

UH, WE REALLY NEED TO SEE, UH, DEVELOP A PLAN IN THIS BUDGET CYCLE TO PROTECT AND INCREASE FUNDING FOR VIOLENCE PREVENTION PROGRAMS IN THE HEALTH DEPARTMENT.

UM, AND THAT CONCLUDES MY COMMENT.

THAT CONCLUDES PUBLIC COMMENT FOR ITEM NUMBER FOUR, AS THAT IS OUR FINAL ITEM.

UM, I WILL OPEN IT UP TO, UH, NON AGENDA, UH, PUBLIC COMMENT.

WOULD YOU LIKE TO TAKE A VOTE CHAIR? OH, THAT PROBABLY WOULD BE GREAT TOO.

COUNCIL MEMBER DUGGAN.

NOW WE CAN GO TO, UH, PUBLIC COMMENT ON NON AGENDAS ITEMS. IF THERE ARE ANY MEMBERS THAT WOULD LIKE TO PROVIDE NON-AGENDA, PUBLIC COMMENT IN PERSON, PLEASE LINE UP AT THE PODIUM AT THIS TIME.

AND IF THERE ARE ANY IN THE ZOOM THAT WOULD LIKE TO PROVIDE NON-AG AGENDA, PUBLIC COMMENT, PLEASE USE THE RAISE HAND FEATURE NOW OR DIAL STAR NINE.

IF CALLING IN, WE HAVE IN PERSON, FIRST PERSON YOUR TIME STARTS NOW.

GOOD AFTERNOON, MEMBERS OF THE BUDGET OVERSIGHT COMMITTEE AND STAFF.

MY NAME IS NICK RUSSO.

UM, I'M THE PROUD CEO OF PEDAL MOVEMENT.

UH, WE'RE A LOCAL BUSINESS AND THE CURRENT OPERATOR OF THE CITYWIDE LONG BEACH BIKE SHARE PROGRAM.

AMONG OTHER THINGS, UM, PEDAL MOVEMENT IS A TRUE LONG BEACH SUCCESS

[01:15:01]

STORY.

WE WERE FOUNDED IN LONG BEACH.

WE WON A CONTRACT FROM THE CITY OF LONG BEACH.

WE HIRED LONG BEACH RESIDENTS, UH, TO HELP US MAINTAIN, UH, THE INCREDIBLE BIKE SHARE PROGRAM THAT WE HAVE.

UM, AND WE HAVE BECOME STATEWIDE LEADERS IN THE MOVEMENT FOR SUSTAINABLE ACTIVE TRANSPORTATION.

UM, OUR TEAM OF NEARLY 30 PEOPLE OPERATES A 16 HOUR A DAY WAREHOUSE, UH, REPAIRING FINE TUNING AND REDISTRIBUTING BIKES ACROSS THE CITY, AS WELL AS A 12 HOUR A DAY CALL CENTER WHERE WE MAINTAIN A 97% CUSTOMER SATISFACTION RATE.

WE'D LIKE TO CALL, UH, YOUR ATTENTION TO THE PUBLIC WORKS PROPOSAL THAT SEEKS TO BRING THIS OPERATION IN-HOUSE.

UM, WITH ONLY ONE THIRD OF THE STAFF THAT WE CURRENTLY HAVE ALLOCATED TO THIS IMPORTANT WORK, SPECIFICALLY IF PASSED THE BUDGET PROPOSAL, UH, WOULD REDUCE OUR OUR WORKFORCE BY 80%, LEAVING NEARLY TWO DOZEN LONG BEACH RESIDENTS WITHOUT A JOB.

THE NEW POSITIONS CREATED UNDER THE PROPOSAL ARE BUDGETED AT RATES LOWER THAN WHAT WE CURRENTLY PAY OUR EMPLOYEES, WHICH UNDERMINES OUR TEAM'S LIVELIHOODS AND SETS A CONCERNING PRECEDENT FOR WAGE STANDARDS BOTH IN OUR CITY AND AT THE, IN THE INDUSTRY AT LARGE.

UM, WITH FEWER THAN HALF OF THE EMPLOYEES CURRENTLY EMPLOYED BY PETAL MOVEMENT, THE PROPOSED BUDGET ALLOCATION WOULD SEVERELY IMPACT SERVICE AND RESPONSE TIMES, ESPECIALLY IF THESE POSITIONS ARE CALLED TO SUPPORT OTHER OPERATIONS AND PROGRAMS WITHIN THE DEPARTMENT.

