Response to Chevron Appeal of Planning Commission CUP 93-40
Prepared By Thomas K. Butt
(Draft in Progress, January 18, 1994)
TABLE OF CONTENTS
INTRODUCTION 4
Conditional Use Permit Appeal 4
The Project 4
Why A Conditional Use Permit is Required 5
Powers of the Planning Commission 5
FINDINGS 5
Types of Findings 5
Conditional Use Permit Findings 5 Evidence from the Public Record 6 Social and Psychological Changes 9
Environmental Findings 10 Statement of Overriding Consideration 10
THE NEXUS PERPLEXUS 11
The Case for Adequate Nexus 11
Congressional Committee on Natural Resources 12
The Clinton Administration 12
History of North Richmond 13
Education Nexus 14 The CAP as a Measure of Student Performance 14 CAP Scores at Schools Nearest The Chevron Refinery 15 Mitigating a Predetermination of Low Achievement 16
ECONOMICS 17
Chevron - An Economic Giant 17
Effect on Profit 18
Effect on Cost of Product 18
Chevron Charity 18
Taxes 19
EMPLOYMENT 19 PROPERTY IMPROVEMENTS 20
CONCLUSIONS 22
Introduction
Conditional Use Permit Appeal On December 16, 1993, the Richmond Planning Commission Granted Conditional Use Permit CU 93-40 with the addition of nine additional conditions and the modification of two others. The nine additional conditions are identified in the Staff Report, Attachment B, dated December 16, 1993, as conditions II-13 through II-21.
On December 27, 1993, Chevron filed an appeal to the Richmond City Council of the Richmond Planning Commission approval of Conditional Use Permit application CU 93-40 for the Chevron Reformulated Gasoline and FCC Plant Upgrade Project. Chevron requested deletion of conditions II-2, II-3 and II-4 recommended in the original staff report as well as conditions II-13 through II-16 and II-18 through II-21 added by the Planning Commission. As reasons for the appeal, Chevron alleged that the conditions added by the Planning Commission were unlawful, arbitrary and capricious, unsupported by evidence, and unconstitutional. Chevron did not appeal new condition II-18 which called for the elimination of a threat of phosgene gas either by utilizing a safe alternative or by providing a detailed study to show how a release will be contained or not cause a hazard.
Also on December 27, 1993, a Chevron press release described the [Planning] commission’s conditions as shortsighted and ill-advised, putting the refinery at a competitive cost disadvantage in a business where refineries can live or die on the basis of pennies per gallon in operating costs.
The purpose of this paper is to respond to Chevron’s criticisms of the conditions imposed by the Planning commission and to show why the conditions are appropriate, legal, and consistent with policies of the General Plan and the Zoning Ordinance. The Project Chevron continues to euphemistically characterize the project as simply the “Cleaner Fuels Project” involving “certain specific modifications needed to produce clean fuels as mandated by Federal and State law”. Frequently omitted from Chevron’s description is the fact that approximately half the cost of the project will be to improve the efficiency and reliability of the FCC Plant and to increase feedstocks to the Alkylation, MTBE, and TAME Plants.1One result is that the production capacity for motor gasolines will rise from approximately 97,000 bbls. per day to approximately 110,000 bbls. per day.2
The proposed project is the latest component of a continuing modernization of the entire refinery, an industrial “Winchester House” beginning ten years ago with the $530 million Lubricating Oil Plant. Major projects completed since then include a $55 million Lubricants Blending and Packaging facility, a new $98 million, 99 megawatt electrical cogeneration plant, a $36 million MTBE Plant, and a $61 million diesel hydrotreater. In November 1991, the No. 4 Crude Unit was modified to increase its capacity from 200,000 bbls. per day to approximately 245,000 bbls. per day.3 Since 1987, Chevron has reported over $1.1 billion of projects under the unique Certified Inspector Program where Chevron calculates its own costs, reviews its own plans, and inspects its own construction. The total cost of these recently completed modernization projects and the proposed project is nearly twice the $1.16 billion value of the entire existing refinery complex, raising the spector of piecemealing a de facto refinery reconstruction project to avoid full environmental review under CEQA.
The Chevron Refinery proper consists of 2,900 acres but is located adjacent to two other Chevron operations, Chevron Research and the Ortho Division of Chevron Chemical. Although the adjacent General Chemical facility is legally a separate entity, it is joined by a pipeline to the refinery and exists principally to process products to and from the refinery. The acid cloud of July 1993 was formed from material either destined for or coming from the refinery.
1DEIR, II.1 2DEIR, Figure III-5 3DEIR, III.13 Why A Conditional Use Permit is Required The existing General Plan land use designations for the Chevron refinery property are General Industry (GI), Special Industry (SI), and Park, Recreation, and Open Space (P). The area within which the proposed project will be constructed is designated General Industry.4
Because petroleum refining is a use which may be obnoxious or offensive by reason of emission of odor, dust, smoke, gas, noise, vibration, and the like, the Planning Commission has the authority under RMC 15.04.140.A.39.n to ...to impose such conditions as it deems necessary to protect the best interests of the neighboring property or neighborhood and to carry out the purposes of the zoning ordinance and the General plan.5 Powers of the Planning Commission The Planning Commission may, after a public hearing, permit uses requiring a Conditional Use Permit, provided three findings can be made:
1. The location of the proposed conditional use is in accord with the policies of the General Plan.6 2. The location, size, design and operating characteristics of the proposed development or use will be compatible with, and will not adversely affect the livability or appropriate development of, abutting properties and the surrounding neighborhood.7 3. The proposed conditional use complies with all applicable provisions of the Zoning Ordinance.8 There are two policies of the General Plan applicable to this project which have not been adequately discussed in the EIR or the staff analysis. The first states that, Performance standards which will safeguard adjacent...residential areas, or other land uses in the community will govern developments of general industry.9 The second is, Limit all forms of activity that may be objectionable such as odors, fumes, vibration or glare so that they will not be noticeable beyond the limits of the industrial district.10 Findings Types of Findings One purpose of a staff report for a Conditional Use Permit is to evaluate whether or not the provisions necessary to grant a permit have been met. These are called “findings.” In this case, there are two types of findings. The first set of findings relates to whether or not the project conforms to the General Plan and the applicable zoning ordinances, including the chapter describing Conditional Use Permits. The second set of findings are known as “environmental findings” because they respond to the requirements of CEQA regarding significant impacts and how they are mitigated. Conditional Use Permit Findings In evaluating Conditional Use Permit Provision Number 2, staff concluded that the location, size, design, and operating characteristics of the proposed development will be compatible with and will not adversely affect the livability or appropriate development of abutting properties and the surrounding neighborhood. The staff concluded further that the Project should be compatible with and overall beneficial to the livability or
4DEIR, IV.A..7 5DEIR, IV.A.11 and RMC 15.04.190.C.5 6RMC 15.04.190.A.1 7RMC 15.04.190.A.2 8RMC 15.04.190.A.3 9Concise General Plan Document of the Richmond General Plan (CGPRGP), 2.04.A 10Ibid., 2.04.A(5) appropriate development abutting properties and the surrounding neighborhood.11In perhaps the largest leap of irrationality, staff concluded that even though the EIR recognized [increased] air emissions from the project as an adverse impact when compared to existing conditions, the project will not adversely impact the livability or appropriate development of abutting properties and the surrounding neighborhood because the increased emissions will not be recognized as such by the BAAQMD for permitting purposes.
The Planning Commission, in approving the Conditional Use Permit with additional conditions, rejected the staff Finding for Provision Number 2 because of the overwhelming evidence that the Chevron Refinery, both currently and with the proposed project has continuing adverse impacts on the surrounding neighborhood relating to pollution and safety, and these impacts are inconsistent with the policies of the General Plan and are violations of the Zoning Ordinance and other provisions of the Richmond Municipal Code. Evidence from the Public Record
The EIR cites substantial evidence, based on public agency records and information provided by Chevron that the Chevron Refinery has a history of routine and periodic activities , including production of odors and fumes, which are objectionable to or adversely affect the livability of non-industrially zoned surrounding neighborhoods and are therefore contrary to the policies of the Zoning Ordinance and General Plan. The EIR cites no evidence that the Chevron Refinery will not continue to adversely affect the livability of surrounding neighborhoods and, in fact, concludes that the proposed project will result in increased emission of air pollutants and increased handling of hazardous materials that might pose threats to the public.
1. BAAQMD has issued 155 violation notices against Chevron from October 1988 through October 1992, some of which came from public complaints about smoke and odor. From January, 1990 through January 1993, there were 275 public complaints (an average of nearly two per week) compiled by BAAQMD. Of these, 106 were confirmed, and 11 resulted in violation notices.12 Any condition in violation of any rule, regulation, standard, or other requirement of the air pollution control district is a public nuisance under RMC 9.22.050(a)(6). 2. According to Chevron, the proposed project will result in an increase of 471 tons per year of stationary source air criteria emissions.13 The most prevalent winds blow Chevron pollution into the residential areas north of the refinery, and during relatively calm winter days inversions concentrate air pollution emissions near the ground.14 3. Under Federal EPA National Ambient Air Quality Standards (NAAQS), the City of Richmond is designated “nonattainment” for Ozone and Carbon monoxide. Under State Ambient Air Quality Standards (SAAQS), the City of Richmond is designated “nonattainment” for Ozone and Respirable Particulate Matter. Failure to attain these standards is due to the Chevron refinery, and the proposed project will exacerbate nonattainment.15 4. The California Department of Toxic substances Control (DTSC) reported 14 hazardous waste violations by the Chevron Refinery from 1989 through 1993.16 5. Within the last three years the Richmond Fire Department has issued two or three written warnings to the Chevron Refinery and an unspecified number of verbal warnings for violations of the Uniform Fire Code.17 Any condition in violation of RMC 8.16 (Uniform Fire Code) is a public nuisance under RMC 9.22.090(a)(5).
11Memo from Planning Department to Planning Commission regarding Conditional Use Permit Application CU 93-40 (Staff Report), CPC Meeting 12/16/93, 8. 12DEIR, IV.C.15 13DEIR, Table IV.C-10 14DEIR IV.C.2-3 15DEIR, IV.C.5 16DEIR, IV.E.10 17DEIR, IV.E.11 6. Since 1989, The Chevron Refinery has exceeded its National Pollution Discharge Elimination System (NPDES) permit limitations on hazardous material discharges 47 times.18 7. In 1992, OSHA observed 65 violations at the Chevron Refinery19. 8. From February 4, 1987 through June 23, 1992, there were 29 hazardous material incidents at the Chevron Refinery which were reported to public agencies, including release of hazardous substances, equipment failures, off-site effects, odors, fires, and injuries.20 Not reported in the DEIR Summary of Hazardous Material Incidents are incidents since June of 1992 and such apparently insignificant incidents as the derailing of two anhydrous ammonia tank cars on October September 31, 1990.21 9. The Chevron Refinery transports 110 million gallons per year of hazardous substances and 1.4 million pounds of FCC catalyst in or out of the facility via rail car every year and stores 1.1 million gallons of hazardous materials in rail cars every day.22 10. The DEIR states that the Project, will significantly increase the use of several hazardous material at the Refinery23 and concludes that, Project implementation would increase handling of hazardous materials that might pose threats to workers at the Refinery or to the public.24 11. In the three years from 1990 through 1992, emergency responses to incidents at the Chevron Refinery included 247 by the Chevron Fire Department, 8 by the Richmond Fire Department, 8 by the Richmond Police Department, and 173 by the Regional Ambulance. The CAN system was activated twice, and the Hazardous Materials Response Team responded once.25 12. There have been releases of hazardous waste and hazardous constituents from the facility into the ground water, soils, and potentially San Pablo Bay. Chemical analysis of monitoring well samples show that there have been releases of heavy metals and organic compaounds into the groundwater. Chemical analysis of soil samples show that there have been releases of heavy metals into the soil. In 1982, during a 200+ year rainfall, wastewater from No. 1 Oxidation Pond mixed with waters of San Pablo bay. A high tide caused Bay waters to overflow the containment dike of No. 1 Oxidation Pond. Some of this co-mingles process, storm, and Bay water was eventually discharged into San Pablo Bay.26
By relying solely on public records for evidence of adverse impacts by the Chevron Refinery on the surrounding neighborhoods, the EIR authors and City Planning staff circumvented compelling sources of information, including interviews with residents and stories in the media. Within the last few years there have been numerous, well-researched stories in both the published and broadcast media about the adverse impacts of the Richmond Refinery on residents of surrounding neighborhoods. Following are samples of some of these interviews:
1. Hubert Lewis Griffin - The physical and psychological toll that living under the toxic plume exacts from Richmond residents has been well documented in the media. Hubert Lewis Griffin, 65, who has lived in Richmond for the last 25 years, said he’s tired of “coughing up old lumps of
18DEIR, IV.E.11 19DEIR, IV.E.12
20DEIR, IV.E.17 21Derailed Chemical Tankers Close Richmond Roadway, West County Times, October 1, 1990. 22DEIR, IV.E.23 23DEIR, IV.E.29 24DEIR, IV.E.25 25DEIR IV.F.23 26United States Environmental Protection Agency, Region 9, Administrative Order on Consent (Agreement) in the matter of Chevron, USA, Inc. - Richmond Refinery, June 18, 1990, 10 things” and feeling sick day after day. “You smell all kinds of smells all the time, said Griffin who lives at 329 South 4th Street., “I’m going to try to get out of here as damn soon as possible.”27 2. Jody White, who has lived along Pennsylvania Avenue in Richmond for 27 years, said he’s fed up with living in the shadow of what he perceives as impending disaster. “Chevron (oil refinery) is like a .357 ready to go off. If I could afford it, I’d get the hell out.”28 3. Jean Young - During the day you can smell different kinds of odors. At night you get different mists in the area, said Jean young, 46, who has lived in North Richmond her entire life. “I’m wondering what kind of effect its having on the population. I wonder if there’s something that’s happening to us physically because of this environment.”29 4. Willie Dye - Every time Willie Dye walks out of the neighborhood grocery his family runs on Filbert Street in North Richmond, he looks over his shoulder to see if there are any problems at the nearby Chevron refinery and manufacturing complex. Dye has lived for eight years in this largely low-income community of 2,500 people. he has endured mysterious odors drifting through his neighborhood from many small chemical spills at the oil refinery and associated chemical and fertilizer plants. he is not convinced by the company assurances that design and operation of the plants make a major chemical accident virtually impossible. “You go to bed; you try not to think about it. But you can’t help thinking about it, because you’re smelling it all the time. you wonder what’s going to be next.”30 5. Bob Carlson - Bob Carlson, who says he lives on “ground zero” across from the Chevron refinery in Point Richmond, woke up on December 6, 1991, to see, “oily black-and-white dust like snow” all over the neighborhood from a 40-ton cloud of dust that had been accidentally released from the Chevron Refinery. “You could attribute short-term respiratory problems to the dust cloud itself”, Contra Costa health Director Dr. William Walker told the Bay Guardian last week. “But there was no chemical effect.”31...But a survey by the Toxic Cloud Task Force, which Bob Carlson helped found, found that 500 people in an 18-mile area reported health problems - not only respiratory problems but also rashes, headaches, two miscarriages, nausea, vomiting, confusion, and inability to concentrate32. 6. Michelle Ozen - Like a canary in a coal mine, Michelle Ozen sniffs the air every morning for chemical smells as she steps off her front porch to go to work.33 7. Bowler-Cone Study - The initial assessment of many treating physicians following the General chemical release in July of 1993, was that symptoms would be temporary and disappear in a matter of days. A follow-up study released in December of 1993 showed that those exposed to the sulfuric acid cloud continue to have, symptoms of either respiratory or skin related diseases along with emotional problems. The Richmond residents had “substantial fears” of future illnesses for themselves and their children,”, said Rosemary Bowler, a San Francisco State University professor who conducted the study along with Dr. James Cone of the University of California at San Francisco.34 8. Francis Aebi - I am and have been a resident, greenhouse owner and operator at 509 Brookside Drive since 1927. Over that span of years I have not been a stranger to air pollutants that have trespassed upon my property. On more occasions than I wish to remember, I had to close my
27Chemical Hazards Just a Part of Richmond Life, The Oakland Tribune, July 28, 1993.
28Ibid.
29Race and the Environment, West County Times, August 1, 1983.
30Living Under a Toxic Cloud of Fear, West county Times, December 13, 1993
31Clearing the Toxic Cloud, The Bay Guardian, April 21, 1993. 32Ibid. 33Chemical Hazards Just a Part of Richmond Life, The Oakland Tribune, July 28, 1993.
34New Study Details Injuries from Spill, San Francisco Chronicle, December 4, 1993. bedroom windows at night to avoid the stench and then to look at the tissue injury to my plants in the morning.35 9. Ahmadia Thomas - My husband is now ill from this pollution. He went to the hospital. The doctor didn’t know why his temperature was so high and his blood pressure was up. They could not get his blood pressure down for five days, and he is still confined to the hospital. I know it’s from the chemicals.36 10. Earnest Witt - I have been here some 40 years and I have seen not only some of my extended family pass away from illnesses, but I have seen quite a few friends in this area to pass away from illnesses. We always wondered what it was that was killing our people and the women having miscarriages, people having skin rashes like I got, people having breathing problems, and so here in the last 15 years, it finally dawned on us that there was something wrong in this community with the bad smells, you know, with the people laying up from cancer. We go through and drive through Chevron and walk through there and sometimes your eyes would burn. You couldn’t grow things in your garden. You would come out the next day and your paint was coming off your cars.37 11. Willie Parker - We believe that Chevron Oil, they are the ones that is causing us to have so many problems with our health. Miscarriages, myself and my wife, we have experiences about three and we believe that plant is the cause of it. And not only us, other people in the community is experiencing the same problems...And you don’t know. You people that don’t live here, you don’t know what we experience late at night. We cannot open our windows late at night. Three o’clock and four o’clock in the morning is when the smell and all the odor starts to come in when they [Chevron Chemical] starts to burn. That’s when its done. It’s not done during the day. It’s done just before the day, and when the wind blows out in North Richmond, it comes right into our living rooms. The house smells during the day after they have burned all night. Your car, it goes into the air and when you go out in the morning, it’s all over your car.38 12. Consewella Niweigha - As a matter of fact, I am raising my children in the same house I was raised in, and I have watched the 20 houses on this block, with three missing. There is one parent out of every house that died of cancer. I watched this. Now my kids are there, and I am worried about it. We do have rashes. Thaey can’t breathe. Your throat burns. Like you say, you walk out on the porch and your eyes burn. You have got to go back in and close the door. You can’t even come out sometimes.39
Social and Psychological Changes According to Raquel Pinderhughes, people undergo profound social and psychological changes as a result of toxic exposure and the threat of exposure to toxics. The experience leaves them with deep, permanent scars which change the way they view themselves, their family, their community, government, and the world. Even if the problem is dealt with, people remain fearful. They are terrified by unknown future effects on their health and the health of family members. Dealing with multiple levels of government and large corporations which make it impossible to define, locate, or meaningfully communicate with accountable officials leaves them with a feeling of vulnerability and lack of control. Helplessness is a reality as well as a strong feeling. Recognition of vulnerability, lack of control and power have radiating effects. There is potential for depression, despair, emotional problems, and substance abuse. Their lack of faith in government institutions has been deeply eroded and affects future interactions with the public sector. Suspicions about information from officials and scientists
35Transcript (Tr.) of Public Scoping Meeting, State of California Department of Health Services, Toxic Substance Control Program, ijn the matter of Chevron Chemical Company hazardous Waste Storage and Incinerator Facility Environmental Impact Report, April 24, 1990, 12. 36ibid, 45 37ibid, 64 38ibid, 68 39ibid, 74 are high. Frustrations over money, lack of resources, financial burdens, and fear of future health problems have profound effects on family interactions.40
Environmental Findings CEQA requires that prior to approval of a project for which an EIR has been prepared, written findings must be made regarding significant effects, and the findings must be accompanied by a statement of the facts supporting such findings.41 In Attachment A of the original staff report, the Planning Department staff made three findings, two of which are not in conflict with or support the conditions added by the Planning Commission.
Environmental Finding 1 stated that, changes or alterations have been required in, or incorporated into the project which avoid or substantially lesssen the significant environmental effects thereof as identified in the final EIR. 42With the inclusion of the conditions added by the Planning Commission, this statement can stand essentially as drafted with one exception. The final EIR was deficient in that it did not fully explore the effects of past and continuing pollution and accidents at the Chevron complex, including the proposed project, on the economic, social, health, and educational quality of life of people living in neighborhoods near the project, especially those living in the path of prevailing winds. The statement supporting Finding 1 conceded that the effects of air criteria pollutants and geology/seismicity were not fully mitigated. The statement erred in concluding that public health and safety were mitigated.
Environmental Finding 2 explains the allocation of responsibility between the City of Richmond and the BAAQMD for establishing conditions and monitoring compliance. Such changes are within the responsibility and jurisdiction of another public agency and not the agency making the finding. Such changes have been adopted by such other agency or can and should be adopted by such other agency.43 This statement is not in conflict with the Planning Commission’s additional conditions. In fact, it supports modified conditions II-2 and II-3 because it justifies requiring the applicant to provide funding for a consultant to the City, if needed, for monitoring conditions of approval.
There is no objection to Environmental Finding 3 which identifies mitigations or alternatives that are infeasible. Specific economic, social, or other considerations made infeasible the mitigation measures or project alternatives identified in the final EIR.44 The reasons for rejecting the “No Project” alternative and Alternatives I and II are reasonable as are the reasons for rejecting flare options which would increase noise and air emissions. Statement of Overriding Consideration Where the decision of the public agency allows significant effects identified in the EIR which are not required to be at least substantially mitigated, the agency is required to state in writing the specific reasons to support its actions based on the final EIR or other information in the record.45 The staff report identified three significant, unavoidable impacts:46
1. Emissions during construction exceeding 150 lbs./day.. 2. Emissions during operation exceeding 150 lbs./day. 3. Possibility of damage from groundshaking.
40Raquel Pinderhughes, Social and Psychological Impacts of Toxic Exposure (San Francisco: University of California, School of Medicine, January, 1993) 9-10. 41CEQA Guidelines, Section 15091 42 Staff Report CU 93-40, Attachment A, page 2 43ibid, 2-3 44ibid,4 45CEQA Guidelines, Section 15093 46Staff Report CU 93-40, Attachment A, page 5 The staff report suggested the following “overriding considerations” to justify permittting the project in spite of unavoidable impacts:47 1. The purpose of the Reformulated gasoline component of the project is to conform to State and Federal regulations for cleaner burning gasoline. 2. Use of reformulated gasoline will result in a decrease of emissions of CO, HC, Nox, and Sox within Contra Costa County. 3. The purpose of the FCC Plant Upgrade is to improve the efficiency and reliability of the FCC Plant, making it more enery efficient and less likely to contribute to an accidental release. 4. The Alkylation Plant modernization will reduce the use of freons and result in less damage to the stratospheric ozone. 5. The project will generate revenues for the City of Richmond and Contra Costa County and will generate jobs and economic activity. 6. The applicant will be required to contribute to the Richmond Urban Forest program. 7. No matter what design standards are used, there will always be the potential for damage in the event of an earthquake. The Statement of Overriding Considerations concluded by stating that, the benefits described above, when taken together, override the environmental impacts of the Project and they include for the residents of Richmond which will not otherwise occur without the project. It should also be noted that the environmental impacts that have been identified as relating to the Project’s operating air emissions are within an area of controversy, where they are judged as not significant under the regulations of the BAAQMD.48 This statement is not in conflict with the additional conditions imposed by the Planning Commission, and in fact, is bolstered by the additional conditions.
The Nexus Perplexus The Case for Adequate Nexus At the heart of Chevron’s criticism of the Planning Commission’s conditions is the claim that there is insufficient connection (nexus) between the specific project and the proposed conditions. Chevron further asserts that portions of the refinery not a part of the specific project are immune from conditions. Chevron erroneously states that there was no evidence before the Planning Commission that existing refinery operations present a nuisance or risk that would be mitigated by the conditions imposed on the CUP.49
The evidence is clear that the existing refinery, with or without the proposed project, is a source of air pollution and safety risks with a history of adverse impacts on the surrounding neighborhoods. These impacts are inconsistent with policies of the General Plan, Zoning Ordinance, and other provisions of the Richmond Municipal Code. The City has a legitimate governmental interest in reducing pollution, increasing public safety, and protecting public welfare. The nexus between those conditions which are intended to reduce pollution and increase safety could hardly be closer. There is nothing in case law to suggest that a mitigation for an adverse impact has to be limited to the same component of a facility that caused the problem.
The case for adequate nexus of the community foundation is more complex but just as compelling. Because of the unappealing environmental conditions that have existed downwind of the refinery for nearly a hundred years, the neighborhoods have attracted and continue to consist largely of residents of the least economic means. There is also evidence that continued exposure to pollution and periodic exposure to fires, explosions, and abnormal emission releases takes a toll on the physical and mental haelth of residents (A paper by Raquel Pinderhughs will be submitted - see summary under “Social and Psychological Changes”, above). This population consists predominantly of protected classes, including African-Americans, Hispanics, and Asians. Many residents feel “trapped” in this area, and those that can move out are replaced by others of similar economic means.
47ibid, 5-6 48 49Attachment A to Chevron Appeal, December 27,1993. Most West Contra Costa County residents have accepted their precarious surroundings like an unpredictable and sometimes violent relative - “it’s something you can’t change so you learn to live with it,” [Michelle Ozen} said...We’re victims really. We want things to change, or we want to move, but we can’t,” said Ozen, a 36-year- old office manager. “You just gotta live with it.”50...Some say the reason industry is often found near poor communities like North Richmond is simple. Poor people live near industry because the land there is cheap. Likewise, they say, industry tends to locate where the land is not too expensive...“You’re not going to see Chevron build a refinery in Moraga,” said Steve Morioka, a hazardous materials specialist with the county.51 Congressional Committee on Natural Resources The disproportionate risks borne by minorities living near hazardous industries has recently attracted substantial attention in the media and by Congress and the Clinton administration under the heading environmental justice, environmental racism, or toxic racism. A congressional committee taking testimony in Richmond heard powerful descriptions of environmental justice.
Michele Washington Jackson - We are here today to speak of environmental racism. This racism is deadly, insensitive, dehumanizing, and economically deficient for the residents of ... the entire City of Richmond. This racism is symbolic of the racism experienced during slavery whereby a few benefit and the majority suffers.52
Dorothy Olden - No matter what we are labeled, we are also a part of America. We deserve clean air. We have the right to live not in fear of our lives or for our children’s lives. We realize that the industries and the communities must coexist together. We have long done our part, but why should we suffer so?53
The congressional study found that, like Richmond, higher percentages of African-Americans and Hispanics live in areas where the air is too dirty to meet federal air quality standards, that the EPA consistently imposes considerably weaker penalties on those who pollute minority neighborhoods than on those who pollute white communities, and that neighborhoods hosting locally undesirable land uses tend to be poorer and have more minority residents than other neighborhoods.54
Speaking of North Richmond, Robert Bullard, a U.C. Riverside professor who has lectured and written extensively on environmental racism, said, “ It’s not by accident that African-Americans live close to those factories. It is not just an accident of income alone. Regardless of income, black people tend to be residentially segregated at every level. North Richmond and dozens of communities like it across the country routinely live with industrial accidents that would be viewed as a disaster or potential disaster in other neighborhoods. Poor people live with crumbling schools, dirty water, and polluted air not just because they’re poor, but because they’re considered disposable”55
The Clinton Administration In a speech on December 2, 1993, Vice-President Gore revealed the administration is preparing an executive order on environmental justice. Other officials anticipate that it will order federal agencies to ensure that minority areas do not suffer disproportionate environmental harm from government building, investment, or policies and regulations.56 The Clinton administration has for the first time agreed to investigate complaints that states are violating the rights of blacks by permitting industrial pollution in their neighborhoods. Members of the West county Toxics Coalition have made similar arguments about the high concentration of hazardous businesses in
50Chemical Hazards Just a Part of Richmond Life, The Oakland Tribune, July 28, 1993 51Race and The Environment, West County Times, August 1, 1993. 52Living With Risk, Majority Staff Report (Washington, D.C.: Subcommittee on Oversight and Investigations, Committee on Natural Resources , December 9, 1993) 35 53Ibid. 54Ibid., 36 55Race and the Environment 56Gore, Black Leaders Discuss Environment, San Francisco Chronicle, December 3, 1993 and around North Richmond, a low income community dominated by blacks and recent immigrants from southeast Asia.57
When Gore spoke to the National Council of Churches on December 2, 1993, the message from the room full of ministers was passionate and poignant: Government has ignored minorities suffering disproportionately from pollution. “Our babies are choking. Our children are sick. Our people are dying,” the Rev. Charles Adams said, “because governments have allowed toxic plants and waste dumps to be built near them.”58 Adams went on to tell Gore that the poor want economic opportunity, but not at the expense of human health.
