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Prop D: Undercutting Port Assets By Up To $150M by Keith Higginbotham | City Beat | 08.16.10 |
+  10:00am | A City Council and Mayor-backed contract with a major oil company that is at the heart of a November ballot proposition seeking to change the City Charter may have undercut potential port oil profits by as much as $150 million over the next ten years, despite repeated objections raised by state and Port of Long Beach officials. While the contract will boost revenues to the nearly bankrupt City Hall-managed Tidelands Fund, the loss to the port could hamper future port development projects, expose the port to additional debt, and threaten the port's business competitiveness at a time when port industry competition is growing rapidly. According to supporters, Proposition D is tacitly about minor changes to the relationship between City Hall and the city's Harbor Department, which manages the port. However, Prop D, and the oil contract behind it, will also shift a great deal of cash from what is one of the leading economic and job creating engines in the Long Beach region to the control of the fiscally-challenged City Hall. Through Prop D, Mayor Foster and the City Council are asking voters to approve two changes to the City Charter: a change to the formula used to calculate how much port profit the city can annually request; and, a change removing control over port-area oil properties from the port's Board of Harbor Commissioners and turning this authority over the the City Council. The first part stipulates that the annual transfer of port profits be based on 5-percent of the port's gross earnings. Currently, the port transfer is based on 10-percent of the port's annual profits. The Charter amendment, if approved, will increase the port's annual transfer to the city by several million dollars a year, depending on port revenues. However, at the heart of the second portion of Prop D is a contract with Occidental Petroleum Co., or Oxy, that was approved in November 2009 by the City Council. The impetus for this new contract was a 2006 proposal from Oxy to invest in new oil production in the harbor tidelands area in exchange for a share in the profits of any new oil production generated. The profit incentive, the argument goes, would justify additional production investment, which in turn would increase oil production and the amount of oil profits going to the city. "Without ongoing capital infusion, the oil production will decline and [the city] may not be able to withstand the next downturn in oil prices," Long Beach Oil and Gas Department's manager of oil operations Curtis Henderson explained to port officials in an April 2009 e-mail obtained by LBPOST.com. These tidelands oil operations are split into two distinct areas—the West Wilmington Field, which basically encompasses the port area and land north of the port, and the Long Beach Unit, which encompasses the four oil islands in Long Beach Harbor . The Tidelands Oil Production Company, or TOPKO, is the city's oil production contractor for the West Wilmington Field and THUMS is the contractor for the oil islands. Oxy owns both—the firm purchased TOPKO in 2006 and THUMS in 2000. Due to geologic fault lines running north and south, the oil reserves beneath the West Wilmington Field sit in roughly five isolated regions. Ownership of each of these "fault blocks" is split in differing proportions between the state, the city, the port and various others. According to an internal port document obtained by LBPOST.com detailing the ownership of the oil rights in these five regions, the state owns a total of 61-percent, the port owns 31-percent, the city owns 7-percent and various unidentified others own 1-percent. However, the split of profits from the roughly 450 active wells in the West Wilmington Field are dictated by two contracts—one between Oxy and the state, and one between Oxy and the city (which includes the port's interests). Under the current contract between the state and Oxy, the state receives 95-percent of the oil profits from state-owned reserves and Oxy receives 5-percent. Under the previous city contract with Oxy, the port received about 95 percent of the profits from existing oil production in city-owned reserves while the city received about 5 percent—Oxy received an administrative fee but no net profits from the city portion of the West Wilmington Field. Under the terms of the new contract between Oxy and the city, which took effect Jan. 1, 2010, profits from any new production will be now be split between City Hall and Oxy, with no money going to the port. The city will receive 51-percent of these new profits while Oxy will receive 49-percent. The lions share of these new profits for the