Reso. No. __-24
RESOLUTION NO. __-24
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RICHMOND,
CALIFORNIA, SUBMITTING TO THE VOTERS A MEASURE TO IMPOSE A
BUSINESS LICENSE TAX ON THE PRIVILEGE OF CONDUCTING THE BUSINESS
OF OIL REFINING IN THE CITY OF RICHMOND
WHEREAS, the City Council (the “Council”) of the City of Richmond (the “City”), within the County of Contra Costa, California (the “County”), desires to place a ballot measure before the voters at the November 5, 2024, to raise revenue for municipal purposes to imposed a business license tax on the privilege of conducting oil refining in the City at a tax rate of One Dollar ($1.00) per barrel of feedstock refined in the City; and
WHEREAS, the City of Richmond (“City”) is authorized by law to establish business license taxes, as an excise tax, upon businesses within the City for the privilege of doing business in the City pursuant to its authority as a charter city, including, but not limited, to Section 7 of Article II of the City Charter; Cal. Const. art XI, Section 5; and Government Code Section 37101 and Business & Professions Code Section 16000 et seq. (to the extent applicable); and
WHEREAS, In 2008, the City’s voters approved Measure T, which established a business license tax wherein manufacturing businesses would pay the greater of (1) what was paid by other general businesses or (2) a flat fee of 0.250% of the value of raw materials used in the manufacturing process (“Measure T”); and
WHEREAS, a party initiated litigation against City regarding Measure T after voter approval and the City and the party ultimately entered into a settlement agreement to resolve the litigation wherein the party agreed to make certain settlement payments and, further, limited the maximum tax payment owed by the party pursuant to Chapter 13.52 of the Richmond Municipal Code (the City’s utility users’ tax) and limited the party’s business license tax obligation under Chapter 7.04 of Richmond’s Municipal Code such that it is calculated at $234.10 plus $46.80 per employee for the first 25 employees and $40.10 for every employee thereafter (“Measure T Settlement”); and
WHEREAS, after June 30, 2025, certain restrictions in the Measure T Settlement will no longer be imposed upon the City, including, but not limited to, the requirement that any new or increased tax imposed upon the aforementioned party before July 1, 2025, would result in that tax amount credited against both the settlement payment and the taxes paid by that same party pursuant to the Measure T Settlement;
WHEREAS, in 2020, the City’s voters adopted Measure U, which modified the City’s business license tax such that the existing business license tax rate is 0.06% to 5.00% of the gross receipts, depending on the business type;
WHEREAS, the City continues to be burdened by impacts from the oil refining industry’s activities within the City, which include, but are not limited to the following:
A. In 2023, it is estimated that an average of 25,000 pounds of hazardous waste was produced each day by the oil refining industry within the City.
B. In 2022, it is estimated that 59,921 pounds of toxic chemicals were released into the surface waters of the San Francisco Bay and San Pablo Bay by the local refinery, impacting local wildlife and communities that closely interact with those waters including fishers. The refinery’s toxic releases increased significantly from the previous year in 2021, when it is estimated that 37,722 pounds of toxic chemicals were released into the surface waters of surrounding bays.
C. Odor complaints in Point Richmond from operations at the Long Wharf, as well as other noise and odor issues in neighborhoods near the refinery, impact the quality of life of City residents.
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D. It is estimated that particulate matter from the refinery alone is linked to approximately 5 to 11 premature deaths in the City each year. Other health impacts from particulate matter, and from other contaminants such as NOx and SOx, include increased risks of infant mortality, cancer risk, and traumatic mental health effects.
E. The City’s asthma rate is at the statewide 90th percentile and the City’s neighborhoods near the refinery, such as the Iron Triangle and Atchison Village, are in the 97th to 99th percentile for asthma.
F. The preceding and other refining-related health impacts affect Richmond residents and their opportunities in life, including their income and, in turn, the economic position of the City itself.
G. In 2012, an explosion at an oil refinery injured six employees and sent 15,000 City residents to hospitals seeking medical treatment. A diesel spill in 2021 underscored more risks inherent in oil refining. Further, in 2023, a flaring incident logged more than 100 air quality complaints to the Bay Area Air Quality Management District. These kinds of incidents require the City’s Fire Department to provide emergency response and City-sponsored alert systems such as Nixle to notify residents. These incidents, including ongoing flaring, which has increased since the local refinery completed its modernization project in 2018, also take a toll on the well-being of residents; at schools near the fence line, students know to run inside from the play yard when they see the refinery start flaring.
H. Property values in the City are suppressed by the proximity of Richmond homes and businesses to an oil refinery, impacting residents directly and the City’s property tax base.
I. The oil refining sector is volatile, and the City is vulnerable to those changes, and could one day be saddled with a toxic site with no one to pay for remediation.