History of North Richmond
At the time the Pacific Refining Company (later Standard Oil of California and finally Chevron) came to Richmond, the area to the north and east of the refinery site was largely low-lying grasslands and tidal marshes. The initial development of this area started in three nodes.
The earliest development, which already dated from the rancho days of the nineteenth century, was near the present day intersection of San Pablo Avenue and Church Lane where the Alvarado Adobe is now restored. This was the headquarters of Rancho San Pablo, and related development spread east and west along the two creek corridors.
The second area of settlement was sparked by the coming of the Atchison, Topeka, and Santa Fe Railroad which established its western terminus in Richmond at the turn of the century. This community of railroad employees grew up around the eastern end of the newly constructed railroad yard and thus became known as “East Yard” near what is now Garrard Boulevard and First and Second Streets. Most of the remaining vestiges have been recently demolished to make way for the Richmond Parkway.
The third area, known for a short time as “west yard” is now what is known as Point Richmond. This area gained ascendancy in the first 10 years of the 20th century because of its proximity to both the Atchison, Topeka, and Santa Fe Railroad terminus and the refinery as well as its higher ground and underlying geology which made it a more attractive site for construction than the marshes.
As Richmond continued to grow and public transportation made it possible for people to commute beyond walking distance to work , the demand for commercially developable land outgrew the confines of the less steeply sloped parts of Point Richmond, and the City expanded to the east after 1910, taking with it the City Hall and the focus of commercial development. What Washington Avenue was from 1900 to 1910, MacDonald Avenue became from the 1920’s on. As MacDonald Avenue became the main street of Richmond, residential development in the form of modest cottages continued in the grasslands north and south of MacDonald Avenue, growing from the west near the town’s two major employers to the relatively uninhabited areas to the east and along San Pablo Avenue.
Prior to World War II, Richmond had a population of some 30,000, largely distributed in Point Richmond and in the former grasslands between San Pablo Avenue and the edge of the marshes along the Bay to the west. During World War II, the Kaiser shipyards swelled Richmond’s population to some 130,000 virtually overnight, including tens of thousands of black workers recruited from rural areas of Louisiana, Arkansas, and Oklahoma. Much of the influx was accommodated in new, government constructed public housing, but most of the black families were isolated and crowded into the older homes in north and west Richmond, many of which were sub- standard even 50 years ago.
When the war ended, those workers who could find work elsewhere did so while others drifted back home. Those workers with the least prospects back home, including thousands of black families, chose to stay in Richmond where they had put down roots and started a coherent community. Many, of course, became successful in business and politics and are now leaders of Richmond. Many others who did not find success remained in North Richmond. After being forced to live in a relatively inhospitable part of town which was subject to pollution and flooding, black families were later subjected to pressure to move out, but not to a better part of Richmond. According to Ann Moore, a Cal State, Sacramento, historian who has written on Richmond history, Richmond
57U.S. Set to Review Complaints by Blacks on Pollution, West County Times, November 21, 1993. 58Gore, Black Leaders Discuss Environment city fathers in the 1950’s wanted black people who settled in North Richmond to return to the South and back east. The City forged ahead with plans to industrialize the North Richmond area, called “cabbage patch” because of its fertile soils. 59 This drive to industrialize North Richmond and to expand and replace existing industry without adequate consideration for adverse impacts on residents of the area continues and is exemplified by this project.
Today, North Richmond is still largely inhabited by disadvantaged minorities, principally blacks, because of the comparatively low land values and correspondingly low rates for residential rents. Values have remained low in these areas for several reasons. The predominant reason is proximity to the petrochemical complex dominated by Chevron’s 2900 acres and the resulting exposure to continuous atmospheric pollution and periodic explosions and fires. As a related factor, the existing housing stock is old and poorly maintained. For years, the area was also subject to flooding, a problem finally alleviated by hydrological improvements in the 1980’s.
The current socioeconomic profile of North Richmond is well illustrated by a recent study of the unincorporated portion consisting of Census Tract 3650.02 with a 1980 population of 2,341. The 1990 study, North Richmond Redevelopment Area Market study and Alternatives Analysis, was prepared by the Department of City and Regional Planning at the University of California, Berkeley. Although focusing on a single census tract, the demographics revealed by the study are indicative of conditions in nearby neighborhoods such as the incorporated area of North Richmond and the Iron Triangle. According to the study, the area :
was 88 per cent black, 7 per cent Hispanic, 2 per cent Asian, and 3 per cent white.- had 28 per cent female headed households.
high school graduation rates were especially low
education statistics represent figures significantly below statewide figures - as well as for surrounding communities.
residents may be experiencing difficulties in securing and maintaining employment due to low levels of educational attainment.
20% of the labor force was unemployed, four times as high as the County rate. A large portion of the population may have stopped looking for work.
household incomes were extremely low with 31 per cent of household below the poverty level.
there are low employment opportunities in the area.
200 of 432 structures are in need of rehabilitation; an additional 99 are in such disrepair that rehabilitation may not be financially feasible; 25 appear to be abandoned.
155 parcels have tax delinquencies.
the quality of housing stock contributes to the accelerated rate of deterioration, perpetuates the overall blighted character, is a disincentive to investment, and serves to facilitate crime and other infringements on public safety and health.
North Richmond is currently extremely unappealing as a place to live. Education Nexus The CAP as a Measure of Student Performance It is an indisputable fact that areas of population with concentrated low income and unemployment levels such as North Richmond will result in students with low skill levels as measured by standardized tests. For many years, the California State Department of Education has operated a testing program called the California Assessment Program (CAP), which was intended to measure, collectively, the relative performance in basic skills of students statewide in the third, sixth, eighth, and twelfth grades. Scores are reported by schools and districts but not by
59Race and the Environment individual students. In fact, no student took the entire test so that scores truly represent composites rather than true averages.
The asserted intent of the CAP program was to, determine the effectiveness of school districts and schools in assisting pupils to master the fundamental educational skills toward which instruction is directed. the program of statewide testing shall provide the public, the Legislature, and school districts evaluative information regarding the various levels of proficiency achieved by different groups of pupils of varying socioeconomic backgrounds, so that the Legislature and individual school districts may allocate educational resources in a manner to assure maximum educational opportunity for all pupils.60
The CAP program correlated the composite raw score and the percentile ranks of scores with the socioeconomic profiles of the students and their families by individual schools and by school districts. Information was collected regarding the highest level of educational attainment by students’ parents, the type of employment of students’ parents, the level of English speaking ability of the students, the level of residential transience of students’ families, and the per cent of student’s families receiving AFDC. Based on these factors, a “socioeconomic index” was compiled.61 For grades 8 and 12, the SES (socioeconomic status) index for a group was the average of the values assigned for levels of parent education, and for grades 3 and 6, the group index was the average of values assigned for technical level of parent employment.62 Low SES indexes tend to correlate with low incomes, and high SES indexes tended to correlate with high incomes. For example, Kensington Elementary, with a Grade 3 SES of 2.94 in 1989/9063, is in a community with a median household income of $61,33064, while Peres Elementary, with a Grade 3 SES of 1.31 in 1989/9065, is in a community with a median household income of less than $32,16566. Statistically, a low SES index has been found to correlate with low test scores and a high SES index with high test scores. In fact, the socioeconomic index appears to be the principal determinate of test performance for a school or district. The relationship is so predictable it can be graphed as a linear equation.
CAP Scores at Schools Nearest The Chevron Refinery Three of the lowest -performing schools in the West Contra Costa Unified School District, as determined by 1989/90 CAP scores are also the three schools closest to and downwind from the Chevron Richmond Refinery. A statewide rank of 1 indicated that 99 per cent of the schools in the state have higher test scores while a rank of 4 indicated 96 per cent of schools statewide had higher scores. Washington Elementary School, which is close to but not downwind from the refinery, has a student body made up largely from students living north and east of the refinery. Its CAP scores are higher than the other three schools but still below district average and substantially below state average. In 1989/90, among 116 elementary schools in the Contra Costa County, these four schools ranked 104 (Washington), 111 (Peres), 115 (Verde), and 116 (Lincoln).67
School Grade 3 Reading Statewide Rank Grade 3 SES Index (1989/90 CAP Scores) WCCUSD (Entire District) 35 1.97 Lincoln Elementary 1 1.22 Peres Elementary 4 1.31 Washington Elementary 19 2.00 Verde Elementary 1 1.46
60California Education Code, Section 60601
61Memo, dated April 17, 1990, from Francie Alexander, Associate Superintendent, Curriculum, Instruction, and assessment Division, California State Department of Education, to District and County Superintendents. 62Lillian Clancy, A User’s Guide to California Public Schools (Walnut Creek: California School Surveys, 1991) 6 63California Assessment Program Survey of Basic Skills, Preliminary Report of School and district Results, 1989/90. 64Income, Education Levels in Bay Area Cities, San Francisco Chronicle (Source: U.S. Census Bureau) 65California Assessment Program Survey of Basic Skills 66Income, Education Levels in Bay Area Cities 67Clancy, 315
In a letter dated September 23, 1993, from Santiago V. Wood of the West Contra Costa Unified school District, to James Farah, the School District expressed concern for the health and safety of students and staff at schools near the refinery, including Washington, Nystrom, Lincoln, and Peres. These concerns included :
1. Increased health risks associated with increased emissions of pollutants into the atmosphere. 2. Increased public safety risk from fires, explosions, or accidental release of toxic gas or vapors. 3. Increased odors. 4. Increased emissions of hazardous materials. 5. Increased emissions of hazardous materials. 6. Increased noise. 7. Increase in traffic, thereby increasing the possibility of major accidents involving tanker trucks resulting in a spill and fire on local roads. 8. Increased hazardous waste could pose a threat to the students and staff. 9. Cumulative health hazards from increase in hazardous materials. 10. Cumulative increase in risk of upset due to increase in hazardous materials. 11. Cumulative increase in clean-up of hazardous waste. 13. Potential for accidents involving vehicles carrying hazardous materials.68
An example of how previous accidents at the refinery have affected nearby schools is the fire of April 10, 1989, when 275 children were evacuated from Verde Elementary School.69
Jean Siri discussed the effect of pollution at Peres School: I have to say that this is where I started working on air pollution, in this school, fifteen to twenty years ago. I spent six months at Peres School. I think then there was an enrollment of about 2,000 children, and I was very upset over the air. The air was abominable. And I felt the children shouldn’t be out having recess since it was being blown on directly by the [Chevron Chemical] incinerator which was not under any permit at the time that I know of...In most schools they have earthquake drills. In this school they have earthquake drills and they have toxic drills. It would never be permitted in any upper middle class schools in the area that I know of.70
Mitigating a Predetermination of Low Achievement Smaller class sizes is one effective way that schools in socioeconomically disadvantaged areas can catch up with students from wealthier families. A pilot program in the late 1980’s at Verde Elementary illustrates this point.71 During three school years from 1985-86 to 1987-88, class sizes were lowered from thirty to fifteen students. At the time the study began, 94 per cent of the students qualified for Chapter I Compensatory Education Assistance (scoring below the fiftieth percentile on standardized achievement tests). The 1988/89 SES Index for Verde was 1.17 for third grade and 1.48 for sixth graders, among the lowest in the state. The ethnicity of the group was 92 per cent black, 3 per cent Hispanic, 2 per cent Asian, and 1 per cent white.
During the three years of the study a ten year trend of declining achievement as measured by the California Achievement test (CAT) was reversed. For some classes, percentage increases of as much as 35 points was achieved. In the spring of 1985, the year before the test began, only 17 per cent of students scored above the 50th
68Response to Comments on the DEIR, Volume 1 69DEIR IV.E.16 70Tr., 63 71Antoinette Henry-Evans, Class Size reduction: Effects on Student Achievement as Measured by Standardized Tests (Master’s Thesis at California State University, Hayward, June 1987) percentile on CAT tests. In the spring of 1988, the third and last year of the experiment, 42 per cent scored above the 50th percentile, a 147 per cent increase! At other district schools during the same time period, the number of students scoring above the 50th percentile rose only 2 per cent.72 During the first two years of the experiment, scaled CAT scores at Verde’s third grade took jumps ranging from 18 to 58 per cent.73
Henry Evans concluded that class size does have an educationally significant effect upon student achievement as measured by standardized tests.74 Her research also indicated that students of lower academic ability, as well as those who are socially or economically disadvantaged, benefit from smaller classes.75
The continuing presence of the Chevron Refinery, including the proposed project, makes the neighborhoods downwind sufficiently unappealing that property values and rents are comparatively low, thus ensuring a resident population concentrated and skewed toward the low range of what the California Department of Education measures with a SES Index. This artificially induced concentration of disadvantaged students virtually assures not only low composite test scores but also schools that are held in low esteem by both the community they are located in and by other communities. There is creditable evidence that the cause and effect relationship of poverty and low academic achievement can be broken by substantially reducing class sizes. Hiring more teachers for specific schools to achieve this is a mitigation with a tangible cost and proven results.
Economics
Chevron - An Economic Giant In a press release dated December 27, 1993, Chevron whined that the conditions imposed by the planning commission would, put the refinery at a competitive disadvantage in a business where refineries can live or die on the basis of pennies per gallon in operating costs. Chevron went on to say that, We have a duty to our stockholders that precludes us from investing hundreds of millions of dollars in a refinery that could be a weak competitor.
The economic facts of the cost to Chevron of implementing the conditions shows that the public relations information presented in the press release is gross exaggeration of the worst kind.
Chevron is a corporation with annual sales of over $41 billion.76 Chevron has 325 million shareholders who saw the value of their investment rise during 1993 from $69.50 per share to $87.13 per share, a 25.36 per cent increase worth $5.7 billion. Since the Planning Commission decision on December 16, 1993, the value of Chevron stock has risen nearly $1 billion! On January 18, 1994, Chevron stock closed at 89 7/8, an increase of $6.6 billion since January of 1993.
On December 5, 1993, Chevron announced an unprecedented five percent bonus for 42,000 employees worldwide costing $70 million after tax, or $0.22 per share. The San Francisco based oil company said the bonuses follow the company’s achievement of the highest total return to stockholders among major American oil companies over the last five years ... On the last trading day of 1993, Chevron’s stock closed at $87.12, up $41.37 per share over the five-year period. That rise, combined with dividend payments, boosted Chevron’s total annual shareholder return to 18.9 per cent per year.77
72Memo dated August 24, 1988, from Frank Carson, Principal, Verde Elementary School, to Dr. W. Marks, Superintendent. 73Memo, dated October 8, 1987, from Frank Carson to Dr. Walter Marks. 74Henry-Evans, 76 75Henry-Evans, 23-28. 76Chevron Corporation 1992 Annual Report ( San Francisco: Chevron Corporation, 1993) 3 77Chevron Workers Get Robust Year-end Bonus, The Oakland Tribune, January 5, 1994. Effect on Profit With yearly dividends of $3.50 per share, the $2 million per year cost of the proposed Richmond Community Foundation would cost shareholders $0.0057 per share ( about one half of one cent) if it were deducted from profits. The actual cost would be substantially less because it would be deductible from corporate income tax. What kind of duty does Chevron have to stockholders that would preclude spending one half cent per year of what would otherwise be profits on the community most impacted by one of Chevron’s three remaining domestic refineries? Effect on Cost of Product According to Chevron, the total refinery liquids production following project completion is about 245,000 barrels per day, 110,000 barrels of which is motor gasoline. 78 This converts to 3.8 billion gallons of liquids (including several types of fuels) and 1.7 billion gallons of motor gasoline per year. If the $2 million per year cost of the community foundation were added to the cost of total liquids, it would add $0.00053 per gallon of liquid. If the entire cost were added only to motor fuels, it would add $0.0012 per gallon of fuel. The actual cost would be less because of corporate tax deductions for the community foundation. Hardly the “pennies per gallon” described in the alarmist Chevron press release! Chevron Charity Of course the additional cost of the Richmond Community Foundation need not come from profits or cause even a minuscule rise in sales price of fuels. Chevron would only have to reallocate some of the approximately $27 million per year donated to charitable causes in places other than Richmond.79 Not only Richmond, but the entire area of West Contra Costar County, receives only about one percent of Chevron’s total annual charitable donations. Chevron claims to have distributed $270,000 to 267 West Contra Costa County charities in 1991.80 Chevron continues to contribute millions annually to programs in the San Francisco Schools while giving only a few tens of thousands to the relatively poorer and much more needy West Contra Costa Unified School District.81 Although the San Francisco School District receives 38 per cent more funding per student than the WCCUSD,82 Chevron has been a loyal supporter of San Francisco Schools, donating $7,500 per year to the Think/Write Project, $234,000 since 1980 to the Ed Fund, and $1.45 million to Accelerated Schools. Chevron’s Vice Chairman, James Sullivan, was co-chair of the 1993 major fund-raiser for San Francisco School Volunteers expected to raise $160,000.83
Chevron not only supports San Francisco Schools. In 1992, Chevron reported contributions to San Francisco United Way of $1.8 million, San Francisco Opera $75,000, San Francisco Symphony $50,000, and San Francisco Ballet $35,000. All this in spite of the fact that more people are employed by Chevron in Richmond (3,509)84 than in San Francisco (2,497)85.
78DEIR, Figure III-5 79Corporations Still Generous but More Particular, San Francisco Business Times (San Francisco: San Francisco Business Times, March 5-11, 1993) 5 80The Economic and Fiscal Effect of Manufacturing, Heavy Industry, and Chevron USA, Activities on Contra Costa County, The City of Richmond, and The Richmond Unified school district (San Francisco: Gruen + Gruen Associates, 3/10/93), 109 81Chevron contributions to West contra Costa County are listed by category in a handout entitled “Richmond Community Activities” distributed to the Community Advisory Panel in 1993. Annual school related contributions listed include $7,500 for scholarships, $6,650 for Junior Achievement, $15,000 for Richmond Unified Education Fund, and unspecified amounts for BOOST and other programs. 82Rebecca Hazelwood, Comparative analysis of Income and Expenditures (Richmond, CA: Citizens Committee for Richmond Schools, December 1991) 9 83Going Beyond the Common Drill, San Francisco Business Times, October 15-21, 1993 84Gruen, 17 85Largest San Francisco Employers, San Francisco Business Times Book of Lists (San Francisco: San Francisco Business Times, 1993) 91 Taxes Chevron complains that the conditions imposed by the Planning Commission constitute an illegal special tax... imposed only on Chevron and not on any other permit or property owner in the City of Richmond., thus subjecting Chevron to discriminatory treatment and denying equal protection of the law.86 Chevron is no stranger to discrimination, but it usually goes the other way. Since Richmond imposed a utility user’s tax several years ago, Chevron was the only taxpayer allowed a unique privilege consisting of a “cap” on the total tax. According to a City ordered audit, In the early years of their election for the “cap” option, it appears as though Chevron did benefit from the tax ceiling because of their higher utility consumption.87 In another unique arrangement, Chevron is allowed to pay 20 per cent of the normal building permit fees charged to others in the City of Richmond and to inspect its own projects under what is called the Certified Inspection Program (C.I.P). Since 1987, the City of Richmond has lost approximately $12 million in potential revenue because of this scam ( see attached paper entitled, Construction at Chevron and The Certified Inspection Program) .
Chevron likes to tout the refinery’s indispensable role in Richmond’s economy by pointing out that it pays approximately $10.7 million in taxes to the City of Richmond, or about 17.2 percent of the General Fund revenues.88 The biggest proportion of this is $13.7 million in property taxes, but only $4 million of this is retained by the Richmond General Fund.89
The assessed value of all Chevron property in Richmond is about $1.5 billion, but only $1.16 billion is for the refinery.90 Unlike other business or residential property in Richmond which the assessor routinely reappraises at the 2 per cent constitutional maximum each year, the assessor depreciates Chevron refinery property by 3-5 per cent annually.91 At 2,900 acres, the Chevron Refinery has an assessed valuation of $401,193 per acre, or $9.21 per square foot (including both land and improvements) which is substantially lower than most other business or residential properties in Richmond.
Employment In the press release of December 27, 1993, Chevron boasted that Chevron is the single largest employer in Richmond with its 3,500 refinery and other employees representing one out of eight Richmond jobs. What Chevron did not say is that only one out of every ten of those Chevron employees actually lives in Richmond, and that only 164 (or 4.7 per cent) of refinery workers lives in Richmond.92 Chevron further reduces permanent job opportunities in the Richmond refinery by routinely out-sourcing much of the maintenance and construction work to contractors.93 Once the construction is completed, the construction jobs will disappear, and the overall number of permanent jobs will most likely continue to diminish. With 1,571 jobs94 spread over 2,900 acres, Chevron has a job density of 0.54 jobs per acre, probably the lowest of any business in Richmond.
Few of the benefits of the jobs Chevron offers go to those in the neighborhoods most impacted by the refinery. As Amos Adams, 71, says, “neighborhoods like North Richmond and other poor, minority communities suffer with the pollution and accidents of industry, but aren’t given the opportunity to enjoy the benefits, namely
86Appeal of Conditional use Permit CU 93-40, December 27, 1993, 2 87Letter from James M. Thompson of Municipal Resource Consultants to Jay M. Goldstone, dated July 29, 1993.
88Gruen, 5 89Gruen, 46-47 90This was derived by dividing the total Chevron property taxes by the tax rate ($18,705,591/0.01181 = $1.58 billion) and the refinery property taxes by the tax rate ($13,740,464/0.0118 = $1.16 billion), Gruen 45-47 91DEIR, IV.G.6 92Gruen, 17 93Gruen, 30 94Gruen, 5 jobs.”95 Fourth Street resident, Robert Coleman said, “We are not benefiting jobwise, but we are constantly being polluted with chemicals in the air.” 96
Property Improvements
Chevron complains that Condition II-19 is, vague and uncertain in that it fails to describe the scope of the cleanup or limit Chevron’s obligation to the area of the RFG Project, or even the refinery property.97These requirements are vague and uncertain only to the extent that the Richmond General Plan, the Richmond Coastline Conservation and Development Strategy, and the Richmond Zoning Ordinance, where they are found, are vague and uncertain. Furthermore, the pertinent references to these documents are found in the Response to the Draft Environmental Impact Report for the Chevron Reformulated Gasoline and FCC Plant Upgrade Project.98
There is a legitimate public interest in carrying out the public policy provisions of the General Plan, the Shoreline Conservation and Development Strategy, and The Richmond Municipal Code. In no way do these conditions deprive Chevron of use of its real property parcel, on which it can continue to operate a commercially viable refinery, nor do they invade the property in any manner. With regard to “clean up”, for example, Chevron is currently in violation of Chapters 9.20 (Solid Wastes), 9.22 (Public Nuisances) and 12.12 (Weed and Rubbish Abatement) in many of the areas on the periphery of the refinery property which is a single, large parcel constituting the site of this project. The Shoreline Conservation and Development Strategy even includes a policy stating, Enforce the City ordinances on weed and rubbish abatement.99 Similarly, Chapter 15.204.205.A.4 of the Richmond Municipal Code requires (for a project seeking permit) that, all areas not otherwise occupied by structures or paved areas shall be landscaped and irrigated by an adequate irrigation system. Chevron is not being asked to landscape all the open space but only to deal with the areas that have been scarred by inappropriate grading, eroded, and are overrun with invasive exotic plants which are both a fire hazard and an eyesore.
Without even a related project, Chapters 12.28 (Streets and Sidewalks) and 12.36 (Maintenance and Construction of Sidewalks, Driveways, Curbs, and Gutters) of the Richmond Municipal Code give authority to the City Council to require owners of abutting properties to pay the cost of constructing streets, sidewalks, curbs and gutters, and to install street trees as well as to maintain curbs, gutters, and sidewalks. This is through incorporation, by reference, of Chapters 22 and 27 of the Improvement Act of 1911, which is found in Part 3, Division 7, Streets and Highways Code of the State of California.100
This condition requires Chevron to do no more than any other owner of a new project or a project involving substantial additions or alterations in the City of Richmond, that is, spend a small fraction of the project cost providing amenities within and adjacent to the project site which make it consistent with the development goals of the City. The Wareham Tech Center in Point Richmond is a good example of how this was achieved in a nearby project. The Tech Center involved an existing building which was expanded as well as the construction of an additional building on the same site. Wareham, the developer, was required by the City to landscape the entire site, move existing overhead utility lines underground, and to participate in an assessment district to pay the cost of constructing curbs, gutters, sidewalks, streets, medians, landscaping, irrigation, street lighting, and underground utilities in the abutting rights-of-way. The total cost of these improvements, which had no functional relationship the buildings proper, was about 10 per cent of the total project cost.
95Race and the Environment, West County Times, August 1, 1993 96Ibid. 97Appeal to Conditional Use Permit CU 93-40, December 27,1993. 98Response to Comments the DEIR, Volume II: Attachments, November 1993. 99SCDS, 44 100RMC 12.36.180 and 12.36.190. In, Erlich, the court found that The City’s police powers extend to imposing certain requirements on construction projects. For example, so long as not to the extent of a taking, the City may specify pursuant to its police powers setbacks, amount of open space to be retained, landscaping requirements, etc... We agree that it is within the City’s police powers to require [public] art to be placed on developments as a condition of approval. (Cf. Agins v. City of Tiburon (1980) 447 U.S. [60 L. Ed. 2nd 106, 100 S. Ct. [*1758] 2138][scenic zoning]; Penn Central Transp. Co. v. New York City, supra, 438 U.S. 104 [landmark preservation]; Euclid v. Ambler Co. (1926) 272 U.S. 365 [71 L.Ed. 303, 47 S. Ct. 114, 54 A.L.R. 1016][residential zoning]; Gov, Code 15813 et seg. [art in public buildings].) Such a requirement does not constitute an exaction, a development fee, a taking, or a tax.101
101Erlich v. Culver City, 15 Cal. App. 4th 1737 (1993). Conclusions
The modifications to Conditions II-2 and II-3 are consistent with Environmental Finding 2 and simply fulfill the City’s right to obtain independent, expert review of the applicant’s performance in order to fulfill the City’s obligation to protect the health, safety, and wefare of its citizens.
Conditions II-13 through II-17 and Condition II-21are intended to provide additional mitigations for effects of the project already identified in Environmental Finding 1 and discussed in the Statement of Overriding Considerations. Insomuch as the weighing of overriding considerations against unavoidable impacts is essentially a subjective evaluation, the additional conditions are not inconsistent with either the final EIR or the Findings.
Condition II-19 is unique in that it is based more on exercising the City’s right to enforce site development related requirements of the General Plan and the Richmond Municipal Code than it is on mitigating impacts of the Project. The City’s responsibilities under the Conditional Use Permit process go beyond implementation of CEQA.
Condition II-20 is based not only on facts included in the EIR but also facts and testimony available in the public record which were ignored by the EIR. The EIR was deficient in not recognizing and evaluating the evidence of continuing and potential effects of the Project on the quality of life of surrounding neighborhods. An addendum to the EIR should be prepared to fully evaluate quality of life issues and provide recomendations for appropriate mitigations.
The most appropriate action for the Richmond City Council to take would be to continue the public hearing on the Chevron appeal for 6-10 weeks while retaining an expert consultant to prepare an addendum to the EIR which provides legally defensible technical grounds for Condition II-20. The City Council should also authorize the City Attorney to obtain outside legal counsel with expert experience in nexus law before the Ninth Circuit. The cost of both of these consultants would be borne by Chevron because the additional services are part of the EIR preparation.
Response to Chevron Appeal of Planning Commission CUP 93-40
Prepared By Thomas K. Butt
(Draft in Progress, January 18, 1994)
TABLE OF CONTENTS
INTRODUCTION 4
Conditional Use Permit Appeal 4
The Project 4
Why A Conditional Use Permit is Required 5
Powers of the Planning Commission 5
FINDINGS 5
Types of Findings 5
Conditional Use Permit Findings 5 Evidence from the Public Record 6 Social and Psychological Changes 9
Environmental Findings 10 Statement of Overriding Consideration 10
THE NEXUS PERPLEXUS 11
The Case for Adequate Nexus 11
Congressional Committee on Natural Resources 12
The Clinton Administration 12
History of North Richmond 13
Education Nexus 14 The CAP as a Measure of Student Performance 14 CAP Scores at Schools Nearest The Chevron Refinery 15 Mitigating a Predetermination of Low Achievement 16
ECONOMICS 17
Chevron - An Economic Giant 17
Effect on Profit 18
Effect on Cost of Product 18
Chevron Charity 18
Taxes 19
EMPLOYMENT 19 PROPERTY IMPROVEMENTS 20
CONCLUSIONS 22
Introduction
Conditional Use Permit Appeal On December 16, 1993, the Richmond Planning Commission Granted Conditional Use Permit CU 93-40 with the addition of nine additional conditions and the modification of two others. The nine additional conditions are identified in the Staff Report, Attachment B, dated December 16, 1993, as conditions II-13 through II-21.