city will go to the City Hall-managed Tidelands Fund, with a small portion going to the General Fund. Due to this delineation between existing and future oil production, it was critical while formulating the terms of the new Oxy contract to determine exactly what the future production of existing wells was. Oxy proposed using an estimate of what is called the base production amount. This base amount is a mathematically derived production level for any given point in time. For example, if this calculated base amount was 1,000 barrels of oil for the month of July, 2015, this amount is all that is covered under the old contract terms. Even if all the wells were drilled 50 years ago, any oil produced over the base amount of 1,000 barrels would be considered new production and covered under the revenue split of the new contract. In 2007, the State Lands Commission (SLC), the Long Beach Department of Oil and Gas (LBGO), and Oxy formed a technical team to work on developing a base production estimate for the West Wilmington Field. While the state participated in the technical team's effort, the SLC participants grew dissatisfied over the eight-month long effort. In an October 2009 letter to LBGO's Henderson, a senior SLC official explained, "the SLC did not fully agree with the methodology used by the [technical team] to forecast future production from the West Wilmington Field." After the technical team released its findings, the SLC decided to develop a separate estimate in conjunction with the port, which was looking to develop its own estimate. In an April 2009 e-mail from port Chief Financial Officer Sam Joumblat to LBGO's Henderson, Joumblat explained why the port sought its own base production estimate. "It is [the port's] fiduciary responsibility to get an independent appraisal of our asset before we sell to Oxy," wrote Joumblat. Through their various consultants, the SLC and the port eventually came up with their own joint estimate, while Oxy and LBGO supported the technical team estimate. The difference between the two estimates, each based on differing methodology, was substantial. According to internal port documents obtained by the LBPOST.com, the Oxy-supported estimate was 62-percent lower than the SLC/port estimate. If the SLC/port estimate was correct, then over the next decade each existing well would produce vastly more oil than predicted by Oxy and LBGO. But in this scenario, the base amount in the new contract would be 62-percent lower than actual production and a tremendous amount of oil from existing wells would be covered by the terms of the new contract. This would greatly increase profits for City Hall and Oxy and conversely reduce what the port might have earned. "Since Oxy is proposing to split profits over the existing reserves, then the lower the existing reserve (the base amount), the higher the amount they will split," wrote the port's Joumblat in a March 2009 e-mail to port senior executives. LBGO had another reason to support the Oxy estimate and discredit the SLC/port methodology—namely, taxes. In an April 2009 e-mail to port officials, LBGO's Curtis Henderson wrote, "The combined tax bill for this year is approximately $18 million. Any agreement offering a different methodology (than the technical team) would be subject to review by the county tax assessor and it would increase [the city's] total bill by at least $10 million." Despite repeated SLC and port objections about the Oxy-supported estimate, City Hall eventually accepted the much lower base amount. The City Council approved the new Oxy contract for future oil production in November, 2009. It utilized the 62-percent lower base amount estimate supported by Oxy and LBGO. Internal port documents show that port officials initially estimated the lower base amount would result in shifting as much as $150 million in potential port profits over ten years to the city. However, based on the average annual port oil profits over the past ten years—about $13.1 million a year—the amount potentially going to the city under the lower base estimate over ten years would be closer to $81 million. The SLC, which is negotiating a separate contract with Oxy for the state portions of the West Wilmington Field, has yet to agree to the same terms as the city—in part due to disagreements with Oxy over the base amount and in part due to disagreements over the profits-sharing split. Under the terms of the city contract with Oxy, if the SLC manages to strike a better deal with Oxy, the terms of the state contract will apply to the city contract. Stay tuned in the coming days for more articles on this issue. Click here to read our policy on covering the Long Beach City Council.
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38 Comments so far.
