RPVCCA_CC_SS_2014_05_20_02d_Rancho_LPG_Tank_FacilityCrTYOF RANCHO PALOS VERDES
TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
FROM: COUNCILMAN BRIAN CAMPBELL
DATE: MAY20, 2014
SUBJECT: RANCHO LPG TANK FACILITY
RECOMMENDATION
Direct staff to agendize the Rancho LPG Tank Facility as a Regular Business agenda
item, accompanied by an updated staff report, to facilitate a full discussion of the issues
related to this facility and the potential for negative impacts on Rancho Palos Verdes
residents, businesses and property.
DISCUSSION
The following paragraphs are meant as both discussion points and as a primer for other
areas of possible exploration:
1. The core question is not whether the facility is 'safe'. The core question is the
extent to which residents of Rancho Palos Verdes should bear the risk of loss in the
event an accident, whatever the cause. As things stand now, our residents bear 100%
of the risk. This Resolution asks the City of Los Angeles, and specifically the City
Council, the Mayor, and the Controller to take specific actions noted in the Resolution to
draw public attention and public debate to this critical question. Passage will lend
impetus to the efforts of LA residents to push the LA City Government to examine,
debate, and then take appropriate remedial action. This will help protect the citizens of
Rancho Palos Verdes.
2. Earlier this year, in Charleston, West Virginia the citizens had their source of
drinking water (the Elk River) contaminated as a result of a chemical spill from an
above-ground tank maintained by Freedom Industries. In 2013, citizens had sought the
local and state government to pass a 'risk-management' law similar to that in effect in
Contra-Costa County. They refused to consider the law. Now, they wish they had done
so. Freedom Industries filed for bankruptcy protection the week after the spill. Our
Rancho Palos Verdes City Council, at a minimum, has a responsibility to its citizens to
go on record as asking the City of Los Angeles to be more pro-active in its regulation of
this facility and to decide how best to allocate the risk of loss in the event of an accident
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between Rancho, the people (and the Port) and its citizens. It is a debate which has
never occurred and which must occur now.
3. As determined from recent events (the pipeline spill in Wilmington) and
railroad tank car explosions, the current laws are either not enforced, or contain
loopholes which give rise to a preventable accident. This is evident in the Rancho
situation where Rancho was cited in March, 2013, by the EPA for the violations noted in
the Resolution. To date, the accusations against Rancho are still the subject of
'negotiations' between Rancho and the EPA.
4. FERC filings, as of December 31, 2012, affirmatively demonstrate that
Rancho is financially insolvent as an independent going concern, having 'borrowed'
over $49 Million from another Plains All American Pipeline entity (Plains LPG Services,
LP) in order to operate. This raises a question of whether, should an accident occur,
Rancho can meet its responsibilities to our citizens to compensate them for damage to
person and property. The rent on the rail spur is not paid by Rancho, but by another
Plains All American Pipeline entity (Plains Marketing, LP) out of a bank account in Van
Wert, Ohio. This is evidence that Rancho does not or cannot pay $1187 in rent from a
local bank account in its own name. This is troubling to many of our citizens who feel
that leases or government contracts should not be given to entities which are financially
insolvent as an independent going concern. Taking this Resolution up will highlight this
issue, which is also a serious issue for the State Lands Commission.
5. The timing of the hearing on the Resolution and passing the Resolution now is
important because:
a. The State Lands Commission is concerned enough about the situation
(i.e. Rancho's and the Port's possible misuse of Tidelands Trust Assets -noted in the
Resolution as consisting of (i) the railroad tracks fronting Gaffey Street adjacent to the
Rancho facility, and (ii) the rail spur permitted by the Port) -that the Commission has
put the Rancho matter on its June, 2014 agenda. It is therefore important that the
Council be heard in advance of that meeting on this issue;
b. Congresswoman Janice Hahn has promised a field hearing in
connection with the Rancho situation. The Congresswoman supports the Resolution.
The best protection of our citizens means that our City Council should go on record
now, in advance of the field hearing;
c. The June election for the Congressional seat being vacated by
Congressman Waxman should operate as a source of focus for discussion and debate
on the Rancho issue. The tanks lie within the boundaries of the 33rd Congressional
District. Candidates vying for the position to serve as the Congressperson for our
constituents should be afforded a forum at which they can declare their support or
opposition to the Resolution. Taking up the Rancho matter now will facilitate debate and
discussion which is important to the citizens when they decide who will represent them
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as it would be reasonably expected that one or more of the Congressional candidates
will attend and state their views.
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