On December 27, 1993, Chevron filed an appeal to the Richmond City Council of the Richmond Planning Commission approval of Conditional Use Permit application CU 93-40 for the Chevron Reformulated Gasoline and FCC Plant Upgrade Project. Chevron requested deletion of conditions II-2, II-3 and II-4 recommended in the original staff report as well as conditions II-13 through II-16 and II-18 through II-21 added by the Planning Commission. As reasons for the appeal, Chevron alleged that the conditions added by the Planning Commission were unlawful, arbitrary and capricious, unsupported by evidence, and unconstitutional. Chevron did not appeal new condition II-18 which called for the elimination of a threat of phosgene gas either by utilizing a safe alternative or by providing a detailed study to show how a release will be contained or not cause a hazard.
Also on December 27, 1993, a Chevron press release described the [Planning] commission’s conditions as shortsighted and ill-advised, putting the refinery at a competitive cost disadvantage in a business where refineries can live or die on the basis of pennies per gallon in operating costs.
The purpose of this paper is to respond to Chevron’s criticisms of the conditions imposed by the Planning commission and to show why the conditions are appropriate, legal, and consistent with policies of the General Plan and the Zoning Ordinance. The Project Chevron continues to euphemistically characterize the project as simply the “Cleaner Fuels Project” involving “certain specific modifications needed to produce clean fuels as mandated by Federal and State law”. Frequently omitted from Chevron’s description is the fact that approximately half the cost of the project will be to improve the efficiency and reliability of the FCC Plant and to increase feedstocks to the Alkylation, MTBE, and TAME Plants.102One result is that the production capacity for motor gasolines will rise from approximately 97,000 bbls. per day to approximately 110,000 bbls. per day.103
The proposed project is the latest component of a continuing modernization of the entire refinery, an industrial “Winchester House” beginning ten years ago with the $530 million Lubricating Oil Plant. Major projects completed since then include a $55 million Lubricants Blending and Packaging facility, a new $98 million, 99 megawatt electrical cogeneration plant, a $36 million MTBE Plant, and a $61 million diesel hydrotreater. In November 1991, the No. 4 Crude Unit was modified to increase its capacity from 200,000 bbls. per day to approximately 245,000 bbls. per day.104 Since 1987, Chevron has reported over $1.1 billion of projects under the unique Certified Inspector Program where Chevron calculates its own costs, reviews its own plans, and inspects its own construction. The total cost of these recently completed modernization projects and the proposed project is nearly twice the $1.16 billion value of the entire existing refinery complex, raising the spector of piecemealing a de facto refinery reconstruction project to avoid full environmental review under CEQA.
The Chevron Refinery proper consists of 2,900 acres but is located adjacent to two other Chevron operations, Chevron Research and the Ortho Division of Chevron Chemical. Although the adjacent General Chemical facility is legally a separate entity, it is joined by a pipeline to the refinery and exists principally to process products to and from the refinery. The acid cloud of July 1993 was formed from material either destined for or coming from the refinery.
102DEIR, II.1 103DEIR, Figure III-5 104DEIR, III.13
1 Why A Conditional Use Permit is Required The existing General Plan land use designations for the Chevron refinery property are General Industry (GI), Special Industry (SI), and Park, Recreation, and Open Space (P). The area within which the proposed project will be constructed is designated General Industry.105
Because petroleum refining is a use which may be obnoxious or offensive by reason of emission of odor, dust, smoke, gas, noise, vibration, and the like, the Planning Commission has the authority under RMC 15.04.140.A.39.n to ...to impose such conditions as it deems necessary to protect the best interests of the neighboring property or neighborhood and to carry out the purposes of the zoning ordinance and the General plan.106 Powers of the Planning Commission The Planning Commission may, after a public hearing, permit uses requiring a Conditional Use Permit, provided three findings can be made:
1. The location of the proposed conditional use is in accord with the policies of the General Plan.107 2. The location, size, design and operating characteristics of the proposed development or use will be compatible with, and will not adversely affect the livability or appropriate development of, abutting properties and the surrounding neighborhood.108 3. The proposed conditional use complies with all applicable provisions of the Zoning Ordinance.109 There are two policies of the General Plan applicable to this project which have not been adequately discussed in the EIR or the staff analysis. The first states that, Performance standards which will safeguard adjacent...residential areas, or other land uses in the community will govern developments of general industry.110 The second is, Limit all forms of activity that may be objectionable such as odors, fumes, vibration or glare so that they will not be noticeable beyond the limits of the industrial district.111 Findings Types of Findings One purpose of a staff report for a Conditional Use Permit is to evaluate whether or not the provisions necessary to grant a permit have been met. These are called “findings.” In this case, there are two types of findings. The first set of findings relates to whether or not the project conforms to the General Plan and the applicable zoning ordinances, including the chapter describing Conditional Use Permits. The second set of findings are known as “environmental findings” because they respond to the requirements of CEQA regarding significant impacts and how they are mitigated. Conditional Use Permit Findings In evaluating Conditional Use Permit Provision Number 2, staff concluded that the location, size, design, and operating characteristics of the proposed development will be compatible with and will not adversely affect the livability or appropriate development of abutting properties and the surrounding neighborhood. The staff concluded further that the Project should be compatible with and overall beneficial to the livability or
105DEIR, IV.A..7 106DEIR, IV.A.11 and RMC 15.04.190.C.5 107RMC 15.04.190.A.1 108RMC 15.04.190.A.2 109RMC 15.04.190.A.3 110Concise General Plan Document of the Richmond General Plan (CGPRGP), 2.04.A 111Ibid., 2.04.A(5)
2 appropriate development abutting properties and the surrounding neighborhood.112In perhaps the largest leap of irrationality, staff concluded that even though the EIR recognized [increased] air emissions from the project as an adverse impact when compared to existing conditions, the project will not adversely impact the livability or appropriate development of abutting properties and the surrounding neighborhood because the increased emissions will not be recognized as such by the BAAQMD for permitting purposes.
The Planning Commission, in approving the Conditional Use Permit with additional conditions, rejected the staff Finding for Provision Number 2 because of the overwhelming evidence that the Chevron Refinery, both currently and with the proposed project has continuing adverse impacts on the surrounding neighborhood relating to pollution and safety, and these impacts are inconsistent with the policies of the General Plan and are violations of the Zoning Ordinance and other provisions of the Richmond Municipal Code. Evidence from the Public Record
The EIR cites substantial evidence, based on public agency records and information provided by Chevron that the Chevron Refinery has a history of routine and periodic activities , including production of odors and fumes, which are objectionable to or adversely affect the livability of non-industrially zoned surrounding neighborhoods and are therefore contrary to the policies of the Zoning Ordinance and General Plan. The EIR cites no evidence that the Chevron Refinery will not continue to adversely affect the livability of surrounding neighborhoods and, in fact, concludes that the proposed project will result in increased emission of air pollutants and increased handling of hazardous materials that might pose threats to the public.
1. BAAQMD has issued 155 violation notices against Chevron from October 1988 through October 1992, some of which came from public complaints about smoke and odor. From January, 1990 through January 1993, there were 275 public complaints (an average of nearly two per week) compiled by BAAQMD. Of these, 106 were confirmed, and 11 resulted in violation notices.113 Any condition in violation of any rule, regulation, standard, or other requirement of the air pollution control district is a public nuisance under RMC 9.22.050(a)(6). 2. According to Chevron, the proposed project will result in an increase of 471 tons per year of stationary source air criteria emissions.114 The most prevalent winds blow Chevron pollution into the residential areas north of the refinery, and during relatively calm winter days inversions concentrate air pollution emissions near the ground.115 3. Under Federal EPA National Ambient Air Quality Standards (NAAQS), the City of Richmond is designated “nonattainment” for Ozone and Carbon monoxide. Under State Ambient Air Quality Standards (SAAQS), the City of Richmond is designated “nonattainment” for Ozone and Respirable Particulate Matter. Failure to attain these standards is due to the Chevron refinery, and the proposed project will exacerbate nonattainment.116 4. The California Department of Toxic substances Control (DTSC) reported 14 hazardous waste violations by the Chevron Refinery from 1989 through 1993.117 5. Within the last three years the Richmond Fire Department has issued two or three written warnings to the Chevron Refinery and an unspecified number of verbal warnings for violations of the Uniform Fire Code.118 Any condition in violation of RMC 8.16 (Uniform Fire Code) is a public nuisance under RMC 9.22.090(a)(5).
112Memo from Planning Department to Planning Commission regarding Conditional Use Permit Application CU 93-40 (Staff Report), CPC Meeting 12/16/93, 8. 113DEIR, IV.C.15 114DEIR, Table IV.C-10 115DEIR IV.C.2-3 116DEIR, IV.C.5 117DEIR, IV.E.10 118DEIR, IV.E.11
3 6. Since 1989, The Chevron Refinery has exceeded its National Pollution Discharge Elimination System (NPDES) permit limitations on hazardous material discharges 47 times.119 7. In 1992, OSHA observed 65 violations at the Chevron Refinery120. 8. From February 4, 1987 through June 23, 1992, there were 29 hazardous material incidents at the Chevron Refinery which were reported to public agencies, including release of hazardous substances, equipment failures, off-site effects, odors, fires, and injuries.121 Not reported in the DEIR Summary of Hazardous Material Incidents are incidents since June of 1992 and such apparently insignificant incidents as the derailing of two anhydrous ammonia tank cars on October September 31, 1990.122 9. The Chevron Refinery transports 110 million gallons per year of hazardous substances and 1.4 million pounds of FCC catalyst in or out of the facility via rail car every year and stores 1.1 million gallons of hazardous materials in rail cars every day.123 10. The DEIR states that the Project, will significantly increase the use of several hazardous material at the Refinery124 and concludes that, Project implementation would increase handling of hazardous materials that might pose threats to workers at the Refinery or to the public.125 11. In the three years from 1990 through 1992, emergency responses to incidents at the Chevron Refinery included 247 by the Chevron Fire Department, 8 by the Richmond Fire Department, 8 by the Richmond Police Department, and 173 by the Regional Ambulance. The CAN system was activated twice, and the Hazardous Materials Response Team responded once.126 12. There have been releases of hazardous waste and hazardous constituents from the facility into the ground water, soils, and potentially San Pablo Bay. Chemical analysis of monitoring well samples show that there have been releases of heavy metals and organic compaounds into the groundwater. Chemical analysis of soil samples show that there have been releases of heavy metals into the soil. In 1982, during a 200+ year rainfall, wastewater from No. 1 Oxidation Pond mixed with waters of San Pablo bay. A high tide caused Bay waters to overflow the containment dike of No. 1 Oxidation Pond. Some of this co-mingles process, storm, and Bay water was eventually discharged into San Pablo Bay.127
By relying solely on public records for evidence of adverse impacts by the Chevron Refinery on the surrounding neighborhoods, the EIR authors and City Planning staff circumvented compelling sources of information, including interviews with residents and stories in the media. Within the last few years there have been numerous, well-researched stories in both the published and broadcast media about the adverse impacts of the Richmond Refinery on residents of surrounding neighborhoods. Following are samples of some of these interviews:
1. Hubert Lewis Griffin - The physical and psychological toll that living under the toxic plume exacts from Richmond residents has been well documented in the media. Hubert Lewis Griffin, 65, who has lived in Richmond for the last 25 years, said he’s tired of “coughing up old lumps of
119DEIR, IV.E.11 120DEIR, IV.E.12
121DEIR, IV.E.17 122Derailed Chemical Tankers Close Richmond Roadway, West County Times, October 1, 1990. 123DEIR, IV.E.23 124DEIR, IV.E.29 125DEIR, IV.E.25 126DEIR IV.F.23 127United States Environmental Protection Agency, Region 9, Administrative Order on Consent (Agreement) in the matter of Chevron, USA, Inc. - Richmond Refinery, June 18, 1990, 10
4 things” and feeling sick day after day. “You smell all kinds of smells all the time, said Griffin who lives at 329 South 4th Street., “I’m going to try to get out of here as damn soon as possible.”128 2. Jody White, who has lived along Pennsylvania Avenue in Richmond for 27 years, said he’s fed up with living in the shadow of what he perceives as impending disaster. “Chevron (oil refinery) is like a .357 ready to go off. If I could afford it, I’d get the hell out.”129 3. Jean Young - During the day you can smell different kinds of odors. At night you get different mists in the area, said Jean young, 46, who has lived in North Richmond her entire life. “I’m wondering what kind of effect its having on the population. I wonder if there’s something that’s happening to us physically because of this environment.”130 4. Willie Dye - Every time Willie Dye walks out of the neighborhood grocery his family runs on Filbert Street in North Richmond, he looks over his shoulder to see if there are any problems at the nearby Chevron refinery and manufacturing complex. Dye has lived for eight years in this largely low-income community of 2,500 people. he has endured mysterious odors drifting through his neighborhood from many small chemical spills at the oil refinery and associated chemical and fertilizer plants. he is not convinced by the company assurances that design and operation of the plants make a major chemical accident virtually impossible. “You go to bed; you try not to think about it. But you can’t help thinking about it, because you’re smelling it all the time. you wonder what’s going to be next.”131 5. Bob Carlson - Bob Carlson, who says he lives on “ground zero” across from the Chevron refinery in Point Richmond, woke up on December 6, 1991, to see, “oily black-and-white dust like snow” all over the neighborhood from a 40-ton cloud of dust that had been accidentally released from the Chevron Refinery. “You could attribute short-term respiratory problems to the dust cloud itself”, Contra Costa health Director Dr. William Walker told the Bay Guardian last week. “But there was no chemical effect.”132...But a survey by the Toxic Cloud Task Force, which Bob Carlson helped found, found that 500 people in an 18-mile area reported health problems - not only respiratory problems but also rashes, headaches, two miscarriages, nausea, vomiting, confusion, and inability to concentrate133. 6. Michelle Ozen - Like a canary in a coal mine, Michelle Ozen sniffs the air every morning for chemical smells as she steps off her front porch to go to work.134 7. Bowler-Cone Study - The initial assessment of many treating physicians following the General chemical release in July of 1993, was that symptoms would be temporary and disappear in a matter of days. A follow-up study released in December of 1993 showed that those exposed to the sulfuric acid cloud continue to have, symptoms of either respiratory or skin related diseases along with emotional problems. The Richmond residents had “substantial fears” of future illnesses for themselves and their children,”, said Rosemary Bowler, a San Francisco State University professor who conducted the study along with Dr. James Cone of the University of California at San Francisco.135 8. Francis Aebi - I am and have been a resident, greenhouse owner and operator at 509 Brookside Drive since 1927. Over that span of years I have not been a stranger to air pollutants that have trespassed upon my property. On more occasions than I wish to remember, I had to close my
128Chemical Hazards Just a Part of Richmond Life, The Oakland Tribune, July 28, 1993.
129Ibid.
130Race and the Environment, West County Times, August 1, 1983.
131Living Under a Toxic Cloud of Fear, West county Times, December 13, 1993
132Clearing the Toxic Cloud, The Bay Guardian, April 21, 1993. 133Ibid. 134Chemical Hazards Just a Part of Richmond Life, The Oakland Tribune, July 28, 1993.
135New Study Details Injuries from Spill, San Francisco Chronicle, December 4, 1993.
5 bedroom windows at night to avoid the stench and then to look at the tissue injury to my plants in the morning.136 9. Ahmadia Thomas - My husband is now ill from this pollution. He went to the hospital. The doctor didn’t know why his temperature was so high and his blood pressure was up. They could not get his blood pressure down for five days, and he is still confined to the hospital. I know it’s from the chemicals.137 10. Earnest Witt - I have been here some 40 years and I have seen not only some of my extended family pass away from illnesses, but I have seen quite a few friends in this area to pass away from illnesses. We always wondered what it was that was killing our people and the women having miscarriages, people having skin rashes like I got, people having breathing problems, and so here in the last 15 years, it finally dawned on us that there was something wrong in this community with the bad smells, you know, with the people laying up from cancer. We go through and drive through Chevron and walk through there and sometimes your eyes would burn. You couldn’t grow things in your garden. You would come out the next day and your paint was coming off your cars.138 11. Willie Parker - We believe that Chevron Oil, they are the ones that is causing us to have so many problems with our health. Miscarriages, myself and my wife, we have experiences about three and we believe that plant is the cause of it. And not only us, other people in the community is experiencing the same problems...And you don’t know. You people that don’t live here, you don’t know what we experience late at night. We cannot open our windows late at night. Three o’clock and four o’clock in the morning is when the smell and all the odor starts to come in when they [Chevron Chemical] starts to burn. That’s when its done. It’s not done during the day. It’s done just before the day, and when the wind blows out in North Richmond, it comes right into our living rooms. The house smells during the day after they have burned all night. Your car, it goes into the air and when you go out in the morning, it’s all over your car.139 12. Consewella Niweigha - As a matter of fact, I am raising my children in the same house I was raised in, and I have watched the 20 houses on this block, with three missing. There is one parent out of every house that died of cancer. I watched this. Now my kids are there, and I am worried about it. We do have rashes. Thaey can’t breathe. Your throat burns. Like you say, you walk out on the porch and your eyes burn. You have got to go back in and close the door. You can’t even come out sometimes.140
Social and Psychological Changes According to Raquel Pinderhughes, people undergo profound social and psychological changes as a result of toxic exposure and the threat of exposure to toxics. The experience leaves them with deep, permanent scars which change the way they view themselves, their family, their community, government, and the world. Even if the problem is dealt with, people remain fearful. They are terrified by unknown future effects on their health and the health of family members. Dealing with multiple levels of government and large corporations which make it impossible to define, locate, or meaningfully communicate with accountable officials leaves them with a feeling of vulnerability and lack of control. Helplessness is a reality as well as a strong feeling. Recognition of vulnerability, lack of control and power have radiating effects. There is potential for depression, despair, emotional problems, and substance abuse. Their lack of faith in government institutions has been deeply eroded and affects future interactions with the public sector. Suspicions about information from officials and scientists
136Transcript (Tr.) of Public Scoping Meeting, State of California Department of Health Services, Toxic Substance Control Program, ijn the matter of Chevron Chemical Company hazardous Waste Storage and Incinerator Facility Environmental Impact Report, April 24, 1990, 12. 137ibid, 45 138ibid, 64 139ibid, 68 140ibid, 74
6 are high. Frustrations over money, lack of resources, financial burdens, and fear of future health problems have profound effects on family interactions.141
Environmental Findings CEQA requires that prior to approval of a project for which an EIR has been prepared, written findings must be made regarding significant effects, and the findings must be accompanied by a statement of the facts supporting such findings.142 In Attachment A of the original staff report, the Planning Department staff made three findings, two of which are not in conflict with or support the conditions added by the Planning Commission.
Environmental Finding 1 stated that, changes or alterations have been required in, or incorporated into the project which avoid or substantially lesssen the significant environmental effects thereof as identified in the final EIR. 143With the inclusion of the conditions added by the Planning Commission, this statement can stand essentially as drafted with one exception. The final EIR was deficient in that it did not fully explore the effects of past and continuing pollution and accidents at the Chevron complex, including the proposed project, on the economic, social, health, and educational quality of life of people living in neighborhoods near the project, especially those living in the path of prevailing winds. The statement supporting Finding 1 conceded that the effects of air criteria pollutants and geology/seismicity were not fully mitigated. The statement erred in concluding that public health and safety were mitigated.
Environmental Finding 2 explains the allocation of responsibility between the City of Richmond and the BAAQMD for establishing conditions and monitoring compliance. Such changes are within the responsibility and jurisdiction of another public agency and not the agency making the finding. Such changes have been adopted by such other agency or can and should be adopted by such other agency.144 This statement is not in conflict with the Planning Commission’s additional conditions. In fact, it supports modified conditions II-2 and II-3 because it justifies requiring the applicant to provide funding for a consultant to the City, if needed, for monitoring conditions of approval.
There is no objection to Environmental Finding 3 which identifies mitigations or alternatives that are infeasible. Specific economic, social, or other considerations made infeasible the mitigation measures or project alternatives identified in the final EIR.145 The reasons for rejecting the “No Project” alternative and Alternatives I and II are reasonable as are the reasons for rejecting flare options which would increase noise and air emissions. Statement of Overriding Consideration Where the decision of the public agency allows significant effects identified in the EIR which are not required to be at least substantially mitigated, the agency is required to state in writing the specific reasons to support its actions based on the final EIR or other information in the record.146 The staff report identified three significant, unavoidable impacts:147
1. Emissions during construction exceeding 150 lbs./day.. 2. Emissions during operation exceeding 150 lbs./day. 3. Possibility of damage from groundshaking.
141Raquel Pinderhughes, Social and Psychological Impacts of Toxic Exposure (San Francisco: University of California, School of Medicine, January, 1993) 9-10. 142CEQA Guidelines, Section 15091 143 Staff Report CU 93-40, Attachment A, page 2 144ibid, 2-3 145ibid,4 146CEQA Guidelines, Section 15093 147Staff Report CU 93-40, Attachment A, page 5
7 The staff report suggested the following “overriding considerations” to justify permittting the project in spite of unavoidable impacts:148 1. The purpose of the Reformulated gasoline component of the project is to conform to State and Federal regulations for cleaner burning gasoline. 2. Use of reformulated gasoline will result in a decrease of emissions of CO, HC, Nox, and Sox within Contra Costa County. 3. The purpose of the FCC Plant Upgrade is to improve the efficiency and reliability of the FCC Plant, making it more enery efficient and less likely to contribute to an accidental release. 4. The Alkylation Plant modernization will reduce the use of freons and result in less damage to the stratospheric ozone. 5. The project will generate revenues for the City of Richmond and Contra Costa County and will generate jobs and economic activity. 6. The applicant will be required to contribute to the Richmond Urban Forest program. 7. No matter what design standards are used, there will always be the potential for damage in the event of an earthquake. The Statement of Overriding Considerations concluded by stating that, the benefits described above, when taken together, override the environmental impacts of the Project and they include for the residents of Richmond which will not otherwise occur without the project. It should also be noted that the environmental impacts that have been identified as relating to the Project’s operating air emissions are within an area of controversy, where they are judged as not significant under the regulations of the BAAQMD.149 This statement is not in conflict with the additional conditions imposed by the Planning Commission, and in fact, is bolstered by the additional conditions.
The Nexus Perplexus The Case for Adequate Nexus At the heart of Chevron’s criticism of the Planning Commission’s conditions is the claim that there is insufficient connection (nexus) between the specific project and the proposed conditions. Chevron further asserts that portions of the refinery not a part of the specific project are immune from conditions. Chevron erroneously states that there was no evidence before the Planning Commission that existing refinery operations present a nuisance or risk that would be mitigated by the conditions imposed on the CUP.150
The evidence is clear that the existing refinery, with or without the proposed project, is a source of air pollution and safety risks with a history of adverse impacts on the surrounding neighborhoods. These impacts are inconsistent with policies of the General Plan, Zoning Ordinance, and other provisions of the Richmond Municipal Code. The City has a legitimate governmental interest in reducing pollution, increasing public safety, and protecting public welfare. The nexus between those conditions which are intended to reduce pollution and increase safety could hardly be closer. There is nothing in case law to suggest that a mitigation for an adverse impact has to be limited to the same component of a facility that caused the problem.
The case for adequate nexus of the community foundation is more complex but just as compelling. Because of the unappealing environmental conditions that have existed downwind of the refinery for nearly a hundred years, the neighborhoods have attracted and continue to consist largely of residents of the least economic means. There is also evidence that continued exposure to pollution and periodic exposure to fires, explosions, and abnormal emission releases takes a toll on the physical and mental haelth of residents (A paper by Raquel Pinderhughs will be submitted - see summary under “Social and Psychological Changes”, above). This population consists predominantly of protected classes, including African-Americans, Hispanics, and Asians. Many residents feel “trapped” in this area, and those that can move out are replaced by others of similar economic means.
148ibid, 5-6 149 150Attachment A to Chevron Appeal, December 27,1993.
8 Most West Contra Costa County residents have accepted their precarious surroundings like an unpredictable and sometimes violent relative - “it’s something you can’t change so you learn to live with it,” [Michelle Ozen} said...We’re victims really. We want things to change, or we want to move, but we can’t,” said Ozen, a 36-year- old office manager. “You just gotta live with it.”151...Some say the reason industry is often found near poor communities like North Richmond is simple. Poor people live near industry because the land there is cheap. Likewise, they say, industry tends to locate where the land is not too expensive...“You’re not going to see Chevron build a refinery in Moraga,” said Steve Morioka, a hazardous materials specialist with the county.152 Congressional Committee on Natural Resources The disproportionate risks borne by minorities living near hazardous industries has recently attracted substantial attention in the media and by Congress and the Clinton administration under the heading environmental justice, environmental racism, or toxic racism. A congressional committee taking testimony in Richmond heard powerful descriptions of environmental justice.
Michele Washington Jackson - We are here today to speak of environmental racism. This racism is deadly, insensitive, dehumanizing, and economically deficient for the residents of ... the entire City of Richmond. This racism is symbolic of the racism experienced during slavery whereby a few benefit and the majority suffers.153
Dorothy Olden - No matter what we are labeled, we are also a part of America. We deserve clean air. We have the right to live not in fear of our lives or for our children’s lives. We realize that the industries and the communities must coexist together. We have long done our part, but why should we suffer so?154
The congressional study found that, like Richmond, higher percentages of African-Americans and Hispanics live in areas where the air is too dirty to meet federal air quality standards, that the EPA consistently imposes considerably weaker penalties on those who pollute minority neighborhoods than on those who pollute white communities, and that neighborhoods hosting locally undesirable land uses tend to be poorer and have more minority residents than other neighborhoods.155
Speaking of North Richmond, Robert Bullard, a U.C. Riverside professor who has lectured and written extensively on environmental racism, said, “ It’s not by accident that African-Americans live close to those factories. It is not just an accident of income alone. Regardless of income, black people tend to be residentially segregated at every level. North Richmond and dozens of communities like it across the country routinely live with industrial accidents that would be viewed as a disaster or potential disaster in other neighborhoods. Poor people live with crumbling schools, dirty water, and polluted air not just because they’re poor, but because they’re considered disposable”156
The Clinton Administration In a speech on December 2, 1993, Vice-President Gore revealed the administration is preparing an executive order on environmental justice. Other officials anticipate that it will order federal agencies to ensure that minority areas do not suffer disproportionate environmental harm from government building, investment, or policies and regulations.157 The Clinton administration has for the first time agreed to investigate complaints that states are violating the rights of blacks by permitting industrial pollution in their neighborhoods. Members of the West county Toxics Coalition have made similar arguments about the high concentration of hazardous businesses in
151Chemical Hazards Just a Part of Richmond Life, The Oakland Tribune, July 28, 1993 152Race and The Environment, West County Times, August 1, 1993. 153Living With Risk, Majority Staff Report (Washington, D.C.: Subcommittee on Oversight and Investigations, Committee on Natural Resources , December 9, 1993) 35 154Ibid. 155Ibid., 36 156Race and the Environment 157Gore, Black Leaders Discuss Environment, San Francisco Chronicle, December 3, 1993
9 and around North Richmond, a low income community dominated by blacks and recent immigrants from southeast Asia.158
When Gore spoke to the National Council of Churches on December 2, 1993, the message from the room full of ministers was passionate and poignant: Government has ignored minorities suffering disproportionately from pollution. “Our babies are choking. Our children are sick. Our people are dying,” the Rev. Charles Adams said, “because governments have allowed toxic plants and waste dumps to be built near them.”159 Adams went on to tell Gore that the poor want economic opportunity, but not at the expense of human health.
History of North Richmond
At the time the Pacific Refining Company (later Standard Oil of California and finally Chevron) came to Richmond, the area to the north and east of the refinery site was largely low-lying grasslands and tidal marshes. The initial development of this area started in three nodes.
The earliest development, which already dated from the rancho days of the nineteenth century, was near the present day intersection of San Pablo Avenue and Church Lane where the Alvarado Adobe is now restored. This was the headquarters of Rancho San Pablo, and related development spread east and west along the two creek corridors.
The second area of settlement was sparked by the coming of the Atchison, Topeka, and Santa Fe Railroad which established its western terminus in Richmond at the turn of the century. This community of railroad employees grew up around the eastern end of the newly constructed railroad yard and thus became known as “East Yard” near what is now Garrard Boulevard and First and Second Streets. Most of the remaining vestiges have been recently demolished to make way for the Richmond Parkway.
