The Richmond City Council approved an unprecedented $550 million settlement with Chevron on Wednesday to remove the Richmond Refining Business License Tax from the November ballot, likely avoiding a lengthy litigation process with the corporation.
The unanimous vote — which came during a packed special meeting filled with Chevron workers holding signs that read “We believe in Richmond” — was scheduled on the heels of a recent court ruling in a lawsuit critical of the proposed ballot measure language.
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According to the settlement, Chevron — which the city said initially proposed paying the $300 million to drop the ballot measure — will pay the city $50 million per year for five years and $60 million per year for five years.
“This agreement ensures Chevron Richmond can continue to provide Northern California with the affordable, reliable and ever-cleaner energy the region’s economy needs,” Chevron said in a statement emailed to Richmondside.
“When I look at this tax settlement agreement I think, ‘This is what people can do when we organize,’ ” Vice Mayor Claudia Jimenez said, adding that the agreement wouldn’t have been made possible if environmental advocates had not initially pushed for the ballot measure. “This week we used our powers to make Chevron pay.”
During an hour of public comment, environmental advocates with APEN and CBE, alongside members of Richmond’s local labor unions, were split on whether the council should approve the resolution removing the ballot measure and advocated for oversight of the settlement funds.
“When our community members dreamt up this vision it focused on a public campaign that empowered residents,” said Kerry Guerin, an attorney with CBE and author of the ballot measure, while urging the council to reject the settlement. “Our campaign did not approach the city with this concept just so Chevron can cut a deal that is pennies to them. I did not write this ballot measure and tax ordinance so the city could settle.”
Megan Zapanta, Richmond organizing director with APEN Action, said to honor what the environmental groups did in crafting the ballot measure the council should commit to using some of the settlement funds to prepare the city for a post-refinery future, including for example the environmental clean-up if or when the refinery closes.
“$550 million is an unprecedented amount of money and none of that would be possible without the frontline community residents who have been living day after day in the shadow of the refinery,” she said. “We know that we would have won in November and right now Chevron would rather pay than to see us win at the ballot box.”
How did city make a $550M deal with Chevron?
According to city sources, settlement negotiations ramped up within the last week between a City Council ad hoc committee that included Mayor Eduardo Martinez, Jimenez and District 3 Councilmember Doria Robinson and Chevron representatives.
“They decided to reach out when I was in Colombia,” Jimenez told Richmondside. “When they gave us that first offer of $300 million, I said ‘This is crap,’ and we aren’t going to settle for that. ”
Jimenez added that the committee wanted to make sure that the settlement amount was near the estimated minimum amount that the $1 per barrel refinery tax would have generated annually.
“It was a really tough negotiation, and we held it together,” she said. “For me, this is the importance of having leaders like me, Mayor Martinez and Doria Robinson who pledge to not take corporate money because when you are dealing with these types of negotiations we can remain strong because we don’t owe anything to the corporations.”
City Attorney Dave Aleshire had noted in the report he prepared for Wednesday’s meeting that Chevron had made clear it intended to challenge the tax in court if voters approved it.
The settlement comes just days after Contra Costa County Superior Court judge John Devine ruled in Chevron’s favor by agreeing that the wording of the refining tax ballot measure was “misleading.”
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“We are disappointed that Richmond voters didn’t get the opportunity (to vote) on a measure that would have held Richmond’s largest polluter accountable for over a century of health and climate damages for the next 50 years, not just the next 10.
— Megan Zapanta, Richmond organizing director, APEN Action
The oil refining tax, which was approved by the City Council in June after it was put together by the Asian Pacific Environmental Network (APEN) and environmental justice group Communities for a Better Environment (CBE), was almost immediately contested in the lawsuit, filed by the Chevron-backed Coalition for Richmond’s Future and Chevron employee Daniela Dickey of Richmond.
Attorney Michael Colantuono, who works as outside counsel with the City Attorney’s Office, noted during the meeting that if the ballot measure had passed the city would have been in a similar situation as the City of Carson — which adopted a similar refining tax in 2017 but due to litigation has not been able to spend any of the tax revenue.
