Richmond City Council approves settlement with Chevron, removes refinery tax ballot measure
In a special meeting Wednesday, the Richmond City Council unanimously approved a 10-year half-billion dollar agreement with the city’s largest taxpayer, Chevron, removing the proposed "Make Polluters Pay" tax from the November ballot.
Richmond Mayor Eduardo Martinez said in a statement that the city had reached an agreement with Chevron Corporation, under which the gas and oil giant would pay the city $550 million over the next ten years.
Soren Hemmila
“The payments will be $50 million annually for the first five years and $60 million annually for the remaining five years. In return, the City of Richmond will remove the proposed business license tax on oil refining from the November 5, 2024, ballot,” Martinez said in a statement.
Martinez said the agreement would achieve many of the purposes of the “Make Polluters Pay” refinery ballot measure and eliminate pending and threatened costly litigation by Chevron, allowing certainty to both the City and Chevron.
The city attorney and a council ad hoc committee of Mayor Eduardo Martinez, Vice-Mayor Claudia Jimenez, and Councilmember Doria Robinson reportedly negotiated the deal.
“The payments from Chevron to the City will go to the general fund and can be allocated by a vote of the City Council,” Martinez said. “These funds can be used to improve vital city services such as improving public safety and emergency response, repairing streets and roads, increasing youth services, expanding library and recreation services, and toxic land cleanup.”
Chevron Spokesperson Caitlin Powell said the agreement settles litigation and removes the Refining Business License Tax measure from the ballot.
“This agreement ensures Chevron Richmond can continue to provide Northern California with the affordable, reliable, and ever-cleaner energy the region’s economy needs,” Powell said.
Vice Mayor Claudia Jimenez said the committee bargained with Chevron until they raised their initial offer of $300 million to the final offer of $550 million and agreed that the Richmond City Council alone would make all spending decisions.
“This is a victory for Richmond and a testament to what people can do when we organize,” Jimenez said in a statement.
Chevron initiated talks with the city and eventually offered a large settlement rather than face the vote that would create the new tax, Jimenez said
Jimenez acknowledged “mixed feelings” about removing the tax measure, expressing confidence in its approval by Richmond voters. However, concerns about a potential legal battle with Chevron influenced the decision.
“Given the risk of losing everything in the courts, as well as the time and the cost of litigation, when we saw an opportunity to guarantee that Chevron would start paying the taxes starting next year, we pivoted in that direction,” Jimenez said.
The measure, which could have collected $60 million to $90 million per year, was pushed by the Asian Pacific Environmental Network and Communities For A Better Environment. Several members of the environmental justice organizations pushed the council to reject the settlement and put the issue before voters.
Kerry Guerin, an attorney with Communities for a Better Environment, said the ballot measure would have put people over profits and generated over $4 billion over the next 50 years.
“I urge you to reject this tax deal so that the community’s voice can be heard, Richmond can be an example for all fenceline communities and that big polluters are truly held accountable,” Guerin said in a public comment before the vote.
“Our campaign did not approach the city with this concept just so that Chevron would cut a deal that is pennies to them,” Guerin said. “I did not write this ballot measure and tax ordinance so that the city could settle.”
Many members of APEN and CBE pushed the council to establish a community oversight board to allocate the funds to move away from the oil and gas sector while minimizing harm to workers and communities, often referred to as a “just transition.”
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