The third area, known for a short time as “west yard” is now what is known as Point Richmond. This area gained ascendancy in the first 10 years of the 20th century because of its proximity to both the Atchison, Topeka, and Santa Fe Railroad terminus and the refinery as well as its higher ground and underlying geology which made it a more attractive site for construction than the marshes.
As Richmond continued to grow and public transportation made it possible for people to commute beyond walking distance to work , the demand for commercially developable land outgrew the confines of the less steeply sloped parts of Point Richmond, and the City expanded to the east after 1910, taking with it the City Hall and the focus of commercial development. What Washington Avenue was from 1900 to 1910, MacDonald Avenue became from the 1920’s on. As MacDonald Avenue became the main street of Richmond, residential development in the form of modest cottages continued in the grasslands north and south of MacDonald Avenue, growing from the west near the town’s two major employers to the relatively uninhabited areas to the east and along San Pablo Avenue.
Prior to World War II, Richmond had a population of some 30,000, largely distributed in Point Richmond and in the former grasslands between San Pablo Avenue and the edge of the marshes along the Bay to the west. During World War II, the Kaiser shipyards swelled Richmond’s population to some 130,000 virtually overnight, including tens of thousands of black workers recruited from rural areas of Louisiana, Arkansas, and Oklahoma. Much of the influx was accommodated in new, government constructed public housing, but most of the black families were isolated and crowded into the older homes in north and west Richmond, many of which were sub- standard even 50 years ago.
When the war ended, those workers who could find work elsewhere did so while others drifted back home. Those workers with the least prospects back home, including thousands of black families, chose to stay in Richmond where they had put down roots and started a coherent community. Many, of course, became successful in business and politics and are now leaders of Richmond. Many others who did not find success remained in North Richmond. After being forced to live in a relatively inhospitable part of town which was subject to pollution and flooding, black families were later subjected to pressure to move out, but not to a better part of Richmond. According to Ann Moore, a Cal State, Sacramento, historian who has written on Richmond history, Richmond
158U.S. Set to Review Complaints by Blacks on Pollution, West County Times, November 21, 1993. 159Gore, Black Leaders Discuss Environment
10 city fathers in the 1950’s wanted black people who settled in North Richmond to return to the South and back east. The City forged ahead with plans to industrialize the North Richmond area, called “cabbage patch” because of its fertile soils. 160 This drive to industrialize North Richmond and to expand and replace existing industry without adequate consideration for adverse impacts on residents of the area continues and is exemplified by this project.
Today, North Richmond is still largely inhabited by disadvantaged minorities, principally blacks, because of the comparatively low land values and correspondingly low rates for residential rents. Values have remained low in these areas for several reasons. The predominant reason is proximity to the petrochemical complex dominated by Chevron’s 2900 acres and the resulting exposure to continuous atmospheric pollution and periodic explosions and fires. As a related factor, the existing housing stock is old and poorly maintained. For years, the area was also subject to flooding, a problem finally alleviated by hydrological improvements in the 1980’s.
The current socioeconomic profile of North Richmond is well illustrated by a recent study of the unincorporated portion consisting of Census Tract 3650.02 with a 1980 population of 2,341. The 1990 study, North Richmond Redevelopment Area Market study and Alternatives Analysis, was prepared by the Department of City and Regional Planning at the University of California, Berkeley. Although focusing on a single census tract, the demographics revealed by the study are indicative of conditions in nearby neighborhoods such as the incorporated area of North Richmond and the Iron Triangle. According to the study, the area :
was 88 per cent black, 7 per cent Hispanic, 2 per cent Asian, and 3 per cent white.- had 28 per cent female headed households.
high school graduation rates were especially low
education statistics represent figures significantly below statewide figures - as well as for surrounding communities.
residents may be experiencing difficulties in securing and maintaining employment due to low levels of educational attainment.
20% of the labor force was unemployed, four times as high as the County rate. A large portion of the population may have stopped looking for work.
household incomes were extremely low with 31 per cent of household below the poverty level.
there are low employment opportunities in the area.
200 of 432 structures are in need of rehabilitation; an additional 99 are in such disrepair that rehabilitation may not be financially feasible; 25 appear to be abandoned.
155 parcels have tax delinquencies.
the quality of housing stock contributes to the accelerated rate of deterioration, perpetuates the overall blighted character, is a disincentive to investment, and serves to facilitate crime and other infringements on public safety and health.
North Richmond is currently extremely unappealing as a place to live. Education Nexus The CAP as a Measure of Student Performance It is an indisputable fact that areas of population with concentrated low income and unemployment levels such as North Richmond will result in students with low skill levels as measured by standardized tests. For many years, the California State Department of Education has operated a testing program called the California Assessment Program (CAP), which was intended to measure, collectively, the relative performance in basic skills of students statewide in the third, sixth, eighth, and twelfth grades. Scores are reported by schools and districts but not by
160Race and the Environment
11 individual students. In fact, no student took the entire test so that scores truly represent composites rather than true averages.
The asserted intent of the CAP program was to, determine the effectiveness of school districts and schools in assisting pupils to master the fundamental educational skills toward which instruction is directed. the program of statewide testing shall provide the public, the Legislature, and school districts evaluative information regarding the various levels of proficiency achieved by different groups of pupils of varying socioeconomic backgrounds, so that the Legislature and individual school districts may allocate educational resources in a manner to assure maximum educational opportunity for all pupils.161
The CAP program correlated the composite raw score and the percentile ranks of scores with the socioeconomic profiles of the students and their families by individual schools and by school districts. Information was collected regarding the highest level of educational attainment by students’ parents, the type of employment of students’ parents, the level of English speaking ability of the students, the level of residential transience of students’ families, and the per cent of student’s families receiving AFDC. Based on these factors, a “socioeconomic index” was compiled.162 For grades 8 and 12, the SES (socioeconomic status) index for a group was the average of the values assigned for levels of parent education, and for grades 3 and 6, the group index was the average of values assigned for technical level of parent employment.163 Low SES indexes tend to correlate with low incomes, and high SES indexes tended to correlate with high incomes. For example, Kensington Elementary, with a Grade 3 SES of 2.94 in 1989/90164, is in a community with a median household income of $61,330165, while Peres Elementary, with a Grade 3 SES of 1.31 in 1989/90166, is in a community with a median household income of less than $32,165167. Statistically, a low SES index has been found to correlate with low test scores and a high SES index with high test scores. In fact, the socioeconomic index appears to be the principal determinate of test performance for a school or district. The relationship is so predictable it can be graphed as a linear equation.
CAP Scores at Schools Nearest The Chevron Refinery Three of the lowest -performing schools in the West Contra Costa Unified School District, as determined by 1989/90 CAP scores are also the three schools closest to and downwind from the Chevron Richmond Refinery. A statewide rank of 1 indicated that 99 per cent of the schools in the state have higher test scores while a rank of 4 indicated 96 per cent of schools statewide had higher scores. Washington Elementary School, which is close to but not downwind from the refinery, has a student body made up largely from students living north and east of the refinery. Its CAP scores are higher than the other three schools but still below district average and substantially below state average. In 1989/90, among 116 elementary schools in the Contra Costa County, these four schools ranked 104 (Washington), 111 (Peres), 115 (Verde), and 116 (Lincoln).168
School Grade 3 Reading Statewide Rank Grade 3 SES Index (1989/90 CAP Scores) WCCUSD (Entire District) 35 1.97 Lincoln Elementary 1 1.22 Peres Elementary 4 1.31 Washington Elementary 19 2.00 Verde Elementary 1 1.46
161California Education Code, Section 60601
162Memo, dated April 17, 1990, from Francie Alexander, Associate Superintendent, Curriculum, Instruction, and assessment Division, California State Department of Education, to District and County Superintendents. 163Lillian Clancy, A User’s Guide to California Public Schools (Walnut Creek: California School Surveys, 1991) 6 164California Assessment Program Survey of Basic Skills, Preliminary Report of School and district Results, 1989/90. 165Income, Education Levels in Bay Area Cities, San Francisco Chronicle (Source: U.S. Census Bureau) 166California Assessment Program Survey of Basic Skills 167Income, Education Levels in Bay Area Cities 168Clancy, 315
12
In a letter dated September 23, 1993, from Santiago V. Wood of the West Contra Costa Unified school District, to James Farah, the School District expressed concern for the health and safety of students and staff at schools near the refinery, including Washington, Nystrom, Lincoln, and Peres. These concerns included :
1. Increased health risks associated with increased emissions of pollutants into the atmosphere. 2. Increased public safety risk from fires, explosions, or accidental release of toxic gas or vapors. 3. Increased odors. 4. Increased emissions of hazardous materials. 5. Increased emissions of hazardous materials. 6. Increased noise. 7. Increase in traffic, thereby increasing the possibility of major accidents involving tanker trucks resulting in a spill and fire on local roads. 8. Increased hazardous waste could pose a threat to the students and staff. 9. Cumulative health hazards from increase in hazardous materials. 10. Cumulative increase in risk of upset due to increase in hazardous materials. 11. Cumulative increase in clean-up of hazardous waste. 13. Potential for accidents involving vehicles carrying hazardous materials.169
An example of how previous accidents at the refinery have affected nearby schools is the fire of April 10, 1989, when 275 children were evacuated from Verde Elementary School.170
Jean Siri discussed the effect of pollution at Peres School: I have to say that this is where I started working on air pollution, in this school, fifteen to twenty years ago. I spent six months at Peres School. I think then there was an enrollment of about 2,000 children, and I was very upset over the air. The air was abominable. And I felt the children shouldn’t be out having recess since it was being blown on directly by the [Chevron Chemical] incinerator which was not under any permit at the time that I know of...In most schools they have earthquake drills. In this school they have earthquake drills and they have toxic drills. It would never be permitted in any upper middle class schools in the area that I know of.171
Mitigating a Predetermination of Low Achievement Smaller class sizes is one effective way that schools in socioeconomically disadvantaged areas can catch up with students from wealthier families. A pilot program in the late 1980’s at Verde Elementary illustrates this point.172 During three school years from 1985-86 to 1987-88, class sizes were lowered from thirty to fifteen students. At the time the study began, 94 per cent of the students qualified for Chapter I Compensatory Education Assistance (scoring below the fiftieth percentile on standardized achievement tests). The 1988/89 SES Index for Verde was 1.17 for third grade and 1.48 for sixth graders, among the lowest in the state. The ethnicity of the group was 92 per cent black, 3 per cent Hispanic, 2 per cent Asian, and 1 per cent white.
During the three years of the study a ten year trend of declining achievement as measured by the California Achievement test (CAT) was reversed. For some classes, percentage increases of as much as 35 points was achieved. In the spring of 1985, the year before the test began, only 17 per cent of students scored above the 50th
169Response to Comments on the DEIR, Volume 1 170DEIR IV.E.16 171Tr., 63 172Antoinette Henry-Evans, Class Size reduction: Effects on Student Achievement as Measured by Standardized Tests (Master’s Thesis at California State University, Hayward, June 1987)
13 percentile on CAT tests. In the spring of 1988, the third and last year of the experiment, 42 per cent scored above the 50th percentile, a 147 per cent increase! At other district schools during the same time period, the number of students scoring above the 50th percentile rose only 2 per cent.173 During the first two years of the experiment, scaled CAT scores at Verde’s third grade took jumps ranging from 18 to 58 per cent.174
Henry Evans concluded that class size does have an educationally significant effect upon student achievement as measured by standardized tests.175 Her research also indicated that students of lower academic ability, as well as those who are socially or economically disadvantaged, benefit from smaller classes.176
The continuing presence of the Chevron Refinery, including the proposed project, makes the neighborhoods downwind sufficiently unappealing that property values and rents are comparatively low, thus ensuring a resident population concentrated and skewed toward the low range of what the California Department of Education measures with a SES Index. This artificially induced concentration of disadvantaged students virtually assures not only low composite test scores but also schools that are held in low esteem by both the community they are located in and by other communities. There is creditable evidence that the cause and effect relationship of poverty and low academic achievement can be broken by substantially reducing class sizes. Hiring more teachers for specific schools to achieve this is a mitigation with a tangible cost and proven results.
Economics
Chevron - An Economic Giant In a press release dated December 27, 1993, Chevron whined that the conditions imposed by the planning commission would, put the refinery at a competitive disadvantage in a business where refineries can live or die on the basis of pennies per gallon in operating costs. Chevron went on to say that, We have a duty to our stockholders that precludes us from investing hundreds of millions of dollars in a refinery that could be a weak competitor.
The economic facts of the cost to Chevron of implementing the conditions shows that the public relations information presented in the press release is gross exaggeration of the worst kind.
Chevron is a corporation with annual sales of over $41 billion.177 Chevron has 325 million shareholders who saw the value of their investment rise during 1993 from $69.50 per share to $87.13 per share, a 25.36 per cent increase worth $5.7 billion. Since the Planning Commission decision on December 16, 1993, the value of Chevron stock has risen nearly $1 billion! On January 18, 1994, Chevron stock closed at 89 7/8, an increase of $6.6 billion since January of 1993.
On December 5, 1993, Chevron announced an unprecedented five percent bonus for 42,000 employees worldwide costing $70 million after tax, or $0.22 per share. The San Francisco based oil company said the bonuses follow the company’s achievement of the highest total return to stockholders among major American oil companies over the last five years ... On the last trading day of 1993, Chevron’s stock closed at $87.12, up $41.37 per share over the five-year period. That rise, combined with dividend payments, boosted Chevron’s total annual shareholder return to 18.9 per cent per year.178
173Memo dated August 24, 1988, from Frank Carson, Principal, Verde Elementary School, to Dr. W. Marks, Superintendent. 174Memo, dated October 8, 1987, from Frank Carson to Dr. Walter Marks. 175Henry-Evans, 76 176Henry-Evans, 23-28. 177Chevron Corporation 1992 Annual Report ( San Francisco: Chevron Corporation, 1993) 3 178Chevron Workers Get Robust Year-end Bonus, The Oakland Tribune, January 5, 1994.
14 Effect on Profit With yearly dividends of $3.50 per share, the $2 million per year cost of the proposed Richmond Community Foundation would cost shareholders $0.0057 per share ( about one half of one cent) if it were deducted from profits. The actual cost would be substantially less because it would be deductible from corporate income tax. What kind of duty does Chevron have to stockholders that would preclude spending one half cent per year of what would otherwise be profits on the community most impacted by one of Chevron’s three remaining domestic refineries? Effect on Cost of Product According to Chevron, the total refinery liquids production following project completion is about 245,000 barrels per day, 110,000 barrels of which is motor gasoline. 179 This converts to 3.8 billion gallons of liquids (including several types of fuels) and 1.7 billion gallons of motor gasoline per year. If the $2 million per year cost of the community foundation were added to the cost of total liquids, it would add $0.00053 per gallon of liquid. If the entire cost were added only to motor fuels, it would add $0.0012 per gallon of fuel. The actual cost would be less because of corporate tax deductions for the community foundation. Hardly the “pennies per gallon” described in the alarmist Chevron press release! Chevron Charity Of course the additional cost of the Richmond Community Foundation need not come from profits or cause even a minuscule rise in sales price of fuels. Chevron would only have to reallocate some of the approximately $27 million per year donated to charitable causes in places other than Richmond.180 Not only Richmond, but the entire area of West Contra Costar County, receives only about one percent of Chevron’s total annual charitable donations. Chevron claims to have distributed $270,000 to 267 West Contra Costa County charities in 1991.181 Chevron continues to contribute millions annually to programs in the San Francisco Schools while giving only a few tens of thousands to the relatively poorer and much more needy West Contra Costa Unified School District.182 Although the San Francisco School District receives 38 per cent more funding per student than the WCCUSD,183 Chevron has been a loyal supporter of San Francisco Schools, donating $7,500 per year to the Think/Write Project, $234,000 since 1980 to the Ed Fund, and $1.45 million to Accelerated Schools. Chevron’s Vice Chairman, James Sullivan, was co-chair of the 1993 major fund-raiser for San Francisco School Volunteers expected to raise $160,000.184
Chevron not only supports San Francisco Schools. In 1992, Chevron reported contributions to San Francisco United Way of $1.8 million, San Francisco Opera $75,000, San Francisco Symphony $50,000, and San Francisco Ballet $35,000. All this in spite of the fact that more people are employed by Chevron in Richmond (3,509)185 than in San Francisco (2,497)186.
179DEIR, Figure III-5 180Corporations Still Generous but More Particular, San Francisco Business Times (San Francisco: San Francisco Business Times, March 5-11, 1993) 5 181The Economic and Fiscal Effect of Manufacturing, Heavy Industry, and Chevron USA, Activities on Contra Costa County, The City of Richmond, and The Richmond Unified school district (San Francisco: Gruen + Gruen Associates, 3/10/93), 109 182Chevron contributions to West contra Costa County are listed by category in a handout entitled “Richmond Community Activities” distributed to the Community Advisory Panel in 1993. Annual school related contributions listed include $7,500 for scholarships, $6,650 for Junior Achievement, $15,000 for Richmond Unified Education Fund, and unspecified amounts for BOOST and other programs. 183Rebecca Hazelwood, Comparative analysis of Income and Expenditures (Richmond, CA: Citizens Committee for Richmond Schools, December 1991) 9 184Going Beyond the Common Drill, San Francisco Business Times, October 15-21, 1993 185Gruen, 17 186Largest San Francisco Employers, San Francisco Business Times Book of Lists (San Francisco: San Francisco Business Times, 1993) 91
15 Taxes Chevron complains that the conditions imposed by the Planning Commission constitute an illegal special tax... imposed only on Chevron and not on any other permit or property owner in the City of Richmond., thus subjecting Chevron to discriminatory treatment and denying equal protection of the law.187 Chevron is no stranger to discrimination, but it usually goes the other way. Since Richmond imposed a utility user’s tax several years ago, Chevron was the only taxpayer allowed a unique privilege consisting of a “cap” on the total tax. According to a City ordered audit, In the early years of their election for the “cap” option, it appears as though Chevron did benefit from the tax ceiling because of their higher utility consumption.188 In another unique arrangement, Chevron is allowed to pay 20 per cent of the normal building permit fees charged to others in the City of Richmond and to inspect its own projects under what is called the Certified Inspection Program (C.I.P). Since 1987, the City of Richmond has lost approximately $12 million in potential revenue because of this scam ( see attached paper entitled, Construction at Chevron and The Certified Inspection Program) .
Chevron likes to tout the refinery’s indispensable role in Richmond’s economy by pointing out that it pays approximately $10.7 million in taxes to the City of Richmond, or about 17.2 percent of the General Fund revenues.189 The biggest proportion of this is $13.7 million in property taxes, but only $4 million of this is retained by the Richmond General Fund.190
The assessed value of all Chevron property in Richmond is about $1.5 billion, but only $1.16 billion is for the refinery.191 Unlike other business or residential property in Richmond which the assessor routinely reappraises at the 2 per cent constitutional maximum each year, the assessor depreciates Chevron refinery property by 3-5 per cent annually.192 At 2,900 acres, the Chevron Refinery has an assessed valuation of $401,193 per acre, or $9.21 per square foot (including both land and improvements) which is substantially lower than most other business or residential properties in Richmond.
Employment In the press release of December 27, 1993, Chevron boasted that Chevron is the single largest employer in Richmond with its 3,500 refinery and other employees representing one out of eight Richmond jobs. What Chevron did not say is that only one out of every ten of those Chevron employees actually lives in Richmond, and that only 164 (or 4.7 per cent) of refinery workers lives in Richmond.193 Chevron further reduces permanent job opportunities in the Richmond refinery by routinely out-sourcing much of the maintenance and construction work to contractors.194 Once the construction is completed, the construction jobs will disappear, and the overall number of permanent jobs will most likely continue to diminish. With 1,571 jobs195 spread over 2,900 acres, Chevron has a job density of 0.54 jobs per acre, probably the lowest of any business in Richmond.
Few of the benefits of the jobs Chevron offers go to those in the neighborhoods most impacted by the refinery. As Amos Adams, 71, says, “neighborhoods like North Richmond and other poor, minority communities suffer with the pollution and accidents of industry, but aren’t given the opportunity to enjoy the benefits, namely
187Appeal of Conditional use Permit CU 93-40, December 27, 1993, 2 188Letter from James M. Thompson of Municipal Resource Consultants to Jay M. Goldstone, dated July 29, 1993.
189Gruen, 5 190Gruen, 46-47 191This was derived by dividing the total Chevron property taxes by the tax rate ($18,705,591/0.01181 = $1.58 billion) and the refinery property taxes by the tax rate ($13,740,464/0.0118 = $1.16 billion), Gruen 45-47 192DEIR, IV.G.6 193Gruen, 17 194Gruen, 30 195Gruen, 5
16 jobs.”196 Fourth Street resident, Robert Coleman said, “We are not benefiting jobwise, but we are constantly being polluted with chemicals in the air.” 197
Property Improvements
Chevron complains that Condition II-19 is, vague and uncertain in that it fails to describe the scope of the cleanup or limit Chevron’s obligation to the area of the RFG Project, or even the refinery property.198These requirements are vague and uncertain only to the extent that the Richmond General Plan, the Richmond Coastline Conservation and Development Strategy, and the Richmond Zoning Ordinance, where they are found, are vague and uncertain. Furthermore, the pertinent references to these documents are found in the Response to the Draft Environmental Impact Report for the Chevron Reformulated Gasoline and FCC Plant Upgrade Project.199
There is a legitimate public interest in carrying out the public policy provisions of the General Plan, the Shoreline Conservation and Development Strategy, and The Richmond Municipal Code. In no way do these conditions deprive Chevron of use of its real property parcel, on which it can continue to operate a commercially viable refinery, nor do they invade the property in any manner. With regard to “clean up”, for example, Chevron is currently in violation of Chapters 9.20 (Solid Wastes), 9.22 (Public Nuisances) and 12.12 (Weed and Rubbish Abatement) in many of the areas on the periphery of the refinery property which is a single, large parcel constituting the site of this project. The Shoreline Conservation and Development Strategy even includes a policy stating, Enforce the City ordinances on weed and rubbish abatement.200 Similarly, Chapter 15.204.205.A.4 of the Richmond Municipal Code requires (for a project seeking permit) that, all areas not otherwise occupied by structures or paved areas shall be landscaped and irrigated by an adequate irrigation system. Chevron is not being asked to landscape all the open space but only to deal with the areas that have been scarred by inappropriate grading, eroded, and are overrun with invasive exotic plants which are both a fire hazard and an eyesore.
Without even a related project, Chapters 12.28 (Streets and Sidewalks) and 12.36 (Maintenance and Construction of Sidewalks, Driveways, Curbs, and Gutters) of the Richmond Municipal Code give authority to the City Council to require owners of abutting properties to pay the cost of constructing streets, sidewalks, curbs and gutters, and to install street trees as well as to maintain curbs, gutters, and sidewalks. This is through incorporation, by reference, of Chapters 22 and 27 of the Improvement Act of 1911, which is found in Part 3, Division 7, Streets and Highways Code of the State of California.201
This condition requires Chevron to do no more than any other owner of a new project or a project involving substantial additions or alterations in the City of Richmond, that is, spend a small fraction of the project cost providing amenities within and adjacent to the project site which make it consistent with the development goals of the City. The Wareham Tech Center in Point Richmond is a good example of how this was achieved in a nearby project. The Tech Center involved an existing building which was expanded as well as the construction of an additional building on the same site. Wareham, the developer, was required by the City to landscape the entire site, move existing overhead utility lines underground, and to participate in an assessment district to pay the cost of constructing curbs, gutters, sidewalks, streets, medians, landscaping, irrigation, street lighting, and underground utilities in the abutting rights-of-way. The total cost of these improvements, which had no functional relationship the buildings proper, was about 10 per cent of the total project cost.
196Race and the Environment, West County Times, August 1, 1993 197Ibid. 198Appeal to Conditional Use Permit CU 93-40, December 27,1993. 199Response to Comments the DEIR, Volume II: Attachments, November 1993. 200SCDS, 44 201RMC 12.36.180 and 12.36.190.
17 In, Erlich, the court found that The City’s police powers extend to imposing certain requirements on construction projects. For example, so long as not to the extent of a taking, the City may specify pursuant to its police powers setbacks, amount of open space to be retained, landscaping requirements, etc... We agree that it is within the City’s police powers to require [public] art to be placed on developments as a condition of approval. (Cf. Agins v. City of Tiburon (1980) 447 U.S. [60 L. Ed. 2nd 106, 100 S. Ct. [*1758] 2138][scenic zoning]; Penn Central Transp. Co. v. New York City, supra, 438 U.S. 104 [landmark preservation]; Euclid v. Ambler Co. (1926) 272 U.S. 365 [71 L.Ed. 303, 47 S. Ct. 114, 54 A.L.R. 1016][residential zoning]; Gov, Code 15813 et seg. [art in public buildings].) Such a requirement does not constitute an exaction, a development fee, a taking, or a tax.202
202Erlich v. Culver City, 15 Cal. App. 4th 1737 (1993).
18 Conclusions
The modifications to Conditions II-2 and II-3 are consistent with Environmental Finding 2 and simply fulfill the City’s right to obtain independent, expert review of the applicant’s performance in order to fulfill the City’s obligation to protect the health, safety, and wefare of its citizens.
Conditions II-13 through II-17 and Condition II-21are intended to provide additional mitigations for effects of the project already identified in Environmental Finding 1 and discussed in the Statement of Overriding Considerations. Insomuch as the weighing of overriding considerations against unavoidable impacts is essentially a subjective evaluation, the additional conditions are not inconsistent with either the final EIR or the Findings.
Condition II-19 is unique in that it is based more on exercising the City’s right to enforce site development related requirements of the General Plan and the Richmond Municipal Code than it is on mitigating impacts of the Project. The City’s responsibilities under the Conditional Use Permit process go beyond implementation of CEQA.
Condition II-20 is based not only on facts included in the EIR but also facts and testimony available in the public record which were ignored by the EIR. The EIR was deficient in not recognizing and evaluating the evidence of continuing and potential effects of the Project on the quality of life of surrounding neighborhods. An addendum to the EIR should be prepared to fully evaluate quality of life issues and provide recomendations for appropriate mitigations.
The most appropriate action for the Richmond City Council to take would be to continue the public hearing on the Chevron appeal for 6-10 weeks while retaining an expert consultant to prepare an addendum to the EIR which provides legally defensible technical grounds for Condition II-20. The City Council should also authorize the City Attorney to obtain outside legal counsel with expert experience in nexus law before the Ninth Circuit. The cost of both of these consultants would be borne by Chevron because the additional services are part of the EIR preparation.
19 Chevron Reformulated Fuels and FCC Upgrade Project
A Simplified Guide to the Options Available to the Richmond City Council in the Appeal of CU 93-40 Approved by the Planning Commission on December 16, 1993
(Draft, January 23, 1994) Authority of The city Council The City Council shall consider the record and any additional evidence and may affirm, reverse, or modify, in whole or in part, the order, requirement, decision, determination, interpretation, or ruling appealed from, or make and substitute any such other or additional decision or determination as it may find warranted. The granting of any appeal must be made by a vote of two-thirds of the whole Council (six votes). Possible Outcomes A Brokered Deal The current scuttlebutt focuses on a deal negotiated among a group of City Councilpersons and Chevron which will result in modifications of the appealed conditions, including a reduced commitment of funding to the broker’s favorite Richmond charities and causes in the range of $3-4 million over a period of several years. Few details are public knowledge except rumors about the possible beneficiaries of the funding and the amounts involved. Little is known about how other conditions would be affected. This scenario would require six votes, and the chances of securing these votes will depend somewhat on the ultimate content of the brokered package and the perception of some Councilpersons on its probability of stanching a lawsuit by the community coalition which originally proposed the conditions adopted by the Planning Commission. The fact that Councilperson Nicchols cannot vote and Councilpersons Griffin and Powers may also not be able to vote, due to conflicts of interest, will make the assembling of six votes particularly challenging. The principal problem with this scenario is that if the package is not sufficient, the community coalition will likely sue the City of Richmond, possibly delaying the project and enhancing media coverage of the flaws in the EIR and the way the City has handled the project permitting process. The City’s defense would be paid for by Chevron through an indemnity agreement if Chevron accepts the permit conditions. Appeal is Unsuccessful If the six votes required to grant the appeal cannot be secured, the Planning Commission decision will stand. In this case it would be extremely prudent for the city Council to adopt additional “findings” to protect the City’s interest by assuring the legal defensibility of the Planning Commission’s decision. The Planning Department has been stubborn and recalcitrant in preparing such findings, but they have been prepared by the community coalition’s attorneys and will be made available to the City Council. If this scenario prevails, Chevron has threatened to sue the City, and the City would be obligated to defend itself and the conditions adopted by the Planning Commission. The attorneys for the community coalition believe the City’s position would be legally defensible.
