Wednesday, May 12, 2010

Who Won: Richmond or Chevron?

By Robert Gammon
Wed, May 12, 2010 at 12:04 PM

The answer appears to be both — or neither, depending on your point of view. The settlement agreement approved by the Richmond City Council last night guarantees that Chevron will pay the city $4 million to $13 million more than it does now each year for the next fifteen years. Although it’s not as much money as the city hoped to collect, it’s more than the oil giant wanted to pay. Plus, the city could have come out a lot worse.

First a bit of background. Chevron lost its control over the council in the November 2008 election as part of a backlash against the oil company’s proposed massive expansion of its Richmond refinery. Voters in that election not only ousted Chevron-friendly politicians who held sway over the council, but they approved Measure T, a tax initiative designed to make the oil giant pay an additional $16 million to $20 million each year to the city. The money was to help repay Richmond residents for the environmental havoc the oil company has caused over the years. But with its bevy of high-priced lawyers, Chevron effectively tied Measure T up in the courts.

So the council decided to put another tax measure on this year’s November ballot. But then Chevron played more hardball. It sponsored its own measure for the same election that would not only keep its taxes low, but would lower taxes throughout Richmond. The move worried council members because the recession might convince cash-strapped voters to approve Chevron’s proposal. The city, as a result, stood to lose $20 million in overall tax revenues a year, a devastating blow that would have brought Richmond to the brink of insolvency.

The council could have stood firm, and hoped that voters would reject Chevron’s tactics. Or it could have held out for a better deal. But the clock was ticking. Chevron was bent on putting its tax-cut measure on the November ballot. So the council agreed to the settlement, and Chevron abandoned its initiative. The council also agreed to kill its own 2010 measure and drop any chance of ever implementing Measure T.

No doubt it was a tough pill to swallow. But the risk for the little city to go toe-to-toe with one of the biggest and richest corporations on the planet was huge.

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