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Home My WebLink About05 - Creating the Ad Hoc Oil Advisory CommitteeQ �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report April 29, 2025 Agenda Item No. 5 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Mark Vukojevic, Utilities Director - 949-644-3011, mvukojevic@newportbeachca.gov PREPARED BY: Mark Vukojevic, Utilities Director TITLE: Resolution No. 2025-15; Creating the Ad Hoc Oil Advisory Committee ABSTRACT: If adopted, Resolution No. 2025-15 would establish the Ad Hoc Oil Advisory Committee comprised of three councilmembers, to review various oil -related items, and make recommendations to the full City Council. RECOMMENDATIONS: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; b) Adopt Resolution No. 2025-15, A Resolution of the City Council of the City of Newport Beach, California, Creating the Ad Hoc Oil Advisory Committee: and c) Confirm the appointments of Councilmember Michelle Barto, Councilmember Noah Blom, and Councilmember Sara J. Weber to serve on the Ad Hoc Oil Advisory Committee. DISCUSSION: The Utilities Department has managed and operated the City of Newport Beach's oil fields in West Newport since the 1980s. The operations include the daily maintenance and repair of, and the regulatory compliance for, the City's 16 oil wells, including one injection well, a production tank facility, and pipelines. The City considers several factors in its ongoing oil operations, including State laws, regulations and mandates, infrastructure rehabilitation, and market conditions. Previous ad hoc committees were formed to provide recommendations, with the most recent committee concluding its work in 2008. If adopted, Resolution No. 2025-15 would establish the Ad Hoc Oil Advisory Committee to work with staff and provide recommendations to the entire City Council on various oil system items, including: 5-1 Resolution No. 2025-15; Creating the Ad Hoc Oil Advisory Committee April 29, 2025 Page 2 1. Current and future operations, efficiencies, feasibilities and studies 2. Compliance and navigation of current and upcoming State laws, mandates and regulations 3. Financial considerations, including income, expenses, budget, economics, capital investments and savings 4. Lease, royalty, and property requirements and agreements The committee would expire upon making its final recommendations to the full City Council or on December 31, 2026, whichever comes first. FISCAL IMPACT: There is no fiscal impact related to this item. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING - The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENT: Attachment A — Resolution No. 2025-15 5-2 ATTACHMENT A RESOLUTION NO. 2025-15 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, CREATING THE AD HOC OIL ADVISORY COMMITTEE WHEREAS, Section 200 of the Charter of the City of Newport Beach ("Charter") vests the City Council with the authority to make and enforce all laws, rules and regulations with respect to municipal affairs subject only to the restrictions and limitations contained in the Charter and the State Constitution, and the power to exercise, or act pursuant to any and all rights, powers, and privileges or procedures granted or prescribed by any law of the State of California; WHEREAS, in the 1950s, the City commissioned the installation and operation of sixteen slant drilled oil wells under its tidelands, and in 1981, the City became the active manager of such wells; WHEREAS, as part of its tidelands management responsibilities and consistent with the Newport Beach City Charter Section 1401, the City's Utilities Department manages the City's sixteen oil wells; WHEREAS, state and county agencies regulate the City's oil operations, including but not limited to, the California Department of Conservation, Geologic Energy Management Division ("CaIGEM") for the safe development and recovery of energy resources; WHEREAS, CaIGEM regulations and new state laws, including but not limited to, Senate Bill 1137 (2022), Senate Bill 551 (2019), and Assembly Bill 2729 (2016), have significantly impacted California oil producers including operations by the City; WHEREAS, on November 9, 1998, the City Council appointed an ad hoc committee to advise the City Council as to matters pertaining to the City's oil operations, which was extended by Resolution Nos. 2000-91, 2003-2, and 2006-28, until it was terminated on December 9, 2008, by Resolution No. 2008-101; 5-3 Resolution No. 2025- Page 2 of 3 WHEREAS, the City Council desires to create an Ad Hoc Oil Advisory Committee to work with City staff and make recommendations to the entire City Council regarding the City's oil operations including, but not limited to: (1) current and future operations, efficiencies, feasibilities, and studies; (2) compliance and navigation of current and upcoming state laws, mandates, and regulations; (3) income, expenses, budget, _economics, capital investments and savings; and (4) lease, royalty, and property requirements and agreements. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City Council hereby creates the Ad Hoc Oil Advisory Committee ("Committee"), which shall be comprised of Council Members Noah Blom, Michelle Barto, and Sara J. Weber. Section 2: The sole purpose and responsibility of the Committee shall be to work with City staff and make recommendations to the entire City Council regarding City's oil operations including, but not limited to: (1) current and future operations, efficiencies, feasibilities, and studies; (2) compliance and navigation of current and upcoming state laws, mandates, and regulations; (3) income, expenses, budget, economics, capital investments and savings; and, (4) lease, royalty, and property requirements and agreements. Section 3: The Committee shall function as an ad hoc committee and shall not be subject to the Ralph M. Brown Act codified in California Section 54950 et seq. Section 4: The Committee shall expire upon making its recommendations to the entire City Council at a noticed public meeting of the City Council or December 31, 2026, whichever occurs first. Section 5: If any section, subsection, sentence, clause or phrase of this resolution is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 6: The recitals provided in this resolution are true and correct and are incorporated into the substantive portion of this resolution. 5-4 Resolution No. 2025- Page 3 of 3 Section 7: The City Council finds the adoption of this resolution is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 8: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution. ADOPTED this 29th day of April, 2025. Joe Stapleton Mayor ATTEST: Leilani 1. Brown City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE C� Aaron C. Harp City Attorney 5-5