20 Hearing is Continued Continuing the hearing while inconsistencies between the original Planning Department Staff Report and the action taken by the Planning Commission on December 16, 1993, are resolved has several advantages. The fact that these inconsistencies exist does not represent a flaw in the process but merely an unavoidable result of circumstances where the Planning Commission differed with staff perceptions but did not have the benefit Planning Department staff had of several weeks to provide backup documentation for their position. The community coalition is convinced that the legal and technical basis for resolution of the inconsistencies exists and can be provided through a combination of additional submissions by the coalition and independent research by the Planning Department and the City Attorney, including the use of expert consultants. The City Council could take the following action: 1. Continue the public hearing for a period of 45 days to allow additional study and review of the complex issues raised by the project, the Planning Commission’s approval of additional conditions, and Chevron’s appeal of the conditions. 2. Direct the Planning Department to do additional research to support, if possible, the additional conditions adopted by the Planning Commission. This is consistent with the Planning Department Staff Recommendation included in the City Council/Committee Agenda Request which states, Should the City Council retain either the revised or added conditions, the environmental and Conditional Use Permit findings should be revised accordingly relative to the nexus between the conditions and the project. The community coalition is preparing extensive legal, technical, and socio-economic documentation which will be provided to the Planning Department for their use. Professor Robert Bullard of UCLA is preparing a study on this subject which will be submitted, and the Planning Department and City Attorney may wish to obtain (at the applicant’s expense) expert outside consultants and counsel to advise them on the conflicting positions at issue. 3. Adopt a resolution encouraging Chevron and the community to enter into negotiations to find a mutually acceptable resolution which will avoid a confrontational vote by the City Council and the virtually certain prolonged litigation that would follow such a vote. This scenario has the advantage of avoiding a divisive vote, avoiding certain litigation, and encouraging resolution. Repeal of All Planning Commission Conditions No one is talking about this scenario, so it does not appear likely. It would almost certainly result in a lawsuit by the community coalition against the City and possible delay of the project.
21
TOXIC CLOUD TASK FORCE 143 Tewksbury Avenue Richmond, CA 94801
February 23, 1994
Hon. Rosemary Corbin, Mayor and Members of the City Council City of Richmond 2700 Barrett Avenue Richmond, CA 94804
Dear Mayor Corbin and Members of the City Council: This letter is to call your attention to what I believe was a substantial violation of a central provision of the Ralph M. Brown Act - one which may jeopardize the finality of the action taken by the Richmond City Council on January 24, 1994. The nature of the violation is as follows: In its meeting of January 24, 1994, the Richmond City Council took action to adopt Resolution 10-94 to authorize an agreement between the City of Richmond and Chevron dated January 24, 1994. The action was not in compliance with the Brown Act because it occurred as the culmination of a discussion in closed session or as a result of private negotiations and agreements involving a majority of the City Council, either as a group or serially, of a matter which the Act does not permit to be discussed in closed session. Each member of the City Council was familiar with the content of the agreement prior to the meeting and public hearing and had discussed it at length with other City Councilpersons, City staff, and Chevron, yet no Councilperson commented on or discussed the agreement in public prior to voting on it. There was no adequate notice to the public on the posted agenda for the meeting that the matter acted upon would be discussed, and there was no finding of fact by the City Council that urgent action was necessary on a matter unforeseen at the time the agenda was posted. The Agenda item 2 stated, “Appeal by Chevron U.S.A. Products Company from Planning Commission approval of Conditional Use Permit CU 93-40, with conditions, Chevron Refinery Reformulated Gasoline and FCC Plant Upgrade Project.” The letter agreement authorized by Resolution 10-94 was not a part of Agenda item 2 and, indeed, explicitly stated, “We wish to make it crystal clear that the following proposal can in no way be related to the permit for the Cleaner Fuels Project.” The City Council apparently agreed and proceeded to illegally add it to the agenda and authorize it as a separate item rather than incorporating its content as conditions of the permit, an action that would have been consistent with the posted agenda. In the event it appears to you that the conduct of the City Council specified herein did not amount to the taking of action, I call your attention to Government Code Section 54952.6, which defines “action taken” for purposes of the Act very expansively. As you are aware, the legal remedy for illegally taken actions is the judicial invalidation thereof upon proper findings of fact and conclusions of law. Pursuant to that provision, Government Code Section 54960.1, I demand that the City Council cure or correct the illegally taken action as follows: formal and explicit withdrawal of Resolution 10-94, disclosure at a subsequent meeting of the reasons why individual City Councilpersons took the positions they did with full opportunity for informed comment by members of the public at the same meeting, notice of which is properly included on the posted agenda. Informed public comment would require access to any and all documents in the possession of the City related to the action taken, with copies available to the public.
22 As provided by Section 54960.1, you have 30 days from the receipt of this demand to either cure or correct the challenged action or inform me of your decision not to do so. If you fail to cure or correct as demanded, such inaction may leave me no recourse but to seek a judicial invalidation of the action pursuant to Section 54960.1, in which I would seek the award of court costs and reasonable attorney fees pursuant to Section 54960.5 Sincerely,
Bob Carlson Cc: Malcolm Hunter, City Attorney Joseph T. Francke, Executive Director, California First Amendment Coalition, 926 J Street, Suite 1406, Sacramento, CA 95814
23 PEOPLE DO! 235 East Scenic Avenue Richmond, CA 94801
March 8, 1994
Hon. Rosemary Corbin, Mayor, and Members of the City Council City of Richmond 2700 Barrett Avenue Richmond, CA 94801
Dear Mayor Corbin and Members of the City Council: After much research and contemplation I must confess I remain more puzzled than ever why the Richmond City Council has seen fit in years past to enact special purpose legislation designed to exempt our City’s richest business enterprise from the responsibilities and taxation policies applied to every other taxpayer in the City. Obviously, I am talking about Chevron, and perhaps not so obviously I am referring to Richmond Municipal Code Section 13.52.060 which was designed to exempt Chevron from the level of utility taxation applied to every other taxpayer in the City of Richmond and Section 6.02.200 which was designed to exempt Chevron from the level of scrutiny applied to other designers and constructors of structures in the City of Richmond. Utility Tax Chevron is the richest and most successful business in the City of Richmond and clearly the enterprise that is least in need of tax relief and subsidies. And yet, in the entire RMC Chapter 13.52 which describes the utility tax, there are only three categories of exemptions. One applies to senior citizens with disabilities or annual incomes less than $12,000 and a second provided a one-time rebate to greenhouse operators who even to this day remain highly threatened by cut flower imports from South America. Hardly in the same category and conspicuous by its inclusion is Chevron, the most profitable oil company in the United States whose value has risen by some $8 billion in the last year or so. The City’s consultant, Municipal Resource Consultants, admitted in a letter dated July 29, 1993, that in the early years of their election of the “cap” option, “Chevron did benefit from the tax ceiling because of their higher utility consumption.” There is evidence that Chevron is continuing to benefit to the tune of millions of dollars per year from the utility tax cap. Because neither the City of Richmond nor Chevron has been willing, probably illegally, to divulge the data used to compute the tax at the standard rate, it is difficult for
24 City staff, much less any ordinary concerned citizen, to know exactly how much the City is losing each year under this arrangement. Part IV.J.2 of the DEIR for the Reformulated Fuel and FCC Plant Upgrade confirms that Chevron’s , current daily natural gas use is about 100,000 million Btu [1 million therms] or 91 million cubic feet per day. This amounts to about 365 million therms per year. At the rate you and I pay for natural gas ($0.53 to $0.73 per therm) Chevron’s natural gas consumption would be valued at $193 million to $266 million, and at the 6 per cent tax rate you and I pay, Chevron’s utility tax on natural gas alone would be $12 million to $16 million instead of the approximately $6 million they currently pay under the cap. Utility taxes are inherently regressive when they are based on amount billed instead of energy consumed. In effect, we get overcharged twice, once when we pay a premium to the utility company for gas or electricity and a second time when we pay a premium for utility tax. As a large scale, industrial user, Chevron probably pays PG&E only about $0.35 per therm for natural gas, and if they value the gas they produce in the refinery (alternative supplier) at the same rate they would have to purchase an equivalent amount from PG&E (primary supplier), the cost is $127 million, and the utility tax at 6 per cent would be $7.7 million for natural gas alone (not including electricity and telephone), or about 30 per cent above what they are paying under the cap. The most equitable solution, and the one I am requesting, is first, that the City Council repeal Section 13.52.060.b because it has no rational basis, is inherently inequitable, and violates the equal protection guarantees of both the California and U.S. Constitutions. Second, the City Council should amend Chapter 13.52 to base the utility tax on energy consumed rather than the amount paid for energy in order the eliminate the subsidy provided to Chevron Corporation by the residents and small businesses of Richmond. Certified Inspection Program Like the Utility Tax cap, the Certified Inspection Program (CIP) is a piece of special purpose legislation passed in 1986 designed to uniquely benefit Chevron and to perpetuate an illegal but de facto relationship that apparently had existed informally between Chevron and the City of Richmond for many years. The unsubstantiated justification for the legislation was that Chevron was inherently better qualified to check its designs and inspect its construction for code conformance than anybody the City of Richmond could employ or retain, and that Chevron had such an enviable safety record that its standards were clearly higher than anything the City could impose on the company. This entire premise is absurd and has cost the City of Richmond perhaps $12 million in fees over the last seven years as well as possibly playing a role in some of the many accidents at Chevron which have resulted in injuries, deaths, and numerous lawsuits. Admittedly, some of the foregone fees would have had to pay for staff or consultants paid for by the City to perform plan checks and inspections, but at least the City would be fulfilling its obligation to protect the public health, safety, and welfare, and those performing the work would possess known qualifications and be adherents to the City’s affirmative action policies and objectives. A related problem developing from the CIP is that Chevron is concealing (and the City is ignoring) projects which should be subject to
25 Site Development Review. Finally, neither the City nor Chevron has conformed to the requirements for periodic audits, quality control checks, verifications of credentials, updating of codes and standards, and verification of licensing of design professionals of record. The bottom line is that the Certified Inspection Program is an abdication of the City’s responsibilities to protect its citizens’ health, safety, and welfare and is an unconstitutional failure to provide equal protection under the law. I am requesting that Section 6.02.200 be repealed. I am also requesting the opportunity to address the City Council personally on these matters.
Sincerely,
Thomas K. Butt Cc: Willie Morris Dan Reed Enclosure
26
Summary of Proposed Requirements and Chevron Response for Chevron to Secure Endorsement of People Do! for the BAAQMD Permit for the Reformulated Fuels and FCC Upgrade Project May 16, 1994
Problem Requested by CBE, WCTC, and Offered by Chevron People Do! 1. The Richmond General Plan and the Fund a study addressing the design and feasibility of Commit to working with [hold Chevron ABAG 1989 Draft Trail Plan designate developing a pedestrian/biking trail connecting Point accountable to getting it done on schedule] the Western Drive north of the Richmond Richmond with the Wildcat Creek Staging Area via Pt. East Bay Regional Parks District to complete a San Rafael Bridge as a hiking/bicycling San Pablo. the study shall assume that the trail segment feasibility study by June of 1995 for a proposed recreational trail, and the General Plan would be a portion of the San Francisco Bay Trail and be trail that connects Point Richmond to the northern encourages developers of adjacent managed by the East Bay Regional Park District. side of Western Drive and extends up through the property to contribute rights of way and Point Molate Beach Park improvements for implementation. Provide a 12-foot wide, paved hiking/biking trail (conforming to the same standards as the trail along Canal Boulevard proposed for the Cutting-Canal Improvement District) from the Richmond-San Rafael Bridge out along the Point San Pablo Peninsula to Point San Pablo and the Point San Pablo Yacht Harbor, and terminating at the east end of the lagoon at the Chevron Rod and Gun Club. Link the south end of the trail to the portion of Western drive east of the Long Wharf in a way that avoids use of I-580. 2. The Richmond General Plan requires Fund a study by the City of Richmond to determine if See above public utilization of the Castro Point there is any feasible way to utilize the former Castro Beltline Railroad and the rail line Point Belt railroad route for any kind of public through Chevron to provide regional recreational use; or alternatively, the use of some kind of access to the coastline. ferry to carry hikers and bicyclists across the portion of San Pablo Bay from Point San Pablo to the Castro Cove/Wildcat Creek Marsh area proposed trail.
3. The Richmond General Plan requires Remove all fences between Western Drive and the Remove 1,000 feet of Bay-side fence along development of public access to the shoreline and between the proposed hiking/biking trail Western Drive as a test to determine the extent of shoreline where feasible. and the shoreline except where required for security at illegal dumping. We will work with the City of the Point Orient pierhead and the Red Rock Marina Richmond and other residents of the point (Navy, pierhead. Pactank, Yacht Harbor) to minimize the dumping [ $2,000 to remove trash over a six month period will be considered an unsuccessful test]. 4. The Richmond General Plan requires Place utility and pipe lines along Western drive Complete removal of abandoned lines along placing of utility lines underground along underground or move them inland a sufficient distance Western Drive in 1995. [only two product Western Drive. that they can be concealed by vegetation. Use native pipelines are currently in use connecting Chevron vegetation to conceal exposed pipelines in upland areas. Chemical to Pactank. An additional line connects the water retention pond where tanks have been removed to the Bay - this is up for BAWQCB review in 1995. Point Orient pier is now surplus, and Chevron is willing to give it to the EBRPD under appropriate circumstances]. 5. The Richmond General Plan designates Where areas along Western Drive have been eroded and Commit to spending up to $50,000 over two years the portion of Western Drive north of the have become dominated by invasive, exotic flora, to remove non-native hillside vegetation in the
27 Richmond San Rafael Bridge as a implement an ecosystem restoration project to revegetate tank fields and alongside Western drive and to Pedestrian/Bikeway. It has also been eroded and bare ground, replace exotics such as broom, conduct appropriate landscaping. We intend to use designated as part of a regional trail. A fennel, iceplant, eucalyptus, and pampas grass with the mayor’s Summer Youth Hiring program number of General Plan policies call for California native plants such as perennial bunchgrasses, where feasible for this activity. [This budgets 10 developers to provide trail easements and oaks, toyons, coyote bush, etc. This area generally youths for one summer plus allowances for public access. extends from the shoreline to Western Drive, and to professional landscape design services and cost of varying degrees inland from Western Drive several new planting. This will be in addition to 20 youth hundred feet. Maintain the project until it is fully positions already committed]. Complete established and self-sustaining. Also, remove any other demolition of Blake Brothers quarry structures infestations of broom and other non-native, invasive along Western drive in 1995. Upgrading our plants at other locations within the scenic corridor to property adjacent to Point Richmond -- all but one prevent future reseeding of restored areas along Western tank (furthest from the community) will be Drive. Provide a long-term ecosystem management plan dismantled. The fences alongside the community to insure annual evaluation and maintenance. will be replaced with attractive redwood and vinyl fencing without barbed wire.
6. The Richmond General Plan encourages Provide periodic paved turnouts and parking spaces with Nothing development of scenic routes to be as facilities for trash collection and removal for the use of attractive as possible with amenities to fishermen and other recreational users of Western Drive facilitate their use by the public at the most used fishing access points.
7. The Richmond General Plan encourages Provide a long-term plan for the Red Rock Marina area Nothing the improvement of the appearance of to either develop it or return it to a natural state, and an Red Rock Marina. implementation schedule.
CHEV20.DOC People Do! 235 East Scenic Richmond CA, 94801 510/236-7435 510/237-2084
March 16, 1994
Milton Feldstein, APCO BAAQMD 939 Ellis Street San Francisco, CA 94109 FAX 415/928-8560
Subject: Permit for Chevron Reformulated Fuels and FCC Upgrade Project, Application Number 9978
Dear Mr. Feldstein:
We are outraged that after nearly six months following completion of the environmental impact report and numerous public hearings, Chevron has not been placed under a single, binding condition which would reduce the present and anticipated level of odors and other public nuisances. For example, the pulsating noise from the flares are a constant irritant where I live in Point Richmond, particularly at night.
28 It is absolutely unacceptable for the permit to state, “Chevron is expected to comply with the provisions stated in the regulation,” when Chevron has a history of over 275 complaints from its neighbors in the last three years.
The District’s draft permit does not consider the real social costs of all this unnecessary pollution on Richmond and North Richmond residents. The possible health effects of the 92.4 tons of POC (Precursor Organic Compounds) pollution, including toxics, and 94.6 tons of particulate pollution(PM10) are serious causes of disease and death. If the real costs of the extra pollution from this project are considered, then certain technologies to reduce the pollution would be considered cost-effective.
The permit does not properly address toxic air pollution from the project. Chevron avoided the determination of Toxics Best Available Control Technology (TBACT) by piecemealing its overall “Modernization Project” which violates the District policy for evaluating toxic risks from new and modified sources.
District rules state, “cumulative effects from all related projects at the facility shall be evaluated and included as part of the project risk” (District Staff Risk management procedure, page 2, May 9, 1991).
A number of factors contributed to the District’s faulty assumption that the risk of this “piece” of the project is less than 1 in one million.
29 The draft permit needs major revisions. We request that the permit be revised with conditions to protect the health, safety, civil rights, and property rights of those living nearest to the refinery.
Sincerely,
Thomas K. Butt
30 PDRB Appeal Presentation
DRO 93-65 Chevron Reformulated Fuel and FCC Plant Upgrade
March 30, 1994
I stand before you today as David stood before Goliath. Arrayed against me and a handful of dedicated citizens, some of whom had to miss work to be here, are the highly paid representatives and lobbyists of this country’s 11th largest Fortune 500 corporation, San Francisco’s most prestigious law firm, and a city staff that will tell you to a person that you have no choice but to rubber stamp a decision that has already been made for you. Unlike the formidable forces assembled here to defeat us at any cost, each of you is, like us, a volunteer, doing what you are doing because you believe you can do what is right for our city. You are not the first, and you are not alone. A courageous planning commission, serving like you as volunteers, only three months ago approved conditions for this project which included exactly what we are asking for today. A less courageous city council found itself unwilling to utter a single word of public debate on this matter, but did manage to secretly negotiate a back-room deal with Chevron with barely enough concessions to forestall what would have been a certain lawsuit. We have submitted for your consideration a list of eight proposed conditions for this project which we believe are appropriate and within the authority of this body. We have also provided backup materials , including excerpts from a number of city ordinances, policy documents, and the General Plan. Staff, of course, is recommending that you imposed no new conditions for this project and simply endorse only those conditions which the applicant is willing to accept. In an effort to counter the issues raised by us in our appeal, staff has made a number of errors by either misquoting or misinterpreting various documents.
Staff states that the DRO and PDRB is limited to considering the Guidelines for Approval and Development Policy Resolutions. What RMC Section 15.04.205(B)(4) actually states is, In addition to all other applicable regulations and polices, the DRO and the PDRB shall give particular consideration during the review process to the following guidelines for approval.”
Staff states that the City Council found that the project conforms to the policies of the General Plan. Neither the minutes of the City Council meeting nor Resolution 10-94 state anywhere that the City Council made this finding. The closest thing to it is Finding No. 1 of the Conditional Use Permit which found that, the location of the proposed conditional use is in accord with the policies of the General Plan.
Staff states that the Shoreline Conservation and Development Strategy (SCDS)is neither a regulation nor a policy to be considered by the PDRB, and that it is not a City Council Policy resolution. Chapter 15.04 of the RMC does not say exactly what a policy resolution is, but the SCDS certainly has the key characteristics. The letter dated September 29, 1987, from the SCDS Citizens Advisory Group to the City Council (drafted by the Planning Department) describes the document as containing, “our policy recommendations to the City Council.” Resolution 221-87 by which the City Council adopted the SCDS describes the document as fulfilling a need to re- examine the City’s current policies, of providing a long-term vision for the shoreline area and a specific short-term action program. RMC 15.04.205(B)(3) states that City Council policy
31 resolutions may be established for the purpose of conserving [Shoreline Conservation and Development?] and enhancing the appearance of specific [shoreline?] areas.
Staff states that the City Council looked at and rejected the notion that the project site should be construed as the contiguous landholdings of the applicant. There is no record that the City Council rejected or even discussed what is the appropriate definition of the site for this project. In fact, there is no record that the City Council ever discussed anything about this project.
Staff states that the Certified Inspection Program (CIP) pertains to building inspection and does not fall under the purview of the DRO or PDRB. In years of abuse of the CIP by Chevron and neglect by the City, hundreds of millions of dollars of construction that is legally required to undergo DRO and/or PDRB has slipped through the cracks. That this should not concern the DRO or the PDRB is beyond comprehension. Although the City may institute legal action to rectify past transgressions by Chevron, we agree that this is neither the time nor the place to impose after-the- fact conditions on completed projects. However, there is a considerable body of evidence to support the fact that this project is simply a component of an integrated, larger project that has been under construction for the last few years, and there is no reason why the PDRB may not take this fact into consideration, as well as the abuse of the CIP, in imposing conditions on the pending application.
Staff states that if the PDRB elects to grant the appeal, it should state wherein the DRO decision was in error. There is nothing in RMC Chapter 15.04 that requires the PDRB to make a finding that the DRO was in error or to further elaborate; this is required only of the appellant, which has already been done. According to RMC 15.04.205 ©(5), the PDRB has only to “render its decision on the appeal.”
32 PEOPLE DO! 235 East Scenic Richmond, CA 94801
April 2, 1994
Members of the Public Development Review Board City of Richmond 2700 Barrett Avenue Richmond, CA 94804
Subject: Chevron Reformulated Fuel and FCC Plant Upgrade, DRO 93-65
Dear PDRB Members:
We feel it is only fair that we provide a rebuttal to the information and opinions you will surely receive from the Office of the City Attorney and the Planning Department as you prepare for your final deliberation on this matter.
Office of the City Attorney
As they have already done, City of Richmond Staff will, almost certainly, continue to tell you that:
1.The City Council has already considered and acted on all matters relating to this project, and that your authority is limited, at most, to questions of color, lighting design, and plant materials within the extent of landscaping already approved.
2.The eight additional conditions proposed by our organization lack “nexus” to the project and therefore cannot legally be imposed.
With all due respect to the Office of the City Attorney and to the Planning Department staff, they have followed the political lead of a City Council which continues to be under tremendous pressure and intimidation from Chevron. City staff has staked out the most ultra-conservative position anyone could ever take on this matter, and our own legal advisors believe they are absolutely wrong in their assessment.
While the City Council’s public pronouncements continue to echo the position which Chevron’s attorneys have laid out for
33 them, their actions indicate otherwise. For example, in the same motion by which the City Council on January 24, 1994, rejected the Planning Commission’s additional conditions supposedly for lack of nexus, they adopted a separate agreement with Chevron containing their own watered-down version of many of the same conditions previously rejected supposedly for lack of nexus. For Chevron and the City to save face, these new versions of conditions were characterized as “voluntary” and “in no way ... related to the permit for the Cleaner Fuels Project.”
Because the City Council considered and adopted, on the advice of the City Attorney’s Office, an agreement which was not on the agenda, they violated the Brown Act. This violation had to be later rectified by legally placing the matter on a subsequent agenda and voting for it again on March 21, 1994.
These are two examples of what proved to be poor legal advice already rendered on the Chevron permit by the City Attorney’s Office. We hope you will keep this track record in mind when considering any additional advice rendered to you by the City Attorney’s Office. You do not work for the City Attorney, nor are you bound or under any constraint to act as he directs. The City Attorney, if anything, works for you. He is not infallible; he is a lawyer hired by the City as a resource for free legal advice. As long as you have good reasons, you need not conform to advice the City Attorney gives you. So long as you accompany your decision by some kind of explanation or findings, the City must defend you and your decision if it is legally challenged.
Throughout the Chevrom permit approval process, City staff continues to obfuscate the process by ignoring the distinction among what are, in fact, three individual and separate review procedures.
CEQA Review
The first review process undertaken by the City was an environmental impact report (EIR) required by the California Environmental Quality Act (CEQA). Under CEQA law, the City is required to analyze the adverse impacts of the project and impose conditions on the applicant intended to mitigate them, where possible. In certifying the EIR, the City Council found that it was generally adequate in its scope, not necessarily that everything in it was factually correct or exhaustively
34 researched. Mitigations required under CEQA generally must have a nexus; that is, the conditions imposed under CEQA must bear some relation to a problem caused by the project. Mitigations suggested by the EIR may be implemented by the City as conditions of discretionary permits, such as a Conditional Use Permit and Site Development Review.
Conditional Use Permit
The second review process by the City was the Conditional Use Permit. This is described in Chapter 15.04.150 of the Richmond Municipal Code. The process was begun by the Planning Commission on December 16, 1993, and concluded on January 24, 1994, by the City Council on appeal. Any actions the City Council has taken on this matter have been in response only to either CEQA or the Conditional Use Permit.
DRO/PDRB
We are now in a third distinct review step. The DRO did not even consider this project until after the City Council had acted on the EIR and the Conditional Use Permit on January 24, 1994. The DRO met to consider the project a month later on February 24, 1994. Site Development Review is a distinct review process derived from Chapter 15.04.205 of the Richmond Municipal Code. There is nothing in that chapter which requires the DRO or the PDRB to conform to, or limit consideration to, conditions imposed by other bodies in previous actions mandated by other laws or chapters of the RMC. In fact, through RMC Chapter 15.04.205, the City Council specifically empowered the PDRB (and not the City Council) to have the last word on conditions for a permit. If Chevron did not wish the PDRB to have the last word, they could have voluntarily submitted this project directly and initially to the PDRB, rather than the DRO, and retained the option of appeal to the City Council.
Nexus
In considering appropriate conditions for this project, the PDRB is not constrained by the nexus requirements related to the CEQA process. The government’s authority to impose reasonable conditions, with legitimate public interests, on property owners, particularly in connection with a construction project, is the basis of all planning law in the United States. For example, The City of Culver City required a project to display or pay for public art as a
35 condition of project approval. The property owner (Erlich) sued the City but lost. In Erlich, the court found that The City’s police powers extend to imposing certain requirements on construction projects. For example, so long as not to the extent of a taking, the City may specify pursuant to its police powers setbacks, amount of open space to be retained, landscaping requirements, etc... We agree that it is within the City’s police powers to require [public] art to be placed on developments as a condition of approval. (Cf. Agins v. City of Tiburon (1980) 447 U.S. [60 L. Ed. 2nd 106, 100 S. Ct. [*1758] 2138][scenic zoning]; Penn Central Transp. Co. v. New York City, supra, 438 U.S. 104 [landmark preservation]; Euclid v. Ambler Co. (1926) 272 U.S. 365 [71 L.Ed. 303, 47 S. Ct. 114, 54 A.L.R. 1016][residential zoning]; Gov, Code 15813 et seg. [art in public buildings].) Such a requirement does not constitute an exaction, a development fee, a taking, or a tax.203
There is a legitimate public interest in carrying out the public policy provisions of the General Plan, the Shoreline Conservation and Development Strategy, and the Richmond Municipal Code. In no way do these conditions deprive Chevron of use of its real property parcel, on which it can continue to operate a commercially viable refinery, nor do they invade the property in any manner. With regard to “clean up”, for example, Chevron is currently in violation of Chapters 9.20 (Solid Wastes), 9.22 (Public Nuisances) and 12.12 (Weed and Rubbish Abatement) of the Richmond Municipal Code in many of the areas on the periphery of the refinery property, which is a single, large parcel constituting the site of this project. The Shoreline Conservation and Development Strategy even includes a policy stating, Enforce the City ordinances on weed and rubbish abatement.204 Similarly, Chapter 15.204.205.A.4 of the Richmond Municipal Code requires (for a project seeking a permit) that, all areas not otherwise occupied by structures or paved areas shall be landscaped and irrigated by an adequate irrigation system. Chevron is not being asked to landscape all the open space but only to deal with the areas that have been scarred by inappropriate grading, eroded, and overrun with invasive exotic plants which are both a fire hazard and an eyesore.