Refinery closures can be announced overnight as a matter of the course of business, such as the Martinez Marathon refinery’s prior fate, before its course reversal and biofuel conversion, or the Philadelphia PES refinery’s sudden shuttering following an on-site explosion. In the latter case, the company declared bankruptcy, leaving behind a site (half the size of the Richmond refinery) that could take more than a decade to remediate at a price of more than a billion dollars according to experts. Meanwhile, the owner and operator of the refinery in Richmond described its lack of closure and cleanup planning for refineries in its 2023 annual report, writing “no provisions are made for exit or cleanup costs that may be required when such assets reach the end of their useful lives unless a decision to sell or otherwise decommission the facility has been made, as the indeterminate settlement dates for the asset retirements prevent estimation of the fair value of the asset retirement obligation.”
J. A conversion of the local refinery from one that refines crude petroleum to one that refines alternative feedstocks or biofuels feedstocks still poses many of the same risks to the same degree, as recent local biofuel conversion projects and subsequent flaring, fires, chemical releases, and air pollution comparable to crude petroleum refining at the Rodeo Phillips 66 and the Martinez Marathon refineries demonstrate.
WHEREAS, the ordinance, attached hereto in Exhibit A, proposes a business license tax, which is an excise tax, upon the business of conducting oil refining in the City at the rate of $1.00 per barrel of feedstock refined in the City and is, therefore, measured by the volume of refining rather than another measurement that may be interpreted as any tax other than an excise tax, including but not limited to, a property tax, sales tax, or use tax, or other excise tax on the sale or consumption or use of feedstock or refined products; and
WHEREAS, the ordinance explicitly excludes the application of the business license tax so to apply an undue burden upon interstate commerce or violate the constitutions of the United States and its territories, and the State of California; and
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WHEREAS, in order for the ordinance to become effective, it must be approved by the electorate; and
WHEREAS, on June 4, 2024, the Council adopted Resolution No. 47-24, calling for a general municipal election on November 5, 2024 (“Election”); and
WHEREAS, the City Council desires to submit the ordinance to the qualified electors of the City at that Election.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Richmond, as follows:
Section 1. The foregoing recitals are true and correct, and this Council so find and determines.
Section 2. A general municipal election has been called for the City to be held on Tuesday, November 5, 2024. The City Council hereby submits the following measure to the voters at the Election:
“To fund general City services, such as clean air and water treatment, roads, parks, fire and emergency response, toxic land cleanup, and improving community health and youth services, and for general government use, shall the measure establishing a business license tax on the privilege of conducting oil refining in the City of Richmond at the rate of $1.00 per barrel of feedstock refined in the City of Richmond, providing approximately $60 million to $90 million annually for 50 years, be adopted?”
Section 3. The ordinance to be approved by the voters is set forth in Exhibit A. The City Council hereby approves submission of the ordinance to the voters of the City at the November 5, 2024, election. The ordinance specifies that the business license tax, which is an excise tax, rate shall be of One Dollar ($1.00) per barrel of feedstock refined in the City of Richmond, as defined therein. The City Clerk is authorized to modify this resolution and/or the ordinance, as provided in Exhibit A, for the purposes of complying with applicable law. In order for this ordinance establishing a tax to become effective, it must be approved by a majority of the City’s voters voting on November 5, 2024.
Section 4. The City Clerk of the City of Richmond is hereby ordered and directed to cause said proposed measure to be printed and to mail a copy of said measure to all registered voters in the City of Richmond with sample ballots in substantially the form set forth in Exhibit A, attached hereto.
Section 5. The City Clerk of the City of Richmond is hereby authorized to sign a Notice of Election and Measure To Be Voted On in a form substantially similar to that attached hereto as Exhibit B. The Clerk of the City is hereby authorized and directed to publish said Notice of Election and Measure To Be Voted On at least one time not later than a week before the election in the EAST BAY TIMES, a newspaper of general circulation circulated within the City of Richmond, in accordance with the provisions of Section 12111 of the Elections Code of the State of California.
Section 6. The Clerk of the City is hereby authorized and directed to cause to be delivered, no later than August 9, 2024 (which date is not fewer than 88 days prior to the date set for the Election) one copy of this Resolution to the Registrar of Voters of the County.
Section 7. The City Council hereby directs the City Clerk to transmit a copy of the measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the measure, not to exceed 500 words in length, showing the effect of the measure on the existing law and the operation of the measure, and transmit such impartial analysis to the City Clerk within thirty (30) days of the adoption of this resolution.
