The Richmond City Council is set to vote Wednesday on a $550 million settlement with Chevron that would remove the Richmond Refining Business License Tax from the November ballot.
According to the city’s agenda report, describing it as a “Tax Agreement Resolution,” Chevron, which initially proposed paying the city $300 million, will pay the city $50 million per year for five years and $60 million per year for five years.
The meeting was set just days after a Contra Costa County Superior Court judge ruled in Chevron’s favor by agreeing that the wording of the refining tax ballot measure was “misleading.”
The council will meet at 5 p.m. today to discuss the lawsuit by the Chevron-backed Coalition for Richmond’s Future and Chevron employee Daniela Dickey of Richmond.
City Council special meetings
WHAT: The Richmond City Council will hold a public hearing and closed session at 5 p.m. today to discuss the lawsuit filed by a Chevron-backed coalition that says its oil refining tax ballot measure language is misleading. It will then hold a public meeting at noon Wednesday to consider approving a settlement with Chevron and removing the refinery tax from the Nov. 5 ballot.
WHERE: 440 Civic Center Plaza and via Zoom
TO PARTICIPATE: While the public cannot attend today’s closed session, there will be public comment allowed before and after the discussion of a second unspecified legal case. Click on today’s agenda for details. Here is the agenda for Wednesday’s meeting, which can also be attended via Zoom.
Wednesday’s meeting is scheduled to take place just hours after the city is due in court in Martinez to argue against the tentative ruling striking down the ballot measure’s language. The deadline for removing the tax from the ballot is Wednesday.
Superior Court Judge John Devine issued the ruling Friday, granting a writ of mandate to remove specific language from the ballot label and agreeing with the plaintiff’s claim that the wording was “misleading or impermissibly biased.”
The ballot measure, brought to the council by the Asian Pacific Environmental Network (APEN) and environmental justice group Communities for a Better Environment (CBE), would generate an estimated $60 million to $90 million in General Fund revenue annually.
Less than two weeks after the City Council unanimously approved the ballot measure, the lawsuit was filed, arguing that describing possible uses of public funds for the tax ballot measure is biased and violates voter rights under state and federal law.
While the court found the ballot label wasn’t false, it ruled the wording was misleading about the uses of the proposed tax revenue, adding that it implies that funds would go to specific projects, despite being a general tax with no spending requirements.
In the city’s agenda report, City Attorney Dave Aleshire notes that Chevron has “made clear its intention to sue to challenge the tax if voters approve it. The City disagrees with Chevron’s legal critique, but cannot deny that litigation is likely and may be long-lasting and expensive.”
He says the Los Angeles County City of Carson adopted a similar refining tax in 2017, and the matter is still in litigation, so Carson has not been able to spend any of the tax revenue.
The council’s choices on the settlement Wednesday, according to Alshire, are to:
- Approve it, remove the tax measure from the November ballot and accept the
agreed payments to create certainty and to avoid litigation. - Disapprove it and allow voters to decide whether to impose the tax and defend
the litigation that will likely follow. - Continue to negotiate. This would likely prevent the Council from removing the
measure from the ballot (by Wednesday’s deadline) and lead to an
energetic campaign on the measure and, perhaps, renewed settlement discussions if it passes, but a significant reduction in income if it fails.
APEN, in an emailed statement to Richmondside that also was intended to represent CBE’s perspective, said the groups are prepared for the measure to continue to the ballot so that the “voters can decide what’s best for the city.”
“Big oil has profited and polluted in Richmond for over a century,” the statement said, adding that the group believes working families in the city deserve increased investment in city services, clean air and water. “We need to prepare now, ahead of refinery transition or closure — so that residents aren’t stuck with the cost of the cleanup. ”
In a May 21 city council meeting, CBE attorney Kerry Guerin, who presented the refinery tax ballot measure for initial consideration, said she felt that it addressed the pitfalls of the voter-approved Measure T which in 2008 attempted to tax the Chevron refinery but was struck down in 2009 as unconstitutional by a Contra Costa County Superior Court judge.
“Learning the lessons of Measure T, we are very confident that an excise tax on the privilege of oil refining in the city would survive legal challenge,” she said at that meeting, adding that the council would still need to assess it with their legal counsel.
Ross Allen, Chevron spokesperson, did not address the settlement in a statement sent to Richmondside but reiterated that the company believes the proposed tax would hurt Bay Area consumers.
“We continue to pursue all efforts to reduce the ballot measure’s negative consequences on the region’s economy and our ability to supply it with affordable, reliable and ever cleaner energy.”
