Last week Greg Kirste submitted to the Sun a misleading letter to the editor of the Sun. Included are some details of interactions by Jill Ingram (City Manager), and Greg Kirste (DBA, Municipal Petroleum Analysts) and Diane Ripley (Principal, Municipal Petroleum Analysts) (brother and sister) with the City Council at its meetings at City Hall.
October 7, 2013: A Two-page proposal was presented to City Council to research and audit the City’s oil and gas production tax from Municipal Petroleum Analysts (MPA) signed by City Manager Jill Ingram and Diane Ripley (Contract #1 with MPA). Ripley is identified as the “Principal, Municipal Petroleum Analysts.” Compensation to be $3000/month for eight months. Agreement maximum cost of $24,000 is below threshold ($28,800) requiring Council approval. Proposal makes no mention of Greg Kirste, her brother.
April 5, 2014: City Manager Jill Ingram sends formal letter to Breitburn LLP (oil) demanding payment of $204,783 for unpaid oil-related taxes from 2000-2013.
May 8, 2014: City receives a check from BreitBurn for $204,783 for back payment of oil production tax from 2000-2013. Additionally, there is another check for barrel tax and permitting fees for 4th quarter of 2013 and 1st quarter of 2014 totaling $12,079.82. Quarterly payments for barrel taxies continue with a July payment of $4970. Quarterly payments ensue, but slowly diminish in size with a quarterly payment of $3814 in March 2017 (last one I requested). Annual oil production license fees are in the range of $1600.
August 21, 2014: Upon her return from an Alaskan vacation with Diane Ripley, Jill Ingram signs a $36,000 ($3000/month) Purchase Order (PO) for MPA. PO amount exceeds her contracting authority without Council approval. However, this PO is subsequently closed with no payments recorded against it.
September 25, 2014: Ingram signs a contract #2 with MPA for auditing related to energy production. Contract identifies Greg Kirste as “DBA Municipal Petroleum Analysts,” and makes no reference to Diane Ripley. Contract amount is for $24,000 payable at a rate of $8000/month. Statement of work is very similar to contract #1. Agreement maximum cost is below threshold ($28,800) requiring Council approval. All three payments are subsequently made.
November 13, 2014: Diane Ripley emails Jill Ingram, Vikki Beatley (Finance Director), Jim Basham (Director of Community Development) and Sean Crumby (Director of Public Works), to remind them about a dinner party at her house with Greg Kirste on Saturday, November 15th.
November 17, 2014: On the Monday following the dinner party, Greg Kirste emails Vikki Beatley a draft of contract #3 with MPA for “Phase 2 (Recovery).” Kirste states “This is the same contract used for Phase 1 (Discovery), but I’ve added the $ recovery task and contingent comp.” The contract calls for payment of a $24,000 fixed fee over a period of six months, plus contingent payments equal to 40% money recovered X 20 years. Note that contract #2 is still active through December.
January 26, 2015: Citizen Robert Goldberg presents his discovery of Jill Ingram’s Alaska vacation with Diane Ripley at Council meeting. Ingram denies any wrong doing, reading from a prepared statement. Vikki Beatley indicates that one of the contracts with Diane Ripley resulted in a back payment of $204,000 from Breitburn LLP and an anticipated revenue stream of $1 million over the next 20 years.
January 30, 2015: In response to an oil development proposal to increase oil production from the Los Cerritos wetlands, Greg Kirste emails Vikki Beatley (Finance Director), that “Diane’s involved from the LB side while I’ve got SB’s interests.” Kirste fails to specify if his proposal is for new production or for an existing debt.
February 2, 2015: Citizen Susan Perrell submits a Public Records Act (PRA) request seeking any deliverables, memos, emails, reports, or correspondence with MPA. Over the next two months, various emails are provided, along with the demand letter from Jill Ingram to Breitburn LLP. However, there are no deliverables or reports from MPA.
July 15, 2015: City of Carson signs a $40,000 contract with MPA to provide a pipeline franchise audit. It identifies personnel as Greg Kirste and Diane Ripley.
September 15, 2015: In response to the PRA request by Robert Goldberg for a copy of Greg Kirste’s resume, the City of Seal Beach responds that it “does not have any records that are responsive to your request.”
July 5, 2016: City of Carson adds $87,875 to contract with Municipal Petroleum Analysts (MPA) to assist the City of Carson in recovering any fee payments determined owed by pipeline operators. Additionally, MPA will assist the City of Carson in identifying and mapping abandoned pipelines, ensuring code compliance, and recovering any and all outstanding abandonment fees owed to the City of Carson. Contract amendment identifies personnel as Greg Kirste and Diane Ripley.
October 18, 2016: At Strategic Planning Retreat, Vikki Beatley (Finance Director) states “public perception” is preventing staff from moving forward with an oil recovery consultant contract. She has tried for six months to find an alternate consultant but was not able to find one with the level of needed expertise because the type of work is new and focused. To improve this public perception, City Council adopts a new strategic objective for staff to hold a study session by March 1st explaining to the public the efforts that staff have gone through, and why they have concluded that MPA is the best choice.