Naples Resident The Port has demonstrated an inability to manage it's finances for the good of the residents of LB. It needs oversight. LBres Keith, this article is inaccurate. First of all, moving from net to gross while changing from ten to five percent will, according to the City's Financial Management dept (which I notice you don't cite anywhere) would probably not create any significant change in Tidelands revenue - it would just prevent the PORT from cooking the books to hide "net" inside "gross". Also, the oil jurisdiction is already the City's - this measure simply seeks to clarify existing law. Did the port pay you to peddle their position without any rebuttle from the City? Thanks for the scary headline and misleading article! Way to serve the City! Godfather The mayor and his cronies have proven without a doubt that they are unable to operate within their means. This proposal is akin to: Leaving the hen house under the supervision of the big bad wolf. The mayor and the council would prefer to "kill" the "Golden Goose" and feast until they are bloated, instead of patiently waiting for the next delivery of golden eggs. The Port has been a success because it is run like a business unlike city hall. The mayor needs to slow his roll and rethink his position on this issue. After all, it would be a shame for the Port of Long Beach to lose its standings in the maritime industry under Mayor Foster's watch. He would be branded a total failure, the worst mayor in the history of Long Beach. He would rate right up there with former LBPD Police Chief Ed Binkley. Another LBRes The port is responsible for a huge number of Long Beach jobs. If City Hall keeps sucking money out of the port it could put those jobs in peril. helloooooo? Wow, this is not accurate. Editors... anyone? He is confusing two separate issues. Steve Kuykendall The port and surrounding oil fields are assets for all the citizens of California. Long Beach is allowed to manage the assets for the benefit of all Californians. In exchange for this management, we receive a number of benefits: jobs for our community members; lower costs for goods coming through the port for our residents; the job creation from their massive infrastructure projects and the construction and environmental programs financed by their revenue; and current contributions to pay for police and fire and maintenance of the surrounding areas. The city charter amendments and oil contracts will probably be challenged in the courts and may end up going to the State Supreme court. The city's desire for more current cash and redesign of the payment formulas appear to be short sighted, to handle an imediate need, rather than the long-term benefits of these assets to all Californians (including Long Beach) and in direct conflict with the California Constitution. There is a limit to reasonable revenue sharing from the port for reimbursement for city services. This combination of City Charter amendment and renegociated contracts with OXY are over the not to our long-term benefit either as residents of Long Beach or Californians. Keith H Thanks as always for all the comments. LBres: According to the City Auditor's own 8-3-10 council meeting handout of port's FY2009 finances (which is just a copy of the port's own FY2009 audited financials) the port had gross revenues in FY2009 of $311.3 million--5 percent of this would be $15.5 million. The FY2009 transfer, based on 10 percent net profit, is $12.4 million. I don't know if Financial Management considers $3.1 million significant, but I think most people would. And Financial Management was not cited because they had nothing to do with the oil issue. And, if the oil jurisdiction is already the city's (often cited as arising from 1301 and 1303 of the Charter) then why does City Hall need a City Charter amendment to take authority away from the Harbor Commission? Keith H Thanks for the comments. RE:helloooo?--I always try to respond to problems readers have with my articles. Perhaps if you could identify your concerns, I could respond. However, there is no confusion here. Prop D seeks to make two changes to the City Charter: one about the port transfer and one about oil property authority. The need for the oil authority change grew directly from the oil contract with Oxy and the negotiations that led to it. The oil authority and oil contract are interrelated. Shemp Keith did a great job of explaining an arcane but critical subject. Everone in LB should read this before going to the polls. The Port is a huge source of jobs in LB and the region and this gouging effort by the City is just not right. I believe that the Port actually BOUGHT a significant portion of the oil lands under their control from the Union Pacific with their own money and continued to clean them up and operate them when oil was less than $15 per barrel. The City really has no right to do this and hopefully the State Lands Comm and the AG will stop it and the net/gross formula change before its too late. As to Naples resident's