When former city manager Shasa Curl told the Richmond City Council in September that rising labor costs and a mounting number of extra projects were leading to overspending, she suggested they postpone asking the community how to spend the $550 million Chevron settlement.
Council members, including Vice Mayor Doria Robinson, questioned Curl’s bleak financial projections and asked for a second opinion.
On Tuesday interim City Manager Mark Scott and Finance Director Emily Combs told the council that the city is in a “stable” financial position that they would characterize as “very solid.”
“I’ve worked with many cities that don’t hold a 21% reserve,” said Scott, who has been a city manager or interim city manager at multiple California cities and elsewhere. “We have needs like everyone else, but I would consider this a very solid financial situation.”
That perspective was markedly different from the Sept. 16 meeting where Curl and city finance staff warned that the city had overspent by nearly $9 million on daily operations last fiscal year. Deputy Finance Director Mubeen Qader said the shortfall, a gloomy five-year forecast and pending public safety labor contracts would require spending a good portion of the initial $50 million Chevron settlement payments (it’s paid annually over 10 years), citing one forecast that the city would have to spend $34.6 million a year of its annual settlement payments after accounting for its liabilities.
Scott said Tuesday’s report was based on the city’s audited budget, which reflects actual spending and revenue, whereas the September projections were based on data from earlier in the fiscal year.
Staff on Tuesday presented the city’s three most recently audited years. Data for 2026-2026 isn’t available until February, after the city’s audit is complete.
The audited figures showed a $13.1 million General Fund surplus in 2022-2023, an $8.7 million surplus in 2023-2024 and a $820,000 deficit in 2024-2025, according to the report.
Combs said that year-end projections for the current year reported in September will change once the audit is finished in February 2027. She also said the city’s multi-year forecasts do not include corrective actions such as savings from vacant positions, which explains why the projected deficits are later reduced or resolved.
“While we might present that forecast once or twice a year to the council in open session, we are constantly working on it,” Combs said. “As questions come up during the year … we are going back to that forecast and it is changing based on the questions we are receiving.”
Combs said that forecasts are not “a statement that a deficit will occur” and that it is a tool to allow the council and staff to plan their future budgets accordingly.
“It (forecasts) is not an adopted budget. It is not even a budget,” Combs said. “It is a decision support tool that helps the city evaluate long-term affordability of its programs and services.”
Council members, like Robinson and Claudia Jimenez, who is running for mayor against Ahmad Anderson in the November election, praised the report, calling it a “breath of fresh air.”
“I’m going to publicly thank you for a very clear and easy to understand financial report,” Robinson said, adding that she requested the report because residents District 3 had been questioning the figures and saying the city was “hiding deficits.”
Combs replied that the city has relied “pretty significantly” on position vacancies to balance the budget though Robinson pointed out the city hired more employees in recent years. According to the city, Richmond’s authorized position list grew from 669 positions in 2021 to about 800, though only about 670 of those positions are filled. This has left a nearly 17% vacancy rate.
Council member Cesar Zepeda said that the budget documents that Curl presented made it appear that the settlement payments were covering the deficit gap. He noted that the prior report showed an $8.6 million deficit becoming a $30.8 million surplus if the settlement payment was included.
Combs said that those figures reflected budgeted spending that was more than the available revenue, which also included previously unspent funds the council had appropriated.
Zepeda also pressed staff on whether 3% of the $2.7 million in interest the settlement has earned, about $81,000, would be spent on the Kids First Initiative. Richmond’s accounting manager Jerry Gurule said that the interest shown was earned only on the first $50 million payment to the city and that the Kids First share would be adjusted during the upcoming audit.
Council member said proposed police hiring ballot measure is confusing voters
Council member Sue Wilson said mailed materials and canvassers seeking signatures to place a proposed minimum police staffing measure on a future ballot are suggesting to voters that the Chevron settlement funds could pay for the positions.
The measure, backed by the Richmond Police Officers Association (RPOA), would require the city to set aside funds for 187 police officers whether the department could fill the positions or not. The union has said in the past months that it would begin collecting signatures this fall.
Wilson, who said canvassers came to her District 5 residence, asked Combs whether it is “sound practice” to use limited-time funds to pay for personnel.
Combs said that it was not.
“Because the revenues stop and the costs continue, like pensions and health,” Combs replied.
Combs said if the measure passed it would increase the city’s pensions liability and that, if ongoing revenues like property taxes, sales taxes and Measure U taxes can’t keep up, the city would need to make budget cuts.
Scott added that adding 40 more officers would have a significant impact on the rest of the city’s budget.
Zepeda, however, pointed out that because the funds are general funds there is nothing legally preventing the council from spending it on salaries, though he acknowledged that the city “shouldn’t.”
RPOA president Sgt. Ben Therriault argued during public comment that the money, like previous Chevron settlements, can be used for anything because it is not a special fund. Outgoing Mayor Eduardo Martinez made a similar point, one that he has repeatedly said since the city reached the agreement with Chevron, saying that calling the money the “Polluters Pay” money leads residents to believe that the money is separate from the general fund.
Several public speakers, some of whom are members of the Asian Pacific Environmental Network (APEN), urged the council to honor the community’s role in “winning the settlement,” which was secured in 2024.
Catherine Lee, a District 5 resident and APEN member, said that residents fought hard against Chevron’s “harms.”
“After two years of waiting to have a say, our community members — especially our youth — are eager to participate in this process and see these funds spent in ways that meet the community’s needs,” Lee said. “We will be paying close attention to how our voices shape the final decisions. We are eager to turn this money into lasting change for Richmond.”
Council member Jamelia Brown asked how much say the public would have, adding that she believes there would be a significant “letdown” if only a part of the settlement can be used on programs the public suggests.
Scott said that any public recommendations for the settlement are ultimately decided on by the council.
“The public, myself as a community member, have been anticipating these funds for so long, and we are talking about the end of 2026 starting that process. Now I’m thinking (it will be the) end of 2027 getting through that process,” Brown said. “At what point do you think these recommendations are coming back to the council?”
Combs said that Dalberg, the firm managing the engagement process, will share their plan with the council on Nov. 10.
“I will say that I believe that the process is supposed to be about six months,” Combs said.