November 13, 2016: Resident Ray Zeoli, a retired oil industry professional with expertise in local oil taxes and fees, emails Council and City Manager the names of two local oil consultants who he believes are well-qualified to assist the City with revenue recovery.
February 24, 2107: City issues a one-page Request For Proposal (RFP) for a “qualified consultant to conduct an audit of oil revenue generated within the City limits.” [PRA 17-423].
March 27, 2017: City Council Study Session #1 on Oil Revenue Recovery. A five-project proposal is presented by Millennium Consulting. Total cost of all five projects is estimated at $244,000 based on hourly billing at $200/hour. Resident Ray Zeoli speaks during public comment in support of Millennium, and against any alternate proposal obligating the City to pay a multi-year commission on oil receipts. Greg Kirste speaks during public comment. Gives handout to City Clerk, says his prior work was “compelling,” and that the City will recover $1.4 million from his previous finding on Breitburn LLP. Kirste says his prior work with the City identified $13 million in additional potential revenue from other companies.
April 9, 2017: In response to an email request from Goldberg to Greg Kirste for a copy of his resume. Kirste provides the following:
“Background– Mr. Kirste was previously Vice President for Pentair and Wicor corporations. He is experienced in business due diligence, financial investigations, and technology. Mr. Kirste is a degreed electrical engineer and also possesses a master’s degree in business. He’s been the senior lead on financial and business due diligence of companies located in the United States, China, Taiwan, India, Australia, and the EU. As a principal at MPA, Mr. Kirste has performed highly detailed investigations of municipal oil, gas, and water pipelines and wells, and the recovery of their related municipal franchise and severance fees and taxes.”
A Google search of “Pentair” yields a swimming pool supply company. A Google search of “Wicor” yielded no listings for a Wicor Corporation.
April 24, 2017: City Council Study Session #2 on Oil Revenue Recovery. Vikki Beatley (Finance Director) acknowledges having received three oil consultant resumes from the public. However, she did not request that they submit proposals because she was fairly certain that Millennium Consulting was a good candidate to do the project. Council directs staff to solicit proposals from the three consultants. There was no mention by staff or Council to consider engaging in future contract work with Greg Kirste (MPA).
May 19, 2017: Oil consultants Don Clark and William Green submit a joint proposal to Beatley. Consideration of the Clark/Green consulting team was suggested to staff and the Council several times by resident Bruce Bennett. Total estimated cost of proposal is $84,500 based on hourly billing at $150/hour.
June 26, 2017: FY 17-18 Budget adopted without any money earmarked for an oil consultant.
July 2017: Greg Kirste “suggested to Staff that they hire either contractor (Millennium or Clarke), narrow the project’s scope, focus solely on tasks that produce revenue, and pay a fixed amount for the work. Municipal Petroleum Analysts (MPA) would provide (without charge) its prior findings/insights/advise, etc. This will capture any low-hanging revenue, and at a greatly reduced total cost (about $20K).” [Reference: email 9/6/17 to Goldberg, et al].
July-August 2017: Kirste and Beatley exchange several emails regarding pipelines operated by Plains Marketing and Golden State Water. Additionally, Kirste sends an informational email regarding a Carson proposed business license tax on oil operators. [PRA 17-423].
October 6, 2017: Greg Kirste sends draft of his “Revised Proposal – Oil Revenue Recovery” to Vikki Beatley (Finance Director) and Ellery Deaton (City Council District 1 and Mayor). He requests their input before “sending it out next week.” Proposal states that “MPA has independently identified new sources of City oil & gas revenue” and “MPA is sufficiently certain this new revenue exceeds $13 million.”
October 12, 2017: Kirste sends an oil revenue proposal to Council members. Reference to “new revenue exceeds $13 million” is changed to unquantified “millions of dollars.” Proposal offers three options for compensation:
a) 15% contingency of all revenue collected,
b) hourly at $200/hour, or
c) fixed-rate per sub-task which would total $455,000 if all sub-tasks were completed.
In addition to one of these fees, the proposal also calls for a monthly payment of $975 ($11,700/year) over the contract term (not specified).
November 13, 2017: During City Council Meeting discussion regarding funding for two additional police officers, Ellery Deaton (Mayor) mentions the potential for enhanced oil revenue.
She says “We have a professional who has worked for us before and brought us money who has told us all and our residents that he can bring us money quickly of money that is owed to us and sitting there…” She indicated that this topic will be discussed at the next City Council meeting on December 11th.
December 11, 2017: Agenda listing includes Item J. recommending approval Resolution No. 6779 authorizing the City Manager to sign the agreement with Municipal Petroleum Analysts. However, no staff report is made available in the agenda packet, and the Item is pulled late Friday afternoon.
December 21, 2017: Jeannette Andruss reports in the Sun that Vikki Beatley (Finance Director) told her that the agreement with MPA was pulled because the contract is still being negotiated.
January 22, 2018: Agenda Item A, Strategic Objectives, states that “Contract negotiations are still in process with the consultant.”
June 11, 2018: Staff recommends to Council approval of a 15% X 7 years contingency contract with Kirste. Council locks up in a 2-2 vote with Moore abstaining.
