01 Apr Richmond Could Use Chevron Settlement Money to Help Pay Off Debt

“However the money is used, it will be used for the betterment of the city and the population,” said Mayor Eduardo Martinez at the March 25 Richmond City Council meeting. (Screenshot captured by Samantha Kennedy / The CC Pulse)

By Samantha Kennedy

More than $392 million of Richmond’s debt could go away and save the city millions. The cost? Most of the historic Chevron settlement. 

Officials inched forward on a proposal March 25 that would use $535.7 million in settlement funds, which are set to be housed in the general fund, to pay off its unfunded pension liabilities and save the city $117 million if later passed. 

The move, which passed 6-0 with council member Soheila Bana absent, asks city staff and the International Federation of Professional and Technical Engineers Local 21 to further research the plan. They’re expected to update the council within 45 days. 

“However the money is used, it will be used for the betterment of the city and the population,” said Mayor Eduardo Martinez. “It’s a gift that keeps on giving when we don’t have unfunded liabilities. That’s money that we can spend.” 

The direction also includes changes to refer to the potential funding source as “general funds” instead of “Chevron settlement funds” after Martinez voiced concerns with differentiating the two. 

If council members later opt to go forward with the plan, which was co-sponsored by council members Claudia Jimenez, Doria Robinson and Sue Wilson, the city’s current payment plan would shrink from 20 years to 10 years. 

Kristen Schumacher Nascimento, who presented the plan and lead researcher specialist with IFPTE Local 21, said the proposed payment plan could mean almost $33 million annually for other long-term projects. 

Martinez, who otherwise supported the plan, pushed back on parts of the proposal that refer to the potential funding source as “Chevron settlement funds” instead of the “general fund.” 

“What do we mean by Chevron funds? Chevron funds are from utility tax. It also comes from property tax, and it comes from the settlement,” he said. “So these Chevron funds, all three of them, aren’t special funds. They are part of the general fund and that’s how we need to be speaking about them.” 

The settlement last year came after environmental groups pushed to place a $1 per barrel tax on the November ballot before officials voted to enter into the 10 year agreement with the company. 

Under the agreement, Chevron will pay the city $50 million per year beginning in July 2025 for the first five years of the deal and $60 million for the remaining five. 

Emma Ishii, a local policy coordinator with the Asian Pacific Environmental Network, one of the groups that worked to place the tax on the ballot, was supportive of the city looking into ways to spend the additional funds. 

“Richmond residents deserve to see all of the options available to them and weigh in on how these funds are spent,” she said. “We hope to see the city invest in tangible projects that will improve the quality of life for residents … and to invest in a plan for a future beyond Chevron with an economy that is regenerative and addresses community needs.”

Council member Jamelia Brown said that it seemed the purpose of the Chevron funds was “misinterpreted to the community.” 

“Let’s be clear, this Chevron tax settlement is not a reward for the city’s budgeting strategy. It is the people’s payday, and they should have a say in what goes on and where that money goes,” she said. “When we use this settlement to quietly pay down debt behind closed doors, what are we telling the people?” 

Brown said that means “robust community input” before deciding to pay off pension liabilities with the settlement funds. 

Robinson and Jimenez disagreed that anything was being — or would be — decided without getting community input. 

“Can we have somebody study it and bring the information back — in an open forum, where many people are online watching with no locked doors; we’re not behind any closed doors here — so we can discuss it and make a good decision?” said Robinson.

The next Richmond City Council meeting is Tuesday.