AS HAS BEEN SUGGESTED, THE CITY AND COMMUNITY DESERVE A DEDICATED AND EXPERIENCED TEAM OF SUBJECT MATTER EXPERTS, ESPECIALLY FOR A PROGRAM THAT HAS BEEN A HALLMARK OF EFFICIENCY AND RELIABILITY AND WILL BE EVER MORE ESSENTIAL TO THE FABRIC OF OUR TRANSPORTATION SYSTEM IN THE COMING YEARS.

FOR NEARLY 10 YEARS, PEDAL MOVEMENT HAS BEEN A REALLY, VERY MUCH PROUD PARTNER WITH THE CITY OF LONG BEACH.

UM, WE'VE HELPED TO BUILD AND SUSTAIN YOUR VERY SUCCESSFUL AND RESILIENT BIKE SHARE PROGRAM.

WE HOPE THAT THE CITY COUNCIL WILL LOOK AT THIS PROPOSAL AND ASK STAFF TO REMOVE THIS LINE ITEM FROM THE BUDGET TO MAINTAIN SERVICE AND RELIABILITY FOR THE BIKE SHARE PROGRAM BY REMOVING THIS LINE ITEM FROM THE BUDGET.

THERE IS NO FINANCIAL COST OR RISK TO THE CITY.

IT'S SIMPLY AN OPPORTUNITY TO MAINTAIN THE CURRENT LEVEL OF SERVICE AS WELL AS THE EXPANSION EFFORTS THAT ARE UNDERWAY WITH THE TRUSTED PARTNER THAT YOU HAVE.

THANK YOU FOR YOUR TIME AND CONSIDERATION.

NEXT PERSON, YOUR TIME STARTS NOW.

WHEN COMMUNICABLE DISEASE RESPONSE IS INSUFFICIENT.

HELLO, COUNCIL MEMBERS.

MY NAME IS RILEY CARPENTER AND I HAVE BEEN AN EMPLOYEE WITH THE CITY OF LONG BEACH FOR THE PAST FOUR YEARS.

I'M CURRENTLY EMPLOYED BY THE COMMUNICABLE DISEASE SURVEILLANCE AND CONTROL, UM, DIVISION AS AN EPIDEMIOLOGY PROGRAM SPECIALIST.

UH, I'M HERE AGAIN REGARDING THE LOSS OF FUNDING OF ABOUT 70 INDIVIDUALS, INCLUDING MYSELF AT THE HEALTH DEPARTMENT EFFECTIVE SEPTEMBER 30TH.

THE MAJORITY OF THESE INDIVIDUALS, AGAIN, INCLUDING MYSELF, ARE CAREER STAFF, MEANING THAT WE ARE NOT TEMPORARY, UH, OR NON-CAREER.

UH, EVEN IF JOBS ARE FOUND ELSEWHERE IN THE CITY FOR THESE INDIVIDUALS, IT STILL LEAVES BEHIND A CRITICALLY UNDERSTAFFED TEAM TO PERFORM THE DUTIES NECESSARY FOR ACCREDITATION AND TO FULFILL REGULATORY RESPONSIBILITIES OF THE HEALTH DEPARTMENT.

THIS IS NOW OUR THIRD ROUND OF LAYOFFS AND LOSS OF FUNDING SINCE 2022.

WITH ONGOING OUTBREAKS SUCH AS THE TUBERCULOSIS OUTBREAK AND LARGE UPCOMING EVENTS SUCH AS THE 2028 OLYMPICS, WE NEED TO INVEST IN PROTECTING OUR COMMUNITY FROM THE THREAT OF COMMUNICABLE DISEASE.

AND WE CANNOT AFFORD TO LOSE MORE STAFF WHEN COMMUNICABLE DISEASE RESPONSE AND INTERVENTIONS ARE SUCCESSFUL.

OUR IMPACT OFTEN GOES UNNOTICED.

OUR INVISIBILITY IS A TESTAMENT TO OUR EFFECTIVENESS.

OUTCOMES CAN BE DEVASTATING FOR COMMUNITY MEMBERS, INCLUDING SEVERE ILLNESS AND EVEN DEATH.

