HUNTINGTON BEACH — The three most profitable workers at City Hall look like giant metal grasshoppers, but together they bring in hundreds of thousands of dollars to the city treasury.
Those "workers" are three brown-painted oil rigs on the Civic Center grounds. For more than two decades, the city-owned wells have diligently and profitably pumped black gold. Their output has paid for the Civic Center grounds many times over, and even more income from the city-owned oil is expected in the future.
Little wonder then that the City Council last week quickly passed a measure to solve a natural gas disposal problem for the wells and to keep the oil flowing.
The oil wells currently generate about $300,000 a year in revenue. The rigs are expected to triple production in the next few years--bringing in close to $1 million annually. That money goes directly to the city's general fund.
Few other communities in the nation have such a treasure trove on their City Hall front lawns. And the Huntington Beach City Council made it clear last week that it is grateful for its bonanza and wants to protect it.
The little-noticed item about the wells on the City Council agenda last week underscored the good luck this coastal community had in buying its Civic Center site in 1969. The city purchased 11.7 acres at Yorktown and Main for just $360,000. The land had oil under it, and the wells have been pumping black gold for the city treasury for more than two decades. City officials said the oil income has come virtually problem-free for most of those years, but in recent months a dilemma has surfaced about how to dispose of the natural gas byproduct from the wells.
"If the gas cannot be disposed of, the oil wells must be shut down, resulting in the loss of considerable revenues," Fire Chief Michael Dolder said in a memo to the council.
And that is something the city can ill afford.
Officials say the city is facing a $3.8-million shortfall this fiscal year, primarily because of the recession. Losing the oil revenue would only make matters worse.
In his memo, Dolder noted that the three wells currently produce about 60 barrels of oil a day. The wells also generate 61,000 standard cubic feet of natural gas every day as a byproduct. Heretofore, Dolder noted, the city has disposed of the natural gas by selling it to Chevron, usually netting about $20,000 a year.