203Erlich v. Culver City, 15 Cal. App. 4th 1737 (1993). 204SCDS, 44
36 Without even a related project, Chapters 12.28 (Streets and Sidewalks) and 12.36 (Maintenance and Construction of Sidewalks, Driveways, Curbs, and Gutters) of the Richmond Municipal Code give authority to the City to require owners of abutting properties to pay the cost of constructing streets, sidewalks, curbs and gutters, and to install street trees as well as to maintain curbs, gutters, and sidewalks. This is through incorporation, by reference, of Chapters 22 and 27 of the Improvement Act of 1911, which is found in Part 3, Division 7, Streets and Highways Code of the State of California.205 An anecdote serves to describe how the City of Richmond implements this power on lesser property owners than Chevron. A couple of months ago, an employee of the Richmond Public Works Department called me (as the managing general partner of a property in Point Richmond) to advise me that the sidewalk (public property) in front of the Baltic Restaurant was cracked and needed replacing. The City employee informed me that the partnership owning the Baltic building would be expected to reimburse the City for the repairs under the provision of the the Streets and Highways Code. Being familiar with the Code, I certainly had no objection, and I cooperated fully. The City of Richmond has the same legal authority to require Chevron to construct or keep up the public improvements in and surrounding the refinery. I would like to point out that neither Western drive nor Gertrude Avenue abutting the Chevron property even has curbs, gutters, sidewalks, lighting, or landscaping, and portions of the streets are in terrible repair. The conditions proposed by People Do! require Chevron to do no more than any other owner of a new project or a project involving substantial additions or alterations in the City of Richmond, that is, spend a small fraction of the project cost providing amenities within and adjacent to the project site which make it consistent with the development goals of the City. The Wareham Tech Center I and II in Point Richmond is a good example of how this was achieved in a nearby project. The Tech Center involved an existing building which was expanded as well as the construction of an additional building on the same site. Wareham, the developer, was required by the City to landscape the entire site, move existing overhead utility lines underground, and to participate in an assessment district to pay the cost of constructing curbs, gutters, sidewalks, streets, medians, landscaping, irrigation, street lighting, underground utilities in the abutting rights-of-way, and a portion of the same hiking and biking trail
205RMC 12.36.180 and 12.36.190.
37 proposed for Western Drive out to Pint San Pablo. The total cost of these improvements, which had no functional relationship to the buildings proper, was about 10 per cent of the total project cost. Even if the need for a nexus existed, although it does not, it could easily be found. The FCC Plant Upgrade portion of the project, which is not a response to new government regulations regarding fuel formulations, is analogous to the entire refinery as an engine is to a car. Everything in the refinery (other plants, pipes, tanks, wharves, and power plants and distribution systems) is connected to the FCC Plant. This includes the facilities on Western Drive north of the San Rafael Bridge. Staff Discussion of Appeal Issues206
Staff states that the DRO and PDRB is limited to considering the Guidelines for Approval and Development Policy Resolutions. What RMC Section 15.04.205(B)(4) actually states is, In addition to all other applicable regulations and policies, the DRO and the PDRB shall give particular consideration during the review process to the following guidelines for approval.”
Staff states that the City Council found that the project conforms to the policies of the General Plan. Neither the minutes of the City Council meeting nor Resolution 10-94 states anywhere that the City Council made this finding. The closest thing to it is Finding No. 1 of the Conditional Use Permit, which found only that the location of the proposed conditional use is in accord with the policies of the General Plan.
Staff states that the Shoreline Conservation and Development Strategy (SCDS) is neither a regulation nor a policy to be considered by the PDRB, and that it is not a City Council Policy resolution. Chapter 15.04 of the RMC does not say exactly what a policy resolution is, but the SCDS certainly has the key characteristics. The letter dated September 29, 1987, from the SCDS Citizens Advisory Group to the City Council (drafted by the Planning Department) describes the document as containing “our policy recommendations to the City Council.” Resolution 221-87, by which the City Council adopted the SCDS, describes the document as fulfilling
206Staff Report for Appeal of Development Review Organization Conditional Approval of DRO 93-65, 3/30/94
38 a need to re-examine the City’s current policies, of providing a long-term vision for the shoreline area and a specific short-term action program. RMC 15.04.205(B)(3) states that City Council policy resolutions may be established for the purpose of conserving [as in Shoreline Conservation and Development?] and enhancing the appearance of specific [as in shoreline?] areas.
Staff states that the City Council looked at and rejected the notion that the project site should be construed as the contiguous landholdings of the applicant. There is no record that the City Council rejected, or even discussed, what is the appropriate definition of the site for this project. In fact, there is no record that the City Council ever discussed anything about this project. One test of what a site is might be the area affected by the improvements being considered. It is of public record (including the EIR) that pollution from this project will adversely affect people beyond even the present boundaries. The nature of the business carried on at the refinery effectively restricts the public use of several miles of Richmond’s shoreline. Requiring Chevron to restore public access to the portions of the shoreline which are remote from the heart of the refinery is a reasonable request.
Staff states that the Certified Inspection Program (CIP) pertains to building inspection and does not fall under the purview of the DRO or PDRB. In years of abuse of the CIP by Chevron and neglect by the City, hundreds of millions of dollars of construction that is legally required to undergo DRO and/or PDRB review has slipped through the cracks. That this should not concern the DRO or the PDRB is beyond comprehension. Although the City may institute legal action to rectify past transgressions by Chevron, we agree that this is neither the time nor the place to impose after-the-fact conditions on completed projects. However, there is a considerable body of evidence to support the fact that this project is simply a component of an integrated, larger project that has been under construction for the last few years, and there is no reason why the PDRB may not take this fact into consideration, as well as the abuse of the CIP, in imposing conditions on the pending application.
39 Staff states that if the PDRB elects to grant the appeal, it should state wherein the DRO decision was in error. There is nothing in RMC Chapter 15.04 that requires the PDRB to make a finding that the DRO was in error ; this is required only of the appellant, which has already been done. According to RMC 15.04.205, the PDRB has only to “render its decision on the appeal,” which should include some findings regarding the basis for additional conditions imposed. Thank you for your consideration and the great deal of volunteer time you have spent considering our appeal.
Sincerely,
Thomas K. Butt
40 Suggested Request for Chevron Community Programs Funding
Total Funding shall total $2 million annually for 10 years Funding shall address educational, health, public safety, and economic development/job creation needs. At least 50 per cent of funding shall be directed towards people living within one mile of the Chevron refinery complex boundaries. Chevron shall allow community input in the selection of programs to fund.
Summary of Chevron Program Continuations and Commitments for Five Years
Program and Source 1994 1995 1996 1997 1998 Level of existing charitable Contributions207 270,000 270,000 270,000 270,000 270,000 Community Education Program208 25,000 25,000 25,000 25,000 Emergency Services Coordinator209 60,000 60,000 60,000 60,000 MLK Health Center Grants210 500,000 500,000 550,000 550,000 0 PAL Mentoring Program211 400,000 400,000 400,000 400,000 Emergency Notification System, Phase I212 750,000 Emergency Notification System, Phase II213 525,000
TOTAL 1,275,000 1,255,000 1,305,000 1,305,000 755,000 ADDITIONAL REQUIRED 725,000 745,000 695,000 695,000 1,245,000
207Chevron claims this amount for “West Contra Costa County”. Only the amount spent in Richmond and North richmond should be counted, so the total may actually be less. 208January 24, 1994, Agrrement letter adopted by Richmond City Council 209ibid. 210ibid. 211ibid. 212ibid. 213ibid.
41 Remarks regarding the Memorandum of Understanding between The Community Groups West County Toxics Coalition, People Do!, and Citizens for a Better Environment and Chevron Richmond Refinery
by Thomas K. Butt
As the leader of one of the three community groups represented in this agreement, I wish it to be known that my execution of the agreement has occurred with the utmost reluctance and extreme distaste.
When we first began negotiating with Chevron representatives several months ago, I had hoped for a resolution of which we could all be proud. As a result of this agreement, Chevron has saved millions of dollars which should have been spent on air pollution controls and reductions. Instead, they have offered pennies. I had hoped that our discussions would have resulted in both Chevron and the community groups standing up proudly, together in public, and announcing a program marking a new departure forged in good faith where Chevron would finally embrace its obligations to run a clean refinery, be a good steward of the 3,000 acres of coastal land occupies in Richmond, and dedicate an adequate portion of its resources toward making better lives for its neighbors who have suffered for years from toxic releases, explosions, pollution, and noise.
Instead, I must confess that I am ashamed to have my signature affixed to this document. The fact that I did sign is not evidence of my satisfaction but only the fact that I was prevailed upon by the other signatories to do so for reasons that relate to the overwhelming legal and monetary resources of Chevron to continue the appeal process at any cost. The arrogance of this corporation toward people is beyond belief.
Probably the aspect of the agreement which most galls me is the inclusion of weasel words, (Hannan-speak, as it were) in a manner that tends to obfuscate the real meaning of every sentence. For example, we asked Chevron to fund or commit to completing a study of the portion of the Bay Trail planned for Point San Pablo. What we got was a commitment to, “work with the East Bay Regional Park District to complete a feasibility study’” and to “encourage the East Bay Regional Parks District to complete the study by June 1995.” Does this mean there will be a study, or not? And if so, when? Who knows?
In the realm of support for non-profit agencies providing badly needed services in the poverty-stricken neighborhoods downwind from the refinery, we asked for firm commitments of dollar amounts in specific years. What we got was an “expectation” of monetary commitments, “dependent on corporate budget approval.” What this means is that the Board of Directors of Chevron Corporation may reduce or eliminate the proposed contributions for any reason whatsoever and without any explanation. What kind of a commitment is that? Even at best, Chevron’s commitment to community funding appears to be little more than a shell game where existing expenditures are redirected and relabled to look like more money for Richmond while the corporation’s real commitments tend to be to San Francisco and the wealthy East bay communities where Chevron executives tend to reside.
Chevron Corporation continues be a leech on the City of Richmond where it manipulates employees, labor unions, and vendors to exercise awesome power over the Richmond City Council. In turn, the City of Richmond subsidizes Chevron to the tune of tens of millions of dollars a year by legislating special and unique exemptions from the utility tax, by allowing Chevron to be the only property owner which regulates its own construction projects, and by incorporating it into a state enterprise zone which was designed to help start-up companies while specifically proscribed from assisting established industries.
This agreement is, in my opinion, a product largely of Chevron’s exercise of raw power and financial clout over those community volunteers and non-profit organizations who are seeking a better and more equitable
42 relationship between Chevron and the environmentally and fiscally oppressed citizens of Richmond. We should not even be here, and if the paid professional staff members of the City of Richmond and the BAAQMD had done their job in the first place, we would not be. The fact that our organizations have, with great expenditures of time and effort, wrung considerable concessions from Chevron over the last several months is vivid testimony about how much responsible government agencies have consistently left on the table in this matter. This is a sad day for all of us, but it should be a particularly sad day for those who were elected or appointed to protect the health and welfare of the people and to see that the law is obeyed and instead have been intimidated and co-opted by Chevron and their stable of high priced attorneys.
43 PEOPLE DO! 235 East Scenic Avenue Richmond, CA 94801 510/236-7435, 510/237-2084, 510/232-5325 FAX
August 23,1994
Floyd Johnson, City Manager City of Richmond 2600 Barrett Avenue Richmond, CA 94804
Ms. Eula Barnes City Clerk City of Richmond 2700 Barrett Avenue Richmond, CA 94804
Dear Mr. Johnson and Ms. Barnes:
On march 8, 1994, I wrote to Mayor Corbin and Members of the City Council expressing my concerns with the structure and administration of the Utility User’s Tax as it involves Chevron. Apparently my concerns resulted in a response dated March 29, 1994, from Municipal Resource Consultants (MRC) addressed to Jay Goldstone, and a memo dated April 25, 1994, from Jay Goldstone to the Mayor and members of the City Council. Mr. Goldstone was kind enough to share these responses with me on June 27, 1994.
I also obtained from your (Mr. Johnson’s)office on June 22, 1994, a document entitled Utility Tax Breakdown By Payor (Chevron, industrial/commercial, and residential) showing the distribution of anticipated tax revenue at four different rates from 6 percent to 9 percent.
These documents, and information stated as fact (and certified by the Richmond City Council)in the August 1993 Draft Environmental Impact Report for the Chevron Reformulated Gasoline and FCC Plant Upgrade Project (DEIR), raise a number of questions which I hope can be answered as a part of the public hearing process to consider an increase in the Utility User’s Tax.
I wrote to you, Mr. Johnson, on July 15, 1994, and again on August 15, 1994, requesting what I perceived to be a timely and reasonable request for information on a topic of vital public interest. At the City Council meeting of August 22, 1994, you demeaned my request, accused me of having some unspecified agenda (presumably other than the public interest), and continued to refuse to respond. You suggested that if I wanted information from the City, I should not simply ask for it, but instead invoke Chapter 2.40 of the RMC.
44
Therefore, under Chapter 2.40 of the RMC, I demand copies of any and all documents, including printed versions of those on electronic media which provide answers or any other information pertinent to the questions posed in the balance of this letter. To help you understand what a question is, they are printed in small, bold face type.
Proprietary Information
Much of the data regarding computation of Chevron’s tax continues to be described as proprietary information, including the “actual costs incurred by Chevron,”214”the actual cost of transporting gas consumed by Chevron,” 215and the “actual quantity of natural gas used by Chevron in the hydrogen feedstock facet of their refining process.”216
BUTT: On what general statutory authority does the City or MRC decide which of these data is proprietary?
TRICE: Government Code Section 6254(i) which exempts information required from any taxpayer in connection with the collection of local taxes which is received in confidence and the disclosure of the information to other persons would result in unfair competitive disadvantage to the person supplying the information.
BUTT: How does the City or MRC decide which discrete items are proprietary, or does Chevron make those decisions?
GOLDSTONE: Everything involving Chevron energy or utility use is proprietary and protected by the Government Code Section 6254(i). Decisions regarding confidentiality are made by the City, not by Chevron.
BUTT: Is information claimed proprietary disclosed by MRC to anyone in Richmond City government? If so, to whom?
GOLDSTONE: No proprietary information considered confidential by the City has been disclosed to anyone in City government. Only MRC has received this information.
BUTT: RMC 13.52.130 gives the Tax Administrator (Director of Finance) the right to inspect and audit records used to determine taxes. Has the Finance Director or his staff audited Chevron records, or has this been delegated to MRC?
214MRC letter to Goldstone, March 29, 1994 215ibid. 216ibid.
45 GOLDSTONE: It has been delegated to MRC.
BUTT: What guarantee or level of comfort does the City have that third-hand information provided by MRC regarding Chevron’s tax liability is accurate?
GOLDSTONE: I have an extremely high level of confidence in MRC. MRC was originally established to audit sales tax revenue which it has been doing since the early 1980’s. One of the general partners was Finance Director of Fresno. Another was in the private sector. Now, out of maybe 450 cities in the State of California, 200 are clients of MRC for sales tax audits. Four years ago, MRC decided to expand their business to do tax audits for all kinds of businesses. I have met the people doing various audits for the City of Richmond. I have a strong comfort level. They understand our ordinances. They only get paid if they find more revenue. They also provide a number of ancillary services at no extra cost. The Chevron audit was one of them. There was no bill. Since the cap was used, even if they found the potential for additional revenue, they would derive no fee from it.
BUTT: Is MRC licensed or regulated by the State of California?
GOLDSTONE: No
BUTT: Is MRC bonded or insured, and if so, by whom, for what, and at what limits?
GOLDSTONE: I will check to see if we have the insurance certificates.
Do MRC principals possess any professional licenses regulated by the State?
GOLDSTONE: Not that I am aware of. TRICE: At least one attorney is licensed by the State.
BUTT: I request copies of any correspondence or reports to or from the City of Richmond and MRC within the last 24 months, copies of currently operable agreements (including all exhibits, certificates of insurance, affirmative action information) between the City of Richmond ad MRC, the amount of fees or ather monies paid to MRC over the last 60 months, any documents describing the process by which MRC was evaluated, selected, and hired, and any brochures, statements of qualification, or other promotional information provided to the City from MRC.
NOTE: all of the above has been produced except certificates of insurance and affirmative action information.
46 Natural Gas
The DEIR sates that, Annual consumption of PG&E electricity in Richmond is about 11.5 million kilowatt-hours (kWH); annual natural gas supply from PG&E is about 15.3 million cubic feet (cu. ft.) Fudge-Mueller, 1992)...The Refinery currently generates about 110 MW of electrical power from its own cogeneration plant and refinery turbogenerators and purchases about 20 MW from PG&E...Current daily natural gas use is about 100,000 million Btu or 91 million cubic feet per day Chevron normally uses its own produced natural gas to meet its gas requirements, and does not purchase natural gas from PG&E (Long, 1993).217
In 1994, MRC inferred that Chevron does not make its own gas but in fact buys it from outside the refinery and pays some entity (local utility company? Pipeline company?) to transport it there. According to MRC, a portion of the gas is used as feedstock rather than for energy production.218In 1993, MRC inferred that Chevron obtained gas from “out of state suppliers” to which it paid “transport fees.”219
The DEIR is not only internally inconsistent but is inconsistent with the MRC explanation. I would like to have the following questions answered:
BUTT: Where and how does Chevron obtain natural gas and in what proportions from each source of supply?
GOLDSTONE: This is confidential, and we do not have that information.
BUTT: Does Chevron use gas for feedstock, and if so, where does that gas come from? Internal production? PG&E? Other suppliers?
GOLDSTONE: They do use some gas for feedstock, and I am sure they procure some gas from PG&E, but I do not know the proportion. This is confidential, and we do not have that information.
BUTT: When Chevron buys gas from PG&E (if in fact it does), what rate does it pay per unit of gas?
GOLDSTONE: This is confidential, and we do not have that information
BUTT: If Chevron does not buy gas from PG&E, what rate would it pay PG&E if it did buy gas from PG&E (equivalent charges as described in 13.52.060(a))?
GOLDSTONE: This is confidential, and we do not have that information
217DEIR, IV.J.2 218MRC letter to Goldstone, March 29,1994 219MRC letter to Goldstone, July 29, 1993
47
BUTT: MRC states that Chevron pays “significantly less per unit of natural gas purchased for many reasons including shear volume.”220What other reasons?
GOLDSTONE: I will inquire of MRC and get back to you.
BUTT: My reading of RMC 13.52.050(a) is that the tax applies to persons “using gas which is delivered through mains or pipes.” I cannot find any exemption for persons using that gas for purposes other than producing heat, or ultimately, electricity. If such an exemption (such as feedstocks for manufacturing products) exists, will you direct my attention to it?
TRICE: Section 13.52.060(b) which discusses gas which is to be resold and delivered through a pipeline distribution system or by mobile transport includes gas turned into other products.
BUTT: Is the gas usage figure in the DEIR correct or not?
GOLDSTONE: I do not know.
BUTT: What proportion of Chevron’s electrical power is provided by PG&E and what proportion is cogenerated? Of the portion cogenerated, where does the gas come from used in the cogeneration, and in what proportions?
GOLDSTONE: This is confidential, and we do not have that information
BUTT: Is the electrical consumption figure in the DEIR correct?
GOLDSTONE: I do not know.
BUTT: Does Chevron have and use an appropriate utility type metering system as decried by RMC 13.52.060(a), or has this been waived by the Tax Administrator?
GOLDSTONE: This has not been waived, but it has never become an issue because Chevron has always paid under the cap plan.
The Cap
220MRC letter to Goldstone, March 29, 1994
48 My reading of RMC 13.52.060(b) is that the maximum rate payable by any user is $953,500 for the tax year commencing July 1, 1990, and this amount has been adjusted annually to $1,148,138 for 1994-95 by the formula set forth in the ordinance.
BUTT: Can you confirm this? Will you provide calculations showing how this cap amount was calculated and what it is for the tax year July 1, 1994 - June 30, 1995?
NOTE: This information is acknowledged to be in the documents produced.
BUTT: Is it the intent of the City to continue with this cap?
GOLDSTONE: Apparently so. The City Council passed it.
BUTT: It has been intimated by you and others that Chevron’s taxable liability under the Utility User’s Tax would be less than the cap. Is this true?
GOLDSTONE: Last year MRC calculated that Chevron would have paid about $12,000 more without the cap, while Chevron claimed they would have paid about $200,000 less. The difference is related to how the tax would have been applied to cogenerated electricity, not the methodology. This year, Chevron claims they would pay over $1 million less if they elect not to use the cap. This has not been verified by either the City or MRC, but their claim may have some validity for two reasons. First, the cap keeps rising with the consumer price index, and second, Chevron is becoming more efficient in energy use.
BUTT: If so, why would Chevron pay the higher cap amount?
GOLDSTONE: The City manager asked them to pay the higher amount at least for 1994- 95, and they agreed.
BUTT: If it is not true, why is the cap amount used in computing the amount of income for City budgetary planning?
NOTE: See above.
BUTT: Have any other Richmond taxpayers qualified to invoke the cap? Do you expect any others to?
GOLDSTONE: No.
BUTT: Is there any rational purpose or basis for the cap? If so, can you describe it?
GOLDSTONE: The concept was established before I came to Richmond. I do not know what policy objectives were intended. Having a cap is not uncommon with utility taxes, but having it apply to only one taxpayer may be somewhat unusual.
49 BUTT: In addition to the above, I request copies of any staff reports, draft ordinances, and City Council session (including study session) minutes during the last 24 months pertaining to the subject of the utility tax.
NOTE: These have been produced.
I expect that you will conform the Richmond Municipal Code regarding the timely production of these documents. When they are ready to pick up, please phone me and advise me of the amount due for reproduction, and I will come down to pick them up.
Sincerely,
Thomas K. Butt cc: Members of the City Council
50 PEOPLE DO! 235 East Scenic Avenue Richmond, CA 94801 510/236-7435, 510/237-2084, 510/232-5325 FAX
March 26, 19995
Sarah Eeles, Chair Community Advisory Panel to Chevron 169 East Scenic Richmond, CA 94801
Subject: Conditional Use Permit CU 93-40
Dear Sarah:
The Conditions of Approval for the subject permit, Item 12, require the applicant to give priority to the purchase of materials from Richmond businesses/firms and to give priority to contracting for labor and services with Richmond businesses/firms.
In order to demonstrate maximum effort to employ Richmond residents and to contract with Richmond firms, the applicant has provided monthly summaries of Richmond Refinery Outreach Contracts and Purchasing Data. For example, the summary submitted for December 1994 indicated a total of 245 Richmond Firms.
A spot check of some of the information provided by Chevron reveals that it is misleading and probably erroneous. The following tables show that many of the firms listed as Richmond businesses may actually be located elsewhere. The check was made by first looking up each business in the phone book. If there was no listing, a call was then made to information. Some of the businesses proved to be clearly located in cities other than Richmond. Others were listed neither in the phone book nor in information, indicating that they probably do not have a permanent presence, if any, in Richmond.
51 Table 2 - Richmond Refinery Outreach Contracts data (Minus Women/Minority Owned Firms) December 1994
Category Number of Firms Percentage of Total Total firms listed 57 100.00 Firms actually in cities other than Richmond 3 5.26 Firms without listed telephones 6 10.53 Firms listed that are actually public agencies 2 3.51 Total Firms listed that may not be Richmond 11 19.30 businesses
Table 3 - Richmond Refinery Outreach Contracts data (Women/Minority Owned Firms) December 1994
Category Number of Firms Percentage of Total Total firms listed 30 100.00 Firms actually in cities other than Richmond 2 6.67 Firms without listed telephones 4 13.33 Firms listed that are actually public agencies Total Firms listed that may not be Richmond 6 20.00 businesses
Errors of 20 percent are substantial. Listing public agencies as “local businesses” is not exactly what the City Council had in mind when they committed Chevron to doing business with Richmond businesses and hiring Richmond residents. It is also a lot of work to have to go to check out all the entries by going to the phone book and calling information. This is why we believe it would be appropriate for Chevron to list the name, contact individual, address, and telephone number for each Richmond business. We also believe the City should do a better job of verifying the information provided by Chevron.
Sincerely,
Thomas K. Butt cc: Floyd Johnson, City Manager Mayor Corbin and Members of the City Council chev28.doc
52 Thomas K. Butt 235 East Scenic Avenue Richmond, CA 94801
(Work)510/236-7435 (Home)510/237-2084 FAX510/232-5325
July 17, 1995
Mr. Mike Hannan Chevron USA Products Company P.O. Box 1272 Richmond, CA 94802-0272
Subject: MOU of May 31, 1994
Dear Mike:
Please provide me a progress report on each of the items in Sections I,II and V of the subject document which is attached. I would also appreciate it if you would provide a copy of the update to the CAP.
I have been receiving updates on Sections III and IV. Thank you.
Sincerely,
Thomas K. Butt cc: Chevron CAP, c/o Sara Eeles 169 E. Scenic Avenue Richmond, CA 94801
53 Richard Toshiyuki Drury (State Bar No. 163559) Adrienne L. Bloch (State Bar No. 215471) Communities for a Better Environment 1611 Telegraph Avenue, Suite #450 Oakland, CA 94612 Tel: (510) 302-0430; Fax: (510) 302-0438
Danielle Fugere (State Bar No. 160873) Christopher Sproul (State Bar No. 126398) Environmental Advocates Bldg. 1004 B O’Reilly Ave. San Francisco, CA 94129 Tel: (415) 561-2222 ext. 121; Fax: (415) 561-2223
Attorneys for Petitioner
SUPERIOR COURT FOR THE STATE OF CALIFORNIA IN AND FOR THE CITY AND COUNTY OF SAN FRANCISCO
COMMUNITIES FOR A BETTER ENVIRONMENT ) Case No. ) ) ) VERIFIED PETITION FOR WRIT OF Petitioner, ) MANDATE (CCP § 1094.5) BASED UPON v. ) THE PORTER-COLOGNE WATER CALIFORNIA STATE WATER ) QUALITY CONTROL ACT AND THE RESOURCES CONTROL BOARD, and ) FEDERAL WATER POLLUTION CALIFORNIA REGIONAL WATER ) CONTROL ACT ) QUALITY CONTROL BOARD – SAN ) FRANCISCO BAY REGION, ) ) Respondents. ) ) ______) CHEVRON U.S.A. Inc., CHEVRON CHEMICAL ) COMPANY LLC, CHEVRONTEXACO ) CORPORATION, CHEVRON PRODUCTS ) COMPANY, GENERAL CHEMICAL ) CORPORATION, ) ) Real Parties in Interest. ) ) )
Petitioner COMMUNITIES FOR A BETTER ENVIRONMENT (“CBE” or “Petitioner”) petitions this Court for a Writ of Mandate pursuant to California Code of Civil Procedure (“CCP”) § 1094.5 (or in the alternative, CCP §1085) directing Respondents California State Water Resources Control Board (“State Board”) and the
54 Regional Water Quality Control Board, San Francisco Bay Region (“Regional Board”) to set aside and vacate Regional Board Order No. 01-067, for violating the Federal Water Pollution Control Act by failing to establish water quality-based effluent limitations for the discharge of dioxins, mercury, selenium, and nickel by Chevron U.S.A. Inc., Chevron Chemical Company LLC, ChevronTexaco Corp., Chevron Products Company, and General Chemical Corp. (collectively “Chevron”) from their facilities into the San Pablo Bay and San Francisco Bay. The Petition also seeks to have the Court overturn State Board Order No. WQO 2002-0011, which upheld Regional Board order No. 01-067. Petitioners allege: INTRODUCTION
1. This action challenges the State Board’s and Regional Board’s failure to comply with the
Federal Water Pollution Control Act (the "Clean Water Act" or “CWA”), 33 U.S.C. § 1251 et seq., and the
Porter-Cologne Water Quality Control Act ("Porter-Cologne Act"), Water Code § 13000 et seq., by reissuing a National Pollutant Discharge Elimination System ("NPDES") permit, that fails to establish water quality-based effluent limitations for pollutant discharges into San Francisco Bay and San Pablo Bay from an oil refinery and other industrial facilities located in Richmond, California.
2. On October 9, 2001, Chevron Corp. and Texaco Inc., merged to form ChevronTexaco
Corp., the entity which now owns and controls the Chevron Richmond Refinery. ChevronTexaco has its headquarters in the City and County of San Francisco.
3. NPDES Permit No. CA0005134 (“Chevron Permit”) governs discharges into San
Francisco Bay by the Chevron Richmond Refinery, the General Chemical Company LLC, and Chevron
Chemical Company. The Chevron Richmond Refinery manufactures various petroleum products, and is classified as an integrated refinery by the United States Environmental Protection Agency (“EPA”) as defined in 40 CFR § 419.50. General Chemical Company LLC (“GCC”) manufactures sulfuric acid and oleum. Chevron Chemical Company (“CCC”) operates two facilities previously used in the manufacture and formulation of pesticides and other products.
4. Chevron discharges wastes into the waters of the San Francisco Bay and San Pablo Bay.
That discharge includes a mixture of a number of pollutants, including among numerous others, polychlorinated dibenzo-p-dioxins and polychlorinated dibenzofurans (collectively referred to as
“dioxins”), mercury, nickel, and selenium. According to the U.S. Environmental Protection Agency’s
55 Toxic Chemical Release Inventory, the Chevron Richmond Refinery is the largest industrial source of dioxin and mercury releases to surface water in the ten-county Bay Area.