“Although I believe this measure learned from Carson lessons in 2017, they have been litigating ever since and spending about a million dollars a year on legal fees and found it necessary to escrow the tax proceeds because they might have to pay them back,” Colantuono said. “Because this is a bird in the hand worth nearly as much as the bird in the bush it is the city attorney’s office recommendation that the council approve the settlement.”
Taking into consideration the uncertainty of litigation and if courts would ultimately side with Richmond, Robinson said that she agreed with the approving the settlement.
“I’m not heartened by what has been happening in the courts, especially in the upper levels in terms of judgments going, in my opinion, in blasphemous ways when it comes to protecting our environment,” she said. “I’m not heartened in the viewing even in Contra Costa County, in Martinez, a pro-corporate atmosphere that our courts have. I’m not heartened. I’m just not.”
The proposed ballot measure would have generated an estimated $60 million to $90 million in General Fund revenue annually. Chevron contended that the tax was unfair and presented an economic burden.
Zapanta had said in a statement Wednesday that the organization is disappointed that voters didn’t get the opportunity to decide upon the measure but acknowledged the need to fund city services.
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When they gave us that first offer of $300 million, I said ‘This is crap,’ and we aren’t going to settle for that. ”
— Richmond Councilmember Claudia Jimenez, on the negotiations with Chevron
“We are disappointed that Richmond voters didn’t get the opportunity (to vote) on a measure that would have held Richmond’s largest polluter accountable for over a century of health and climate damages for the next 50 years, not just the next 10,” Zapanta said, referring to the five decade duration of the proposed tax. “We look forward to working with the city to ensure that these funds are used both to meet immediate needs and to invest in a just transition that builds a future beyond oil for Richmond.”
Councilmember Gayle McLaughlin said she would bring a resolution to the Sept. 10 City Council meeting that would allocate some of the funding for a “just transition.”
“I look forward to doing that and collaborating with the environmental justice groups who have done so much for Richmond and continue to do more as we go forward,” McLaughlin said.
The settlement decision followed a closed session meeting and public comment held session Tuesday night, attended mostly by a couple dozen union and refinery workers — including refinery Director Tolly Graves — who expressed support for the deal.
“I want to thank the council members and the mayor for the recent productive dialogue, and I would like to say I would like to build on that spirit,” Graves said. “We do appreciate the support of labor, the unions in Contra Costa County, who understood that a mutually accepted solution was the prudent path forward.”
Eduardo, Claudia, and Doria are honest and if they thought it best to settle I trust their judgment
The courts have been hostile to Richmond’s interests witness the ten year struggle to settle the Wine Haven. Point Molate suits.
Once again, Chevron buys its way out of taking any responsibility for poisoning Richmond, the air we breathe and this planet. They laugh all the way to the bank every minute of every single day–and it is all at the cost of our lives…literally. They make billions of dollars in profit every year, so this is not even change from their pockets. This is found pennies under their proverbial couch cushions. Once again, this money makes it okay to poison us all–and particularly we denizens of Richmond, CA (not to mention the people who have to live nearest to the refinery itself). Thank you, Richmond.
Thanks for all of this work and for a good report it’s really valuable to me to have this information available. I’m not in a position to be involved closely with city activities and this is very valuable to me.
I’m deeply disappointed that Chevron has once again escaped accountability. It’s disheartening, especially when so many of our Richmond residents are struggling with respiratory issues, allergies, and heart conditions directly linked to the air pollution in our community. This isn’t just about statistics; it’s about our neighbors, our children, our elders, who are paying the price with their health.
I would have appreciated the opportunity to vote on this matter, to have a say in the future of our city, and to hold Chevron responsible for the damage they’ve done. Our voices deserve to be heard, and our community deserves better. We can’t keep letting these injustices slide.
Reminder: if a random person rather than a city or other level of government did this, it’d be called extortion.