comment, it is Port money that will be used to stabilize your seawalls. A little gratitude would'nt hurt. Bixby Knolls Res LBres is correct. Anyone seeking a complete understanding of the issue should view the city coucil live video of Aug. 3 2010 beinging at 2hr and 20 min. CHARLIE HEY - They do what they have to do! Sounds good More money for tidelands projects in the city and less for port expansion. That sounds like a good thing. LetsBeABeachCity I do not understand this sentiment that LB needs the Port to keep expanding. Port expansion has contributed to polluting our air and water for years while benefiting mostly people that live outside the city. Perhaps I'm wrong in assuming this but it seems like all the money the Port contributes to the city is to clean up problems it helped to create. Every longshoreman I know lives outside of the city boundaries. Granted that is only a few, and maybe it is anomaly, but it seems that LB residents' dependence on Port jobs is largely overestimated by many readers. In the meantime the city should be doing what it can to attract future jobs in tech, healthcare, and science because those will be the best jobs in future, if not already. To "let's be a beach ci Very well said. observer Last week the PT did a story about automatic pay increases mandated by the City Charter that city officials claimed lack of knowledge. Today the LB Business Journal did a story about 574 city employees who make over $100,000 a year. The Aquarium has a debt of $117 milllion (requiring another bailout) and plans a $50 million expansion. We seem to demand more accountabilty from the Port than we do elected officials and other institutions. Citizen for a better LB Keith H: I notice that the Port of LB is a frequent and prominent advertiser in the LB Post. In the interest of open & complete disclosure what is the amount that the Port gave the LB Post in last 12 months? Keith H Thanks for the comments. Re:LetsBeABeachCity - If by expanding you mean the port growing its boundaries, well, the port hasn't done this in any large way for quite some time--nor is it likely to in the near future. The development that the port keeps talking about is actually redevelopment with a small amount of land creation in the harbor, i.e., filling in some existing slips and such. For example, the port's Middle Harbor Project will fill in about 55 acres of slip area and consolidate two pier areas into a single terminal. However, this would not increase the boundaries of the port where it meets the surrounding neighborhoods. On the other hand, if by expanding you simply mean increasing cargo volumes through the existing or redeveloped facilities, that I am afraid, will continue for some time as long as the cargo continues to come here. As to money from the port, the amount the port has paid in environmental programs is a drop in the bucket compared to the $10 billion a year that the port and port-handled cargo generates in local, state, and federal tax revenue. As for the jobs numbers (30,000 LB jobs directly related to the port), I know the person who develops those numbers and have talked to him at length in the past about how he comes up with them. I have never seen or heard anything that would make me believe they are not very accurate, especially at the city level. The further away from Long Beach you get with the estimates, the more I think you have to figure them as general estimates. Naples Resident Shemp: I would gladly assume responsibiltiy fo the maintenance of my seawall in exchange for fewer trucks and less pollution in the community. I will also thank you to address me in a civil manner and not make assumptions about my lifestyle. This is an emotionally charged topic and we must all be on guard to ensure that the discussion does not disintegrate into name-calling. Ryan ZumMallen, Editor @Citizen for a better LB, thank you for commenting. Currently, the Port of Long Beach is not advertising with the LBPOST.com. We always disclose when an advertiser is the topic of an article. Keith H Re: Citizen -- To follow up on Ryan's comment, I have no idea. I have nothing to do with advertising and who does or does not advertise has never been mentioned to me. The management of LBPost has always afforded me free reign to cover whatever news I see fit to cover. LB Native After all of the comments posted, I think Naples Resident and LBres really summed things up nicely. This article is poorly written, the point obviously slanted, the facts not well produced, no info from the City's point of view, etc. etc. The City of Long Beach has suffered through many poor leaders over the years, through the 60s & 70s so many bad decisions were made that we will be working to overcome them for many years to come. Bob Foster, Pat West, and Laura Doud should be hailed as heroes in a battle to bring this City to what is could/should be. The Port is one very good example of politics gone awry. It is a department of the City and needs to act as such--these measures are simply (and hopefully only