5. On May 12, 1999, the U.S. Environmental Protection Agency (“EPA”) found that accumulation of dioxins and mercury in San Francisco Bay fish tissue threatens the health of subsistence anglers. EPA determined pursuant to CWA Section 1313(d) that the effluent limitations established for discharge of mercury, nickel, selenium, and dioxins into the Bay are not stringent enough to achieve water quality standards. EPA ranked this pollution problem as a "high priority” with respect to dioxins and mercury.
6. San Francisco Bay and San Pablo Bay are listed as having impaired water quality on the
EPA 303(d) list for a number of pollutants, including dioxins, mercury, selenium, and nickel.
7. On June 20, 2001, the Regional Board NPDES Permit No. CA0005134 to Chevron.
Order No. 01-067. Order No. 01-067 did not establish water quality-based effluent limitations on dioxins, mercury, selenium, and nickel. Instead, that order set interim limits on these pollutants intended to allow existing discharge performance as part of new long term “compliance schedules
8. On July 17, 2001, CBE filed an administrative petition challenging the Chevron permit before the State Board. The administrative petition alleged that Regional Board Order 01-067 improperly excluded water quality-based effluent limits on dioxins, mercury, selenium, and nickel from Chevron’s
NPDES permit and instead relied upon “interim” limits that are not water quality-based, pending future studies to develop “total maximum daily loads.” (“TMDLs”) CBE has previously raised these same concerns in timely comments to the Regional Board.
9. On October 19, 2001, the Regional Board responded to petitions on the Chevron permit by stating, among other things, that it was implementing “the State Board’s recent Tosco Remand Order
(Order No. WQO 2001-06)” when it adopted the Chevron permit. Regional Board’s Response to petitions at 2. State Board Order WQ 2001-06 upheld the use of an interim limit on dioxins in the Tosco Avon
Refinery permit (Regional Board Order No. 00-56), pending future studies to develop a TMDL.
10. On July 18, 2002 the State Board adopted Order WQO 2002-0011. Despite CBE’s petition, Order WQO 2002-0011 upheld the Regional Board’s reliance on interim limits, pending future studies to develop TMDLs, in Order 01-067 for dioxins, mercury, selenium, and nickel, instead of
56 establishing water quality-based limits. During the July 18, 2002 State Board adoption hearing, State
Board staff stated that this strategy was consistent with the Tosco Order (State Board Order 2001-06).
11. On July 19, 2002 this Court remanded State Board Order 2001-06 and Regional Board
Order 00-056 for further proceedings in accordance with the requirements of the CWA. See: Communities for a Better Environment v. State Water Resources Control Board (“CBE v. SWRCB”, Statement of
Decision filed July 19, 2002, San Francisco Superior Court case no. 319575). The decision held that the
State and Regional boards violated the law by failing to include a numeric water quality-based effluent limit on dioxins in the Tosco NPDES permit. The Court found that a performance-based interim permit limit, pending future studies to develop TMDLs, did not constitute the requisite water quality-based limits.
12. In the Chevron Permit, the State and Regional boards have used the same strategy of excluding water quality-based effluent limits, and relying instead on interim limits pending development of future TMDLs, that this Court found illegal in the Tosco permit.
13. Order No. 01-067 and State Board Order No. WQO 2002-0011 must be vacated because:
(1) the Permit purports to establish performance-based interim effluent limitations for dioxins, mercury, selenium, and nickel as part of “schedules of compliance” that are not authorized and/or are inconsistent with the CWA; and (2) the Permit fails to establish water quality-based effluent limitation governing discharges of dioxins, mercury, selenium, and nickel in violation of 33 U.S.C. § 1311(b)(1)(C) and 40
C.F.R. 122.44(d).
PARTIES
14. Petitioner Communities for a Better Environment (“CBE”) is a non-profit, public benefit corporation organized under the laws of the State of California with offices in Oakland and Huntington
Park, California. CBE has approximately 20,000 members throughout the State of California, thousands of whom live and/or recreate in and around the San Francisco Bay and Delta watershed. Hundreds of CBE members live in the City and County of San Francisco. CBE works to protect and enhance the environment and public health primarily in California’s urban areas. For over 20 years, CBE has actively advocated and litigated water quality issues in California, including advocacy and litigation involving the Regional Board, the State Board and EPA.
57 15. Members of CBE reside near the myriad waterways making up the Bay and Delta watershed, including San Pablo Bay and San Francisco Bay, where Chevron discharges effluent. Members of CBE use those areas to swim, fish, sail, boat, kayak, bird watch, view wildlife and engage in scientific study including monitoring activities. Numerous members of CBE have eaten, or would like to eat fish from San Francisco Bay and San Pablo Bay, but are seriously concerned about the health effects of consuming dioxin and mercury-contaminated fish from the Bays. They also have been exposed to dioxins, mercury, selenium and nickel through skin contact and ingestion of water while swimming in the Bays, and/or would like to swim in the Bays, but are fearful of doing so due to concern about exposure to dioxins, mercury, selenium and nickel.
16. The discharge of dioxins, mercury, selenium, and nickel by Chevron has impaired and continues to impair each of those uses. Discharges of these pollutants from Chevron contributes to the unacceptably high levels of dioxins, mercury, selenium, and nickel in San Pablo Bay and the rest of San
Francisco Bay.
17. The interests of CBE’s members have been, are being, and will continue to be directly and adversely affected by the Respondents’ failure to comply with the Clean Water Act and the Porter
Cologne Act in issuing Orders No. 01-067 and No. WQO 2002-0011 .
18. Respondent State Water Resources Control Board (“SWRCB”) is the entity authorized by
Water Code § 13320 and Chapter 5.5 to oversee California’s implementation of the NPDES permitting program, including reviewing permits issued by the Regional Water Quality Control Boards. On July 18,
2002, the State Board issued a final order denying Petitioner’s administrative appeal., Order No. WQO
2002-0011, which is at issue in this case.
19. Respondent Regional Water Quality Control Board, San Francisco Bay Region is the entity authorized pursuant to Water Code § 13263 and Chapter 5.5 to issue NPDES permits for discharges of pollutants in the San Francisco Bay region, subject to review by the State Board. Respondent Regional
Board issued the NPDES permit at issue in this case.
20. Real parties in interest Chevron U.S.A. Inc., Chevron Chemical Company,
ChevronTexaco Corp., Chevron Products Company, and General Chemical Corp. (collectively “Chevron”) are the owners and operators of the Chevron Richmond Refinery, the Chevron Chemical Company Hensley
58 Street and Castro Street facilities, and the General Chemical Richmond Works, respectively. Chevron
U.S.A. Inc., and Chevron Products Company are wholly owned subsidiaries of ChevronTexaco Corp.
ChevronTexaco maintains its headquarter in the City and County of San Francisco. The quality of the wastewater discharged by Chevron is governed by NPDES Permit, No. CA0005134 (Order No. 01-067), the subject of this petition. Therefore, Chevron has an interest in the outcome of Petitioner’s proceeding to set aside Order No. 01-067 and Order No. WQO 2002-0011. JURISDICTION AND VENUE
20.21. This court has jurisdiction pursuant to Code of Civil Procedure § 1094.5 and Water Code
§ 13330. Venue is proper in this court pursuant to Code of Civil Procedure § 393 and § 401(1).
21.22. This petition is timely filed within 30 days of service of State Board Order WQO 2002-
0011, in accordance with Water Code § 13330. STATUTORY BACKGROUND
22.23. The Clean Water Act sets forth a program for the protection of water quality through a combination of regulatory mechanisms aimed at eliminating the discharge of pollutants into the Nation’s waters by 1985. 33 U.S.C. § 1251(a)(1).
23.24. Central to the Clean Water Act’s statutory scheme are the requirements for states to adopt numerical and narrative water quality standards sufficient to protect the designated uses of navigable waters, and to attain these standards through, among other programs, the NPDES permitting program. 33
U.S.C. §§ 1313, 1342. Discharges of a pollutant by any person are unlawful unless such discharge is in compliance with the requirements of the Clean Water Act, including the requirements of an NPDES permit.
33 U.S.C. § 1311(a). In California, water quality standards are established in Basin Plans. Water Code §
13241. The Basin Plan for the San Francisco Bay region was last promulgated on June 25, 1995. Non- relevant amendments have been added since that time. The Water Code establishes specific procedures for modifying a Basin Plan. Water Code §§ 13244, 13245. These include notice, a public hearing and approval by the State Board of any proposed modification. Id.
24.25. States that have been delegated authority by EPA to implement the Clean Water Act are responsible for issuing NPDES permits to dischargers subject to the Clean Water Act’s permitting
59 requirements. California has been delegated authority by EPA to implement the Clean Water Act. See
Water Code Chapter 5.5. Attached to that delegation is the requirement that NPDES permits abide by minimum procedural and substantive requirements established by the CWA and federal regulations.
NPDES permits also must be consistent with the applicable Basin Plan. Water Code § 13263(a). Any requirements of State law including, for example, Basin Plan requirements, that are inconsistent with the
CWA or its regulations, are superseded by the federal requirements. Water Code § 13372.
25.26. The Clean Water Act prohibits issuance of a permit that does not provide for compliance with the Clean Water Act, or regulations promulgated under the Clean Water Act. 40 C.F.R. § 122.4(a).
See also 33 U.S.C. § 1342(b); Water Code § 13377. The Water Code prohibits issuance of a permit that is inconsistent with the requirements of the applicable Basin Plan. Water Code § 13263(a).
26.27. A water quality standard consists of the designated uses of a waterbody and the water quality criteria for that waterbody based upon such uses. 33 U.S.C. § 1313(c)(2)(A). By definition, when the quality of a waterbody is not meeting applicable water quality standards, that waterbody is not supporting all of its existing or designated beneficial uses.
27.28. A water quality standard can be established in narrative form. The Basin Plan includes a narrative toxicity standard. Basin Plan at 3-4. The narrative toxicity standard requires that all waters be maintained free of toxic substances in toxic amounts. Id. It also prohibits chronic toxicity in ambient waters. Id. The narrative toxicity standard was originally included in the Basin Plan dated April 1975.
1975 Basin Plan at 4-14. There has been no substantive modification of the narrative toxicity standard since its initial establishment in the April 1975 Basin Plan. Non-substantive edits to the narrative toxicity standard’s language were made on June 25, 1995, clarifying the existing standard. No additional changes to the narrative standard have been made since that date.
28.29. The Basin Plan established numeric water quality standards criteria for mercury and nickel applicable to San Francisco Bay and San Pablo Bay in 1987. These numeric standards were continued in effect by the 1995 review of the Basin Plan. The National Toxics Rule established a numeric water quality standard for selenium applicable to San Francisco Bay and San Pablo Bay in 1992.
29.30. The “California Toxics Rule” (“CTR”), promulgated by EPA on May 18, 2000, does not establish water quality standards criteria for TCDD equivalents, mercury, selenium, or nickel in either the
60 San Francisco Bay or San Pablo Bay. (TCDD equivalents, or “TEQ,” is a measurement of the additive toxicity of several dioxins.)
30.31. Water quality standards are implemented and enforced through the establishment of effluent limitations in NPDES permits. The CWA defines an “effluent limitation” as “any restriction established by a State or the Administrator on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged from point sources into navigable waters, . . . including schedules of compliance.” 33 U.S.C. § 1362(11).
31.32. Section 1311(b)(1)(C) of the Clean Water Act requires NPDES permits to include “any more stringent effluent limitation, including those necessary to meet water quality standards. . . .” 33
U.S.C. 1311(b)(1)(C). Effluent limitations issued pursuant to Section 1311(b)(1)(C) are commonly referred to as “water quality-based effluent limitations.” Water quality based effluent limitations must be included in an NPDES permit wherever the State agency determines that a reasonable potential exists that the discharge of a pollutant may cause or contribute to an exceedance of a water quality standard. 40 C.F.R. §
122.44(d)(1).
32.33. A “schedule of compliance” is defined by the CWA as “a schedule of remedial measures including an enforceable sequence of actions or operations leading to compliance with an effluent limitation, other limitation, prohibition, or standard.” 33 U.S.C. § 1362(17). Schedules of compliance cannot exceed any deadline imposed by the CWA. 40 C.F.R. § 122.47(a)(1).
33.34. Section 1311(b)(1)(C) requires that any "more stringent effluent limitations" established pursuant to Section 1311(b)(1)(C) be achieved not later than July 1, 1977. Id. After July 1, 1977, schedules of compliance are not authorized to extend the date of compliance for any water quality-based effluent limitations. This is especially true for water quality standards that were in existence prior to July 1,
1977, such as the narrative toxicity standard in the Basin Plan.
34.35. The Basin Plan purports to authorize schedules of compliance to implement water quality standards promulgated after the date the Basin Plan was amended to include such compliance schedule authority. On June 25, 1995, the Basin Plan was amended to include, for the first time, authority to establish schedules of compliance. The Basin Plan limits the use of schedules of compliance to deferring achievement of newly adopted water quality standards.
61 35.36. NPDES permits are issued for a fixed term not to exceed five years. 33 U.S.C. §
1342(b)(1)(B); 40 C.F.R. § 122.46(a). When issuing a NPDES permit, States must adhere to mandatory public participation procedures, including an opportunity to submit comments. 33 U.S.C. § 1342(b)(3).
See also 40 C.F.R. §§ 124.6, 124.10.
36.37. Section 1313(d) of the Clean Water Act requires that States identify waters in which the effluent limitations set by the State pursuant to the Act are not stringent enough to implement the water quality standards applicable to those waters. 33 U.S.C. § 1313(d)(1)(A). The resulting lists of impaired waters are commonly referred to as “303(d) Lists.” Once identified, a TMDL is required to be established for all waters identified by the Section 303(d) List. A TMDL is the maximum daily amount of total discharge from all sources of an identified pollutant at which the applicable water quality standard will be achieved, allowing for seasonal variations and a margin of safety which takes into account any lack of knowledge concerning the relationship between effluent limitations and water quality. 33 U.S.C. §
1313(d)(1)(c); 40 C.F.R. § 130.7(c).
37.38. The provisions of TMDL-based compliance schedules in the State Board’s “Policy for
Implementation of Toxics Standards for Inland Surface Waters, Enclosed Bays, and Estuaries of
California” (“State Implementation Plan” or “SIP”) have not been approved by EPA.
38.39. The CWA required TMDLs to be established promptly. Indeed, under the CWA,
TMDLs were required to have been established beginning in June, 1979. TMDLs are an important tool established by Congress in 1972 to achieve the CWA’s goals of fishable and swimmable waters by 1983 and elimination of pollution discharges by 1985. FACTUAL BACKGROUND
39.40. Polychlorinated dibenzo-p-dioxins and dibenzofurans are a group of chemicals that are by-products of various industrial processes involving chlorine. Seven of these dibenzo-p-dioxins and ten of the dibenzofurans (collectively “dioxins”) cause toxicity by a common mechanism, and are among the most toxic chemicals known. These 17 dioxins are known to have the potential to exacerbate each others’ toxicity in an additive fashion. Dioxins are long-lasting, persistent pollutants in the environment, bioaccumulate in animal tissues, and concentrate in the food chain. Exposure to dioxins may increase cancer risk, affect the immune system, and cause diabetes, endometriosis, a range of learning problems and
62 other adverse effects. Dioxins have been measured at elevated concentrations in fish throughout San
Francisco Bay.
40.41. Mercury is an extremely toxic element that is persistent in the environment, bioaccumulates, and concentrates in the food chain. Chronic exposure to mercury may cause neurotoxicity among other health effects. Mercury has been measured at elevated concentrations in water, sediment, fish, and other biota throughout San Francisco Bay.
41.42. Selenium is an element that is persistent in the environment, bioaccumulates, concentrates in the food chain, and is toxic in excessive exposures. Exposure to selenium may cause developmental effects, birth defects, and other health problems. Selenium has been measured at elevated concentrations in water, shellfish, fish, waterfowl, and marine mammals in San Pablo Bay and much of the rest of San Francisco Bay.
42.43. Nickel is a persistent trace element. Excessive exposure to nickel may cause toxic effects in shellfish, plankton and phytoplankton that form the base of aquatic food chains. Nickel has been measured at elevated concentrations in San Pablo Bay and other portions of San Francisco Bay.
43.44. On May 12, 1999, EPA finalized the 1998 303(d) List and TMDL Priority Schedule for
California ("1998 303(d) List"). The 1998 303(d) List identifies San Pablo Bay and San Francisco Bay as impaired by, amongst other pollutants, dioxins, mercury, selenium, and nickel. Dioxins, mercury, and selenium have been named as contaminants in State health warnings and advisories that caution people who may consume food resources from the San Francisco and San Pablo bays. The EPA named dioxins and mercury pollution as “high priority” pollution problems throughout San Francisco Bay.
44.45. The Chevron Richmond Refinery is the largest petroleum refinery discharging waste water directly into the San Francisco Bay system. The Richmond Refinery, Chevron Chemical Company
LLC, and General Chemical Corp. facilities collectively are classified by the State and the EPA as a “major discharger.” Chevron discharges an average of 6,800,000 gallons of partially treated waste water per day into San Pablo Bay, through an outfall designated by its NPDES permit as Waste 001. Regional Board
Order 01-067 at findings 2-8. Dioxins, mercury, selenium and nickel are measured in Chevron’s refinery operations.
63 45.46. There is a reasonable potential for Chevron’s discharges of dioxins, mercury, selenium, and nickel in Waste 001 to cause or contribute to violations of water quality standards in San Pablo Bay and San Francisco Bay. Regional Board Order 01-067 at Finding 28; State Board Order 2002-0011 at 15.
46.47. The Regional Board failed to include numeric water quality-based effluent limits for dioxins, mercury, selenium, or nickel in the Chevron permit when it adopted Order 01-067.
47.48. Although the Regional Board calculated a water quality-based effluent limit value for dioxins of 0.014 picograms of “TCDD equivalents” per liter of waste water discharged in Waste 001, the
Regional Board excluded this water quality-based limit from the Chevron permit when it adopted Order
No. 01-067. See Regional Board Order 01-067 at B.5 and Fact Sheet at 10-11 and Table 2. (TCDD equivalents, or “TEQ,” is a measurement of the additive toxicity of combinations of the polychlorinated dibenzo-p-dioxin and dibenzofuran compounds. Regional Board Order 01-067 at Attachment D.) Instead of adopting the 0.014 pg/L water quality-based effluent limit value on TCDD equivalents it had calculated, the Regional Board adopted an “interim” limit of 0.1 pg/L on TCDD equivalents in Waste 001 -- a limit
600 percent higher than the water quality based limit. Regional Board Order 01-067 at B.5. The 0.1 pg/L limit is not a water quality-based limit. State Board Order WQO 2002-0011 at 12. Chevron’s past discharge performance indicates that it already complies with the 0.1 pg/L limit. State Board Order WQO
2002-0011 at 15.
48.49. For mercury, the Regional Board calculated a water quality-based effluent limit value of
0.011 micrograms per liter (ug/L) of waste water discharged in Waste 001. Regional Board Order 01-067
Fact Sheet at 10-11 and Table 2. However, the Regional Board excluded this water quality based limit from the Chevron permit when it adopted Order No. 01-067. Instead of adopting the 0.011 ug/L water quality-based effluent limit value on mercury it had calculated, the Regional Board adopted interim limits of 0.075 ug/L on the concentration of mercury and 0.149 kilograms per month on the mass of mercury in
Waste 001. Regional Board Order 01-067 at B.5. These limits are also over 600 percent higher than the water quality-based limits. The Regional Board calculated that Chevron’s current discharge performance would comply with the mercury limits it adopted. Regional Board Order 01-067 at Finding 29.
49.50. For selenium, the Regional Board calculated a water quality-based effluent limit value of
4.3 micrograms per liter (ug/L) of waste water discharged in Waste 001. Regional Board Order 01-067
64 Fact Sheet at 10-11 and Table 2. However, the Regional Board excluded this water quality based limit from the Chevron permit when it adopted Order No. 01-067. Instead of adopting the 4.3 ug/L water quality-based effluent limit value on selenium it had calculated, the Regional Board adopted interim limits of 50 ug/L on the concentration of selenium and 2.38 pounds per day on the mass of selenium in Waste
001. Regional Board Order 01-067 at B.5. These limits are over 8 times higher than the water quality based limits. Chevron’s past discharge performance resulted in a maximum observed effluent selenium concentration of 48 ug/L. Regional Board Order 01-067 Fact Sheet at Table 2.
50.51. For nickel, the Regional Board calculated a water quality-based effluent limit value of
34.2 micrograms per liter (ug/L) of waste water discharged in Waste 001. Regional Board Order 01-067
Fact Sheet at 10-11 and Table 2. However, the Regional Board excluded this water quality based limit from the Chevron permit when it adopted Order No. 01-067. Instead of adopting the 34.2 ug/L water quality-based effluent limit value on nickel it had calculated the Regional Board adopted an interim limit of
65 ug/L on nickel in Waste 001 – approximately double the water quality based limit. Regional Board
Order 01-067 at B.5. Chevron’s past discharge performance resulted in a maximum observed effluent nickel concentration of 43.16 ug/L. Regional Board Order 01-067 Fact Sheet at Table 2.
51.52. Regional Board Order 01-067 states that the interim limits on dioxins, mercury, selenium and nickel it established will be replaced by water quality-based effluent limits after further studies and the development of TMDLs and waste load allocations. Regional Board Order 01-067 at findings 23-26, 29,
33, 35, 43-45 and Effluent Limit B.5.
52.53. The Regional Board made predictions about when plans for data collection and other work will result in the development and establishment of TMDLs. Regional Board Order 01-067 at findings 23-25; Effluent Limitations B.5; and Fact Sheet at 18-21. The Regional Board stated that it included compliance schedules for dioxins, mercury, selenium, and nickel in the Chevron permit based on these predictions. Id. Regional Board Order 01-067 states that the interim limits for dioxins, mercury, selenium, and nickel shall remain in effect until June 30, 2011, May 18, 2010, June 30, 2006 and May 18,
2010, respectively, or until the Board amends the limit based on Waste Load Allocation in the TMDL.
Regional Board Order 01-067 at B.5.
65 53.54. State Board Order WQO 2002-0011, issued on July 18, 2002, dismissed the issues raised by CBE regarding effluent limits and compliance schedules for dioxins, mercury, selenium and nickel as
“insubstantial and inappropriate for State Board review.” WQO 2002-0011 at 3, n. 7. The State Board thereby allows Regional Board Order No. 01-067 to stand without correcting the effluent limits for dioxins, mercury, selenium, or nickel, in the Chevron permit.
54.55. On July 15, 2002, this court issued a final decision in Communities for a Better
Environment et al. v. State Water Resources Control Board et al. (“CBE v. SWRCB”) (see Exhibit A) affirming Petitioners’ objection to Regional Board’s exclusion of a numeric water quality-based effluent limitation in an NPDES permit when the state permitting agency determines that pollutants “are or may be discharged at a level which will cause, or have the reasonable potential to cause, or contribute to an excursion above any State water quality standard.” (CBE v. SWRCB, Statement of Decision filed July 19,
2002, San Francisco Superior Court case no. 319575) PROCEDURAL BACKGROUND
55.56. On June 4, 2001, and previous dates, Petitioner submitted comments on the draft versions of Order No. 01-067. Petitioner objected to the proposed effluent limitations for dioxins, mercury, selenium, and nickel, as well as the proposed “schedules of compliance” to defer water quality-based effluent limits.
56.57. On June 20, 2001, The Regional Board adopted Order No. 01-067 reissuing the NPDES permit for Chevron Richmond Refinery. The permit authorized Chevron to discharge wastewater to San
Francisco and San Pablo bays.
57.58. On May 22, 2002, Petitioner filed an administrative appeal of Order No. 01-067 with the
State Board based on, among other concerns, the absence of water quality-based effluent limits for dioxins, mercury, selenium, and nickel, and the reliance on improper “schedules of compliance” and interim limits only for these pollutants.
58.59. On June 6, 2002 the State Board held a workshop on the administrative appeal of Order
No. 01-067. A public hearing was held on July 18, 2002.
66 59.60. On May 22, 2002 and again on July 10, 2002, Petitioner submitted comments to the State
Board objecting to the arbitrary exclusion of water quality-based effluent limits required by the CWA for dioxins, mercury, selenium, and nickel.
60.61. On July 18, 2002, the State Board dismissed CBE’s petition in relevant part, and upheld
Order No. 01-067. In Order No. 01-067, the Regional Board predicts the future establishment of effluent limitations for dioxin, mercury, selenium, and nickel, pending a TMDL study. The State Board’s decision refused to reverse the Regional Board’s position that these predictions of future activities amount to water quality-based effluent limitations that comply with the CWA’s mandate to include water quality-based effluent limitations when a discharge of a pollutant may have a reasonable potential to cause or contribute to an exceedance of a water quality standard. 33 U.S.C. § 1311(b)(1)(C); 40 C.F.R. § 122.44(d). State
Board Order WQO 2002-0011.
61.62. State Board Order No. WQO 2002-0011 rejects Petitioners’ objections to the absence of water quality based effluent limits, reliance on interim limits pending TMDLs and schedules of compliance for dioxins, mercury, selenium, and nickel.
62.63. The State Board explicitly rejected for review any issues raised by Petitioner that are not addressed by State Board Order No. WQO 2002-0011. WQO 2002-0011, at 3, n. 7.
63.64. Petitioner has exhausted all administrative remedies that the Agency provided. Petitioner has submitted oral and written comments raising all factual and legal arguments concerning the Permit’s substantive inadequacies.
64.65. Petitioner has no plain, speedy, or adequate remedy in the ordinary course of law. Unless the Court grants the requested writ of mandate to require the State Board and the Regional Board to comply with their legal duties, Respondents will continue to proceed in violation of the law.
65.66. Petitioner has mailed a copy of this petition to the Attorney General for the State of
California. A copy of the letter to the Attorney General is attached as Exhibit B.
66.67. Petitioner has incurred substantial costs and attorneys fees that will continue to accrue in an amount not yet determined. Petitioner is entitled to an award of attorneys’ fees if it prevails in this action as provided in California Code of Civil Procedure § 1021.5 because this action seeks to enforce
67 important rights affecting the public interest which, if enforced, will confer significant benefits on the general public. Petitioner will seek an award of fees and costs. STANDARD OF REVIEW
67.68. Water Code § 13330(d) provides that “the court shall exercise its independent judgment on the evidence in any case involving judicial review of a decision or order of the state board issued under
Section 13320, or a decision or order of a regional board for which the state board denies review under section 13320.” CLAIMS FOR RELIEF FIRST CLAIM FOR RELIEF (Failure to Establish a Water Quality-Based Effluent Limitation for Dioxins –
33 U.S.C. § 1311 (b)(1)(C); 40 C.F.R. § 122.44 (d); CCP §1094.5)
68.69. Petitioner incorporates the allegations of paragraphs 1 through 68, inclusive, as though fully set forth herein.
69.70. By issuing Order No. 01-067, Respondents committed a prejudicial abuse of discretion by reissuing NPDES permit No. CA0005134 with the exclusion of a water quality-based effluent limitation for dioxins in violation of 33 U.S.C. § 1311(b)(1)(C) and 40 C.F.R. § 122.44(d), and contrary to this court’s ruling in CBE v. SWRCB (see Exhibit A).
70.71. The failure of the State Board and Regional Board to establish a water quality-based effluent limitation for dioxins in Orders No. 01-067 and WQO 2002-0011 is a prejudicial abuse of discretion by failing to proceed in the manner required by law, by rendering decisions not supported by their findings, and/or by making findings not supported by the weight of the evidence. SECOND CLAIM FOR RELIEF (Failure to Establish a Water Quality-Based Effluent Limitation for Mercury –
33 U.S.C. § 1311(b)(1)(C); 40 C.F.R. § 122.44(d); CCP §1094.5)
71.72. Petitioner incorporates the allegations of paragraphs 1 through 68, inclusive, as though fully set forth herein.
68 72.73. By issuing Order No. 01-067, Respondents committed a prejudicial abuse of discretion by reissuing NPDES permit No. CA0005134 with the exclusion of a water quality-based effluent limitation for mercury in violation of 33 U.S.C. § 1311(b)(1)(C) and 40 C.F.R. § 122.44(d), and contrary to this court’s ruling in CBE v. SWRCB (see Exhibit A).