Section 8. The Finance Director of the City is hereby authorized and directed to prepare and file with the Registrar of Voters (through the City Clerk) an impartial analysis of the measure contained in Section 2 hereof covering its financial impact upon the City government in
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accordance with Section 2.16.070 of the Municipal Code of the City, within the time established by the Registrar of Voters.
Section 9. Pursuant to Section 9282 of the Elections Code of the State of California, the legislative body of the City of Richmond, or any member or members of the legislative body authorized by the body, or any individual voter who is eligible to vote on the measure or bona fide association of citizens, or any combination of voters and associations, may file a written argument, not to exceed 300 words in length, accompanied by the printed name(s) and signature(s) of person(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, for or against the City measure. Such arguments shall be due on the date fixed by the City Clerk.
Section 10. This tax is a general tax requiring the approval of a majority of qualified electors casting votes. The Council has complete discretion to expend the tax proceeds for any lawful purpose of the City of Richmond.
Section 11. Pursuant to California Elections Code section 9285, subdivision (b), the City Council hereby adopts the provisions of California Elections Code section 9285, subdivision (a), relating to rebuttal arguments for the measure identified in section 2 above only for the November 5, 2025, election and thereafter this section 11 shall expire.
Section 12. This resolution shall take effect immediately upon its adoption.
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Reso. No. __-24
I certify that the foregoing resolution was passed and adopted by the City Council of the City of Richmond at a regular meeting thereof held June 18, 2024, by the following vote:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
CLERK OF THE CITY OF RICHMOND
(SEAL)
Approved:
Mayor
Approved as to form:
City Attorney
State of California }
County of Contra Costa : ss.
City of Richmond }
I certify that the foregoing is a true copy of Resolution No. __-24, finally passed and adopted by the City Council of the City of Richmond at a regular meeting held on June 18, 2024.
Pamela Christian, Clerk of the City of Richmond
EXHIBIT A
FULL TEXT OF ORDINANCE
EXHIBIT B
Notice of Election and Measure To Be Voted On
CITY OF RICHMOND
NOTICE OF GENERAL MUNICIPAL ELECTION
AND MEASURE TO BE VOTED ON
NOTICE IS HEREBY GIVEN that a General Municipal Election will be held in the City of Richmond on Tuesday, November 5, 2024, at which there will be submitted to the voters the following measure:
Said Election has been consolidated with the Statewide General Election to be held in the City of Richmond on November 5, 2024. The election precincts within the City of Richmond for said Election shall be the regular election precincts established for said Statewide General Election, and the polling places and officers of election within the City of Richmond for said Election shall be the same as those selected and designated or to be selected and designated for said Statewide General Election.
NOTICE IS FURTHER GIVEN pursuant to Article 4, Section 9282 of the Elections Code of the State of California, the legislative body of the City of Richmond, or any member or members of the legislative body authorized by the body, or any individual voter who is eligible to vote on the measure or bona fide association of citizens, or any combination of voters and associations, may file a written argument, not to exceed 300 words in length, accompanied by the printed name(s) and signature(s) of the person(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, for or against the City measures.
NOTICE IS FURTHER GIVEN that, based upon the time reasonably necessary to prepare and print the arguments and sample ballots for the election, the City Clerk has fixed Wednesday, August 21, 2024, during normal office hours, 8:30 a.m. to 5:00 p.m., as the date after which no arguments for or against the City measure may be submitted to the Clerk for printing and distribution to the voters as provided in Article 4. Arguments shall be submitted to the City Clerk, accompanied by the printed name(s) and signature(s) of the person(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument, at the Richmond City Hall, 450 Civic Center Plaza, Suite 300, Richmond, California. No more than five signatures may appear on the argument.
NOTICE IS FURTHER GIVEN that the City Council of the City of Richmond has determined that rebuttal arguments, not to exceed 250 words in length, as submitted by the authors of the opposing direct arguments, may be filed with the City Clerk by Monday, August 26, 2024, during normal office hours, 8:30 a.m. to 5:00 p.m., accompanied by the printed name(s) and signature(s) of the person(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers. No more than five signatures may appear on the rebuttal.
NOTICE IS FURTHER GIVEN that any ordinance, impartial analysis, or direct argument filed under the authority of the Elections Code will be available for public examination in the City Clerk’s office from Tuesday, August 27, 2024, to Thursday, September 5, 2024. Any rebuttal argument filed under the authority of the Elections Code will be available for public examination in the City Clerk’s Office from Tuesday, August 27, 2024, to Thursday, September 5, 2024.
The polls will be open on Election Day between the hours of 7:00 a.m. and 8:00 p.m.
Pamela Christian
Clerk of the City of Richmond
City Elections Official
NOTA:
Si desea obtener información en Español de este aviso legal, puede llamar a la Oficina de la Secretaria Municipal, (510) 620-6513.
Dated: Publish: