Is Whittier Facing Bankruptcy
Due to the Oil Project?



Our City Council new back in April 2011. In an article in the Whittier Daily News dated April 13, 2011 here is what Bob Henderson said.

But Henderson said the city can't just stop the

project and say no to Matrix.

"If we take an applicant in this position, cut off
discussion and not let them go forward, we'd be liable for millions of dollars in punitive damages, "he said.  "We'd be taking away a property right."

Yet according to an e-mail that was obtained through a public records request dated August 7, 2008. Steve Helvey asked for the County's consent to enter into the lease with Matrix Oil and Clayton Williams Energy. The problem is the County never granted the City that request. The City on their own signed the lease without the County's consent.

Here is that E-Mail:


Sent: Thursday, August 07, 2008 10:31 AM

To: Ilona Volkmann; csalseda@counseLlacounty.goy

Subject: FW: From Jim Day-Long Form Lease and Resolution of Intention

Attachments: REDLINE-Long Form Oil, Gas and Mineral Lease (00906622).DOC; REDLlNE-
Resolution of Intention to Lease (00906620).DOC; REDLINE-Alternate Resolutiuon oflntention to
Lease (00906621).DOC


Here are the latest documents. I'd appreciate it if you and Christina would look at section 6.1 to see if that meets your needs so that we can get your consent to enter into the lease.

Any idea on the timing for us to receive the Districts consent to the lease?




6.1. No Surface Entry Unless and Until Conditional Use Permit Obtained and CEQA Complied With. Lessee shall not be entitled to make any surface entry on the Leased Land (other than for visual inspection or surveying purposes in support of an application for a Conditional Use Permit) unless and until:

(iv) no Conditional Use Permit will be issued by the City of Whittier until Lessor has obtained a release from protected area status of that portion of the Leased Land upon which surface operations are allowed under an issued Conditional Use Permit from the Los Angeles County Proposition A District.

The proof that the County never gave its approval is on line 32 of the lawsuit that was filed by L.A. County
on October 25, 2012. Here is line 32.

32. Without the approval of the District, Whittier adopted a resolution of intent to leaseH the Whittier Hills Property for production of oil, gas and other hydrocarbons ("Resolution of Intent 11 to Lease").

On August 26, 2008 the city went out to bid on the oil project still not having the approval of the County of Los Angeles. There was only one bidder, Matrix and Clayton Williams Energy. The City had been working on this project since October 18, 2006 with Matrix according to e-mails that were obtained through a public records request. That was over one year before the first car dealership went out of business which was December of 2007 and about two years before the economy crashed in October 2008.

E-Mails from November 2006:

From: "JeffKems" <>

Date: November 14,2006 11:51:57 AM PST

To: "'Mike McCaskey'" <>, "Mac McFarland" <>

Subject: Landfill wells

Silas Briones and I visited the Whittier Landfill on November 2, 2006, primarily to look at 2 wells, Central Fee 63 (the so-called "leaking well") and Savage #1 (the well with a gin pull over it). We don't see potential in resurrecting these 2 wells.

The Savage #1 is an orphan well and may have some potential for someone. A person can test the well for 90 days and then either keep it or tum it back to the DOG. The challenge would be placing tanks and facilities within the landfill boundary and working with all the landfill agencies. We do see potential in a field wide type development, which would require about 2 acres of land adjacent to the landfill from which we would drill wells and process oil and gas. This is what we discussed at our meeting with the City on October 18. If the City owns such a tract of land, we could start thinking about what kind of deal structure might work for all the parties.

Jeff Kems

From: Dave Mochizuki

Sent: Thursday, November 16. 2006 10:17AM
To: Gina Nlla; Thanos Gauthier

Subject: FW: Landfill wells

FYI. .. looks like we proceed with abandonment.

From: J.e.McFarland []
Sent: Thursday, November 16, 2006 9:38 AM
To: Dave MochizukI; Steve Helvey
Cc: Jeff Kerns; Mike McCaskey
Subject: Fwd: Landfill wells
Steve and Dave,

See below for write up from Jeff Kerns on the two Landfill wells. Matrix does not see economic potential for trying to resurrect and put either well back on production. They recommend that you move forward with abandonment plans. Matrix will be glad to assist you with technical advice, contractor contacts, etc.

As indicated, both Jeff and Mike do see potential for drilling new wells into the former Chevron acreage. Today's oil prices make that feasible. The key would be a "drillsite" of approx. 2 acres from which they could drill wells, erect a tank farm • etc. Of course, The City and Matrix would also need the

permission/cooperation of the Habitat Authority and other agencies with jurisdiction over the area and activities, and we would have to clarify the ownership of mineral rights underlying the land.

Please let us know how you would like to proceed.


Dave Mochizuki, Steve Helvey - City of Whittier

Jeff Kerns, Mike Mc Caskey & J C Mc Farland - Matrix Oil

On October 28, 2008 the City of Whittier signed a lease agreement with Matrix Oil and Clayton Williams Energy. Still no approval from L.A. County to sign the lease.

In a letter dated May 9, 2012 to L.A. County where the City is trying to reimburse the County for land there has been no negotiation on (in which the County sent the City's check back) the city says they could be at potential risk from claims by the Lessee (Matrix Oil and Clayton Williams Energy) for the loss of revenues that these delays may cause. Over four years later the City still does not have the approval from L.A. County to sign the lease with Matrix Oil and Clayton Williams Energy.

Excerpts from Letter to L.A. County:

May 9, 2012

Ms. Ilona Volkmann
District Administrator
Regional Park and Open Space District
L.A. County Dept. of Parks & Recreation
510 S. Vermont Avenue
Los Angeles, CA 90020

It is the opinion of the City of Whittier that any potential continued failure to move forward in a reasonable manner to perfect the entitlements of the CUP that have been approved by the City Council creates a source of potential risk to the City (and possibly the District) from claims that might be made by our Lessee for the lost revenues that these delays may cause.

Because the City did not get approval back in August 2008 and did their own thing they have put this Community on the financial hook which could result in bankruptcy to the entire City of Whittier. With pending litigation against the oil project from the State, State Attorney General and the County of Los Angeles for breaches in contracts and agreements that the City agreed to the City's future looks gloomy.

These e-mails and letters make it clear that the City was aware of the risk for sometime and continued anyway. When I ask at a council meeting how something for the oil project is being paid Bob Henderson always answered the oil companies are paying for it.

The loss of anyone of these lawsuits can kill the oil project. Do you think the oil companies want their money back.....of course. Plus potential losses.

Our City's financial solvency has been put at risk do to our City Councils in competency. It's time for a no confidence vote for our City Council.