the first) steps to bring the reigns in on what has been let run on far too long! Honkeydog to Ryan Z: I like the Post too much to press the issue of sponsorship, but a follow-up article would seem prudent, no?; to Keith H: thou dost protest too much--me thinks :-) LetsBeABeachCity "As for the jobs numbers (30,000 LB jobs directly related to the port), I know the person who develops those numbers and have talked to him at length in the past about how he comes up with them." Who came up with that number, how did they come up with them, and what do they mean specifically? Out of that alleged 30K how many of those people actually live in LB? Are you saying that My point was that many of those that benefit from the Port don't have to deal with the cons like those of us that actually live here. Also, if we're just throwing out actual figures without providing methodologies then this guy I know says it's only 2,000. Who is he and how did he come up with that number, well, apparently that doesn't matter. By the way is this your LinkedIn profile? Says here that Keith Higginbotham was in the past an "Advertising and Multimedia manager" for the Port of Long Beach. http://www.linkedin.com/pub/keith-higginbotham/12/230/53b Belmont Heights Resident I found the article fascinating about the upcoming Proposition D. I have to admit, my bias is to assume that BOTH the port and city aren't run in the most financially responsible way. For that reason, I went and watched that Aug 3 city council meeting, and I am surprised to hear that the Port rebuffed the City Auditor. Much as I am skeptical about government agencies being run efficiently, I think the solution is to bring in more sunshine and transparency. I don't think the Port should accept government cheese (Fed and State $) when it suits them, then claim to be 'run like a business' at others. Let's face it, the Port of Long Beach is a public entity, and the way it's run is subject to public oversight and auditing. So the first part of Prop D sounds like a good thing; there's a perverse incentive to waste money when payments based on Net instead of Gross. Now the second part, related to this Occidental deal sounds a bit dubious too. You're telling me that the state gets 95% of the revenue for their Oxy contract? And that in the current city contract 95% goes to the port and 5% goes to the city, with a fee paid to Oxy? THAT sounds like some savvy negotiation that benefits the public. (That oil's been there for millions of years. If only that $$ from extracting the oil went into a fund that invested in the long-term good of the people.) I agree with @Steve Kuykendall that this part of Prop D seems very short sighted. Keith H Thanks for the comments. Re: LB Native - Your comments about the port are simply incorrect. The port is run as a business and the Harbor Department was expressly given a vast amount of autonomy when created by City Hall. Agree or disagree with the Harbor Department's management style or decisions, all you have to do is look at the port balance sheets to see their success. Long Beach is regarded worldwide, both in financial circles and the shipping industry, as one of the best run U.S. ports. And, while it is true that the port is managed by a city department, that department has a primary responsibility to operate the port under the terms of the Tidelands Trust Act in which the state granted the port lands to the city in 1911. Those terms, and numerous state Supreme Court rulings since, have not only affirmed that the City (and vis-a-vis the Harbor Department) is the trustee of the state in regards to the port, but also that the port and its revenues must be utilized for the benefit of all the citizens of the state--not municipal interests. Any fiduciary responsibility the Harbor Department has to the city is secondary. And, I will second your motion about City Auditor Doud. LetsBeABeachCity Whoops, disregard that question, I didn't even need to research what your ties are to the Port because it says it in the top right of this page. "Prior to this, [Keith Higginbotham] served as the Advertising and Multimedia Manager for the Port of Long Beach." After that you wrote for a shipping trade magazine. Keith clearly has a very biased view on this subject and I would advise other readers to just disregard it as it is basically lobbyist speak. Keith H Honkeydog: We do plan to follow up on this. As for protesting too much, I hope my responses don't seem that way. I am just trying to be responsive to readers comments. LetsBeABeachCity: I was trying to be succinct in my comment, but if you want to know more details about how the jobs figures are calculated, send me an email (keith@lbpost.com) and I can try to give you more information or point you to the person directly. As for working at the port, you are totally correct. For five years. I make no bones about it and it is included right in my bio at the top of this page. I left to return to writing about the transportation industry. Keith H LetsBeABeachCity: Whoa, Tex. I