TO ENSURE THE CONTINUED HEALTH AND SAFETY OF OUR COMMUNITY, WE ARE REQUESTING YOUR SUPPORT FOR INCREASED AND SUSTAINED INVESTMENT IN THE VITAL DUTIES THAT WE PERFORM.

AND WITH OUR PROJECTED LOSS OF FUNDING DATE BEING SEPTEMBER 30TH, I URGE YOU TO TAKE IMMEDIATE ACTION TO ENSURE THAT THESE PUBLIC HEALTH PROFESSIONALS ARE ABLE TO CONTINUE SERVING THE COMMUNITY IN THE SAME CAPACITY THAT THEY ARE CURRENTLY.

THANK YOU FOR TAKING THE TIME TO LISTEN TO MY STORY AND I HOPE YOU'LL SUPPORT LONG BEACH HEALTH STAFF.

NEXT PERSON.

OUR FRIEND RILEY, UH, TELLS ME IT'S NOT NECESSARILY WHAT THEY ARE TRAINED IN.

HELLO, UH, HONORABLE COMMITTEE, SASHI MORRIN BUSINESS REP WITH THE I AM DISTRICT 9 4 7 REPRESENTING, UH, LOCAL LODGE EMPLOYEES, 1930 EMPLOYEES, WHICH, UH, RILEY IS ONE OF.

AND, UH, SPEAKING TO THE HEALTH DEPARTMENT AND, UH, HOPEFULLY, UH, YOU GUYS ARE ABLE, ARE WORKING, FINDING SOME SUCCESS TO MAKE THE FUNDING MORE STABLE.

UH, FINDING ROOM IN THE GENERAL FUND.

UH, WE ARE WORKING WITH THE DEPARTMENT STAFF, SO THERE ARE MEMBERS THAT ARE FINDING, UH, UM, NEW POSITIONS.

UH, BUT AS

[01:20:01]

SO THEIR RE THEIR TALENTS, UH, MAY NOT BE, UH, SERVING THE COMMUNITY AS EFFECTIVELY AS WE WANT THEM TO.

SO AGAIN, LET'S FIND A WAY TO MAKE THE HEALTH DEPARTMENT PART OF THE GENERAL FUND SO WE CAN, UH, RETAIN SOME OF THESE SERVICES THAT ARE SO VITAL TO THE HEALTH OF THE COMMUNITY.

THANK YOU MADAM CLERK.

UM, MY NAME IS CHRIS COVINGTON AGAIN.

UM, I JUST HAVE A FEW ITEMS OFF THE AGENDA TO BRING TO YOUR ATTENTION.

FIRST, I WANNA GIVE DEEP APPRECIATIONS TO THE BUDGET TEAM IN HOUSE FOR YOUR EFFORTS FOR HAVING THE COMMUNITY BUDGET COMMITTEES.

COMMUNITY MEETINGS LAST NIGHT WAS THE MOST ATTENDED IN MY OPINION.

UM, AND IT WAS THE FIRST TIME THAT VIOLENCE PREVENTION, UH, OUTRANKED ALL THE OTHER PRIORITIES IN THE CITY.

UM, SO IT IS A PRIORITY COMING FROM THE COMMUNITY SESSIONS.

I'M LOOKING FORWARD TO THE REPORT AS TO HOW IT COMPARES TO THE OTHER MEETINGS AND THEN ALSO THIS, THE ONLINE SURVEY.

UM, IN REGARDS TO TODAY'S TIMING OF THE MEETING, UM, THERE WASN'T SIGNIFICANT OR SUFFICIENT NOTICE THAT THERE WAS GONNA BE A TIME CHANGE.

UM, MANY OF THE FOLKS WHO I WAS IN COMMUNICATIONS WITH, UH, WHO WERE PLANNING TO BE HERE, WERE EXPECTING TO BE HERE AT THREE O'CLOCK.

UM, AND THE MEETING STARTED AT ONE.

UM, SO WHEN WE'RE TALKING ABOUT COMMUNITY ENGAGEMENT, WE HAVE TO MAKE SURE WHEN THESE MEETINGS ARE SET, THAT THERE'S ENOUGH ADVERTISEMENT THAT GOES OUT, WHETHER IT BE IN YOUR NEWSLETTERS ON SOCIAL MEDIA, THE CITY'S SOCIAL MEDIA, ET CETERA, SO THAT WE CAN HAVE COMMUNITY, UH, PRESENT.