73.74. The failure of the State Board and Regional Board to establish a water quality-based effluent limitation for dioxins in Orders No. 01-067 and WQO 2002-0011 is a prejudicial abuse of discretion by failing to proceed in the manner required by law, by rendering decisions not supported by their findings, and/or by making findings not supported by the weight of the evidence. THIRD CLAIM FOR RELIEF (Failure to Establish a Water Quality-Based Effluent Limitation for Selenium –
33 U.S.C. § 1311(b)(1)(C); 40 C.F.R. § 122.44(d); CCP §1094.5)
74.75. Petitioner incorporates the allegations of paragraphs 1 through 68, inclusive, as though fully set forth herein.
75.76. By issuing Order No. 01-067, Respondents committed a prejudicial abuse of discretion by reissuing NPDES permit No. CA0005134 with the exclusion of a water quality-based effluent limitation for selenium in violation of 33 U.S.C. § 1311(b)(1)(C) and 40 C.F.R. § 122.44(d), and contrary to this court’s ruling in CBE v. SWRCB (see Exhibit A).
76.77. The failure of the State Board and Regional Board to establish a water quality-based effluent limitation for dioxins in Orders No. 01-067 and WQO 2002-0011 is a prejudicial abuse of discretion by failing to proceed in the manner required by law, by rendering decisions not supported by their findings, and/or by making findings not supported by the weight of the evidence. FOURTH CLAIM FOR RELIEF (Failure to Establish a Water Quality-Based Effluent Limitation for Nickel –
33 U.S.C. § 1311(b)(1)(C); 40 C.F.R. § 122.44(d); CCP §1094.5)
77.78. Petitioner incorporates the allegations of paragraphs 1 through 68, inclusive, as though fully set forth herein.
69 78.79. By issuing Order No. 01-067, Respondents committed a prejudicial abuse of discretion by reissuing NPDES permit No. CA0005134 with the exclusion of a water quality-based effluent limitation for nickel in violation of 33 U.S.C. § 1311(b)(1)(C) and 40 C.F.R. § 122.44(d), and contrary to this court’s ruling in CBE v. SWRCB (see Exhibit A).
79.80. The failure of the State Board and Regional Board to establish a water quality-based effluent limitation for dioxins in Orders No. 01-067 and WQO 2002-0011 is a prejudicial abuse of discretion by failing to proceed in the manner required by law, by rendering decisions not supported by their findings, and/or by making findings not supported by the weight of the evidence. FIFTH CLAIM FOR RELIEF
(Illegal Application of Schedules of Compliance for Dioxin Effluent Limitations (33 U.S.C. § 1311(b)(1)(C); CCP §1094.5)
80.81. Petitioner incorporates the allegations of paragraphs 1 through 80, inclusive, as though fully set forth herein.
81.82. Respondents committed a prejudicial abuse of discretion by finding in Order No. 01-067 that a schedule of compliance deferring compliance with an as-yet-to-be established water quality-based effluent limitation for dioxins is consistent with the Clean Water Act and the Water Code and/or is authorized by the Basin Plan and/or the State Implementation Plan.
82.83. In issuing Orders No. 01-067 and WQO 2002-0011, the State Board and Regional Board committed a prejudicial abuse of discretion in establishing and/or allowing a “schedule of compliance” to comply with a non-existent, future water quality-based effluent limitation for dioxins, by failing to proceed in the manner required by law, by rendering decisions not supported by their findings, and/or by making findings not supported by the weight of the evidence. SIXTH CLAIM FOR RELIEF
(Illegal Application of Schedules of Compliance for Mercury Effluent Limitations (33 U.S.C. § 1311(b)(1)(C); CCP §1094.5)
83.84. Petitioner incorporates the allegations of paragraphs 1 through 80, inclusive, as though fully set forth herein.
70 84.85. Respondents committed a prejudicial abuse of discretion by finding in Order No. 01-067 that a schedule of compliance deferring compliance with an as-yet-to-be established water quality-based effluent limitation for mercury is consistent with the CWA and the Water Code and/or is authorized by the
Basin Plan and/orthe State Implementation Plan.
85.86. In issuing Orders No. 01-067 and WQO 2002-0011, the State Board and Regional Board committed a prejudicial abuse of discretion in establishing and/or allowing a “schedule of compliance” to comply with a non-existent, future water quality-based effluent limitation for mercury, by failing to proceed in the manner required by law, by rendering decisions not supported by their findings, and/or by making findings not supported by the weight of the evidence. SEVENTH CLAIM FOR RELIEF
(Illegal Application of Schedules of Compliance for Selenium Effluent Limitations (33 U.S.C. § 1311(b)(1)(C); CCP §1094.5)
86.87. Petitioner incorporates the allegations of paragraphs 1 through 80, inclusive, as though fully set forth herein.
87.88. Respondents committed a prejudicial abuse of discretion by finding in Order No. 01-067 that a schedule of compliance deferring compliance with an as-yet-to-be established water quality-based effluent limitation for selenium is consistent with the CWA and the Water Code and/or is authorized by the
Basin Plan and/or State Implementation Plan. a.
88.89. In issuing Orders No. 01-067 and WQO 2002-0011, the State Board and Regional Board committed a prejudicial abuse of discretion in establishing and/or allowing a “schedule of compliance” to comply with a non-existent, future water quality-based effluent limitation for selenium, by failing to proceed in the manner required by law, by rendering decisions not supported by their findings, and/or by making findings not supported by the weight of the evidence. EIGHTH CLAIM FOR RELIEF
(Illegal Application of Schedules of Compliance for Nickel Effluent Limitations (33 U.S.C. § 1311(b)(1)(C); CCP §1094.5)
71 89.90. Petitioner incorporates the allegations of paragraphs 1 through 80, inclusive, as though fully set forth herein.
90.91. Respondents committed a prejudicial abuse of discretion by finding in Order No. 01-067 that a schedule of compliance deferring compliance with an as-yet-to-be established water quality-based effluent limitation for nickel is consistent with the CWA and the Water Code and/or is authorized by the
Basin Plan and/or the State Implementation Plan.
91.92. In issuing Orders No. 01-067 and WQO 2002-0011, the State Board and Regional Board committed a prejudicial abuse of discretion in establishing and/or allowing a “schedule of compliance” to comply with a non-existent, future water quality-based effluent limitation for nickel, by failing to proceed in the manner required by law, by rendering decisions not supported by their findings, and/or by making findings not supported by the weight of the evidence.
RELIEF REQUESTED Wherefore, Petitioners pray that: 1. A peremptory writ of mandate issue, pursuant to Code of Civil Procedure § 1094.5, directed to Respondents, compelling Respondents to set aside and vacate Order No. 01-067 and Order No. WQO 2002-0011; 2. Petitioner recover its costs (including reasonable attorney, witness, and consultant fees) as authorized by the CCP § 1021.5 and any and all other relevant provisions of law; and, 3. Such other relief be granted as this Court may deem appropriate.
Respectfully Submitted,
Dated: August 16, 2002.
By: ______Adrienne L. Bloch, Staff Attorney COMMUNITIES FOR A BETTER ENVIRONMENT
Danielle R. Fugere ENVIRONMENTAL ADVOCATES
Attorneys for Petitioner
Daniel Butt, Legal Intern
72 VERIFICATION
I, RICHARD DRURY declare: I am the Acting Executive Director of petitioner Communities for a Better Environment (CBE). I have read the above petition and complaint and know its contents. All the facts alleged in the above petition not otherwise supported by citations to the record, exhibits, or other documents are true of my own personal knowledge. /// I declare under penalty of perjury that a foregoing is true and correct. Executed this day _____ of August, 2002, at Oakland, California.
______Richard Drury CBE Acting Executive Director
73
PEOPLE DO! 235 East Scenic Avenue Richmond, CA 94801
June 22, 1994
Reader’s Forum West County Times P.O. Box 128 Pinole, CA 94562
Subject: Utility Tax Equity
Dear Editor:
The Richmond City Council is contemplating a utility tax increase which might not even be necessary if the special interest exemptions for Chevron were eliminated. Before raising the utility tax rate, taxpayers should demand an explanation why Richmond Municipal Code Section 13.52.060 (Utility Tax) was crafted to uniquely exempt Chevron from the level of utility taxation applied to every other taxpayer in the City of Richmond. There are only two active exemptions to the utility tax. One, which makes some sense, applies to senior citizens with disabilities or annual incomes less than $12,000. Hardly in the same category is a cap on the rates for Chevron, the most profitable oil company in the United States. The City’s consultant, Municipal Resource Consultants, has confirmed that in the early years of their election of the “cap” option, “Chevron did benefit from the tax ceiling because of their higher utility consumption.” There is evidence that Chevron is continuing to benefit to the tune of millions of dollars per year from the utility tax cap. Both the City of Richmond and Chevron are unwilling, probably illegally, to divulge the data used to compute Chevron’s tax at the standard rate. This makes it difficult for City staff, much less any ordinary concerned citizen, to know exactly how much the City is losing each year under this arrangement. The Draft Environmental Impact Report for the Reformulated Fuel and FCC Plant Upgrade confirms that Chevron’s “current daily natural gas use is about 100,000 million Btu [1 million therms] or 91 million cubic feet per day.” This amounts to about 365 million therms per year. At the rate most Richmond residents and businesses pay for natural gas ($0.53 to $0.73 per therm) Chevron’s natural gas consumption would be valued at $193 million to $266 million, and at the 6 per cent tax rate everyone but Chevron pays, Chevron’s utility tax on natural gas alone would be $12 million to $16 million instead of the approximately $6 million they currently pay under the cap.
74 Utility taxes are inherently regressive when they are based on amount billed instead of energy consumed. In effect, we get overcharged twice, once when we pay a low-usage premium for the use of gas or electricity and a second time when we pay a fixed- percentage tax on the inflated (compared to high-volume users) utility bill. As a large scale, industrial user, Chevron probably pays PG&E only about $0.35 per therm for natural gas. If the gas produced in the refinery (alternative supplier) is valued at the same rate Chevron would have to purchase an equivalent amount from PG&E (primary supplier), the cost is $127 million. At 6 per cent, the utility tax on this amount would be $7.7 million for natural gas alone (not including electricity and telephone), or about 30 per cent above what Chevron is now paying under the cap. In effect, the rest of us are subsidizing Chevron. There is a solution I suggested to the City Council four months ago. First, repeal the Chevron cap, because it has no rational basis, is inherently inequitable, and violates the equal protection guarantees of both the California and U.S. Constitutions. Second, base the utility tax on energy consumed rather than the amount paid for energy. With these changes to the ordinance, it is entirely possible that the projected budget deficit can be closed with no increase in the actual utility tax rate. At worst, the rate may not have to be increased as much as the City manager has recommended.
Anyone wishing to join the campaign of People Do! for utility tax equalization , or to consider litigation to stop the City from illegally favoring Chevron, should contact me.
Sincerely,
Thomas K. Butt
75 PEOPLE DO! 235 East Scenic Avenue Richmond, CA 94801
June 22, 1994
Reader’s Forum West County Times P.O. Box 128 Pinole, CA 94562
Subject: Certified Inspection Program
Dear Editor:
At a time when the Richmond City Council is considering raising revenues through tax increases, it may be appropriate to first consider eliminating special privileges for Chevron which have resulted in a significant reduction in revenues and continue to expose the City to potentially expensive liability. Like the utility tax cap, the Certified Inspection Program (CIP) is a piece of special purpose legislation passed in 1986 designed to uniquely benefit Chevron and to perpetuate an illegal but de facto relationship that apparently had already existed informally between Chevron and the City of Richmond for many years. The CIP essentially allows Chevron the unique privilege of plan checking its own designs for buildings and plants, inspecting its own construction, and paying a fraction of the building permit fees assessed to ordinary people or businesses. The unsubstantiated justification for the legislation was that Chevron was inherently better qualified to check its designs and inspect its construction for code conformance than anybody the City of Richmond could employ or retain, and that Chevron had such an enviable safety record that its standards were clearly higher than anything the City could impose on the company. This entire premise is absurd and has cost the City of Richmond perhaps $12 million in lost revenue over the last seven years as well as possibly playing a role in some of the many accidents at Chevron which have resulted in injuries, deaths, and numerous lawsuits. Admittedly, some of the foregone fees ( but not $12 million) would have had to pay for staff or consultants paid for by the City to perform plan checks and inspections, but at least the City would be fulfilling its obligation to protect the public health, safety, and welfare, and those performing the work would possess known qualifications and be adherents to the City’s affirmative action policies and objectives. A related problem developing from the CIP is that Chevron is concealing (and the City is ignoring) projects which should be subject to Site Development Review. Anyone who has
76 undergone the City’s torturous design review process should be outraged that Chevron is the only entity in Richmond that has found a way to avoid it. Neither the City nor Chevron has conformed to the requirements for periodic audits, quality control checks, verifications of credentials, updating of codes and standards, and verification of licensing of design professionals of record. The bottom line is that the Certified Inspection Program is a criminal abdication of the City’s responsibilities to protect its citizens’ health, safety, and welfare and is an unconstitutional failure to provide equal protection under the law. Four months ago I recommended to the City Council that the section of the Municipal Code crafted to uniquely benefit Chevron with the CIP be repealed. A month ago, the Public Development Review Board asked the City Manager to probe the CIP. Nothing has happened, except that the City Council and the City manager have ignored our appeals and are concentrating instead on raising our taxes.
Sincerely,
Thomas K. Butt
77 MEMO
November 23, 2000
From: Tom Butt To: Members of the Finance, Administrative Services and Economic Development Committee Subject: Proposed Amendment to the Utility User's tax
On November 30, 2000, you will be reviewing an amendment I have suggested to Richmond Municipal Code Section 13.52.100. I want to share with you the reasons that I believe this amendment should be enacted.
Even with the nearly $60 million in bonds that the City Council recently voted to issue for infrastructure needs, our actual unfunded infrastructure capital replacement and maintenance requirements are in the hundreds of millions of dollars. We have to find new sources of revenue before our streets literally crumble back into gravel roads. The utility tax is one potential source of increased revenue that could produce additional millions of dollars annually without any increase in the tax rate or the amount paid by all but one taxpayer.
There are only two active exemptions to the utility tax. One, which makes some sense, applies to senior citizens with disabilities or annual incomes less than $12,000. Hardly in the same category is a cap on the rates for Chevron, one of the most profitable oil companies in the world. In fact, the recent rise in fuel prices has boosted Chevron profits far beyond all expectations. Just eight days after surprising the oil industry with an announcement that it was buying Texaco oil in a deal that would created the world's fourth largest oil company, Chevron released an equally shocking earnings report Tuesday that shattered all estimates…. For the three-month period ending September 30, Chevron's oil-refining and product sales division, which makes and sells gasoline, posted an operating profit of $260 million, nearly 2 1/2 times the $107 million profit from the third quarter of 1999.221 In the 1980's, following the municipal income shortfalls resulting from Proposition 13, the Richmond City Council passed the Telecommunication, Gas, Electricity, Water and Video User's Tax (RMC Chapter 13.52). The tax was established as a percentage of the user's payments for various utility services, the current amount being 8 per cent. At the behest of Chevron, the City Council incorporated into the ordinance a provision for a "maximum tax."
13.52.100 Maximum tax payable.
(a) The maximum tax payable by any service user under the cumulative application of Sections 13.52.030, 13.52.040, 13.52.050, 13.52.060, 13.52.070 and 13.52.080 and this section shall be the base amount of $1,148,137.54 for each percent of tax imposed for any tax year, which base amount shall be adjusted annually by that percentage which is ninety (90%) percent of the total percentage of change in the United States Department of Labor, Bureau of Labor Statistics' Gas (piped) and Electric Consumer Price Index For All Consumers Urban for the San Francisco/Oakland/San Jose Area calculated on the basis of the two consecutive
221 "Banner Year for Chevron," West County Times, October 25, 2000
78 and most recent completed years for which data is available from the United States Department of Labor.
This maximum tax liability shall be effective only if the service user elects to avail itself of such maximum tax liability provision and enters into an agreement with the Tax Administrator prior to the commencement of the tax year to pay the maximum tax liability directly to the City during the tax year. No portion of the sum shall be refundable in the event the service user subsequently determines that its tax liability under this chapter would have been less than the maximum tax liability. Upon execution of the agreement between the Tax Administrator and the service user, the Tax Administrator shall notify all relevant service suppliers of the names and locations of all service users making payments directly to the City.
Since the ordinance was enacted more than fifteen years ago, Chevron has each year elected to pay the maximum tax rather than the percentage tax. Chevron is the only taxpayer that has elected this alternative. I have maintained, for some six years, that this maximum tax alternative is unfair and inappropriate for two principal reasons.
1. It is special interest legislation designed to benefit a single taxpayer 2. It has deprived the City of Richmond of tens of millions of dollars of potential income.
In response, City official have continued to insist that the alternative maximum tax provision has not resulted in any significant difference in the amount of tax that would have been paid by Chevron under the percentage election. The fact is that no City of Richmond staff member or elected official has ever been privy to information about Chevron's utility usage to be in position to make a statement of fact on this issue.
The only "audit" ever made at the direction of the City of Richmond to determine whether or not Chevron was benefiting from the cap was made six years ago by the City’s prior consultant, Municipal Resource Consultants (MRC). They confirmed that in the early years of their election of the “cap” option, “Chevron did benefit from the tax ceiling because of their higher utility consumption.” There is evidence that Chevron is continuing to benefit to the tune of millions of dollars per year from the utility tax cap. In 1994, Finance Director Jay Goldstone stated publicly that Chevron had elected to pay, under the maximum tax alternative, an amount of tax that would be $1 million to $2 million higher than under the percentage computation. City Manager Floyd Johnson said that Chevron's "generosity" resulted from a personal appeal he made to offset a projected budget shortfall. However, when I (as a Chevron shareholder at the time) complained to chevron that they were overpaying their legal tax liability, Chevron responded, "We will continue to evaluate our annual refinery utility usage on an annual basis to determine whether it is more cost effective to pay the annual maximum tax, or to pay the tax based on actual utility usage. Implicit in this reply was the statement that Chevron would select the computational method that they perceived to result in the minimum tax liability. "222 Regarding Floyd Johnson's statement about Chevron's generosity, Mr. Hook responded, "…such a statement, if made, was not made in coordination with appropriate company
222 Letter dated October 27, 1994, from Gary S. Hook to Tom Butt
79 personnel, and Chevron is in no position to comment on the statements of local government officials made without our knowledge or consent."223 In 1994, The Draft Environmental Impact Report for the Reformulated Fuel and FCC Plant Upgrade confirmed that Chevron’s “current daily natural gas use is about 100,000 million Btu [1 million therms] or 91 million cubic feet per day.” This amounted to about 365 million therms per year. At the rate most Richmond residents and businesses paid for natural gas ($0.53 to $0.73 per therm) Chevron’s natural gas consumption would have been valued at $193 million to $266 million, and at the 6 per cent tax rate that everyone but Chevron paid, Chevron’s utility tax on natural gas alone would have been $12 million to $16 million instead of the approximately $6 million they paid under the cap. Utility taxes are inherently regressive when they are based on amount billed instead of energy consumed. In effect, we get overcharged twice, once when we pay a low-usage premium for the use of gas or electricity and a second time when we pay a fixed- percentage tax on the inflated (compared to high-volume users) utility bill. As a large scale, industrial user, Chevron probably would have paid (in 1994) PG&E only about $0.35 per therm for natural gas. If the gas produced in the refinery (alternative supplier) were valued at the same rate Chevron would have had to purchase an equivalent amount from PG&E (primary supplier), the cost is $127 million. At 6 per cent, the utility tax on this amount would have been $7.7 million for natural gas alone (not including electricity and telephone), or about 30 per cent above what Chevron paid in 1994 under the cap. In effect, the rest of us were and still are subsidizing Chevron. There is a solution I have suggested to the City Council several times over the past six years. First, repeal the Chevron cap, because it has no rational basis, is inherently inequitable, and violates the equal protection guarantees of both the California and U.S. Constitutions. Second, base the utility tax on energy consumed rather than the amount paid for energy. With these changes to the ordinance, it is entirely possible that the income to the City from the utility tax could be significantly increased with no increase in the actual utility tax rate.
On March 8, 1994, I wrote to Mayor Corbin and Members of the City Council expressing my concerns with the structure and administration of the Utility User’s Tax as it involves Chevron. Apparently my concerns resulted in a response dated March 29, 1994, from Municipal Resource Consultants (MRC) addressed to Jay Goldstone, and a memo dated April 25, 1994, from Jay Goldstone to the Mayor and members of the City Council. Mr. Goldstone was kind enough to share these responses with me on June 27, 1994.
I also obtained from the city manager's office on June 22, 1994, a document entitled Utility Tax Breakdown By Payer (Chevron, industrial/commercial, and residential) showing the distribution of anticipated tax revenue at four different rates from 6 percent to 9 percent.
These documents, and information stated as fact (and certified by the Richmond City Council) in the August 1993 Draft Environmental Impact Report for the Chevron Reformulated Gasoline and FCC Plant Upgrade Project (DEIR), raise a number of questions which I had hoped could have been answered as a part of the public hearing process to consider an increase in the Utility User’s Tax.
Transcripts of the actual questions posed and the answers provided follow:
223 Letter dated January 5, 1995, rom Gary s. hook to Tom Butt
80 BUTT: Much of the data regarding computation of Chevron’s tax continues to be described as proprietary information, including the “actual costs incurred by Chevron,”224”the actual cost of transporting gas consumed by Chevron,” 225and the “actual quantity of natural gas used by Chevron in the hydrogen feedstock facet of their refining process.”226 On what general statutory authority does the City or MRC decide which of these data is proprietary?
TRICE: Government Code Section 6254(i) which exempts information required from any taxpayer in connection with the collection of local taxes which is received in confidence and the disclosure of the information to other persons would result in unfair competitive disadvantage to the person supplying the information.
BUTT: How does the City or MRC decide which discrete items are proprietary, or does Chevron make those decisions?
GOLDSTONE: Everything involving Chevron energy or utility use is proprietary and protected by the Government Code Section 6254(i). Decisions regarding confidentiality are made by the City, not by Chevron.
BUTT: Is information claimed proprietary disclosed by MRC to anyone in Richmond City government? If so, to whom?
GOLDSTONE: No proprietary information considered confidential by the City has been disclosed to anyone in City government. Only MRC has received this information.
BUTT: RMC 13.52.130 gives the Tax Administrator (Director of Finance) the right to inspect and audit records used to determine taxes. Has the Finance Director or his staff audited Chevron records, or has this been delegated to MRC?
GOLDSTONE: It has been delegated to MRC.
BUTT: What guarantee or level of comfort does the City have that third-hand information provided by MRC regarding Chevron’s tax liability is accurate?
GOLDSTONE: I have an extremely high level of confidence in MRC. MRC was originally established to audit sales tax revenue which it has been doing since the early 1980’s. One of the general partners was Finance Director of Fresno. Another was in the private sector. Now, out of maybe 450 cities in the State of California, 200 are clients of MRC for sales tax audits. Four years ago, MRC decided to expand their business to do tax audits for all kinds of businesses. I have met the people doing various audits for the City of Richmond. I have a strong comfort level. They understand our ordinances. They only get paid if they find more revenue. They also provide a number of ancillary services at no extra cost. The Chevron audit was one of them. There was no bill. Since the cap was used, even if they found the potential for additional revenue, they would derive no fee from it.
BUTT: Is MRC licensed or regulated by the State of California?
GOLDSTONE: No
BUTT: Is MRC bonded or insured, and if so, by whom, for what, and at what limits?
GOLDSTONE: I will check to see if we have the insurance certificates.
224MRC letter to Goldstone, March 29, 1994 225ibid. 226ibid.
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Do MRC principals possess any professional licenses regulated by the State?
GOLDSTONE: Not that I am aware of. TRICE: At least one attorney is licensed by the State.
BUTT: The DEIR sates that, Annual consumption of PG&E electricity in Richmond is about 11.5 million kilowatt-hours (kWH); annual natural gas supply from PG&E is about 15.3 million cubic feet (cu. ft.) Fudge-Mueller, 1992)...The Refinery currently generates about 110 MW of electrical power from its own cogeneration plant and refinery turbogenerators and purchases about 20 MW from PG&E...Current daily natural gas use is about 100,000 million Btu or 91 million cubic feet per day Chevron normally uses its own produced natural gas to meet its gas requirements, and does not purchase natural gas from PG&E (Long, 1993).227
In 1994, MRC inferred that Chevron does not make its own gas but in fact buys it from outside the refinery and pays some entity (local utility company? Pipeline company?) to transport it there. According to MRC, a portion of the gas is used as feedstock rather than for energy production.228In 1993, MRC inferred that Chevron obtained gas from “out of state suppliers” to which it paid “transport fees.”229
The DEIR is not only internally inconsistent but is inconsistent with the MRC explanation. I would like to have the following questions answered:
Where and how does Chevron obtain natural gas and in what proportions from each source of supply?
GOLDSTONE: This is confidential, and we do not have that information.
BUTT: Does Chevron use gas for feedstock, and if so, where does that gas come from? Internal production? PG&E? Other suppliers?
GOLDSTONE: They do use some gas for feedstock, and I am sure they procure some gas from PG&E, but I do not know the proportion. This is confidential, and we do not have that information.
BUTT: When Chevron buys gas from PG&E (if in fact it does), what rate does it pay per unit of gas?
GOLDSTONE: This is confidential, and we do not have that information
BUTT: If Chevron does not buy gas from PG&E, what rate would it pay PG&E if it did buy gas from PG&E (equivalent charges as described in 13.52.060(a))?
GOLDSTONE: This is confidential, and we do not have that information
BUTT: MRC states that Chevron pays “significantly less per unit of natural gas purchased for many reasons including shear volume.”230What other reasons?
GOLDSTONE: I will inquire of MRC and get back to you.
BUTT: My reading of RMC 13.52.050(a) is that the tax applies to persons “using gas which is delivered through mains or pipes.” I cannot find any exemption for persons using that gas for
227DEIR, IV.J.2 228MRC letter to Goldstone, March 29,1994 229MRC letter to Goldstone, July 29, 1993 230MRC letter to Goldstone, March 29, 1994
82 purposes other than producing heat, or ultimately, electricity. If such an exemption (such as feedstocks for manufacturing products) exists, will you direct my attention to it?
TRICE: Section 13.52.060(b) which discusses gas which is to be resold and delivered through a pipeline distribution system or by mobile transport includes gas turned into other products.
BUTT: Is the gas usage figure in the DEIR correct or not?
GOLDSTONE: I do not know.
BUTT: What proportion of Chevron’s electrical power is provided by PG&E and what proportion is cogenerated? Of the portion cogenerated, where does the gas come from used in the cogeneration, and in what proportions?
GOLDSTONE: This is confidential, and we do not have that information
BUTT: Is the electrical consumption figure in the DEIR correct?
GOLDSTONE: I do not know.
BUTT: Does Chevron have and use an appropriate utility type metering system as described by RMC 13.52.060(a), or has this been waived by the Tax Administrator?
GOLDSTONE: This has not been waived, but it has never become an issue because Chevron has always paid under the cap plan.
BUTT: My reading of RMC 13.52.060(b) is that the maximum rate payable by any user is $953,500 for the tax year commencing July 1, 1990, and this amount has been adjusted annually to $1,148,138 for 1994-95 by the formula set forth in the ordinance. Can you confirm this? Will you provide calculations showing how this cap amount was calculated and what it is for the tax year July 1, 1994 - June 30, 1995? Is it the intent of the City to continue with this cap?
GOLDSTONE: Apparently so. The City Council passed it.
BUTT: It has been intimated by you and others that Chevron’s taxable liability under the Utility User’s Tax would be less than the cap. Is this true?
GOLDSTONE: Last year MRC calculated that Chevron would have paid about $12,000 more without the cap, while Chevron claimed they would have paid about $200,000 less. The difference is related to how the tax would have been applied to co-generated electricity, not the methodology. This year, Chevron claims they would pay over $1 million less if they elect not to use the cap. This has not been verified by either the City or MRC, but their claim may have some validity for two reasons. First, the cap keeps rising with the consumer price index, and second, Chevron is becoming more efficient in energy use.
BUTT: If so, why would Chevron pay the higher cap amount?
GOLDSTONE: The City manager asked them to pay the higher amount at least for 1994-95, and they agreed.
BUTT: If it is not true, why is the cap amount used in computing the amount of income for City budgetary planning?
NOTE: See above.
BUTT: Have any other Richmond taxpayers qualified to invoke the cap? Do you expect any others to?
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GOLDSTONE: No.
BUTT: Is there any rational purpose or basis for the cap? If so, can you describe it?
GOLDSTONE: The concept was established before I came to Richmond. I do not know what policy objectives were intended. Having a cap is not uncommon with utility taxes, but having it apply to only one taxpayer may be somewhat unusual.
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