March 7, 2023
City Attorney's Office
DATE: March 7, 2023
TO: Mayor Martinez and Members of the City Council
FROM:
David J. Aleshire, City Attorney
James J. Atencio, Senior Assistant City Attorney
Lina Velasco, Director of Community Development
SUBJECT:
Legal Services Agreement with Aleshire & Wynder, LLP
for legal services in connection with proposed Chevron
Hydrogen Fuel project and Reimbursement Agreement
with Chevron
FINANCIAL IMPACT: The total expenditure for the legal services agreement is not to exceed $85,000. Deposits from the project
applicant will be collected to cover costs related to this contract. A reimburse agreement will also be executed
with Chevron to ensure all City costs related to this LSA are covered.
PREVIOUS COUNCIL
ACTION:
None
STATEMENT OF THE
ISSUE:
To support the City with specialized legal representation relating to the Chevron Hydrogen Fuel project, the City Attorney seeks approval of a legal services agreement
with Aleshire & Wynder for an amount not-to-exceed
$85,000 to be reimbursed by the Project applicant
through a Reimbursement Agreement.
RECOMMENDED ACTION:
APPROVE a legal services agreement with Aleshire &
Wynder for legal representation related to a proposed
Chevron Hydrogen Fuel project, with the term expiration date of June 30, 2024, and for a total amount not to
exceed $85,000 and APPROVE a Reimbursement
Agreement between the City and the project applicant
(Chevron) such that project applicant reimburses for City AGENDA
REPORT
March 7, 2023
staff and the City’s environmental consultants’ costs and expenses- City Attorney’s Office (James Atencio 510-
620-6509). This item was continued from the
February 21, 2023, and February 28, 2023 meetings.
DISCUSSION:
The Chevron Products Company (Chevron) operates a petroleum refinery located in Richmond. The refinery currently operates a two -train hydrogen plant that produces hydrogen to supply process units including hydrocracking and hydrotreating to manufacture transportation fuels, such as gasoline.
Chevron plans to submit an application to the City’s Planning Department for a Hydrogen Fuel Project (project) in the City. The project proposes to alter the existing facility to produce fuel cell grade hydrogen (H2) as an alternative to motor vehicle fuel. As part of that process, Chevron has submitted a n Authority to Construct (ATC) application to the Bay Area Air Quality Management District (BAAQMD) for a new Hydrogen Fuel Project. The project will require an environmental assessment to ensure compliance as required by the California Environmental Quality Act (CEQA), as well as demonstrate compliance with State and City requirements.
Given the complexity of the project, City staff is proposing to use Aleshire & Wynder, LLP to provide legal services and support to the Planning Department for the processing of the project application and associated review . A separate legal services agreement is proposed to help track costs and ensur e that Chevron reimburses the City for all legal expenses associated with the consideration of their Project. This is accomplished through the City requiring a reimbursement agreement with Chevron to ensure that Chevron fully pays for all costs and expenses related to the project.
The Reimbursement Agreement requires Chevron to make an initial deposit of $100,000 and to keep it funded with at least $50,000 or 90 days of forecast expenses, as requested by the City. The funding includes paying for the City staff and the City’s environmental consultants. CEQA requires that the consultants be independent of the project proponent even though they pay costs and work for the City. Section 7 includes language implementing this. Developer must also pay the cost of defending litigation. (Section 8.2).
The City typically uses this mechanism to fund development projects. City also retains its police powers to approve, deny or condition projects (Section 10).
DOCUMENTS ATTACHED:
Attachment 1 – Legal Services Agreement with Aleshire and Wynder Attachment 2 – Project Reimbursement Agreement