am trying to answer your questions in a civil manner. First, you know nothing about me, what I believe, who I like or who I support. You have no idea what I did at the port, why I left the port other than what I told you, or even how I feel about the port. If you want to talk about the issue, that's fine, otherwise might I suggest you confine your comments to what you do know. LetsBeABeachCity Keith, I don't know you, my opinions of your stance on this issue is based only on what you have provided us on this page. As I first read through this you struck me as person who thinks the Ports priorities are more important than the city's. You come across in your writings to be one of these people that think with out the Port, Long Beach would not exist. Your assertions in the comments section and finding out that you used to get paid to help the Port out with their marketing campaigns then later wrote for a shipping trade magazine furthered my belief in this. I am not accusing you of being a bad person, just that you are biased on this subject. Keith H LetsBeABeachCity: I would like to be able to assure you that the opinions you have are incorrect, but I'm not sure how to do that. Just because I worked for the port years ago does not mean I am inclined toward them one way or the other. Based on the hundreds of articles I have written on them over the years, there are many people at the port that are no doubt laughing at the irony of you suggesting that I am somehow pro-port. They said the same thing about me then that you are saying now, just that I was anti-port. And, just so there is no misunderstanding, American Shipper is not a publication run by the shipping industry. It is a very highly regarded and independently-owned news publication that reports on the shipping industry. It is often compared to The Economist--just covering a very narrow sector of business instead of business in general. Belmont Heights Resident I have to give kudos to the LBPost for bringing up a discussion on city politics that I just don't get at the PT or other local press. I went and read up on the ballot initiative. http://www.longbeach.gov/civica/filebank/blobdload.asp?BlobID=28275 Sure enough, it looks like the City is saying "the oil's under City land, so the City Council should decide what happens to it, not the Port." And then, they're saying "The Harbor hasn't been acting in the interests of the city, so rather than have worry if the Port's massive expenditures like a new bridge might cut into Net profits, and thus city revenue, let's just collect 5% of Gross Revenue rather than 10% of Net" Quite frankly, I'm not sure if I can find fault with either of these concepts. Now ask me if I like this 51%-49% profit split between the City and Occidental, and I'd have to say that it looks kind of shady at first glance. But you're not going to convince me that the Port is doing me any favors in controlling Oil negotiations. As a Long Beach resident, at least I have the illusion that the folks at the City are my public servants. At at least there's an attempt at sunshine and transparency and accountability. I have no trust at all in the negotiations and dealings that go on at the Port. The port has no accountability to us Long Beach residents. We feel the impact of the pollution more than the rest of the state, the benefits should be more under our control. Overall, I think I will support Prop D. Citizen for a better LB Ryan: Thank you for your response, but it does not answer the question I asked. My question is, what has the LBPost received from the Port of LB over the past 12 months? LB Woman After reading this article and many comments, I checked 8/3 city council meeting video. I have great sympathy for the City Auditor in dealing with the port. In this day of sunshine and transparency, the port emits bad air from a black box. I will vote Yes on Prop D to force the Port to be more open and less arrogant. Me Oh My LB Woman: Arrogant is the City demanding the port use an improper accounting technique (I'm an accountant). Arrogant is the City demanding money from the port earlier than the City Charter specifies. Arrogant is the City stating it has an $18.5M shortfall, counting on getting $12.5M accelerated from the port and then quickly allocating it to seawalls and a breakwater study - still claiming there's a $18.5M shortfall. Now that's arrogant. TH Expensing the transfer to lower the next transfer is not proper. There is nothing wrong with what the city is proposing from an accounting prespective. At the end of the day, this looks to me like port stakeholders (mostly non-LB residents) are upset because the city is finally starting to realize that while the port may benefit the region it is a myth to think that it is a net benefit for the citizens of Long Beach. money talks First, thanks for bringing up this issue as it is probably not on anybody's radar and should be. Second, i am really confused and will do my own research now. Third, when i want to get to the bottom of things....FOLLOW