UM, I ONLY KNEW BECAUSE I WAS PREPPING FOR IT AND THEN I HAD TO LEAVE MY HOUSE LIKE 15 MINUTES BEFORE THE MEETING.

UM, SO IN REGARDS TO VIOLENCE PREVENTION AS A WHOLE, UH, WE ARE DOING RESEARCH INTO HOW TO HAVE A ROBUST VIOLENCE PREVENTION PROGRAM FOR THE CITY OF LONG BEACH.

UM, WE'RE ESTIMATING A ROBUST, UM, PROGRAM WOULD BE AT COST AN ESTIMATE OF $15 MILLION.

UH, EARLIER TODAY YOU HEARD, UH, AND ASKED TO EXPLORE UNHEALTHY UH, FOOD AND UNHEALTHY SODA TAX AND BERKELEY AND OAKLAND, THEY PASSED IT.

UH, THEY GAIN 9 MILLION TO 10 MILLION ANNUALLY FROM THAT TAX.

UH, WE ARE EQUIVALENT SIZE OF OAKLAND AND, UH, WE COULD BE POTENTIALLY BRINGING IN $10 MILLION.

UH, WE HAVE ABOUT A TWO YEAR RUN RUNWAY TO PREPARE TO GET IT ON THE NEXT GENERAL ELECTION CYCLE SO THAT THE VOTERS CAN ACTUALLY VOTE ON THIS.

AND I WOULD HOPE THAT U THREE UM, CAN TAKE THIS UP AS A PRIORITY IN REGARDS TO THIS YEAR'S BUDGET CYCLE.

UM, PROTECTING AND INCREASING THE AMOUNT THAT GOES TO VIOLENCE PREVENTION IS, UH, INCREDIBLY IMPORTANT.

WE'RE SEEING VIOLENCE INCREASE, THE SHOOTINGS AND STABBINGS ARE INCREASING, AND YET OUR PROGRAMS ARE BEING SLATED TO BE DECREASED OR BE AT REDUCED CAPACITY UNTIL FUNDS COME AVAILABLE.

UM, WE'RE ESTIMATING TO CONTINUE AT THE BASE FUNDING THAT WE'RE CURRENTLY OPERATING.

WE NEED $2 MILLION AND WE'RE REALLY APPRECIATIVE OF THE MAYOR AND THE CITY MANAGER FOR ALLOCATING $300 TOWARDS VIOLENCE PREVENT IN THE HEALTH DEPARTMENT.

BUT THAT'S 300,000 OF A NEED OF 2 MILLION.

SO I'M ASKING IF ON THIS COMMITTEE CAN CONSIDER, CAN ADVOCATING AND FIGHTING FOR, UH, AT LEAST $2 MILLION, PLEASE DROP UP YOUR COMMENT.

THAT CAN BE DONE.

UH, AT LEAST GET US TO A MILLION DOLLARS SO THAT WE CAN SUSTAIN THE, UM, CURRENT PROGRAMS THAT ARE ACTUALLY PREVENTING, UM, VIOLENCE AND ALSO FREEING UP TIMES IN OUR POLICE DEPARTMENT TO ACTUALLY SOLVE REAL CRIMES.

UH, THANK YOU SO MUCH.

A REALLY QUICK, UM, I DID SEND OUT A MEETING REQUEST WITH EACH OF YOUR OFFICES.

THANK YOU CTHE DUGGAN FOR ACTUALLY MEETING WITH ME AND RESPONDING SO QUICKLY.

I'M STILL WAITING, UH, FOR MEETING TIMES.

FOR THE REST OF YOU, WE WOULD LIKE TO HAVE A CONVERSATION TO REALLY DIVE INTO THESE, UM, ITEMS AND PRIORITIES AND SEE HOW WE CAN MAKE THAT HAPPEN IN THIS YEAR CYCLE.

THANK YOU SO MUCH.

THAT CONCLUDES PUBLIC COMMENT FOR NON AGENDA PUBLIC COMMENT.

UM, THANK YOU EVERYONE THAT SPOKE.

UM, SEEING, UH, ANY ADDITIONAL COMMENTS FROM MY, MY COUNCIL COLLEAGUES? SEEING NONE, UM, I WILL ADJOURN THE MEETING.