THE MONEY.... East Side LB Resident While the port may benefit the state as a whole, Long Beach residents suffer the immediate consequences of increased pollution and traffic. Since we, as residents, have to live with this in our back yards, the city should have more control and oversight. Measure D will ensure consident funding with which the city, by law, can use only to improve our coastline and keep our beaches and communities clean. There's nothing wrong with that. Chris Garner Keith, I was extremely dismayed that you would publish your article regarding a City oil contract and not take the time to verify the accuracy of the story with Long Beach Gas and Oil, the City agency directly involved in the lengthy negotiations and responsible for its implementation. While the article contains many significant errors and misconceptions, the two primary contentions are that this specific oil contract will reduce Harbor Department revenues by up to $150 million and that Prop D is a direct result of this oil deal. Neither is an accurate portrayal. Oil Contract - Approved 9-0 by the City Council in November of 2009, the new OWPA oil contract provides many significant benefits to the City including incremental revenue estimated to be about $100 million over the next ten years including oil sale revenue, taxes, and fees, the infusion of a minimum of $20 million of private capital into local oil exploration and drilling, the creation of many high paying jobs for the local economy, the reduction of the City's risk and liability, and does all this in an environmental neutral manner. In addition, the new OWPA contract actually frees up Harbor Department cash as Oxy will front the drilling investment with its own capital rather than the Harbor Department doing so as had been the case in the past. In exchange for its capital investment and assumption of all risk, Oxy is provided 49 percent of the resulting incremental revenue. The OWPA formula base was modeled on the other OWPA that has been operational since 1994 and has successfully resulted in about one BILLION dollars in incremental oil revenue for the State, the City and Oxy. Without the provision of a sufficient financial incentive for the contractor to invest many more millions of dollars into additional exploration and drilling, the local oil production volume would steadily decrease over time as would the City's expected oil revenue. The City will receive 51 percent of the incremental revenue. Depending upon actual oil market prices and actual incremental volumes produced, the anticipated new revenue to the City is estimated at $100 million over the next ten years or so. This amount includes not only net profit from oil sales but also taxes, fees, and other revenue to the City from the oil operations. The $150 million mentioned in the article was the original estimated revenue when oil market prices were higher than today. At the time of adoption last year, it was recommended to the City Council that the new revenue to be created by the OWPA be allocated to the Tidelands Fund. Despite what your article states, this contract will not "shift a great deal of cash" from the Port as this cash would never have materialized without this new OWPA agreement being implemented. This is revenue that the Harbor Department would not reasonably anticipate receiving in the future as this revenue is above and beyond what would have otherwise been produced under the prior contractual arrangements. This was not revenue that the Harbor Department was relying upon for "future port development projects" or to protect "the port's business competitiveness". Prop D â€' The article’s contention that the OWPA oil deal is “at the heart of a November ballot proposition” is completely inaccurate. The OWPA oil contract is in place and operational and no change in the City Charter is necessary for the terms of that contract to be fulfilled. The impetus for Prop D is truly the proposed calculation change in the Harbor Department’s annual transfer. The proposed change of the Charter language dealing with the oil properties in the Harbor area is simply a matter of taking advantage of this ballot opportunity to add clarity in an attempt to avoid future issues that might arise out of who controls the land needed for overall oil operations, including operations considered in the OWPA. Sincerely, Chris Garner Director, Long Beach Gas and Oil
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Keith Higginbotham takes you inside City Hall and reports weekly on the decisions being made.
Keith Higginbotham is a freelance journalist and writer who most recently served as the West Coast editor for the trade magazine American Shipper, covering the shipping and logistics industries. Prior to this, he served as the Advertising and Multimedia Manager for the Port of Long Beach. He began his journalism career more than a decade ago as the Trade and Transportation beat reporter at the Long Beach Press-Telegram.
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